Thứ Ba, 30 tháng 5, 2017

BUSINESS IN BRIEF 30/5

HAGL Agrico plans to reduce debts with share swap

 HAGL Agrico plans to reduce debts with share swap, Booming tourism creates property market opportunities, Short-term deposit rates forecast to reduce in 2017, HCM City draws more 1.37 billion USD in foreign investment
     
Hoang Anh Gia Lai Agriculture International JSC (HNG) will issue 55 million shares worth VND660 billion (US$29 million), the firm announced on Thursday.
 The sale aims to swap the debt owed to its parent company Hoang Anh Gia Lai JSC (HAG).
The shares will be sold at a price of VND12,000 per share, higher than the current market price of VND11,300 per share on Thursday.
The convertible debt accounted for only a small part of the total debt of VND9.6 trillion that HNG owed to HAG as of December 31, 2016.
Following the issuance, the chartered capital of HAGL Agrico will increase to VND8.2 trillion. HAG’s rate of ownership in HNG will increase from 67.8 per cent to approximately 70 per cent, equivalent to 575.5 million shares.
In the first quarter of 2017, HNG recorded net sales of VND470 billion, equaling to just 37 per cent of the same period last year. This fall was due to the decrease in the sale of cattles, which dropped from VND892.4 billion to VND196.2 billion, plus HNG no longer recorded the revenue from the sales of sugar and corn products.
Post-tax profit of HNG in Q1 of 2017 reached VND2.7 billion, down 92 per cent year-on-year. However, this profit helped HNG end the previous three consecutive quarterly losses.

Booming tourism creates property market opportunities

Vietnam’s flourishing tourism has stimulated the property market. From 2010-2016, the number of foreign visitors to Vietnam doubled to 10 million people. Domestic tourists also increased, from 28 million to 62 million people.

Some localities, like Nha Trang, Da Nang, and Phu Quoc, recorded high tourism growth last year. Nha Trang city welcomed 1.2 million foreign tourists (up of 23%) and Da Nang 1.7 million foreign tourists (up 33%).

Infrastructure is an important factor in tourism development. Vietnam now has 9 international airports. It had only 5 in 2010. The airports have continued to upgrade and open new terminals. Tourist visa regulations have been simplified and visa fees reduced. Phu Quoc, the only destination in Vietnam where the policy of visa exemptions for foreign tourists is applied, has seen the number of tourists increase 25%.

Positive market signals have encouraged investors to invest in tourism property projects. According to Savills Hotel Consultation, midscale and luxury hotels and resorts in Nha Trang and Cam Ranh are projected to increase 29% a year for the next 3 years. Da Nang tourism properties are predicted to rise 30%; Phu Quoc properties 27%. Domestic travel companies say Da Nang and the central region have advantages for golf tourism.

Ngo Hoai Chung, Deputy Director General of the Vietnam National Administration of Tourism, said: “Vietnam’s tourism development strategy to 2020 and vision to 2030 identifies golf tourism as a high-priority specialized tourism product. We aim to make golf tourism a principal product of Da Nang and the central region, help localities attract investment, and connect travel agencies and golf course owners.”

Natural conditions, government policies, and market demand give the tourism property market in Vietnam a great potential to prosper.

Short-term deposit rates forecast to reduce in 2017

The market research company Market Intello forecast that the average interest rate this year would reduce by 0.5 percentage points compared with 2016.

In the “Vietnam Macroeconomic Report - May 2017” released recently, Market Intello expected the short-term deposit rates to drop to 4.5 percent for the three-month term and 6.3 percent for the 12-month term due to inflation management measures of the State Bank of Vietnam and the Government.

The research company also anticipated that exchange rates would increase by between 1 percent and 1.5 percent as the US Federal Reserve’s plans to raise rates twice in June and September may put pressure on the exchange rate.

In addition, the trade deficit may make the demand for US dollars rise much more than in 2016, it said, adding however, that the Vietnamese dong will not be depressed because of the ability to control inflation below 4 percent and abundant foreign reserves of the State Bank of Vietnam.

Under the report, Market Intello also maintains its forecast for Vietnam’s economic growth at 6.1 percent in 2017.

“Agriculture is expected to recover slightly but the decline in the mining industry will impact the economic growth considerably,” it said.

Market Intello cut the CPI forecast to around 3.8 percent, explaining that raising electricity prices could push up inflation in the third quarter, but weak domestic demand will hold inflation under the inflation target.

According to Market Intello, boosting investment from the domestic economic sector should be the biggest challenge in improving Vietnam’s economy for the rest of the year.

“The Government has taken actions to accelerate capital disbursement from the State budget and improve the business environment for the private sector. However, until April 2017, the rate of capital disbursement from the budget was slower than the target rate,” it said.-

HCM City draws more 1.37 billion USD in foreign investment

Ho Chi Minh City attracted 1.37 billion USD in foreign direct investment (FDI) in the first five months of 2017, a year-on-year increase of 45.8 percent.

According to the municipal Department of Planning and Investment, the southern metropolis granted investment licences to 283 new projects worth 341.98 million USD and allowed 81 existing ones to increase capital of 287.05 million USD.

The city also permitted 775 foreign investors to register to contribute capital to and buy shares in businesses, with a total capital of 742.2 million USD.

The processing and manufacturing industry was the most attractive with nearly 123 million USD (making up 35.9 percent), followed by wholesale and retail, and automobile and motorcycle repair with over 92 million USD  (27.1 percent), information and communications with 55 million USD (16.2 percent), and real estate activities with 40.25 million USD (11.8 percent).

