BUSINESS IN BRIEF 1/8 Bosch to pump extra $47m in Dong Nai         Bosch Group will pump an extra US$47 million into its manufacturing plant in the southern province of Dong Nai, adding to the capital already invested by the group over the past few years. In 2015 and 2016, Bosch poured $23 million and $22 million, respectively, into the plant. The increase in investment is aimed at meeting the demand for the automotive belt in the Southeast Asian and Asian markets, baodautu.vn reported. Bosch is one of the world’s leading global suppliers of technology and services, headquartered in Germany. Last year, Bosch Vietnam’s domestic sales revenue stood at $98.9 million, a year-on-year increase of 40 per cent. Vo Quang Hue, managing director of Bosch Vietnam Company Ltd, said as Viet Nam accelerates the industrialisation and urbanisation process, it is aiming for a smart economy. These trends provide an opportunity for Bosch to diversify its products, especially in connectivity solutions for a smart city and Industry 4.0, he added.  Australia partially ends probe against VN’s galvanised steel      Australia’s Anti-Dumping Commission (ADC) has announced a partial rescission of its anti-dumping, anti-subsidy investigation on Vietnamese zinc-coated (galvanised) steel. The ADC, under Australia’s Department of Industry, Innovation and Science, has also been investigating zinc-coated steel imported from India and Malaysia. However, only the probe on Viet Nam’s steel has been terminated partially. Viet Nam’s Ministry of Industry and Trade (MoIT) said the ADC concluded that Vietnamese galvanised steel producers and exporters received countervailable subsidies from the government during the investigation period, but the subsidies were at negligible level. Therefore, the ADC has decided to terminate the anti-subsidy probe on all Vietnamese galvanised steel producers and exporters. The ADC will not recommend any subsidies for Viet Nam in its final report to the Minister for Industry, Innovation and Science. Also, Australian investigators found that the dumping range of two of the three Vietnamese exporters was even lower than the minimal level. As a result, the ADC has terminated investigation into these two companies. To arrive at the decision, the MoIT said, the ADC took into account complaints from the concerned parties, the statement of essential facts (SEF), comments relating to the SEF, and information it gathered from the investigation process. Parties can seek a review of the decision by lodging an application with the Anti-Dumping Review Panel within 30 days of publication of the notice.  Vietnam presses on with trade promotion in Italy A trade promotion programme is underway in Bologna and Rome cities from July 23-26, aiming to boost Vietnamese exports to Italy’s distribution network via the Coop Italia and Conad supermarket chains. The programme is organised by the Ministry of Industry and Trade (MoIT), the trade office of the Vietnamese Embassy in Italy, authorities of Emilia-Romagna and Lazio regions, the federation of Italian cooperatives LegaCoop, the system of Italian consumer cooperatives Coop Italia and the Agro-Food Centre of Rome (CAR). In Bologna, the business delegation of Vietnam, led by Director of the MoIT’s European markets department Dang Hoang Hai, met with the Emilia-Romagna region’s chamber of commerce and Coop Italia. Secretary General of the region’s commerce chamber Claudio Pasini lauded the development potential of Southeast Asian countries, including Vietnam.  He said Vietnam is a strongly growing economy that attracts many foreign investors, including those from Emilia-Romagna. Relations between Vietnam and Italy have been enhanced over the past decade, spurring bilateral trade. Vietnamese goods have increased in both quantity and quality in recent years, he said, adding that the country also has a young skilled workforce. These factors have helped Vietnam to success in Europe and the world. Pasini noted the EU-Vietnam Free Trade Agreement is expected to take effect in 2018, which will facilitate bilateral economic and trade ties. The Emilia-Romagna region has set up a representative office in Vietnam’s southern province of Binh Duong. Its exports to the country reached 179.5 million USD in 2016 and are expected to grow rapidly. For his part, Director of the European markets department Dang Hoang Hai said this is the second time the MoIT has held a trade promotion programme in Italy. The activity is held within the framework of the two countries’ joint committee and the plan to boost Vietnamese firms’ direct participation in foreign distribution networks by 2020. During their trip to Italy, the Vietnamese delegation visited CAR, the biggest centre for agricultural food distribution in Rome and central Italy. The centre is also one of Europe’s most important distribution hubs. In 2016, trade between Vietnam and Italy surpassed 4.68 billion USD, up 8 percent from 2015, including 3.27 billion USD of Vietnam’s exports.- QTSC spurs smart city model Ho Chi Minh City-based Quang Trung Software City has recently launched a bike share scheme, one of various pilot models under its Smart City project.  