BUSINESS IN BRIEF 26/4 Vietnamese firms attend FHA show in Singapore     Vietnamese enterprises operating in food and hospitality are attending the trade show, Food and Hotel Asia (FHA) 2018, in Singapore. The event will conclude on April 27. This is the first time Vietnamese firms have participated in Asia’s largest exhibition in the food and hospitality sector. There are 14 Vietnamese enterprises featuring products in the Viet Nam Food Pavilion, which covers an area of 200sq.m. Through its 40 years of development, FHA has grown in tandem with Asia’s food and hospitality industry and has earned itself the reputation of being the most comprehensive premier international food and hospitality trade show in the region. This year’s event is expected to attract over 4,000 businesses from more than 70 countries worldwide. Some 50,000 enterprises have registered to visit the show and sign contracts, according to the organising board. Tran Thu Quynh, trade counsellor at the Vietnamese Embassy in Singapore, said together with several businesses which had export activities and commercial presence abroad, such as TH True Milk, Co May and Trung Nguyen Coffee, the trade office prioritised introducing small- and medium-sized start-ups operaring in intensive agricultural processing field, especially in coffee, cocoa, cashew nut, fruits, rice and seafood. The office will help connect Vietnamese enterprises with others through the Vietnam Food Pavilion, Quynh said. Ho Si Bao, director of Amazon Vietnam Food Company, said the trade show offered a good opportunity for participating companies to introduce their products and learn about international tastes to build an appropriate marketing strategy to increase their exports. This year, the company plans to increase its capacity to produce cocoa and sochola to five tonnes per month to meet local demand and exports. Việt Nam rice exports face uncertain Q1     Viet Nam’s rice exports faced an unpredictable first quarter this year, increasing in January, declining in February and recovering in March, according to the Ministry of Agriculture and Rural Development. An estimated 524,000 tonnes of rice were exported in January, with a total value of $249 million, reported the Ministry of Agriculture and Rural Development, representing a 49 per cent rise in volume and 51.3 per cent in value compared to December 2017. After declines in February, exports rose steeply in March, jumping 93.9 per cent in volume and 100 per cent in value to US$338.44 million month-on-month. The rice export price also surged in March by 3.3 per cent to $513.7 per tonne. The country’s overall rice exports in the first quarter of this year increased by 15.5 per cent compared to the same period in 2017. The average rice export price in the first quarter of the current year rose by 14.2 per cent year-on-year to $501 per tonne, reported cafef.vn. The rice export price was higher against most export markets during the same period last year, with the highest price reaching $834.5 per tonne for rice exported to Chile, a year-on-year increase of 114 per cent. However, rice exports to this market fell sharply by 95 per cent in volume and 90 per cent in year-on-year value. China has remained the largest export market for Vietnamese rice, accounting for 27.7 per cent of total volume during the first quarter of the current year. During the first quarter of 2018, 40 per cent of Viet Nam’s major rice export markets saw a surge in terms of both volume and value, while 60 per cent saw a reduction in rice exports. Viet Nam’s rice exports to Bangladesh increased 89 times in volume and 59 times in value. A similar but smaller-scale trend occurred in rice exports to Turkey, Iraq, Malaysia and France. However, rice exports to markets such as Argentina, Chile, Ukraine, Angola, Singapore, South Africa and the Netherlands plunged between 60 to 95 per cent in both volume and turnover over the same period last year. According to experts, Viet Nam will have greater opportunities when the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) comes into effect, helping rice exporters increase exports to countries that joined the agreement and demand high quality and food safety standards, such as Japan, Australia and New Zealand. Viet Nam’s structure for exporting rice products has shifted to reducing middle and lower quality rice products while increasing high quality rice products annually. As a result, from the end of 2017 to the current period, Viet Nam’s rice export prices have increased to $50 to $100 per tonne against its competitors, such as Thailand, Pakistan and India. TTC Sugar purchasing treasury shares    The Thanh Thanh Cong - Bien Hoa JSC (TTC Sugar, stock code: SBT) began to purchase shares on April 18 to increase its treasury share (TS) holding and capital surplus, via order matching at market prices. It expects to continue to do so until May 17. The number of shares projected to be bought is 83,552,800, or 15 per cent of the total issued. The target purchase price is expected to be under VND30,000 ($1.30) per share and the total value of TS being purchased will not exceed VND2.506 trillion ($110 million). MB Securities Company has been appointed as the agent to conduct the transactions. The move also reflects its management’s commitment to complying with a resolution approved by the annual general meeting in terms of applying its operational strategy. Management is also optimistic about the development, growth scenario, and future potential of the company. SBT’s share has recently traded under its real value. The company has expressed confidence in positive business performance in 2017-2018 and plans to utilize free cash flows to invest in profitable investments in the future. In a report released in the first quarter of 2018, FPT Securities (FPTS) recommended purchasing SBT shares at VND30,000 ($1.30) per share, based on analysis of growth motivation, profitability, management assessments, and stock evaluation. After 23 years of operations, SBT has upgraded its total capacity from 8,000 tons of sugarcane to 48,600 tons per day, making it the leader in Vietnam’s sugarcane industry. It is making significant changes in production capacity and increasing efficiency by mechanization as well as the capacity of raw sugar refining. The company is also expanding in both domestic and foreign markets. Its gross profit margin is expected to improve annually, to 17 per cent by 2020, while its ROE is to reach 15 per cent in 2021 after M&As. Pre-tax profit from 2018 to 2022 will increase at 30 per cent per annum. FPTS claims that SBT is in a period of both revenue and profit growth. The company has announced plans to 2020, including selling 1.1 million tons of sugar, increasing export volumes, and growing the market share in both the institutional and individual segments. After the recent merger, the company’s production and business operations have been growing and expanding, gaining economies of scale and enhancing value chains. The company possesses an in-depth and strategic orientation and has changed its organizational model in accordance with international management standards. It is currently being consulted and advised by the Big 4 global audit companies and the IFC on corporate governance and also strengthening its cooperation with international institutional investors in the industry. SBT’s market capitalization on April 17 stood at $458 million, accounting for 0.3 per cent of total market capitalization. It is the leader in Vietnam’s sugar industry, accounting for approximately 42 per cent of the sugarcane industry’s market capitalization and is 16 times larger than the second-largest company in the industry. Sao Do breaks through with brand power From a small business with charter capital of approximately VND6.8 billion ($298,480) in 2002, Sao Do has become a conglomerate and listed among the “trillion dong” businesses in Vietnam. The point that piques many people’s curiosity is how Sao Do has achieved such spectacular success during its 16 years. Chairman of the Board of Directors of the Sao Do Investment Group, Mr. Tran Van Thang, said that one of the most important things that helped Sao Do achieve rapid growth is adopting the right business strategy and having the ability to seize an opportunity. For a private enterprise like Sao Do, the difficulties following establishment and in the early stages of development were by no means small. If the company was unable to resolve problems and identity the most appropriate path towards development, the possibility of failure was very real. Now with a multi-sector business focus, in its early stages Sao Do was almost exclusively involved in real estate. It then used its position and profile in the sector to move into other associated business fields. This approach also contributed to limiting the dispersion of investment capital, as all activities are conducted within a single project site. After its establishment, Sao Do embarked on investment in and the construction of two urban area projects: Sao Do 1 and Anh Dung 2. Both were completed quickly and soon became model projects in the northern port city of Hai Phong, featuring all the key items found in the real estate industry: houses, villas, public works, trees, sports areas, and shopping centers. Seventy security cameras were installed, and each urban area had its own security and sanitation team. So it was unsurprising that the two projects won a Gold Medal for infrastructure planning at an international exhibition held in Hai Phong in 2004 as well as a Gold Medal for beautiful architecture. The early success of the young business created momentum for Sao Do on its path towards development. Having gained the trust of customers and partners, it began to be involved in a series of large projects, expanding its scope of operations and business fields. Sao Do is now a multi-sectoral private conglomerate with four subsidiaries: the Sao Do Petrol JSC (Sao Do Petrol), the Sao Do Construction JSC (Sao Do Construction), the Sao Do Materials Co. (Sao Do Materials), and the Hai Phong Port JSC. Sao Do also has holdings in companies such as the Nam Dinh Vu Port Company, the Nam Dinh Vu Power Company, and the Nam Viet Environment Treatment Company. In 2017, the Sao Do Group recorded total production value of over VND1.3 trillion ($57.06 million). Revenue reached over VND724 billion ($31.7 million) and profit over VND70 billion ($3.07 million), while more than VND75 billion ($3.2 million) went to State coffers. “Outstanding success like this doesn’t come easily,” said Mr. Nguyen Thanh Phuong, General Director of the Sao Do Group. Vietnam’s market economy and ongoing integration means local enterprises will probably face relatively tougher challenges in the years to come. Interestingly, the key to success for the company is its brand. At its inception, Sao Do determined that its brand development strategy, with branding at the core, was the foundation for promoting the development of the business. Mr. Phuong believes that its brand is not a tangible asset. A brand grows from prestige, product and construction quality, investment efficiency, and customer satisfaction. To achieve all these, every job must be done well. In recent years, Sao Do has worked hard on specific tasks such as studying and evaluating scientific projects, investing in designs suitable to each project, surveying and offering reasonable quotes, and honing and improving the skills of its sales staff to advise and attract customers. “When it comes to building or participating in major projects such as the Hanoi - Hai Phong Highway (material supply) and the Nam Dinh Vu Industrial Park and Nam Dinh Vu Port, customers fully support the