In January-May, the total newly registered and supplemented capital from domestic enterprises was over 453.5 trillion VND (19.67 billion USD), 2.4 times higher than the same period last year.

HCM City plans to develop 60,000 businesses in 2017. The municipal authorities have so far encouraged 413 business households to turn themselves into enterprises.

Emirates boosts exports from Vietnam to UAE

Emirates SkyCargo, the freight division of Emirates, has played a key role in strengthening trade links in perishables between Vietnam and the UAE.

Over the last year, the carrier has facilitated a near fivefold increase in the exports of fruits, including rambutan and lychee, from Vietnam to Dubai.

As a result of the collaboration efforts between Emirates SkyCargo and Vietnam’s Trade Promotion Agency (Vietrade), the volume of perishable exports from Vietnam to Dubai has increased considerably, touching a record of close to 110 tonnes in January 2017.

“Vietnam has huge comparative advantages in agriculture. That is why we requested Emirates SkyCargo to facilitate exports of perishable products by air freight to capitalise on the country’s vast potential,” Pham Binh Dam, Ambassador of Vietnam to the UAE, said.

“Emirates SkyCargo started operations in Vietnam in 2008 and has since then played an important role in the growing trade between Vietnam and the UAE. By working closely with Vietrade and by building upon our expertise in shipping perishables, we developed air freight solutions that have helped increase the export of premium fruits and vegetables from Vietnam to Dubai,” Ravishankar Mirle, Emirates vice president, Cargo Commercial, Far East and Australasia, said.

Bac Giang to export half of lychee output

The northern province of Bac Giang, a lychee farming hub of Vietnam, plans to export about 50,000 tonnes of “thieu” lychee, or 50 percent of its total output, in 2017, local officials said at a meeting on May 27.

The event, aimed to promote lychee sales, was attended by Deputy Minister of Agriculture and Rural Development Le Quoc Doanh, representatives of the northern border provinces of Lang Son and Lao Cai, officials of Chinese localities importing lychees, and domestic and foreign lychee traders.

Vice Chairman of the Bac Giang People’s Committee Duong Van Thai said this year, the province continues to focus its lychee export to traditional markets, especially China. It will increase the export volume to the US, the EU, Japan, the Republic of Korea and Australia while expanding shipments to the Middle East, Thailand and Canada.

In the domestic market, the fruit will be sold mainly in Hanoi, Ho Chi Minh City and nearby provinces.

However, he noted, abnormal weather conditions like prolonged heat waves and late cold spells affected the growth of lychee trees, making the rate of fruits fall by about 40 percent from 2016 to some 100,000 tonnes.

The output of lychees under VietGAP and GlobalGAP standards in the province is about 40,000 tonnes and 1,600 tonnes, respectively. Notably, there have been 218ha of lychee trees granted codes by the US, Thai added.

At the meeting, officials of Lang Son and Lao Cai provinces, which border China, pledged the best possible conditions for Bac Giang’s lychee export to China. They promised the customs clearance time will be within 20 minutes.

Fang Dong, deputy head of Hekou county in China’s Yunnan province, spoke highly of the quality and appearance of Bac Giang’s lychees, which have become popular among Chinese consumers.

Bac Giang officials also vowed to give favourable conditions and ensure security for traders to purchase and process the local lychees.-

Binh Duong: FDI in five months exceeds yearly target

Southern Binh Duong province has lured nearly 1.5 billion USD in FDI in the first five months of 2017, 6.5 percent higher than the province’s target of 1.4 billion USD for the entire year, according to the provincial People’s Committee.

The province hereby came second, after Ho Chi Minh City, in FDI attraction. It is now home to more than 2,890 FDI enterprises with a total investment of 27.1 billion USD.

Binh Duong has been working to draw more FDI between 2016 and 2020 in an attempt to make breakthroughs in the fields of industry, services, and hi-tech agriculture, said Chairman of the provincial People’s Committee Tran Thanh Liem.

Liem noted that the province is inviting foreign investment in high-quality services, industrial support services, and high-value and environmentally-friendly industries.

In addition, the locality also plans to attract over 7 billion USD in FDI and about 110,000 billion VND from domestic investors, he added.

To fulfill the goals, the provincial People’s Committee will continue improving policies for investment attraction and better undertake measures to support enterprises and help them resolve difficulties.

It will put more effort into raising quality of human resources, enhancing public administrative reforms and improving effectiveness of state management.

The province’s industrial production index in May rose by 7 percent from the previous month and by 15.21 percent from the same period last year.

The index for the first five months of the year grew 8.21 percent year on year with manufacturing and processing up 8.18 percent and electricity production and distribution up 13.48 percent.

Local CPI during the period gained 3.62 percent year on year.

Power sector seeks way to go green over power shortage

Vietnam’s electricity supply might meet only half of total demand in the future, predicted Tran Trong Quyet, vice chairman of the Southern Power Association.

Hydropower, renewable and gas-fueled thermal power are expected to provide 48.3 percent of power demand by 2020 and 39.9 percent by 2030, while power demand is expected to increase 9 – 10 percent each year during 2016 -2030.

Furthermore, the Government halted two nuclear power projects in the central province of Ninh Thuan, therefore, coal power is needed for power security but has drawbacks in economic efficiency and environmental pollution.

Quyet said renewable power would be better for the environment but requires huge initial investment.

Coal power needs a lot of land, causes environmental issues and is expensive, but still plays an important role in ensuring national power security, he added.