Accordingly, the bikes under the share scheme will be distributed at fixed spots across the park of Quang Trung Software City (QTSC). The users will use their customer cards (provided by QTSC) to pick up the bikes and then return the vehicles at spots placed around the park. According to plans, four stations will be placed around the QTSC area by the end of July 2017. Lam Nguyen Hai Long, general director of QTSC said, “After finishing the trial period, we will review the process and work on a detailed plan to submit to the city leaders with a view to replicate the model in many other areas in the city.” Besides bike sharing, QTSC is deploying a raft of IT projects to boost management efficiency, such as face search, car detector, helpdesk, smart building or operations management systems (OMS). Long shared, “The extensive deployment of the applications will lay the groundwork to turning QTSC into a world-class software city in the not-so-distant future.” QTSC is known as a pioneer software city model in Vietnam. Its scope, however, still remains modest when compared to Southeast Asia and Asia. To outline a well-conceived long-haul development strategy, earlier this year QTSC teamed up with KPMG, a world-leading professional services firm, to make a comprehensive assessment of its operations as well as its position compared to other hi-tech parks in Asia. According to survey results, QTSC ranked the fourth in scale, operational efficiency of firms based in the software city, foreign direct investment attraction, business scope, and human resources qualification. Based on the survey and study results, KPMG has advised QTSC leaders to raise capital from domestic and external sources under the public private partnership (PPP) model, as well as attract and support private firms to provide utility services, such as food and beverage, entertainment, and healthcare for workers in the park, and apply advanced IT solutions to build up QTSC as a smart city miniature.  Taxation authority suggests revoking business license over tax debts The Department of Taxation in Ho Chi Minh City suggested revoking business license of enterprises which owe tax. As per the Department’s report, 209 firms owe VND2,118 billion ($93.1 million) over tax. Of these firms, realty enterprises owe a giant debt. Because the Department of Taxation  had applied some measures to collect tax yet its efforts were unrewarded, it has to suggest revocation of license as final choice. 12 enterprises owed VND500 billion in the first quarter of 2017. They are Viet Hai freight forwarding and property company at 118 Huynh Tan Phat in District 7 which owes VND159 billion; Hong Quang Construction and Realty Company at 007-008 Hoang Dieu Apartment in District 4 which owes VND100 billion. Before, the Department of Taxation publicized 182 companies which owed tax debt. The Department asked authority to ban these companies’ managers from leaving the country. As of the middle of the year, the Department has collected nearly VND10 trillion. Equitized businesses face penalty for not listing on stock market The State Securities Commission of Vietnam (SSC) has sent a document requiring businesses after equitization to list on the stock market as many have not abided by the regulation so far. They will face a penalty of up to VND300-400 million according to Decree 145/2016 of the Government for continuing the share listing delay. According to SSI, the sanction will urge enterprises to start share trading, increase supply for the stock market, boost them to operate transparently and protect legitimate rights and benefits of investors. In April, the Government publicized the names of 578 businesses who have not listed on the stock market after equitization. Two months later, the Ministry of Finance reviewed the situation and found the number increase by 12 companies to total 730. The ministry said that the list of these 730 companies will be publicly posted on the Government Portal and the ministry’s website. Explaining the listing delay, companies said that they had not met norms to list on the stock market. Some said that they were doing relevant procedures. Still, investors believed that they are afraid of information transparency. Vietnam Export Forum 2017 to take place in August Vietnam Export Forum 2017 will be organized on August 8, expected to attract 400 delegates from ministries, agencies and leading businesses in HCMC and provinces, announced HCMC Investment and Trade Promotion Centre yesterday. Delegate will discuss global and regional markets after the US’s withdrawal from Trans-Pacific Partnership (TPP), challenges and opportunities for Vietnamese businesses to attend global supply chains. In addition, they will analyze quality and competitiveness improvement of Vietnamese products. Domestic business associations will share risk management modes in exports. The forum will also connect Vietnamese enterprises with Indonesian, Malaysian, South Korean and Japanese firms, supply newly updated information about export markets and solutions to improve the competitiveness of export companies in key markets. From that, businesses can estimate, adjust and improve their management and production process as well as product quality to meet technical requirements and trade barriers in countries and participate in global supply chains. Firms fret over wage hike, social insurance Employers have expressed their concerns over the rising minimum wage and the social insurance policy. The Ministry of Labor, Invalids and Social Affairs held two dialogues with Vietnamese enterprises and the Korea Chamber of Business in Vietnam (Korcham) on labor policy last Friday. Than Duc Viet, deputy director general of Garco 10 Corporation, said his company has 1,200 employees, so it is under huge pressure from wage and social insurance payments. Therefore, he proposed the ministry not increase the minimum wage and delay social insurance payment based on actual incomes that will take effect next year. The rise spike in the minimum wage is reasonable as it will improve living conditions for workers. However, enterprises may not afford to pay their staff, given annual minimum wage increases, he said. He stressed enterprises may lose appetite for expanding their investments, as high wages for workers will hurt their competitiveness with other regional players. A wage hike is unlikely to enhance the productivity of their employees. Vu Thi Ha, who is in charge of salary and labor policies at Drilling Mud Corporation, said raising the minimum wages also entails increasing the salary fund and social insurance payments for laborers. This may make companies, especially those facing financial difficulties, unable to pay their staff. Besides, their staff may suffer negative effects like higher living expenses and social insurance payments. As of June 2017, South Korea had injected US$54.5 billion