company,” he said. “Even in the construction phase of the Nam Dinh Vu Industrial Park, Sao Do attracted businesses to lease out more than 33 ha. I think the success Sao Do has found will continue to benefit from the company’s development strategy and from the brand values Sao Do’s employees have created.” VND20 trillion in credits for HCMC’s 2018 market stabilization Twelve credit institutions participating in the market stabilization program this year have agreed to set aside VND19.65 trillion to make low-interest loans for enterprises. The Government news website quoted Nguyen Duc Lenh from the central bank’s HCMC branch as saying that the program has attracted three more credit institutions to participate. Total credits registered by the 12 lenders are VND1.48 trillion higher than last year. Last year’s short-term interest rates for the program ranged from 5.5% to 7% per year. Regarding development orientations of the 2018 program, Nguyen Huynh Trang, deputy director of the HCMC Department of Industry and Trade, said HCMC will continue to expand the program. HCMC plans to coordinate with other localities to support enterprises in joining connectivity programs monthly as well as help enterprises expand their sales networks. Goods supplies in this year’s program, including the 2019 Lunar New Year holiday period, are expected to satisfy 25-40% of market needs and pick up 15-35% from last year’s results, Trang said. According to the city’s trade department, enterprises participating in the market stabilization programs have always prepared bountiful goods supplies and offers prices which are 5-10% lower than market levels. The number of selling points of the market stabilization program in HCMC is now 10,602, making it easy for city residents, particularly those working at export processing zones and industrial parks, to buy quality products at reasonable prices. Taxi operators want ride-hailing cabs to change number plate color The taxi associations of Hanoi, Danang, and HCMC have proposed the Ministry of Public Security issue yellow number plates for ride-hailing cabs like those of Grab to make them easily recognizable, instead of white plates for private cars. Leaders of the associations requested that the number plates of vehicles of nine seats or fewer used for ride-hailing services should be in yellow and the letters and numbers in black, news site Dan Tri reports. The color change, if approved, should be simplified and free, and the numbers should remain unchanged, according to the associations. When a vehicle is no longer used for transport service, the plate color would return to its original state. Recently, the number of vehicles for ride-hailing services has soared fast, at nearly 100,000 units. For now, they are currently in the pilot period and there is no way to identify them, said a source from the associations. Consequently, too many problems have been arising like traffic jams, unfair competition with traditional taxis and budget losses. Moreover, traffic cops have trouble regulating traffic and tackling violations. Earlier, traditional taxi operators had been constantly objecting to ride-hailing companies like Uber and Grab as the latter recognized as private vehicles was given more priority than the former seen as transport service. As a result, the traditional taxi firms including Vinasun reported a sharp decrease in incomes of drivers. In addition, they had suggested authorities improve the transparency of operations from companies like Uber and Grab, so that all taxi operators could compete with each other on a level playing field and help minimize traffic jams. They had proposed that Uber and Grab vehicles must be self-equipped with banners as identity signs like traditional taxi cabs. HCMC taxman asks Grab to pay Uber transfer tax Following Grab’s acquisition of Uber’s Southeast Asian business, the HCMC Tax Department has ordered GrabTaxi Co Ltd to file and pay tax on the Uber transfer in line with the Law on Tax Management and relevant regulations. Tuoi Tre Online reports that Grab has been told to submit the contract and other related documents on the transfer of Uber business and market share in Vietnam to Grab no later than mid-April. According to the HCMC Tax Department, the transfer of Uber is subject to corporate income tax in Vietnam. Moreover, Government’s Decree 218 stipulates that foreign firms’ revenues stemming from service supply and capital contribution in Vietnam will be subject to tax. Moreover, organizations and individuals receiving capital from foreign firms must file and pay the corporate income tax on behalf of the foreign firms as stated in Circular 156. The HCMC Tax Department also reminded Grab of Uber’s tax arrears of VND53.3 billion (US$2.3 million). On April 5, Grab affirmed it would not pay the tax arrears that Uber owes to the HCMC Tax Department as Uber had committed to fulfilling its tax obligations in Vietnam. Ministry explains delay in announcing RON 95 petrol base price The Ministry of Industry and Trade has given an explanation for its delay to publicize the RON 95 gasoline base price said to be a factor behind fuel traders’ price manipulation, according to Nguoi Lao Dong newspaper. After a meeting of the Ministries of Industry and Trade and Finance on March 28, the Ministry of Industry and Trade sent a report on the calculation of base prices of fuels to Deputy Prime Minister Vuong Dinh Hue, head of the steering committee for price management. The report was expected to set the base price for this high-quality fuel. However, on April 11, the ministry was asked to continue consulting relevant agencies about the base prices of fuels. Therefore, the ministry is consulting relevant agencies and will submit results to the Prime Minister for consideration and approval soon. Deputy Prime Minister Hue earlier assigned the ministry to