To limit the impact of coal power, Quyet warned that technology to deal with coal slag must be used carefully, besides measures to ensure coal supply.

The Electricity of Vietnam (EVN) has used significant sums on treating exhaust fumes from old coal thermal power plants, including Pha Lai, which received more than 1.34 trillion VND (58.96 million USD), Hai Phong 1.57 trillion VND (69.08 million USD) and Quang Ninh 1.74 trillion VND (76.56 million VND).

Nguyen Van Thu, Chairman of the Vietnam Association of Mechanical Industry, stressed the necessity of coal-based energy.

He recommended the Government issue policies and regulations to ensure sustainable development of this power, instead of enterprises selecting their own technologies and contractors.

Mentioning 14 coal thermal power projects earmarked for the Mekong Delta region, he said the construction must be done following strict technology requirements.

The sun is also a prominent source of energy, with the south paying more attention to solar power. The EVN Southern Power Corporation is investing in a solar battery project on Con Dao island.

Ministry predicts wood exports at 7.5 billion USD this year

The export of wood and wood products is forecast to bring home 7.5 billion USD in 2017 and keep increasing in the following years, according to the Ministry of Agriculture and Rural Development (MARD).

The ministry said the overseas shipments of wood and wood products have continually grown since the beginning of this year, reaching 2.4 billion USD between January and April – a year-on-year rise of 12.7 percent.

Last May, the European Union (EU) and Vietnam finished the six-year negotiation on a voluntary partnership agreement (VPA) on Forest Law Enforcement, Governance and Trade.

While the EU has a demand for 85-90 billion USD worth of imported wood products each year, Vietnam’s annual export of these items to this market is just about 700-800 million USD.

The VPA is expected to help expand Vietnam’s wood export markets to 28 EU countries.

The MARD said if Vietnam taps into these markets well, its wood shipments to the EU can hit billions of USD each year. Meanwhile, there are signs that other countries also have stronger demand for Vietnam’s wood products, which will give another boost to the export of this industry.

Vietnam Airlines increases over 4,700 flights during summer

The national flag carrier Vietnam Airlines will increase the number of domestic flights to serve passengers’ travel demand during the peak time of summer 2017.

Accordingly, from now to August 20, the airline will launch an additional 4,700 one-route flights from Hanoi to Da Nang, Chu Lai, Pleiku, Nha Trang, Ho Chi Minh City and Phu Quoc and from HCM City to Da Nang, Nha Trang and Phu Quoc.

During the peak time from June 28 to August 6, Vietnam Airlines will increase 47 flights per day compared to normal days, with over 400 flights per day in total.

The carrier also offers promotional tickets for domestic flights until August 31.

In summer 2017, Vietnam Airlines is estimated to provide over 4.6 million seats on domestic routes, up 14 percent year-on-year and 13.5 percent against normal days.

Milk competition gets fierce in Vietnam

Milk brands in Vietnam are pouring millions of dollars into promotional campaigns and the development of new products to secure their foothold in the increasingly competitive market.

The domestic milk market is seeing an explosion in the range of products offered by manufacturers in their attempt to appeal to customers who are paying more and more attention to the content of their milk.

Since 2015 when Vietnam scrapped a piece of legislation setting a limit to how much a business can spend on promotions and advertising, milk brands have been unsparing in their expenditures for the activities.

According to market research companies, the advertising and promotion budget of an undisclosed top dairy producer in Vietnam in 2016 was close to VND9 trillion (US$396.48 million), of which over VND2 trillion ($88.11 million) was spent on advertising and market research, and the rest on sales promotions, exhibits and product launch.

Milk brands have also elevated investment in their distribution system and sales channels.

Vinamilk, Vietnam’s leading dairy producer, currently operates a network of over 220,000 retail outlets nationwide, while their products are sold at 100 percent of supermarkets and convenient stores in the country.

Meanwhile, rising competitor TH True Milk is taking risks by spending huge sums of money on renting locations across Vietnam to open their outlets.

“It would take a large number of sales [for TH True Milk] to make up for the costs of running these stores,” an expert from the Ministry of Industry and Trade asserted. “Perhaps TH’s goal is not as much to increase their sales as it is to promote their brand’s image.”

While Vietnam’s milk market in the past was dominantly a two-horse race between Vinamilk and Dutch dairy cooperative FrieslandCampina, in recent years the picture has remarkably changed to include emerging big players such as TH True Milk or Nutifood, among several other imported foreign brands.

Heightened competition has prompted dairy producers to come up with new initiatives that target consumers’ demand for safe, environment-friendly products.

According to Phan Minh Tien, Vinamilk’s marketing executive, the company introduced to the market nearly 30 new products in 2016.

It was the first to launch organic dairy products that meet European standards in Vietnam.

TH True Milk is also catching up in the organic race by unveiling its first organic cow farm in north-central Nghe An Province earlier this year.

Smaller dairy brands trying to enter the infantile organic market are importing ready-made products from foreign producers.

U.S.-headquartered Abbott Laboratories last year reported VND10 trillion ($440.53 million) in revenue from the Vietnamese market alone, an increase of over VND2 trillion ($88.11 million) from the previous year.

FrieslandCampina, which owns Dutch Lady and Frisco, featured a photo of a Vietnamese woman checking its products on her smartphone in its 2016 annual report, signifying the growing importance of the Vietnamese market in the company’s global business.

The competition has proven too fierce for some producers.

Last year, French food-product corporation Danone announced the termination of its formula milk business in Vietnam under the brand of Dumex, which previously only made up around 3.2 percent of the local market.