into Vietnam, thereby becoming the largest investor. Korean enterprises have created jobs for more than one million local residents, partly boosting the South East Asian nation’s export turnover, according to Korcham president Ryu Hang Ha. Besides, Korean firms are having difficulty with the uncertain prospect of the Trans-Pacific Partnership trade agreement, and rising payrolls. Notably, foreign workers are obliged to contribute social insurance in Vietnam early next year. They wondered why Korean workers who have paid their social insurance in South Korea must make other payments in Vietnam despite inadequate healthcare infrastructure and skills. Doan Mau Diep, Deputy Minister of Labor, Invalids and Social Affairs, said some associations suggested not increasing the minimum wage next year, but the Vietnam General Confederation of Labor pushed for a wage hike to meet basic needs of workers. The National Wage Council will consider whether to delay the minimum wage hike or not. However, improving minimum living standards for employees, and ensuring wage payment abilities of employers are taken into careful account to be in line with labor productivity and consumer price index hikes, said Deputy Minister Diep. In regard to compulsory social insurance payments for foreign workers, he explained the Constitution requires all employees to enjoy social security benefits, and the Government does not discriminate between domestic and foreign workers. Besides, this is regarded as a viable solution to protect domestic workers. “The cost of recruiting local workers will be higher than foreign counterparts if they are compelled to pay social insurance,” he noted. Investors can apply for outbound tour operating licenses online Businesses can get licenses online to organize outbound tours, according to the Vietnam National Administration of Tourism (VNAT). Nguyen Quy Phuong, head of the Travel Department at VNAT, said VNAT is issuing and renewing licenses online for those operating outbound tours. The department will launch online licensing pretty soon, Phuong told the Daily on the sidelines of a meeting on the restructuring of the tourism sector last Friday. To operate inbound tours in accordance with the 2017 Law on Tourism, tour operators must be set up under the Enterprise Law and place deposits at banks, and their leaders must have intermediate-level certificates or diplomas on tourism. The same requirements also apply to operators of outbound tours but their directors must hold college diplomas or above. There are now 1,500 entities nationwide offering outbound tours, according to data from VNAT. Freight exchange platforms on the rise Transport companies have embraced freight exchange platforms as a new business model to obtain orders, Tuoi Tre newspaper reports. A company in HCMC said it just spent VND3.2 million rather than VND5 million transporting building materials from HCMC to Binh Phuoc Province thanks to the Vinatrucking Freight Exchange Platform. Vinatrucking general director Ta Cong Thuan said that the platform helps match those wanting to have goods delivered and trucking firms through its website. Goods owners can save costs as there are more service providers to choose from while trucking firms can maximize the efficiency of their truck operations, thus cutting the number of trucks on the road. Many other freight exchange platforms  such as Aleka and sanvanchuyen have been launched. Aleka CEO Le Minh Tu said the company also offers passenger transport services. Car owners are required to provide vehicle information and the platform will quote appropriate prices for each car so that customers can compare prices. However, transport exchange platforms have faced difficulties to attract customers. Lam Dai Vinh, director of Lam Vinh Transport Co Ltd, said the company has withdrawn from the Vinatrucking exchange platform. The platform focuses on long and two-way trips from the south to the north but ignores short routes such as between HCMC and Binh Duong Province. Thuan said more than 1,000 enterprises have put their names down to join in the first transport exchange. However, Vinatrucking has not been performing as well as expected. In addition, it is still new. Cargo and truck owners have yet to have mutual trust. Bui Van Quan, chairman of the HCMC Transport Association, said the exchange platform helped reduce vehicles on the road, save fuel costs and alleviate environmental pollution. Enterprises need time to adapt. Pham Sanh, a traffic expert, said opaque transport fees and the lack of enterprises with a good reputation have impeded operations of these transport exchange platforms. A traffic expert said 60-70% of trucks would return empty after they complete a single trip, so to compensate for that, trucking firms would charge higher fees. A freight exchange platform can help deal with that by making sure trucks will have cargo on both directions and this can cut transport costs by 30-40%. Just one inspection/year at hotels Authorities will carry out no more than one inspection into hotels across the country each year, according to the Ministry of Culture, Sports and Tourism. The ministry asked city and provincial tourism departments to coordinate with city and provincial leaders to give guidance for implementation of the new regulation. The ministry assigned tourism departments to prepare plans to avoid carrying out overlapping inspections. Snap checks must be performed in line with the law and Directive 20 of the Prime Minister which bans authorities from inspecting enterprises more than once a year. Hotels are fed up with so many inspections which often overlap one another and are lengthy. At a conference on tourism development in HCMC early this year, the general manager of a five-star hotel said his hotel coped with 13 inspections last year. He said the number of inspections should be drastically slashed to help businesses save time and cost. According to data of the National Administration of Tourism, Vietnam has more than 20,000 hotels with 400,000 