BUSINESS IN BRIEF 4/9 Rubber exports reap over US$1.52 billion Vietnam’s export revenue from rubber has hit more than US$1.52 billion in the past eight months, representing a year-on-year decrease of 14.1%. According to the Ministry of Agriculture and Rural Development (MARD), the country shipped 131,000 tonnes of rubber abroad in August, earning US$286 million. MARD said that the export price of rubber in the first seven months of this year saw a decline of 18%year on year to US$2,387/tonne. China remained Vietnam’s largest rubber importer, consuming 43.9% of Vietnam’s total rubber export value. The second biggest importer was Malaysia with 20.5% of the market share. The export volume to this market surged by 20.3%, but the export value fell 5.7% compared to the same period last year. VFA proposes stockpiling more rice The Vietnam Food Association (VFA)has proposed the government allow businesses to purchase an additional 300,000 tonnes of rice from farmers to stabilise its prices in the domestic market. The purchase will last a month, starting on September 15. The move came after Thailand, one of the world’s leading rice exporters, surprisingly lowered the prices of its 100B rice from US$430 to US$380 per tonne, which had an immediate and substantial impact on the global rice market, including Vietnam . In June- July local businesses bought 1 million tonnes of rice from farmers for national reserves to support farmers and stabilize the price of rice for export. However, VFA Chairman Truong Thanh Phong said only 200,000-300,000 tonnes of the stockpiled rice have been exported, meaning businesses now suffer a loss of US$30 per tonne (equal to US$24 million in total) due to the Thai sales decision. In the long-term, Phong said businesses are encouraged to actively explore new markets. VFA also asked the government to negotiate with Angolan and Kenyan governments to accelerate the delivery time as the two African countries have imported a large amount of rice from Vietnam. 2013’s economy likely to grow by 5.3% Vietnam’s GDP growth rate in 2013 is more likely to stay at only 5.3%, or 0.2% less than predicted, according to a National Financial Supervision Commission (NFSC) report. The NFSC released a report after evaluating the economy in the past eight months, saying achieving the initial target of 5.5% this year will be a challenging task. It said the inflation rate will hover around 5% if there is no fluctuation in the prices of basic commodities. Thus, the price management will play a decisive role in controlling the consumer price index (CPI) to less than 7% by the year’s end. To do this, Vietnam needs an appropriate roadmap for adjusting the prices of essential goods and public services to avoid market shocks. The country’s balance of payments this year will see a surplus of US$1.5-2 billion, a much lower number than in 2012. The NFSC also forecast that national GDP and CPI in 2014 will reach 5.6-5.8% and 7% respectively and the corresponding figures will be 6-6.2% and 6.5%  in 2015. To reach these targets, the commission said, policies to be introduced in  2013-2014 need to support the aggregate demand (including investment and consumption), enabling businesses to keep expanding production and boost the economy. Total social investment capital should not be less than 30% of GDP, to balance the supply and demand of goods and stabilise the macro-economy. Meanwhile, in the medium term,  the policies should focus on improving supply and demand, the production capacity and effectiveness of the whole economy. Crucially, the economic reform process needs to be accelerated within the next 2-3 years to make a breakthrough in the field. In addition, exports will remain an important driving force behind the country’s growth, and foreign direct investment (FDI) attraction will support domestic production and exports. However, in the long-term the country should have comprehensive measures in place to gradually reform the agriculture, rural areas and support industry and domestic businesses, said the NFSC. Promoting cooperation potential with Japanese locality Vietnam attaches importance to Japan’s direct investment and rolls out the red carpet to welcome Japanese businesses, including those from Toyama prefecture. Vietnamese ambassador to Japan Doan Xuan Hung made the statement at an economic workshop on Vietnam held in Toyama prefecture on August 30. The ambassador spoke highly of Toyama’s industrial achievements in recent times, as well as the great potential cooperation between Vietnam and Toyama. More than 100 local businesses attending the workshop were introduced to Vietnam’s investment environment and human resources. At a reception given by the prefecture’s governor Toyama Takakazu Ishii, Hung confirmed that not only the government but also localities of Vietnam place strong emphasis on strengthening cooperative ties with Japan, and bilateral relationship is entering the best period ever. He said that Japanese Prime Minister Shinzo Abe selected Vietnam for his first overseas trip after taking office