Despite recent drops in wholesale prices for milk in Vietnam by 5-20 percent, retail prices are still lagging at a relatively high level due to the added costs of transportation, advertising and promotion.

Take FrieslandCampina’s Dutch Baby line for example. Local consumers are still paying VND250,000-350,000 ($11-15) for a can of the powdered milk despite wholesale prices having dropped to VND180,000 ($8) a can.

Vietnam’s Ministry of Industry and Trade has announced its plan to tighten control over prices of milk and other supplementary products for children under six years of age, while requiring dairy companies to publicly list prices that are applied throughout their entire distribution network.

A ministry official advised local consumers to remain cautious toward foreign milk products ‘imported’ into Vietnam in the luggage of air passengers, as they could be fake or expired milk that had been repackaged to look authentic.

N.M.H., a seasoned buyer of such ‘luggage’ goods, said there was no guarantee of these products’ quality, given the fact that last year Japanese dairy company Meiji warned customers of fake Meiji products being sold on the black market in Vietnam.

An expert in the business has warned that foreign milk may not be suitable for consumption by Vietnamese people, as the formula offered in each country may differ depending on nutrition demands of the local population.

According to Vinamilk’s marketing executive Phan Minh Tien, the firm’s milk market has been in steady growth over the past two years, with ample potentialities yet to be leverage.

An average Vietnamese consumes around 14.5 kilograms of milk a year, compared to Thailand’s 32.4 kilograms and South Korea’s 39.7 kilograms, Tien pointed out.

With such tremendous space for development, local milk producers have been making remarkable investments on increasing their production and improving milk quality through foreign cow breed imports.

In the past three years, Vinamilk has invested close to VND1.9 trillion ($83.7 million) in upgrading and expanding its farms.

The dairy producer has so far imported nearly 8,600 milk cows from the U.S. and Australia via deals worth a total of over VND595 billion ($26.21 million).

It is looking to import a further 1,500 cows from the U.S. this July.

WB provides finance for Da Nang's infrastructure

The World Bank’s Board of Executive Directors approved $72.52 million in additional financing on May 27 from the IDA Scale-Up Facility to support investments in infrastructure in the central city of Da Nang.
The additional financing will come from the International Development Association (IDA), the World Bank’s financial resource for low-income countries.

“The pace of infrastructure investment in cities, including those for transport and sanitation services, must match the pace of economic growth,” said Mr. Ousmane Dione, WB Country Director for Vietnam. “Strengthening integrated investments in infrastructure in growing metropolitan centers like Da Nang is crucial for sustaining the engine of inclusive growth for Vietnam.”

The fourth largest city in Vietnam, Da Nang is widely viewed as well-planned and well-governed, with a strong commitment to becoming a “green city” by 2025.

The additional financing aims to support the scaling up of the Da Nang Sustainable City Development Project, by helping develop a separate sewer/house connection system - and hence minimize pollution risks - for the coastal tourism area of My An-My Khe.

Transport services are also targeted for improvement, through the establishment of an integrated fare system and intelligent transport system (ITS) for the city’s public transport network, including its Bus Rapid Transit system.

Another component of the additional financing will focus on upgrading the road from Hoa Nhon to the Hoa Son area of Da Nang, so that local traffic will be diverted from the Da Nang - Quang Ngai Expressway and the Da Nang Bypass.

Japanese FDI rebounds

Japan is gradually moving towards regaining its leading position in foreign direct investment (FDI) in Vietnam after a period of lagging behind other countries.
According to the Foreign Investment Agency (FIA), Japan invested $1.94 billion into Vietnam during the first five months of this year, accounting for 16 per cent of all FDI in the country and ranking it second.
South Korea continued to lead the way, with total investment of $4.41 billion, accounting 36.4 per cent.
Singapore was third, with investment of $1.23 billion, accounting for 10.21 per cent.
By 2014, Japan had lost its leading place after several years at the top, with $2.05 billion in investment, down sharply from $5.87 billion in 2013. In 2015, its total investment declined yet again, to $1.84 billion.
Japan was squeezed out of the Top 3 largest investors in Vietnam during the first quarter, by China.
However, with a rise in investment capital to over $1 billion, Japan then surpassed China in April, pushing it into fourth place.
As at May 20, total FDI in both newly-registered projects, additional capital to existing projects, and contributed capital to purchase shares had reached $12.13 billion this year, up 10.4 per cent year-on-year. Disbursement was $6.15 billion, up 6 per cent year-on-year.
Investors poured capital into 18 sectors, including $8.09 billion into manufacturing and processing, accounting for 66.7 per cent of newly-registered capital in the first five months, followed by mining, with $1.28 billion. Wholesale and retail was third, with $798 million.
FDI inflows have gone to 58 cities and provinces, in which northern Bac Ninh province attracted the most, with $2.76 billion. Southern Binh Duong province ranked second, with $1.64 billion, followed by Ho Chi Minh City with $1.39 billion.
According to a recent survey by the Japan External Trade Organization (JETRO) in Hanoi, more than 60 per cent of Japanese enterprises in Vietnam plan to expand their business and continue to view the country as an important investment destination.
The main reason for the business expansion plans is that enterprises want to increase revenue. For non-manufacturing businesses, the main driving force is high growth potential.
Some 62.8 per cent of the more than 600 businesses participating in the survey said they are profitable, up 58.8 per cent from 2015 and higher than in Thailand and Indonesia but lower than in the Philippines and China.