guest rooms. The average annual growth was 9% last year with four and five-star hotels posting respective growth of 14% and 16%. Deposit agreements need to be properly managed Agreements in which property developers use to sell their products should be properly managed to guarantee the rights of the parties concerned: the investor, the homebuyer and the bank. Placing a deposit is a commitment to a deal between the investor and the customer despite a lack of necessary documents for sale of future housing. As investors meet regulatory conditions to put their housing products on sale, their customers will pay the agreed-on price when placing a deposit. Otherwise, the buyer will lose their deposit as some cases have occurred. Nguyen Tran Nam, chairman of the Vietnam Real Estate Association, said this home sale method is intended to satisfy the needs of homebuyers who want to have their own apartments as soon as possible. Nam said property developers can sell their products after they have completed procedures, secured land ownership, paid land tax, and obtained construction and sale licenses, among others. Such an agreement between the seller and the buyer is governed by the Civil Code. The customer has to place a deposit for a particular product on a first-come, first served basis in line with international practices. This deposit agreement is in line with prevailing laws as well. The bank that enters into such a contract must comply with the banking regulations, said Can Van Luc, deputy general director of the Bank for Investment and Development of Vietnam (BIDV). Financial expert Vu Dinh Anh said this kind of agreement is actually a real estate derivative which is not prohibited by law. Pham Thanh Hung, deputy chairman of Cen Invest, said such agreement helps property developers assess the commercial viability of their projects. Deposited money is kept in escrow accounts, so property developers cannot use it for other purposes. This business practice helps developers actively map out business plans, make business projections, and build pricing strategies, Hung noted. Meanwhile, Nam said, the Government should cap the size of a deposit at 10-20% of a home’s value. The contract should be designed in a way that protects the rights of the homebuyer. Value of M&A deals forecast to reach US$5 billion this year Mergers and acquisitions (M&A) transactions in Vietnam are forecast to reach about US$5 billion this year, down from US$5.8 billion in 2016 and US$5.2 billion in 2015, said Le Trong Minh, editor-in-chief of Dau Tu newspaper. At a press conference held in Hanoi on July 20 to announce the upcoming Vietnam M&A Forum 2017, Minh said M&A transactions are facing numerous difficulties. Enterprises and the Government should find ways to increase both the quality and the number of deals. According to an assessment of forum organizers, in 2016 and the first haft of 2017, the equitization of State-owned enterprises was not as good as expected. In 2016, only 52 State enterprises went public, representing only 25% of the 2015 figure, and the number was 20 in the first six months of this year, or 76% of the same period last year. According to a report by the Government, 96.3% of State enterprises have been equitized but only 8% of the State holdings have been offered to the public. In 2016, retail was among the key sectors of M&A deals, accounting for 38.46% of total value. A notable deal took place in early May 2016, when Central Group from Thailand acquired the Big C supermarket chain from Casino Group at US$1.05 billion. Earlier, another Thai group, TCC Holdings, spent US$800 million taking over Cash & Carry businesses in Vietnam from German retail group METRO. In 2014-2018, M&A transactions in Vietnam may hit US$20 billion, Minh added. M&A has helped diversify capital mobilization channels in Vietnam and boost economic restructuring and equitization of State-owned enterprises. In addition, corporate governance and the competitiveness of many local enterprises have improved thanks to M&A deals. Vietnam M&A Forum 2017 will be held by Dau Tu newspaper on August 10 at GEM Center in HCMC. The forum will feature a specialized conference on M&A activities, a ceremony to honor the best M&A deals of 2016-2017 and a training workshop on M&A strategy. Ben Tre Province to develop seven wind power projects The government of Ben Tre Province at an investment promotion conference on July 20 gave approval in principle to 30 large-scale projects, including seven wind power projects with total pledged capital of around US$900 million. Among the seven investors, Ben Tre Renewable Energy JSC will invest over VND6.5 trillion in a wind power plant with a designed capacity of 110 MW in Ba Tri District, and Power Generation Corporation 1 will develop a 230-MW plant worth more than VND3.4 trillion in Thanh Phu District. Western Green Energy Investment Co Ltd will implement a 70-MW wind park project worth around VND2.9 trillion, while Mekong Wind Power JSC, VPL Energy JSC, and Thien Phu Energy JSC will set up three wind power projects with a combined capacity of 115 MW worth about VND3.5 trillion. Besides, a joint venture between Asia Petroleum Energy JSC and South Korea’s Doarm Engineering Co Ltd will inject US$180 million into an 80.5-MW power plant in the rural district of Binh Dai. The local government also approved 23 other projects worth around US$197 million in fields such as food processing, infrastructure for industrial parks, coconut processing, fertilizer, and textile-garment. Ben Tre has so far this year attracted 37 domestic projects with registered capital of VND20.6 trillion (US$908 million), and three foreign direct investment (FDI) projects capitalized at US$217 million, according to the provincial Department of Planning and Investment. The local government at the conference on July 20 also struck memorandums of understanding with four investors who will carry out some projects with total capital of around VND10 trillion (US$440 million). Truong Hai Auto JSC pledged to offer