showed his resolve to boost cooperation with the Southeast Asian nation. The ambassador expressed his hope that the governor will visit Vietnam some times in the future to explore the opportunity for cooperation. He also proposed the prefecture create favourable conditions for Vietnamese students to study in Toyama, and local businesses to receive Vietnamese apprentices. For his part, Ishii said that up to 250 Toyama businesses have invested in China and Southeast Asia and many of them are shifting their production bases from India and Thailand to Indonesia and Vietnam. He appreciated the preferences that the government of Vietnam has offered to Japanese businesses, which make Toyama businesses feel at ease. Toyama has hundreds of small- and medium-sized enterprises mostly specialising in support industries – an area that Vietnam is in dire need of. Hung’s three-day trip to Toyama prefecture is part of activities to mark 40 years of diplomatic ties between Vietnam and Japan in 2013. On August 29, the diplomat visited the Kuroda Electric Co. Ltd. that has received and trained 10 Vietnamese apprentices for the past three years. The company manufactures thermoplastic components for office machines such as printers, fax machines, projectors and components for hybrid electric vehicles. It has invested in an industrial zone in Vietnam’s Hai Duong province since 2006. Recently, it invested in building a new factory in Hanoi covering an area of 1.5 ha, 3 times larger than the Hai Duong plant. China, Vietnam localities protect consumer rights Officials from Vietnam’s Lao Cai province and Honghe prefecture of China’s Yunnan province on August 30 discussed the protection of consumer rights. The programme’s objective is to protect consumer rights and handle cross-border consumer disputes on the basis of the memorandum of understanding the two sides signed in December 2012. Nguyen Ba Binh, Deputy Director of the Lao Cai Department of Industry and Trade, said the two sides have seriously observed the document while respecting each country’s law. At the seminar, the two sides agreed to increase the dissemination of information about commodities, especially food, that may violate consumer rights and harm their health. They will also encourage businesses to open their representative offices and branches in the other country to fully carry out their rights and responsibilities towards consumers. Emerging enterprises need to have strategic visions President Truong Tan Sang believes businesses must incorporate longer term visions into their business strategies if effective, sustainable development is to be achieved. He passed in his advice to 40 outstanding young businesses recognised at an August 31 ceremony in Hanoi that also celebrated the 68th anniversary of the August Revolution and Vietnamese National Day, the 20th anniversary of the Vietnam Association of Young  Entreprenuers’establishment and the Vietnam Entrepreneur Movement (1993-2013), and the 10th anniversary of the Gold Star Awards. Sang said  the 20 year history of the Vietnam Association of Young  Entrepreneurs have seen it successfully foster solidarity between young entrepreneurs, significantly contributing to national socioeconomic development. The association’s central and grassroots levels run recognition schemes like the Gold Star Awards, Red Star Awards, initiatives honouring young business talents,  and an international economic integration education programme. These schemes nurture the younger generations’ dreams to enrich themselves and their country. Many young businesspeople have worked their way up to prestigious large-scale enterprises within the Vietnamese business community. President Sang affirmed the Party’s and State’s interest in cultivating young entrepreneurs, facilitating production and business activities, and perpetuating national renewal, construction, and defence. He placed his confidence in the association’s ability to support entrepreneurs as they implement Party and State socioeconomic policies. The association needs to protect member solidarity and fine-tune its guiding regulations, Sang added. He also agreed with the association’s proposal to restructure the Gold Star Award, a prize awarded to deserving members of Vietnam’s young business community in the interests of encouraging healthy competition. President Sang urged the association and its members to contribute their own ideas to Government socioeconomic orientations and consult with authorities on how best to promote the international reputation of the country’s trademarks. The young entrepreneurs in attendance duly shared their initial thoughts on these issues. They suggested resolving tensions in relations between credit institutions and enterprises and asked the Party and State to accelerate its administrative reform as a way of improving the health of the national business environment. Red River localities join hands to attract investment Industry and trade sectors of 14 cities and provinces along the banks of the Red River have agreed to strengthen their cooperation