coordinate with the Ministry of Finance and relevant agencies to closely monitor sales of E5 bio-fuel and RON 95 gasoline in the first quarter of this year. After that, they will work together to calculate the base prices of fuels in accordance with market conditions and prevailing regulations. Earlier this year, Deputy PM Hue directed the ministry to publicize the RON 95 gasoline base price right after the first quarter of the year following complaints by consumers over the high price of RON95. However, the ministry has not set the base price as a regulatory frame. Instead, at the latest price adjustment period, the ministry only advised fuel traders not to raise the selling price of RON 95 by more than VND526 per liter. Da Lat flower growers need help: experts      Around 300 million flowers from Da Lat are exported to markets such as Japan, South Korea and China every year, but experts say that more active networks among growers and buyers could help the industry reach its full potential. Da Lat has 9,000 hectares devoted to growing flowers, with many farmers using glasshouses which have increased output and profits, up to VND5 billion (US$220,000) per ha annually. According to Lam Dong Province’s People’s Committee, flower exports from the city saw major growth in the last three years, and exports are forecast to rise by 15 per cent over the next five years. However, only around 10 per cent of Da Lat flowers are exported. To save money, many farmers in the city are growing flowers that are not officially licensed. This makes them more difficult to export. The lack of licensing is a major deterrent to foreign business partners, according to the Da Lat Flower Association. In addition, Da Lat flowers have to be shipped to HCM City before they can be transported to foreign markets. Most flower businesses have small orders and cannot afford direct transportation. Nguyen Phuc Huy, director of the Florian Co.Ltd, a trader of agricultural products, said that if flowers were transported directly from Da Lat, expenses would fall, which would enhance their competitiveness in foreign markets. Also, many Da Lat farmers have not networked with foreign businesses since most foreign markets set high standards for flower quality and the farmers are afraid that their products would not meet the standards. To satisfy the city’s goal of increasing flower exports by 20 per cent of the city’s annual output by 2020, the Da Lat Flower Association is importing licensed flower seeds that are popular in foreign markets. Farmers have also been urged to work closely with export companies and to form co-operatives so they can fulfill bigger orders. Bahrain to import more VN goods      Members of the ASEAN Bahrain Council (ABC) have expressed interest in importing more textile and wood products from Viet Nam to Bahrain, Vo Tan Thanh, director of HCM City-based Viet Nam Chamber of Commerce and Industry, said. Speaking at a meeting between the ABC and Vietnamese enterprises held on Monday in HCM City, Thanh said: “Bahrain has a large demand for imported textiles, footwear, seafood and agriculture, all of which are Viet Nam’s strengths.” Bahrain is currently importing these products from other countries, but would prefer to import more of them from Viet Nam, he said. Viet Nam’s current export value to Bahrain is modest at US$20 million. Bahrain’s main exports to Viet Nam of chemicals and petrochemical products, among others, are expected to increase. Sheikh Duaij bin Isa Al-Khalifa, chairman of the ASEAN-Bahrain Business Council who led the delegation to Viet Nam, said the trip would promote the Vietnamese and Bahraini business communities and help achieve economic growth and prosperity across ASEAN and the Gulf Cooperation Council (GCC). Established in 2017, ABC wants to be the premier advocacy organisation for Bahraini corporations within ASEAN, serving as the leading voice for the Bahraini private sector in promoting mutually beneficial trade and investment relationships between the Kingdom of Bahrain and ASEAN. “We plan on playing our part in increasing trade, investment, tourism and cultural relations, while developing our local economy and enhancing mutual consultative relations,” Khalifa said, adding that Bahrain wants to be a regional hub for the ASEAN countries. ABC has been at the forefront of creating a business friendly climate for investors from the ASEAN region to invest in Bahrain and vice versa, according to the chairman. On May 4, it will launch the ASEAN Bahrain Portal which will serve as a platform to exchange, market and display products. ABC plans to set up two permanent offices in Ha Noi and HCM City which will help cater to the needs of businesses interested in expanding to the Middle East and North African region, using Bahrain as a hub. Bahrain provides 100 per cent of repatriation of capital, zero income tax, and no import duties on raw materials and machineries imported to set up manufacturing bases in Bahrain. It is the financial capital of the GCC countries and has direct access to the US and UK for all businesses setups in the Bahraini Emirati. Khalifa stressed the need for more participation from the Vietnamese business community in the budding business environment of Bahrain. Transport must be sustainable: experts      More than 100 scientists, researchers and practitioners from 12 nations are taking part in the three-day International Conference on Sustainable Development of Civil, Urban and Transportation Engineering (CUTE) 2018, which opened in HCM City on Tuesday. “CUTE 2018 provides an international forum on the latest technologies and research in these engineering fields,” Prof Le Vinh Danh, president of Ton Duc Thang University, the organiser of the conference, said in his opening speech. Prof Geert Wets, from Belgium’s Hasselt University, said that sustainable development was