VND6 trillion in partnership with Ben Tre Province. Meanwhile, ATM Development Construction Investment JSC plans to spend around VND2 trillion on projects aimed at developing economic and social infrastructure, and conserving the biodiversity of a local forest in Thanh Phu District. Masan Group is committed to injecting VND1.5 trillion into a food processing plant and a hi-tech breeding farm while Tay Bac Construction Investment JSC intends to invest VND470 billion in an urban project and the new Ba Mu market. Dao Minh Phu, deputy governor of the State Bank of Vietnam, said some banks have promised to lend about VND1.56 trillion to 10 projects in the province. HCMC wastewater treatment sector expected to draw investors Many investors are expected to pour capital into the wastewater treatment sector in HCMC as the municipal government is working on incentives for enterprises in this sector. The city plans to develop 11 wastewater treatment facilities with a total capacity of nearly 1.9 million cubic meters a day by 2020 and more than three million cubic meters by 2030 to treat household wastewater in the city. However, only Binh Hung and Binh Hung Hoa plants have been built with a respective daily capacity of 141,000 and 30,000 cubic meters. But the landscape is expected to change. A consortium comprising Lotte E&C, Huvis Water and Honor Shine Global has proposed investing in wastewater treatment facilities in the city with a combined capacity of more than 650,000 cubic meters a day. The investors plan to integrate three current plants of Tan Hoa-Lo Gom, Saigon West and Binh Tan into a new wastewater treatment system. The project to be developed under the form of build-lease-transfer (BLT) would require about US$350 million in the first phase and US$132 million in the second phase. The first phase is expected for completion by 2020 with a treatment capacity of 450,000 cubic meters. An environment expert on July 20 told the Daily that foreign enterprises at the moment are not willing to invest in wastewater treatment due to risks of capital recovery. Therefore, the city authorities should have clear pricing policy for wastewater drainage and treatment services. According to Decree No. 80/2014/ND-CP on wastewater drainage and treatment, polluters must pay for pollution treatment and the income from wastewater drainage and treatment services must step by step cover the cost of drainage services. On Tuesday, the city government issued a plan aimed at wooing private investors into the city’s wastewater treatment sector in 2017-2020. Accordingly, the city will renew its policies and mechanisms to encourage individuals and organizations to protect the environment by collecting, reusing, recycling and treating waste. The city will also launch an appropriate roadmap to revise up environmental protection fees for household wastewater treatment services. A representative of the Steering Center for the Urban Flood Control Program told the Daily that the center is drawing up a draft plan on charges for wastewater services and will send it to the city government this year. The charges will depend on the amount of household wastewater but specific charges remain unknown. Environment experts said that if capital recovery is ensured, enterprises would invest in the sector and the plan to build seven wastewater treatment plants with a total capacity of 1.6 million cubic meters a day by 2020 can be implemented. First wholly Singapore-owned bank to operate in Vietnam The State Bank of Vietnam (SBV) on July 19 gave approval in principle to United Overseas Bank Limited (UOB) to open the first 100% Singapore-owned bank in the country. The central bank also approved UOB Vietnam’s board members, supervisors and general director. UOB has to complete procedures according to the SBV's regulations and guidance to be considered and granted a license for formal incorporation and operation in Vietnam.  In addition, the central bank permitted UOB Vietnam to set up a branch based on the HCMC branch of UOB right after being granted the license. UOB on July 20 said that the wholly foreign-owned bank in Vietnam will help UOB support Vietnamese enterprises and consumers as well as its regional clients investing in Vietnam. The bank will also help many Vietnamese companies with business expansion through business advisory services and financial solutions such as cash management and project financing. The Singaporean bank plans to extend its branch network beyond HCMC and considers a branch in Hanoi City. UOB has facilitated more than US$3 billion of foreign direct investment from Asia into Vietnam since 2013. UOB’s regional clients have invested in industries such as construction, real estate, manufacturing and fast-moving consumer goods. According to the central bank, eight wholly foreign-owned banks had been established and operated in Vietnam as of the end of 2016 including ANZ, HSBC, Hong Leong Vietnam, Shinhan Vietnam, Standard Chartered Vietnam, Public Bank Vietnam, CIMB Vietnam and Woori Vietnam. Customs clearance for HCMC importers allowed at ICDs Importers of goods subject to customs procedures at the port of entry have been given the green light to complete their customs clearance at inland container depots (ICD) of Phuoc Long Port Co Ltd, according to the latest dispatch of the General Department of Vietnam Customs. The department said local enterprises that have goods under Article 1 of Decision No.15/2017/QD-TTg of the Prime Minister on the list of imported goods required to follow customs procedures at the port of entry is now allowed to transport their products from border gates to destination ports stated on bills of lading in order to go through customs if the port is a seaport or airport. Importers are also allowed to do the same if their goods have destination ports to be inland waterway ports, and inland container depots of Phuoc Long. The dispatch’s detailed instruction is expected to help reduce the amount of goods which has been congested at ports since early this