and make full use of regional connectivity to attract more investment, exploiting the potential and advantages of each locality. The agreement was reached during a conference between sector representatives from the localities in Hanoi on August 30. They will continue updating information and effectively remove difficulties for businesses by working more closely with relevant agencies for the rest of the year. Accordingly, they will discuss with People’s Committees in the region to seek solutions to obstacles in the implementation of projects, clearing the ground to develop industry and a trade infrastructure system. Local Industry and Trade Departments will continue to renovate methods to promote trade in foreign markets, focusing on promising destinations as well as products with high domestic consumption and export demand. Meanwhile, the price stabilization programme targeting some essential goods will also be maintained. In the first seven months of this year, industry production in the Red River Delta and North Central regions reached more than US$51.4 billion, a 32.3 percent rise year-on-year, while the national figure saw only a 5.2 percent increase against the same period last year. Despite climbing inflation, the region’s retail and consumption services still posted VND 440 billion of turnover in the January-July period, rising 13.5 percent year-on-year and accounting for 29.6 percent of the country’s total. Hanoi saw the greatest turnover in the region. At the same time, the area earned more than US$27 billion in exports, up 47.1 percent over 2012 and 37.1 percent of the national total. Hanoi, Hai Duong, Hai Phong and Quang Ninh are leading localities in exports. In 2012 and the first seven months of 2013, the localities invested as much as VND761.5 billion in supporting businesses engaged in the price stabilization programme. The localities also organised 927 mobile shops to make sure people in mountainous and remote areas were serviced. Foreign firms invested in improving business climate HCM City hosted an August 30 conference for municipal leaders and foreign investors to discuss their respective ideas regarding improving Vietnam’s investment environment. Japanese Business Association Chairman Yamaguchi Kimio acknowledged foreign investors have benefited from some initiatives recently undertaken by Vietnamese authorities. But more reforms are needed to meet expectations, particularly in administration, infrastructure, and traffic services. Many Japanese investors raised their concerns about the strict regulations governing worker overtime. EuroCham Business Association Deputy Head Nicola Connolly affirmed European businesses’ commitments to continuing their Vietnamese operations, suggesting the country boasts a number of advantages over regional rivals. Some European investors are worried Vietnam risks slipping behind other Association of Southeast Asian Nations members by failing to address some of the problems encountered in employment, salary, and tax rates. US Business Association Spokesperson Herb Cochran thinks Vietnam should focus on improving transparency and offering equal access to credit and land usage rights. He stressed the need to step up the enforcement of intellectual property protection and respect the rights of investors and workers during, technology transfer processes. Korean Business Association Representative Paik In Ki proposed revising investment, land management, environment, and taxation laws with direct impacts on business operations. Foreign Investment Authority Chief Do Nhat Hoang reiterated the Vietnamese Government’s intention to attract foreign investors and facilitate their operations via a range of incentive policies. The complaints and petitions of foreign businesses will be given priority, he added. HCM City People’s Committee Vice Chairman Le Manh Ha, thanked foreign businesses for their opinions and vowed to do everything in his power to address their concerns. Coffee exports suffer sharp falls Vietnam’s coffee exports during the first eight months of 2013 are estimated ata974,000 tonne total worth US$2.09 billion—a year-on-year decrease of 23.2 percent in volume and 22.5 percent in value. The Ministry of Agriculture and Rural Development (MARD) has reported August’s coffee export volume amounted to only 86,000 tonnes, valued at US$183 million. The US and Germany remain Vietnam’s largest coffee import customers, claiming 13.1 percent and 11.3 percent of export market share respectively. But the value of the industry’s US exports fell 18.7 percent in annual terms. German exports slipped 30.3 percent in value. In more hopeful signs, coffee exports to the UK rose 11.5 percent, Spanish exports climbed 7.7 percent, and Russian exports surged 28.4 percent. Verafirm global portal introduced in Vietnam The latest version of the only global industry-supported portal, Verafirm, which effectively aids businesses in managing their software and efficiently documents, was officially introduced in Vietnam on August 29 by the BSA Software Alliance with the support of