Preferential policies on industrial clusters

The Government has issued a series of preferential policies on industrial cluster development in Decree 68/2017/ND-CP (Decree 68).

Under Decree 68, investment and business projects in industrial clusters will be exempted from land lease fees in seven years and enjoy other incentives in accordance with the legal regulations.

Technical infrastructure business projects will be entitled to land lease exemption in 11 years; borrow State credits under 70% of total investment; and benefit from other incentives.

Incentives for trade village industrial clusters

Decree 68 regulates that business and investment projects in trade village industrial clusters will enjoy 11-year-land lease exemption and get State credits under 70% of total investment capital.

Technical infrastructure business projects will be exempted from 15-year-land lease fees and 70% of credit loans.

These projects will get local budget to relocate enterprises, cooperatives, and household production sites to trade village industrial clusters and get investment in technical construction.

However, the decree also stresses that preferential trade village industrial clusters must be listed in the planning and operate in line with the regulations on industrial cluster management.

BCI awards given to Vietnamese

Asia’s leading construction solution provider BCI at a ceremony held on Friday in HCM City gave awards to the top 10 Vietnamese architectural firms and property developers.

The portfolios of the architecture firms contain US$4.9 billion worth of property construction projects which are expected to start this year.

The BCI Asia Top 10 Architects for 2017 were given to Alinco Ltd, Baumschlager Eberle Asean Co Ltd, DAC - Vietnam Architectural Design and Consultancy Company, Dark Horse Architecture Co Ltd, GK Archi Co Ltd, HTT Group – Hồ Thiệu Trị Architect & Associates, NQH Architects Co Ltd, Plan Add Vietnam Co Ltd, PTW Vietnam Co Ltd  and TTA-Partners Construction Architecture JSC (TTAP).
The BCI Asia Top 10 Developers Awards for 2017 were presented to Đất Xanh Real Estate Service and Construction JSC, FLC Group, Hưng Thịnh Real Estate Business Investment Corporation, Novaland Investment Group Corporation, Phát Đạt Real Estate Development Corporation, Phú Mỹ Hưng Development Corporation, Sun Group, Tân Hoàng Minh Group, Việt Hưng Urban Development & Investment Company (VIHAJICO), and Vingroup.

The awards aim to encourage socially responsible architecture and serve as a platform for domestic and international networking by elite architecture firms, property developers, manufacturers and service providers.

Around 150 architects, designers, senior executives and leading professionals in the building and property development industry were presented with the FuturArc Green Leadership Award and FuturArc Prize 2017.Currently in its tenth year, FuturArc Prize, Asia’s foremost Green building design competition, has been established as a renowned platform where innovative ideas pour in from professionals and students globally. Six winning designs have been selected this year for residential or commercial developments in an Asian city.

There are two winners and two merits from Việt Nam.

Bùi Quang Vũ and his team has won the first place for their Professional entry titled Urban Plug-In Module, which details the stitching together of landscape, building and hydrology at the scale of building elements, architecture, neighbourhood and city.

The second place in the Student category goes to Trần Duy Tân’s team for The Forgotten Network, with the concept of industrial-scale urban farming that utilises unused water towers.

Bùi Dương Khang Kiều and his team received a merit award in the Student category for their entry You Feed Me To Feed Your Future, which offers a restored lake environment with a symbiotic relationship between humans, commercial buildings and space.

Nguyễn Quốc Tuấn’s team also received merit in the Student category. Their project, Cost to Make More, recognises the need for clean water supply, especially around industrial areas in Bangladesh. Their design seeks to create a model that is able to alleviate the contaminated water situation, as well as improve the lives of workers and the sustainable development of the city.

An independent panel of international jurors sat through a thorough review process and selected a total of six winning teams (three from the Professional category; three from the Student category) and 10 merit recipients (in teams).

Ceremonies for the 13th BCI Asia Top Award were also held in Hong Kong, Indonesia, Malaysia, the Philippines, Singapore and Thailand.

BCI awards given to Vietnamese
   
Asia’s leading construction solution provider BCI at a ceremony held on Friday in HCM City gave awards to the top 10 Vietnamese architectural firms and property developers.

The portfolios of the architecture firms contain US$4.9 billion worth of property construction projects which are expected to start this year.

The BCI Asia Top 10 Architects for 2017 were given to Alinco Ltd, Baumschlager Eberle Asean Co Ltd, DAC - Vietnam Architectural Design and Consultancy Company, Dark Horse Architecture Co Ltd, GK Archi Co Ltd, HTT Group – Hồ Thiệu Trị Architect & Associates, NQH Architects Co Ltd, Plan Add Vietnam Co Ltd, PTW Vietnam Co Ltd and TTA-Partners Construction Architecture JSC (TTAP).

The BCI Asia Top 10 Developers Awards for 2017 were presented to Dat Xanh Real Estate Service and Construction JSC, FLC Group, Hung Thinh Real Estate Business Investment Corporation, Novaland Investment Group Corporation, Phat Dat Real Estate Development Corporation, Phu My Hung Development Corporation, Sun Group, Tan Hoang Minh Group, Viet Hung Urban Development & Investment Company (VIHAJICO), Vingroup.

The awards aim to encourage socially responsible architecture and serve as a platform for domestic and international networking by elite architecture firms, property developers, manufacturers and service providers.

Around 150 architects, designers, senior executives and leading professionals in the building and property development industry were presented with the FuturArc Green Leadership Award and FuturArc Prize 2017.Currently in its tenth year, FuturArc Prize, Asia’s foremost Green building design competition, has been established as a renowned platform where innovative ideas pour in from professionals and students globally. Six winning designs have been selected this year for residential or commercial developments in an Asian city.