month. This problem occurred when customs officers at Cai Mep, Cat Lai and Hiep Phuoc ports cited Decision No.15 and the department’s Official Letter No.4284 as a reason to disallow importers to transfer their goods to ICDs. The situation has had adverse effects on local firms. Notably, this regulation is not in line with other legal regulations and international practices. Therefore, the HCMC Department of Customs sent two official letters to the General Department of Customs asking for a way out. Phuoc Long’s ICDs such as Phuoc Long I, Phuoc Long III, Transimex, Tanamexco, Phuc Long and Sotrans which are under the supervision of the Saigon Port Border Customs Sub-department Region IV have been permitted to carry out customs procedures so far. Hanoi-Chungcheong air route to be launched this year Flights connecting Vietnam’s capital of Hanoi to South Korea’s Chungcheong will be launched at the end of this year with five weekly services to further boost tourism cooperation between the two countries. Kim Eyeong Ho, head of the Tourism Division under the Department of Culture, Sports and Tourism of Sejong, a city in Chungcheong region, said relevant agencies in the region are joining forces to launch flights in November or December this year. The opening of the new air service will help bring more Vietnamese tourists to a new Korean destination beside familiar ones such as Seoul, Busan and Jeju Island. The name of the carrier operating the flights remains undisclosed. HCMC-Chungcheong flights can start next year if five flights a week from Hanoi go well, Kim Eyeong Ho told the Daily on the sidelines of the Chungcheong tourism introduction ceremony in HCMC on Wednesday. Vietnamese travel companies offering tours to Chungcheong will enjoy preferential policies. Jung Chang Wook, a KTO representative in Vietnam, said South Korea highly valued the development of the Vietnamese market with more than 50% growth last year. Chungcheong includes Deajeon City famous for tourism, science and medical treatment, Sejong City considered the second capital of South Korea with many government agencies headquartered there, Chungcheongbuk-do Province with attractive resorts, and Chungcheongnam-do Province with the ancient citadel of Gongju Gongsanseong recognized by UNESCO as a cultural heritage site of the world. Last year, over 251,000 Vietnamese visited South Korea, up 54.5% versus 2015, and the number was nearly 178,000 by July 9, a year-on-year increase of 29.8%. Dung Quat oil refinery works on expansion project The State-owned Binh Son Refinery and Petrochemical Company Limited (BSR) has completed the overall plan for the upgrade and expansion of the Dung Quat Oil Refinery. Tran Ngoc Nguyen, CEO of BSR, said the expansion project will cost more than 1.8 billion USD, of which equity capital and loan capital will account for at least 30 percent and 70 percent, respectively. BSR plans to borrow some 1.26 billion USD, Nguyen said, adding that the estimated loan amount is in line with the Prime Minister’s decision on granting approval. Under the project, BSR will set up and put into operation some additional technology workshops for the processing of crude oil with higher sulfur content, such as Murban, ESPO and Arab Light, increasing the stable supply of petroleum products in accordance with the Euro 5 standard.  Crude oil supply of the refinery will also be significantly increased, thus helping it become less dependent on crude oil supply from the Bach Ho (White Tiger) oil field. Expansion work is expected to be completed by 2021, following which Dung Quat Oil Refinery will have capacity to refine 8.5 tonnes of crude oil per year. Manufacturing, processing industry lures FDI Vietnam’s manufacturing and processing industry attracted 12,075 foreign-invested projects with a total registered capital of 180.68 billion USD as of late June, according to the Ministry of Planning and Investment (MPI)’s Overseas Investment Agency.  Economists attributed the figures to Vietnam’s abundant workforce and several incentives for investors.  At the Vietnam Business Forum recently held in Hanoi, Deputy Prime Minister Vuong Dinh Hue reiterated the Vietnamese government’s policy of considering the foreign-invested sector an extremely important part of the Vietnamese economy.  Head of the MPI’s Central Institute of Economic Management Nguyen Dinh Cung said foreign direct investment (FDI) flowing into manufacturing and processing industry is a positive sign, helping Vietnamese firms access advanced technology.  Vietnam is in the period of golden population with over 6.3 million people of working age, giving the sector an edge to attract FDI. Southern Power Corporation develops key electricity projects The Southern Power Corporation under the Electricity of Vietnam Group (EVNSPC) is planning to build 53 more 110 kV power projects in southern provinces and cities, bringing the total number of works in 2017 to 79. In July, the company started construction of eight electricity projects and connected 10 others with the national grid. The EVNSPC is speeding up the second phase of a project to bring power to households without electricity. More than 6,100 families of the Khmer ethnic minority group in the Mekong Delta province of Kien Giang will benefit from the project. Nearly 9,000 households have had access to power in the first phase. Meanwhile, a project designed to supply electricity for rural areas has been  completed in Hau Giang and Ca Mau provinces with thousands of locals having electricity. Regarding the third development policy loan (DPL3) project, funded by the World Bank, the company has operated four power facilities to support shrimp farming in Ca Mau, Bac Lieu, Soc Trang and Tra Vinh and one power facility for artificial lighting for dragon fruits in Long An province.  