the US Embassy in the country. Verafirm operates as an online and smart portal on which businesses are able to look for information and manage their software assets. It is based on the cooperation with the world’s software giants and prestigious experts. Registering on Verafirm, companies find it easier to control and save their data on purchased products. In Vietnam , the portal not only helps local enterprises simplify their software asset administration but also raises their competitiveness thanks to the efficient use of the system. Once registering on the portal, businesses will receive a Verafirm certification affirming that they comply with the law of intellectual property and business ethics. The BSA expressed belief that Verafirm will play a crucial role in protecting software copyrights, helping improve Vietnamese exporters’ prestige in the US market and create a better business and investment climate for foreign enterprises in Vietnam. German and Vietnamese experts discuss macroeconomic reform The German Development Cooperation’s GIZ Macroeconomic Reform Programme and the Vietnamese-German University on August 30 co-organised a forum on “Macroeconomic reform of Vietnam”. The forum is part of the framework of the GIZ’s Macroeconomic Reform Programme in Vietnam as commissioned by the Federal Ministry for Economic Cooperation and Development (BMZ). It is also one of the very first programmes in which the GIZ performed its advisory function since its inception in Vietnam in 1993. At this forum, key experts from the Central Institute for Economic Management, the State Bank of Vietnam, the Ministry of Finance, the Economic Commission of the National Assembly, the National Financial Supervisory Commission share their analyses and perspectives on economic restructuring and reform of state enterprises, the monetary policy and financial market, as well as the economic outlook and foreign investment in Vietnam. Variety of discussions are facilitated through the moderation of German and Vietnamese experts. The participants, coming from various macroeconomic management and research institutions, banks and enterprises, also shared their views, comments and recommendations on macroeconomic policies under the aspects of economic, monetary and financial reforms. “The stabilisation of the financial sector and the guarantee of a stable monetary and currency policy based on sound economic analyses are two of the most demanding challenges for Viet Nam in its current process of transformation.” – Associate Professor, Doctor Le Xuan Ba, Programme Director, President of Central Institute for Economic Management (CIEM) points out in his remarks to the forum. The Macroeconomic Reform Programme aims at strengthening market-oriented institutions in Vietnam. The Programme focuses on three levels of capacity development: improving the general Vietnamese regulatory framework; reforming institutions responsible for supervising and implementing the regulatory framework; and raising the performance capability of their staff. The Programme’s components reflect the key areas: Economic and Social Policy, Public Finance and Financial Systems Development. The training interventions in the Programme’s component 4 ‘Strengthening Macroeconomic Policies’ contribute to the development of a stable and transparent financial system in Vietnam, as well as to strengthening the State’s core functions in managing further economic reforms. By training experts in macroeconomics and finance, the component supports capacity building efforts of key institutions responsible for macroeconomic and fiscal governance in the task of supervising and steering Vietnamese markets and the economy. The programme enables experts from several partner institutions to design and advise on reforming monetary and fiscal policy that take national, regional and international macroeconomic policies and objectives into account and contribute to the national development goals of Vietnam. Dairy farmers need supportive policies Dairy farming may have helped improve incomes for many farmers but needs to become more efficient to grow sustainably, experts have said. Ho Mong Hai, deputy head of the Animal Husbandry Department's HCM City office, said as living standards go up, there is increasing demand for milk and dairy products. "But milk output meets only about 30 per cent of the domestic demand," he told Viet Nam News, adding that " the country imports large quantities of milk and dairy products." Meanwhile, the cow-breeding industry is facing challenges that threaten its sustainable development, he said. They include shortage of experience among farmers, lack of good animal strains, insufficient land for raising cattle and foraging, and poor veterinary services, he said. Luu Van Tan, head of Dutch dairy company FrieslandCampina Viet Nam's Dairy Farming Development Department, said another problem is that more than 90 per cent of dairy farms are of small scale, which results in low productivity and quality and high costs. FrieslandCampina has a US$13 million programme