There are two winners and two merits from Viet Nam.

Bui Quang Vu and his team has won the first place for their Professional entry titled Urban Plug-In Module, which details the stitching together of landscape, building and hydrology at the scale of building elements, architecture, neighbourhood and city.

The second place in the Student category goes to Tran Duy Tan’s team for The Forgotten Network, with the concept of industrial-scale urban farming that utilises unused water towers.

Bui Duong Khang Kieu and his team received a merit award in the Student category for their entry You Feed Me To Feed Your Future, which offers a restored lake environment with a symbiotic relationship between humans, commercial buildings and space.

Nguyen Quoc Tuan’s team also received merit in the Student category. Their project, Cost to Make More, recognises the need for clean water supply, especially around industrial areas in Bangladesh. Their design seeks to create a model that is able to alleviate the contaminated water situation, as well as improve the lives of workers and the sustainable development of the city.

An independent panel of international jurors sat through a thorough review process and selected a total of six winning teams (three from the Professional category; three from the Student category) and 10 merit recipients (in teams).

Ceremonies for the 13th BCI Asia Top Award were also held in Hong Kong, Indonesia, Malaysia, the Philippines, Singapore and Thailand.

Lai Chau to invest US$4.8m in growing macadamia
   
The northern mountainous province of Lai Chau will spend VND110 billion (US$4.8 million) from its budget on growing macadamia, which is expected to help boost the local economy.

The information was released at a seminar on the potential of growing macadamia in the province on Sunday.

Beneficiaries of the fund, to be invested from now till 2030, will include businesses, co-operatives, households and individuals who have 50 hectares or more of concentrated macadamia plantations.

Authorities said they are working to create favourable conditions, including exemptions and land rent reductions, to encourage businesses to invest in growing macadamia.

The province expects to be growing 10,000ha of macadamia by 2030.

Currently, Lai Chau has around 244ha of macadamia farms, concentrated in Tam Duong, Phong Tho and Sin Ho Va, and Nam Nhun districts. Of this, 100ha have an average capacity of 800kg of fresh macadamia nuts per hectare per year.

Nguyen Lan Hung, vice-chairman of Viet Nam Macadamia Association (VMA), said the province’s land and climate are suitable for growing macadamia, which has the potential to become an important cash crop for a poor province like Lai Chau. Farmers and businesses must pay close attention to the quality of the seedlings and the growing technology.

At the conference, VMA and Lien Viet Post Joint Stock Commercial Bank committed to providing macadamia growers with funds, technology and output during the macadamia development period.

Rubber export prices rise sharply
   
The average export price of rubber in the first four months of 2017 was US$2,016 per tonne, a year-on-year increase of 68.8 per cent.

The rise in rates has raised the product’s export value, despite its decreasing output in the same period.

The General Department of Viet Nam Customs reported that since the beginning of this year to the end of April, rubber exports touched 301,500 tonnes in volume, a drop of 2.1 per cent against the same period last year. However, its turnover hit $607.9 million, a year-on-year increase of 65.4 per cent.

On May 22, the price of SVR CV and SVR L rubber stood at VND50,752 (US$2.23) and VND49,620 per kilo, up 1.2 per cent and 1.8 per cent, respectively, compared to early May.

The rise in rubber export rates is linked to its rising price in the world market, the falling rubber stockpile at Tokyo Commodity Exchange’s (TOCOM) bonded warehouse, as well as the decline in Viet Nam’s rubber output for export.

Viet Nam is among the three largest rubber exporters in the world, after Thailand and Indonesia.

In April 2017, Viet Nam exported the most mixtures of natural and synthetic rubber at 26,213 tonnes, worth $47.5 million, accounting for 50.5 per cent of the rubber sector’s volume. Its SVR 3L rubber output was 8,643 tonnes, down 5.7 per cent in volume over the previous month, while its SVR 10 rubber export was 5,191 tonnes, down 11.4 per cent in volume over the previous month.

China is the leading importer of Vietnamese rubber, accounting for 63.2 per cent with 190,000 tonnes, worth $383.7 million, a 12.08 per cent rise in volume and nearly 90 per cent in value over the same period last year.

Bac Giang to export half of lychee output
   
Northern Bac Giang Province, a lychee farming hub of Viet Nam, plans to export some 50,000 tonnes of “thieu” lychee, or 50 percent of its total output, in 2017.

This was stated by local officials at a meeting on Saturday.

The event, aimed to promote lychee sales, was attended by Deputy Minister of Agriculture and Rural Development Le Quoc Doanh, representatives of the northern border provinces of Lang Son and Lao Cai, officials of Chinese localities importing lychees, and domestic and foreign lychee traders.

Vice chairman of Bac Giang People’s Committee Duong Van Thai said this year, the province continues to focus on lychee export to traditional markets, especially China. It will increase export volume to the United States, the European Union, Japan, the Republic of Korea and Australia while expanding shipments to the Middle East, Thailand and Canada.

In the domestic market, the fruit will be sold mainly in Ha Noi, Ho Chi Minh City and nearby provinces.

However, he noted, abnormal weather conditions such as prolonged heat waves and late cold spells had affected the growth of lychee trees, making the rate of fruits fall by about 40 percent from 2016 to some 100,000 tonnes.

The output of lychees under VietGAP and GlobalGAP standards in the province is currently some 40,000 tonnes and 1,600 tonnes, respectively. Notably, 218ha of lychee trees have been granted codes by the United States, Thai added.