Under the project, 695 kilometres of medium-voltage line, 609 kilometres of low-voltage line and transformation stations with total capacity of 115.8 MVA will be constructed. The company is carrying out the fourth development policy loan (DPL4) project to improve power system with total investment of over 10 trillion VND (439.9 million USD). Components of the projects are the second circuit of the 220kV transmission line for Phu Quoc island district, 11 110kV power grid facilities, seven power transformation stations with total capacity of 372 MVA and 37 sub projects to upgrade medium-voltage grid, enhancing sufficient power for urban areas. Other power transmission line development project of the company comprises the construction of Can Duoc and Sa Dec 220kV stations, 13 sub power grid projects and three electricity distribution facilities.  Compensation for ground clearance, slow progress of investment procedure approval, shortage of capital and slow disbursement of official assistance development (ODA) are main challenges of the company when carrying out power projects. They will have critical impacts on power supplying for southern provinces by 2020, particularly key localities like Binh Duong, Long An, Dong Nai, Tay Ninh and Ba Ria-Vung Tau. VIB opens new branches nation-wide Vietnam International Bank (VIB) has opened three new branches in the cities of Huế and Cần Thơ and the Bình Dương Province to expand its business operations nation-wide. The additional branches are eligible to undertake a variety of financial and banking activities, such as capital mobilisation, lending, payment and others, the bank said in its statement. On the occasion, the bank has launched a gratitude programme in which hundreds of gifts will be offered to customers who make transactions at the new branches. Earlier, VIB also opened more branches to meet customers’ increasing demand for financial services in localities such as Hạ Long City, Thái Bình and Vĩnh Phúc provinces. Over the past six months this year, the bank’s total assets witnessed a year-on-year increase of 10 per cent to VNĐ115 trillion (over US$5 billion). Its credit balance reached VNĐ75.68 trillion during the period, up 15.7 per cent year-on-year, including a lending balance of VNĐ69.2 trillion. Most of the credit growth was contributed by personal loans, which went up by more than 30 per cent, compared with the end of 2016, clearly demonstrating the bank’s intention to focus on the retail segment, VIB said, adding that deposits also saw a yearly growth of 15 per cent. From January to June, the bank’s pre-tax profit topped VNĐ380 billion, surging 25 per cent, compared with the same period in 2016, or accounting for 51 per cent of its yearly plan.  Agribank branch top leaders prosecuted for causing losses The Ministry of Public Security’s Police Investigation Agency on Monday announced they had completed their investigation into the fraud and irresponsible actions related to lending at the Central Sài Gòn branch of Agribank (Vietnam Bank for Agriculture and Rural Development). The police recommended criminal charges against nine suspects, including former branch directors Phạm Thị Mai Toan and Phí Thị Ong, former branch vice director Đỗ Thị Yến, bank officers and directors of companies that falsified documents to get loans from the bank. According to the police investigation, American national Hoàng Tiến Dzũng founded six companies based in HCM City and hired people to work as company directors to borrow money from the bank. The companies reportedly failed to pay the bank interest. Subsequently, in November, 2009, Dzũng falsified a project to get a loan of VNĐ90 billion (US$4 million) to help the six companies pay interest. Fake documents were submitted to the bank, claiming that one of the six companies – Á Châu Company – had earned profits, while in fact, the company had incurred losses. Despite knowing the truth, Toan still approved the loan.  Earlier, in April 2009, the Central Sài Gòn branch offered a loan of VNĐ75 billion ($3.3 million) to ADN Company, whose director is Hoàng Văn Cường. Cường also falsified documents that claimed the company needed investment for a rubber tree growing project in southern Bình Thuận Province. Former branch director Phí Thị Ong signed papers authorising the loan although she was aware that Cường’s company was unqualified for it.  At present, Hoàng Tiến Dzũng has escaped from Việt Nam and police have issued a wanted notice for him. Chinese trade fair set for Hanoi in August More than 100 companies from the Chinese province of Zhejiang are set to come together to showcase their textile expertise at a trade fair in the capital city of Hanoi this August, reports the Vietnam News Agency. This year’s 6th edition, regarded as an important international platform for textiles, consumer electronics and home furnishings, will open its doors daily August 3-5 at the International Centre for Exhibition located at 91 Tran Hung Dao Street. The event, said Trinh Xuan Tuan of Vinexad, the organizer, will serve as a barometer for the upcoming year, spotlighting contemporary trends and innovations in interior textiles, home furnishings, household textiles and a range of allied services. Last year’s event closed with the signing of US$24 million of contracts, solidifying its status as a major exhibition for boosting trade and investment between the Chinese and Vietnamese business communities. Vietnam leatherworkers, shoemakers look to EU for salvation Vietnamese leatherworkers and shoemakers are generally upbeat about the prospects for enhanced trade brought about by a soon to be European-Vietnam free trade agreement, says the Vietnam Leather, Footwear, and Handbags Association. Speaking with local media, Diep Thanh Kiet, vice chair of the Association, told local media earlier this year that the elimination of tariffs on the country’s exports to the EU could provide a tremendous boon to sales and earnings in the EU market over the next decade. Vietnam and the EU are tentatively on track to ratify the wide-ranging free trade pact, more commonly referred to by the acronym EVFTA and see it come into force by early 2018, Mr Kiet noted. However, it could take longer for ratification as the consequenceof a ruling that requires each individual county in the EU to ratify the agreement separately, which results in a more time-consuming process than he had desired. For Vietnam, the EVFTA takes on added importance following the demise of the Trans-Pacific Partnership, which was a monumental free-trade agreement between 12 Pacific Rim nations,following the withdraw by the US earlier this year. Vietnam was set to be one of the TPP pact’s biggest beneficiaries, he acknowledged. But getting ready for enactment of the EVFTA is not without its problems as product quality will need to be upgraded, he added.  