an “urgent demand” and that civil engineering has a significant impact on the environment. “It is reported in numerous studies that civil engineering is responsible for several important problems such as energy consumption, CO2 emissions and natural resource depletion,” he added. Alternative solutions have been sought in the last decades to reduce environmental impacts in the civil engineering sector, he said. Different proposals include reducing energy consumption by using low-embodied energy materials (“eco-materials”); developing energy-efficient buildings with high thermal isolation; and using renewable energy (solar, wind, geothermal) and eco-architecture principles to optimize energy consumption of the buildings. “Today, sustainable development in civil engineering is not restrained at a building scale. The city scale should be considered: transport of occupants between their residences and their work sites, and the energy losses in the energy distribution network,” Prof Woloszyn Monika, from Savoie Mont Blanc University in France, said. “There are a combination of different approaches which can contribute to sustainability of the civil engineering sector: investigations of sustainable materials; intelligent principles in architecture design; and different tools for analysis and assessment of energy performance, at a building scale and also at a city scale,” she added Scientists and professionals at the conference plan to discuss construction techniques, sustainability in transportation techniques and sustainable trends in urban master planning and architecture. Presentations will include design of green buildings, foundation engineering, nanotechnology in civil engineering, green highway design and maintenance, sustainable airport planning, operation and management, and transformation of old craftsman villages into new economy areas. CUTE 2018 helps connect Vietnamese universities, research institutions, foreign universities, and researchers, with the aim of developing new projects and applying research to practical urban planning, architecture and transportation proposals. The conference has received 100 papers, and after a comprehensive evaluation process by internationally recognised experts, the organising committee chose 79 papers on construction, roads, bridges, urban development and architecture. Attendees are from Australia, Belgium, the Czech Republic, France, Italy, Malaysia, Poland, South Korea, Switzerland, Taiwan, Thailand and Viet Nam. The conference is co-organised by Ton Duc Thang University (Viet Nam), Hasselt University (Belgium), Technical University of Ostrava (Czech Republic), Savoie Mont Blanc University (France), University of Trieste (Italy) and Wroclaw University of Science and Technology (Poland). The first CUTE was organised in 2016 in HCM City. WB: Growth expected to ease Growth in developing East Asia and Pacific (EAP) is expected to remain strong and reach 6.3 per cent in 2018, according to the latest World Bank economic report on the region. “Enhancing Potential”, the April 2018 edition of the World Bank East Asia and Pacific Economic Update released last week, underscores that even with favorable prospects, policymakers in the region will be well advised to recognize and address emerging challenges. Attending to the short-term risks associated with a faster-than-expected rise in interest rates in advanced economies and the possible escalation of trade tensions will require tighter monetary policy and larger fiscal buffers. To raise growth in the longer term, boosting public and private investment, productivity growth, and human capital will be key. “Robust growth has underpinned the region’s tremendous gains in reducing extreme poverty,” said Ms. Victoria Kwakwa, World Bank Vice President for East Asia and the Pacific. “To build on this success and improve the prospects for the large share of the population who remain economically insecure will require sustaining growth over the longer term. Policymakers need to focus on addressing risks to economic stability while taking steps to enhance longer-term growth potential.” After growing faster than anticipated in 2017, China is expected to slow moderately to 6.5 per cent in 2018 as its economy continues to rebalance away from investment and towards domestic consumption with policies that focus more on slowing credit expansion and improving the quality of growth. Excluding China, growth in developing EAP is expected to remain stable in 2018 at 5.4 per cent, reflecting continued robust domestic and external demand. Growth in Indonesia and Thailand is expected to strengthen in 2018, with improved prospects for investment and private consumption. In the Philippines, growth is likely to remain stable in 2018. In Malaysia and Vietnam, growth is expected to ease, as public investment moderates in the former and agricultural production stabilizes in the latter after rebounding in 2017. Prospects for several of the smaller economies are generally favorable, in part due to higher commodity prices. In Myanmar, economic growth is projected to rise in 2018, although investment prospects could deteriorate with the ongoing developments in Rakhine State. Mongolia’s higher growth is predicated also on continued macroeconomic stabilization. Papua New Guinea could experience a cyclical recovery as commodity prices rise, although the recent earthquake could hurt prospects. Growth in Cambodia is expected to pick up slightly, while Laos will likely see stable growth. In related news, the IMF’s World Economic Outlook (WEO), Chapter 1, April 2018: Global Prospects and Policies, released on April 17 shows that growth elsewhere in emerging and developing Asia is expected to remain strong. India’s economy is projected to grow at 7.4 per cent in 2018 and 7.8 per cent in 2019, up from 6.7 per cent in 2017. The forecast is unchanged