At the meeting, officials of Lang Son and Lao Cai provinces, which border China, pledged the best possible conditions for Bac Giang’s lychee export to China. They promised customs clearance time would be within 20 minutes.

Fang Dong, deputy head of Hekou County in China’s Yunnan Province, spoke highly of the quality and appearance of Bac Giang’s lychees, which have become popular among Chinese consumers.

Bac Giang officials also vowed to provide favourable conditions and ensure security for traders to purchase and process local lychees.

Regulations drafted for non-banking financial companies

Non-banking financial companies (NBFC) may be allowed to set up a maximum of three branches in a fiscal year.
It was drafted in a circular released last week by the State Bank of Việt Nam (SBV) asking for comment.
The draft circular states that NBFCs with operation duration of less than 12 months (from the date of inauguration to the time of proposal) are allowed to set up two branches at maximum while the number for NBFCs with operation duration of more than 12 months is three in a fiscal year. One branch cannot be managed by more than three transaction offices.
NBFC includes general financial companies, factoring companies, consumer lending companies and financial leasing companies.
To qualify for the opening of domestic branches and transaction offices, NBFC must comply strictly with regulations on debt classification and risk provisioning according to the SBV’s regulations.
Besides this, they are required to meet regulations on the ratio of bad debt to total outstanding loans of under 3 per cent or as decided by the SBV governor in each period.
To set up a branch abroad, in addition to meeting conditions as the opening of a domestic branch, NBFC must have a minimum operation duration of three years and total assets of over VNĐ20 trillion (US$877.19 million) according to audited consolidated financial statements. They must also make profits for three consecutive years before the year of making the proposal.
Under the draft, the SBV governor has the authority to approve or disapprove the establishment of NBFC; termination of operation or dissolution of domestic branches, transaction offices and representative offices; as well as the establishment of branches and representative offices abroad.
The governor of the SBV may authorise directors or chief inspectors of the bank’s branches in provinces and cities to approve or disapprove of the establishment of NBFC; termination of operation or dissolution of branches and transaction offices at their locations; and the change of the name and location of the branches’ headquarters or transaction offices.

Lower food prices pull CPI down in May

Consumer price index (CPI) in May dropped by 0.53 percent from the previous month mostly due to a sharp fall in food prices, the General Statistics Office (GSO) said on May 29.

This month’s CPI rose 0.37 percent from last December and 3.19 percent from the same period of 2016. The five-month figure hiked 4.47 percent from a year earlier.

Seven of the 11 groups of main commodities and services saw slight price increases, namely culture, entertainment and tourism (up 0.13 percent); household appliances and goods (0.1 percent); beverage and cigarette (0.08 percent); garment, footwear and hat (0.05 percent); and medicine and health care services (0.04 percent); education (0.02 percent); and other goods and services (0.15 percent).

Price declines were recorded in the four remaining groups. Food and catering services prices sank 1.43 percent, followed by transport services (down 0.34 percent), postal and telecommunication services (0.05 percent), and housing and construction materials (0.02 percent).

Do Thi Ngoc, Deputy Director of the GSO’s Price Statistics Department, said in the group of food and catering services, grain food prices decreased 0.06 percent in May because northern provinces have been harvesting the winter-spring rice while rice export became stagnant.

Prices of foodstuff, which makes up the biggest proportion in the food and catering services group, declined 2.27 percent, mainly in fresh meat. Notably, pork prices plummeted 9.94 percent from April due to a surge in supply, unchanged demand, and Chinese traders’ weak purchase.

She added petrol prices were cut on May 5 and 20, leading to a 0.71-percent fall in fuel prices compared to the previous month.

Meanwhile, there are factors hampering a further drop in CPI, including the hot weather, which fanned electricity consumption that in turn boosted power prices up by 0.98 percent. The hot weather also spurred the demand for cooling equipment and summer apparel and footwear.

Housing maintenance materials grew 0.93 percent as construction sand prices soared after sand mining was restricted nationwide, she noted.

In May, domestic gold prices fluctuated in line with global gold prices, dropping 0.1 percent from April to around 36 million VND (1,853 USD) per tael. The price of US dollar also declined slightly to 22,600 – 22,700 VND per USD.

The GSO said the core inflation, which is the CPI excluding grain food, fresh foodstuff, energy and the State-managed goods of health care and educational services, in May increased 0.08 percent month on month and 1.33 percent year on year. The five-month core inflation rose by 1.56 percent from a year earlier, lower than the planned inflation of 1.6 – 1.8 percent, indicating a stable monetary policy.

CPI in June is likely to be the same or fall slightly from May since pork and poultry prices will still follow the downward trend.

Meanwhile, stronger tourism demand in summer will augment eating and hospitality services prices. Price increases are also predicted for electricity, water and petrol, according to the GSO.  

VINPA asks for petroleum protection

The Vietnam Petroleum Association (VINPA) has proposed to establish commercial barriers to protect local firms once import duties on fuel products are gradually reduced to zero percent.

VINPA Chairman Phan The Rue said gradual tax reduction to zero percent had put pressure on domestic petroleum producers and distributors.

Rue told the media that the country should have a long-term development strategy for the petrol market, at least to the year 2020. In particular, important policies of whether the local market should be opened to foreign companies or not should be formulated.

Currently, several petroleum firms have been selling shares to FDI businesses, he said, adding that the Government should have economic solutions or technical barriers in place to stipulate what FDI firms are permitted to do for the sector to ensure energy security.