This means Vietnameseleatherworkers and shoemakers will need to up their game and provide quality products on a timely, consistent and economical basis to be successful. That in turn takes money to retool and cash local businesses don’t have. So, it’s a bit of a catch 22. The leather and footwear segments are currently on an unsustainable path producing massive quantities of product as low prices with very little earnings left over to show for all their effort. The low earnings don’t leave enough after paying all the bills to retool and plough back into updating with the modern equipment and technologies needed to streamline operations, cut excessive direct and overhead costs to right the ship and put the segments on the path to prosperity and sustainability. So first and foremost, the leather and footwear segments must find avenues to raise sorely needed equity capital and that’s the real bottom line. According to a report by the General Department of Vietnam Customs, total gross exports of footwear to the EU for the five months leading up to June 2017 tallied in at US$1.76 billion, making it the country’s second largest sales market. Meanwhile, for the same time frame, sales of leather handbags, suitcases and briefcases in the EU market registered just US$365 million. The profit on these sales figures is negligible and for purposes of explanation only— a 5% profitability ratio would equate to less than US$20 million earnings nationwide on the total sales of leather handbags, suitcases and briefcases for the 5-month period. But if one looks on the bright side,these small numbers highlight the significant potential for leatherworkers and shoemakers in the EU market and why it represents their salvation, if they can retool and get on the right path to increased prosperity. Aluminium exports reach US$50 million The Dak Nong Aluminum Company has exported over 140,000 tons of aluminum and 24,000 tons of hydrate amounting to US$50 million this year. Dak Nong Company, part of the Vietnam National Coal - Mineral Industries Group, produced over 242,000 tons of convert aluminum in that period. Its aluminum products are mainly exported to the Republic of Korea and Japan. The Dak Nong Aluminum Company, situated in the Nhan Co Industrial Zone of the DakR’Lap District, Dak Nong Province, began a trial operation in November 2016 and will start operating officially this August. US property purchases on shaky legal grounds According to experts, the estimated US$3 billion spent by Vietnamese people to purchase US residential property could have been transferred largely through illegitimate ways. The “Profile of International Activity in US Residential Real Estate” report by the US National Association of Realtors (NAR) showed that between April 2016 and March 2017, Vietnamese people spent up to US$3 billion buying residential property in the US. Currently, money for buying real estate cannot be transferred through normal banking channels, which begs the question: how did these Vietnamese buyers transfer money abroad to buy real estate? According to Vietnam’s Law on Foreign Exchange Management of 2005 (amended in 2013), Vietnamese people can only transfer money overseas under prescribed circumstances, such as carrying a maximum of US$5,000 or equivalent when going through border checkpoints.  Additionally, Vietnamese people can transfer money overseas through banking, to pay for tuition or medical expenses, though the amount is usually quite small. Nguyen Hung, CEO of TPBank, was quoted as saying on vnexpress.net that money transferred overseas to purchase property may go through illegitimate channels, as banks only accept legal transactions and the amount is not so large usually . “Maybe they transferred money through other means and not through banks. The State Bank of Vietnam will surely make moves to control outgoing flows of foreign currency,” said Hung. From a financial perspective, Dr Nguyen Tri Hieu commented that there are many illegitimate ways Vietnamese could have transferred money overseas to buy property, such as through friends and families, but this is unlikely, since the Law on Foreign Exchange Management only allows carrying up to US$5,000 when travelling abroad. Alternatively, they can disguise it as legal transactions, like tuition or medical expenses, but the transferrable amount is not much and it might take years to collect enough money to pay for a house. As such, this method also seems unlikely. Surprised by the amount of money Vietnamese people have spent on real estate in the US, the director of a real estate firm in Hanoi said that US$3 billion is a considerable amount which would greatly benefit the economy if used in business.  When using this amount on US properties, not only does it not benefit the economy, but it also causes losses of foreign currency in the country. “I was quite concerned when I heard that Vietnam is one of the top residential property buyers in the US,” he said. The US real estate market is on the rise, but whatever method Vietnamese people are using to buy US residential property, they still face a considerable amount of risks, according to experts. These include legal, ownership, and market risks. “Even if the money is not delivered in the US, Vietnamese people cannot be sure, regardless of whether or not a contract was involved. Since this is considered money laundering, the buyer or investor does not have grounds to sue,” Dr Hieu warned. VNN