from the October WEO, with the short-term firming of growth driven by a recovery from the transitory effects of the currency exchange initiative and implementation of the national goods and services tax and supported by strong private consumption growth. Among the ASEAN-5 economies (Indonesia, Malaysia, Philippines, Thailand, and Vietnam), broadly stable growth is projected for the group, at 5.3 per cent in 2018 and 5.4 per cent in 2019 (compared with 5.3 per-cent in 2017). Experts: Banking sector to enjoy another strong year The banking sector will enjoy another strong year in 2018, experts told a seminar in Ho Chi Minh City this week. Speaking at Fiinpro Talk 6 on “Vietnamese banking stocks: investment opportunities and risks,” Nguyen Anh Tu, Deputy Director General of the State Bank of Vietnam’s Monetary Policy Department, said banking stocks did well in 2017 thanks to a favourable economic environment with a positive outlook for growth, well-anchored inflation, improved management of banks, better supervision by the Government, and a decrease in non-performing loans. With economic growth expected to be even better this year, it would be another good year for the banking sector, he said. Banks are more likely to make a profit on the back of a strong economy since it stimulates demand for credit, and Vietnam is a bank-based economy with 92 percent of capital in the economy provided by banks according to the National Financial Supervision Council, he said. Retail lending is increasing due to demand from newly-established small businesses and SMEs, which have traditionally found it difficult to get corporate loans from banks, and increasing consumption by individuals due to positive expectations from the economy and rising affluence, he said. According to a report from the Boston Consultant group, the size of the middle- and upper-income classes in the country will reach 33 million by 2020, creating huge demand for financial and insurance services. According to data compiled by StoxPlus from 18 banks, who account for 60 percent of the country’s loans, retail loans are growing at double the rate of corporate loans, and increased their share to 37 percent of total loans. “Consumer finance has been growing rapidly and playing a part in the parent banks’ story,” Nguyen Quang Thuan, CEO of financial and business information provider StoxPlus, said. He cited the example of FE Credit, the consumer finance arm of Vietnam Prosperity Joint Stock Commercial Bank (VP Bank), which accounts for the majority of its parent company’s loans and helps VP Bank improve its earnings. Similarly, HDBank owns HD Saison, a growing consumer finance company. Besides, lenders like Techcombank, Sacombank, VP Bank, SHB, and Military Bank have posted significant commission incomes from their partnerships with life insurers last year, he added. Speaking about banking stocks, he said: “[They] still have some room to play.” He said banks are buying back their bad debts from the VAMC to collect them while their income from lending would remain at around 3 percent. Fees earned through partnerships with third party financial services providers would drive the earnings growth of banks, especially those with large customer bases, he added. Lam Dong works to build Da Lat potato brand The Central Highlands province of Lam Dong has approved a programme to build Da Lat potato brand to prevent farmers from selling cheap Chinese potatoes disguised as potatoes from Da Lat, which are more expensive. In the near future, the province plans to spend around 1 billion VND (44,000 USD) to print around 200,000 packages that will be provided during a pilot run to several Da Lat potato farmers and businesses. Around 700 tonnes of potatoes will be packaged in 2 and 5 kilo packages. The packages will feature the logos of the Da Lat brand (the provincial brand for produce and products made in Da Lat), and will be designed in ways that make it difficult to imitate. This will help customers tell the difference between the two types of potato.  Traders often import cheap potatoes from China, cover them with red dust, and sell them as Da Lat potatoes, which are four to five times more expensive, and are regarded as having higher quality than Chinese potatoes. Nguyen Hong Phong, Director of the Phong Thuy Agriculture Manufacturer and Trade Ltd, said that while Da Lat’s potato output is relatively high, its supply can fall during the rainy season, so some traders import Chinese potatoes and sell them as Da Lat potatoes. During transportation, inspections and other procedures, the fake Da Lat potatoes are registered and referred to as Chinese potatoes. Many customers in other provinces and some in Da Lat fell for this trick, since it is hard to point out fake Da Lat potatoes without careful examination. Tran Huu Tho, a potato farmer, said that he looks forward to be part of the branding programme because he believes customers might one day reject the Da Lat potato due to fraud. After the programme takes effect, individuals and organisations who package Chinese potatoes as Da Lat potatoes will be disciplined and charged with fraud. Reforms should ease credit access Micro, small and medium enterprises businesses are defined as the engines of growth and innovation in the APEC region, alongside the two important areas of agriculture and innovative startups (Photo: ipsard.gov.vn) More efforts should be made to boost administrative reform in the banking system to further facilitate access to credit for micro, small and medium enterprises. This was the consensus at the conference titled “Reforming administrative procedures – improving credit access” held on April 20 by the State Bank of Vietnam and the Chamber of Commerce and Industry (VCCI). According to VCCI data, 97 percent of the 500,000 enterprises operating in Vietnam are small and medium sized (SMEs). Of these, 85-90 percent is micro and small companies. Bank capital has contributed significantly to the development of the private economic sector, especially the SMEs. This was demonstrated in the rapid improvements of both the overall business environment and the credit ranking of the country. Vietnam’s business climate ranked 68th out of 190 economies surveyed in the World Bank’s Doing Business Report 2018, a jump of 14 ranks against the previous year – a record improvement. Its Getting Credit Index was among the top 30 economies, with the 29th position. VCCI Chairman Vu Tien Loc said that the banking sector’s contributions to the economy are more than the numbers, particularly given that about 55 percent of medium- and long-term capital is being provided by bank credit. At present, about 80 percent of credit is channeled into the production sector while the capital supply for the Building-Operate-Transfer (BOT) tends to decline, Loc said. However, he pointed out that a number of enterprises have still found it difficult to access bank credit. “Some businesses told me that they have thousands of hectares of farmland for production, but bank regulations require the mortgage of workshops to get loans. This is not to the advantage of agricultural enterprises,” Loc said. In fact, this type of businesses is often small-scale, lacks collateral assets and management experiences and is vulnerable to market changes, all of which make it difficult for them to gain credit from banks.   “We need to change the method of giving credit so that farmers can use their own land as the mortgage to get capital to grow their businesses. This is not the responsibility of the banking industry, but the Government,” Loc said. Micro, small and medium enterprises, as well as women-owned businesses, are defined as the engines of growth and innovation in the APEC region, alongside agriculture and innovative startups, in which additional investment is urged. One of the critical issues for their development is financing, and the Government should improve credit access for these targeted enterprises, especially reforming lending procedures for agricultural and startup businesses, Lộc said. Dao Minh Tu, Deputy Governor of the State Bank of Vietnam (SBV), said Vietnam has created a legal framework to build a truly equal credit relationship between banks and businesses. Banks have cut back a wide range of cumbersome procedures, as well as provided diversified products. At present, SBV has built a big database on credit information, which helps assess the performance of enterprises, their creditworthiness and financial capability. Businesses also know the banks’ information. Saigon Securities Inc targets 15 percent rise in profit Saigon Securities Incorporation (SSI) targets pre-tax profits of 1.615 trillion VND (70.8 million USD) on revenues of 3.41 trillion VND (149.56 million USD) this year, year-on-year increases of 12 percent and 15 percent. At its annual general shareholders meeting in Ho Chi Minh City last week, the company also laid out its medium- and long-term business strategies for each of its areas of business like securities services, treasury, investment banking, and asset management. Shareholders approved a change in the company’s name to SSI Securities Corporation. The company’s rationale was that SSI was a well-known brand in the domestic and international financial markets. Last year it was selected by Forbes Vietnam as the only securities company among Vietnam’s 40 Most Valuable Brands, with its brand valued at 26.5 million USD. Nguyen Hong Nam, the company’s deputy general director, said SSI achieved high growth last year, with revenues rising 19.8 percent to over 3.04 trillion VND. Its pre-tax profit was more than 1.4 trillion VND, a 23 percent rise, he said. Its revenues from securities services were 1.328 trillion VND, a year-on-year increase of 53 percent and accounting for 43.5 percent of total revenues, he said. SSI retained its position as the leading brokerage on both the HCM City and Hanoi exchanges with a 15.26 percent market share compared to 13.04 percent in 2016. Vietnam’s GDP growth rate is expected to be 6.7 percent this year, and investment from the private and foreign sectors is expected to increase sharply, he said. This year is also forecast to be the peak year for divestment and equitisation, he said. These are positive factors that would boost the securities markets this year, he added. Sacombank vows to finish settling bad debts in five years The Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) has pledged to finish settling all of the 100 trillion VND (4.38 billion USD) of its bad debts in five years, instead of 10 years as stated in the restructuring plan approved by the State Bank of Vietnam. At the annual shareholders’ meeting in Ho Chi Minh City on April 20, Chairman of Sacombank’s board of directors Duong Cong Minh said the bank has handled nearly 20 trillion VND (876 million USD) of the bad debts so far. Over the last couple of years, Sacombank did not give dividend payments to its shareholders because it was being restructured and had to increase provisions, he said, noting that it is speeding up restructuring and expects this process will finish in three years in minimum and five years in maximum. If this process is smooth, Sacombank is able to pay dividends to its shareholders in 2018 or 2019, with the central bank’s approval, he added. Sacombank reports that its combined assets were worth about 368.45 trillion VND (16.14 billion USD) at the end of 2017, up 11 percent from the year’s beginning. The bank posted an 11-percent rise in capital mobilisation to some 338.43 trillion VND (14.82 billion USD) and a 12.5-percent increase in credit outstanding balance to around 225.59 trillion VND (9.88 billion USD). The ratio of non-performing loans was 4.59 percent. The