The technical barriers could include non-tariff measures, requirements on standards or a distribution system.

The chairman also shared experience from the retail sector, citied by the tuoitre.vn newspaper. He stated that the lack of strict barriers had led to FDI businesses dominating the market.

The Government, therefore, should have solutions to resolve difficulties faced by Binh Son Refinery and Nghi Son Refinery to improve the competitiveness of the local petroleum sector. Nghi Son Refinery, which is meant to become operational in 2018, in particular, could sufficiently meet Vietnam’s petrol demand.

However, the issue was whether the production cost of local refineries could compete with foreign firms, the chairman told the newspaper.

According to trade accords Vietnam has joined, import duty on fuel will be zero by 2024. Rue proposed the adjustment of special consumption tax to avoid a serious State budget deficit. Specifically, environmental protection tax should be adjusted this year, followed by special consumption tax next year and VAT in the 2020-22 period.

Currently, income from fuel import tax accounts for seven percent of the State budget, he said, adding that agencies should carefully prepare a roadmap for raising other taxes to ensure the harmony of State budget income.

The association said fees and taxes make up more than 50 percent of the fuel price. Therefore, cutting fuel import tax to zero percent necessitates increasing other taxes to make up for the lost income.

“Once the import duty is cut to zero, we should increase other taxes to make up for the loss. It is necessary to ensure that the total tax sum accounts for half the retail fuel price. As the import tariff moves down to zero, other taxes must be raised to offset the shortfall. Paying higher taxes is how every citizen shows his/her responsibility to the country,” he said.

In fact, the Ministry of Finance has several times indicated its intention to raise environment tax for fuels from the current 4,000 VND per litre to 8,000 VND. A92 gasoline, the country’s most widely used fuel, currently sells for 17,063 per litre VND, including the 3,000 VND per litre environment tax. If the new tax rate is approved, the price would rise to more than 22,000 VND per litre, analysts calculated.

The association is strongly supporting the proposal on so-called environment tax hike policy. However, the public is not.

Bui Danh Lien, chairman of the Hanoi Transport Association, said a shortfall in the State budget required solutions other than hiking environment tax, which is not used for the benefit of the environment. He believed there were many solutions to the budget shortfall with the most important one being to cut public spending.

Sharing his ideas, Truong Dinh Tuyen, former minister of industry and trade, said increasing taxes was not the right solution.

Tuyen said increasing taxes might help reduce losses to the State revenue in the short-term but was not a sustainable solution.

“We should try instead to cut taxes and assist local businesses in reducing input cost, which will help boost their performance,” he said, adding that what’s more important is to create a competitive fuel market that provides the best retail prices for consumers.

Vietnam consistent in enhancing trade ties with US

The official US visit of PM Nguyen Xuan Phuc from May 29-31 demonstrates Vietnam’s consistent policy on enhancing trade relations with the US, which has been Vietnam’s top trade partners for the past 10 consecutive years.

According to the America Market Department under the Ministry of Trade and Industry, Vietnam-US trade has maintained a high annual growth of about 20 percent since their Bilateral Trade Agreement (BTA) took effect in 2001. Last year, the two-way trade hit 47 billion USD, 33.5 times higher than the 2001 figure of 1.4 billion USD.

In the first four months of 2017, Vietnam exported 12.4 billion USD worth of commodities to the US, mostly textile-garment, footwear, computers, seafood, farm products, timber and timber products, electronics and components.

The figure represented 20 percent of the country’s total exports and an increase of 8.7 percent from the same period last year.

Vietnam is now the US’ 16th largest trade partner with Vietnam enjoying high trade surplus.

Vietnam has put its name on the US’s international trade partner map, said Tran Duy Dong, director general of the America Market Department, adding that in spite of difficulties posed by the US’s anti-dumping or anti-subsidy duties, Vietnamese exporters have learned from experience to grow stronger, continuing entering the market.

Despite the US’s withdrawal from the TPP, the bilateral Vietnam-US trade and investment relationship will continue to grow, US Consul General in HCM City Mary Tarnowka confirmed.

She expected the ties to grow stronger as Vietnam’s recent efforts on international economic integration reaffirmed its intention to continue its economic reforms and further open its economy.

Tarnowka noted that those reforms will promote the establishment of a fair and transparent management system, allowing of the prediction of a new wave of trade and investment in the future.

Experts believed that Vietnam is yet to become a major market for the US but increasing incomes of its citizens will stimulate consumption of luxurious brands, including those from the US.

When US President Donald Trump launches a series of plans in Asia, the Vietnam-US ties will be a lever for the two countries’ mutual trade and economic benefits. The upcoming meeting between the two nations’ leaders will be a good opportunity to promote their shared strategic interests and create more jobs for their people.

Authorities from both sides are closely working to improve their trade cooperation mechanisms for better facilitation of the bilateral trade.

Tami Overby, Senior Vice President for Asia at the US Chamber of Commerce said the chamber is making effort to find ways for further boosting the Vietnam-US trade, including the possibility of a free trade agreement. She added that US companies need to be more creative in dealing with obstacles when entering the Vietnamese market.

To support local companies in gaining access to the US market, Minister of Trade and Industry Tran Tuan Anh said besides programmes to build national competitiveness through branding and removals of duties and other technical barriers, the ministry has devised master plans to improve competitive edges for export products with the emphasis placed on those in manufacturing and processing industry.

At the same time, enterprises must also take an active role in enhancing production capacity, developing market overseas, and becoming part of the global supply chain.

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR

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