bank plans to cut the bad debt ratio to under 3 percent and continue to shorten the restructuring road map in the time ahead. In 2018, it targets total assets at 430.9 trillion VND (18.87 billion USD), mobilised capital at 399.5 trillion VND (17.5 billion USD), credit outstanding balance at 255.2 trillion VND (11.18 billion USD), and pre-tax profit at nearly 1.84 trillion VND (80.59 million USD). Vinh Tan 4 thermal plant ensures environmental protection standards Construction of the Vinh Tan 4 thermal power plant in the southern province of Binh Thuan is on schedule and has met both international and Vietnam’s standards on environmental protection, announced the Electricity of Vietnam (EVN). At a ceremony held at the plant on April 19 to mark it as a project to celebrate the 60th Traditional Day of Vietnamese construction sector (April 29), Deputy Minister of Construction Le Quang Hung noted that the large-scale plant is the first of its kind designed by Vietnamese experts. It also has a high rate of local content, at nearly 26 percent.  The same day, the plant received approval for official operation. The Vinh Tan thermal power plant, on the list of urgent construction projects in 2013-2020, is invested by the EVN.   The plant has two turbines with a combined capacity of 1,200 MW and was built at a cost of more than 40 trillion VND (1.76 billion USD), which was mainly sourced from preferential loans from the Republic of Korea and Japan, while the remaining came from EVN’s reciprocal capital. Construction of the plant began in March 2014, with the first turbine completed in late 2017 and the second one is set to finish in June 2018.  In full operation, it is expected to generate about 7.2 billion kWh each year. It is the first large-scale coal-fuelled thermal power plant in Vietnam using the supercritical steam generator. The plant is also hoped to contribute to socio-economic development in the South Central Region and raise the stability and economic operation of the national grid. Hanoi targets 12.7 billion USD in exports Hanoi has set a target of earning about 12.7 billion USD from exports in 2018, a rise of about 8 percent over the previous year. To this end, the capital city will continue speeding up administrative reform, focusing on strengthening IT application in administrative procedure settlement. Meanwhile, the city will design policies to improve production and exports, while enhancing competitiveness of local enterprises and foster labour supply-demand connections, and attracting more investment in infrastructure development and services. The municipal People’s Committee has assigned the Hanoi Department of Taxation to coordinate with relevant agencies to implement projects in modernising tax management and applying IT in all stages and steps of tax management in order to create favourable conditions for enterprises, ensuring transparency and reduce cost. The Hanoi Customs was asked to pilot a management and supervision system of goods transported through Noi Bai International Airport, measure clearance time for import-export goods, and conduct a survey on enterprises’ satisfaction in 2018. The city will also issue certificates of origin (C/O) through its online public services, while joining the national and ASEAN one-door mechanism in granting C/O in line with commitments of the Government to ASEAN. The city will also apply measures to increase business’ access to credit by connecting them with banks and credit institutions, while holding training courses to upgrade enterprises with information on foreign markets, free trade agreements and new policies and laws related to import-export activities. As of the end of the first quarter of 2018, Hanoi’s industrial production expanded 8.5 percent, a rise of 3.4 percent year on year. Total retail and service revenue was estimated at 617.49 billion VND (27.16 million USD), up 12.4 percent year on year. The city’s exports fetched 155 million USD, up 16.9 percent year on year, while social investment attraction rose 9.5 percent. At the same time, foreign arrivals to Hanoi hit 1.13 million. Vietnam promotes seafood exports to Europe Vietnamese aquatic products are being introduced at the Seafood Expo Global, the biggest event of its kind in the world, which takes place in Brussels, Belgium, from April 24-26.  This is the 20th time Vietnam has taken part in the event. Over the past five years, the Vietnamese corner is one of the ten biggest in the expo. This year’s event brought together more than 1,850 units from 79 countries and territories worldwide. It is expected to draw over 28,000 visitors, including European seafood distributors and processors who come to seek business opportunities.  At the opening ceremony, Vietnamese Ambassador to Belgium Vu Anh Quang visited Vietnamese booths, pledging that the Vietnamese Embassy will try its best to facilitate the access of Vietnamese products to the European market.  To Tuong Lan, Deputy Secretary General of the Vietnam Association of Seafood Exporters and Producers (VASEP), told the Vietnam News Agency that the expo is very useful as it helps businesses promote their products and explore the taste of consumers, urging Vietnamese enterprises to grasp market trends in order to introduce suitable products.  Statistics show that Europe was Vietnam’s biggest seafood importer in 2017 with a turnover of 1.5 billion USD. 2018 is expected to be a promising year for Vietnam’s shrimp exports. In September 2017, the European Commission issued a yellow card warning Vietnam for failing to progress in fighting illegal, unreported and unregulated (IUU) fishing.  After April 23, the EU will assess Vietnam’s efforts to fight IUU fishing. The "yellow card" is followed by a "green card" if the problem is resolved or a "red card" if it isn’t. A “red card” can lead to a trade ban on fishery products. VNN