since 1995 under which it established a milk purchase system by signing contracts with farmers, provided them regular technical support and training in dairy farming, and set up a quality control system for milk. To encourage farmers to pay attention to milk quality, the company always bases its purchase price on quality, Tan said. Recently the programme helped small farmers form small groups to reduce costs and since higher volumes fetched higher prices, he said. Tran Van Dat of Duc Lap Ha commune in southern Long An Province's Duc Hoa District said he joined a group of five members two years ago and enjoys higher prices from the company. "The company also connects forage distributors and farmer groups so that the latter can buy cattle feed at cheaper prices than from agents." Dat earns a profit of VND30 million (US$1,420) a month from his herd of 30 cows, which produces 160-200 kilos of milk every day. Le Van Mong of Tan An Hoi commune in HCM City's Cu Chi District said his co-operative has 20 members with 200 cows that produce 850-900 kilos of milk a day. Thanks to the programme, the incomes of small farmers in the group have significantly improved, he said. There are more than 4,000 farmers in the programme who supply around 240 tonnes of fresh milk every day. Their milk quality has improved significantly over the years, and contain no antibiotics residues or additives. Tan said the company plans to expand the model to other provinces and co-operate with authorities to develop dairy projects to increase the country's milk supply. Hai said a Government dairy development plan has set a target of meeting 38 per cent of milk demand domestically by 2020. The country had 166,990 heads of milch cattle last year, producing 382,000 tonnes of milk. "Milk production has grown at an annual rate of around 12 per cent, but domestic demand has increased even faster," Hai told Viet Nam News. Vietnam sees low inventory, rise in index of industrial products The General Statistics Office has announced that the index of industrial products rose 5.3 percent in August, compared to the same period last year. In this, mining leaped 0.05 percent; processing and manufacturing increased 4.6 percent; power generation and distribution grew 0.55 percent. Total retail sales and services were estimated at VND1,705 trillion in August, up 12.3 percent year-on-year. This increase helped reduce commodities in stock. Inventory index of industrial processing and manufacturing until August 1 rose by 9 percent compared to the same period last year. The Ministry of Industry and Trade said this is the lowest inventory index of industrial processing and manufacturing against the same period last year, yet it also showed the country’s economic recovery is low. The General Statistics Office also announced export turnover in the first eight months of this year at around US$84.8 billion. A highlight in last eight-month exports was that Foreign Direct Investment still played an important role. While total imports in the domestic sector reached $28.7 billion, up 3.1 percent year-on-year, the FDI sector export showed a total of $56.1 billion, up 21.6 percent year-on-year. Vietnam recorded a trade deficit of $577 million in August, 0.7 percent of total export turnover. This is acceptable for Vietnam's balance of trade. Instant noodles market flourishes in Vietnam High demands of instant noodles in Vietnam have brought both opportunities and challenges to the producers. According to World Instant Noodles Association, Vietnamese rank fourth in the world among instant noodle consumers, with 4.3 million packets consumed in 2009. Since then the number has risen to 5.1 million, popular in both rural and urban areas. This has led many companies to invest in the market. Vietnam now has about 50 instant noodles manufacturers who are expanding their businesses. In 2012, the Japanese firm, Nissin Foods, opened a USD41 million factory in Binh Duong Province. This year the Vina Acecook also invested USD10 million into two factories in HCM City, bringing its total number of factories to seven. According to the World Instant Noodles Association's own statistic, Vina Acecook has about 50% of the market share. The instant noodles market earned total VND20 trillion in 2012. The supermarkets offer a great variety of noodles, mostly from Vietnam and Thailand and South Korea. Amid the tough competition, several older brands, once familiar in Vietnam, such as Miliket, have gone by the wayside. The Miliket brand was introduced before 1975. A number of other instant rice-based products have seen a similar shift, with a majority of consumers seeing them as high-end products. As a result, many instant products found on the shelves of Vietnamese supermarkets are now actually produced in other countries, such as The Czech Republic, the US or Germany. Parking fees at Noi Bai Airport outrageous After one customer was chagred VND1.03 million (USD47) for parking her car at Noi Bai International Airport for four days, even aviation officials were surprised. The customer, Nguyen Thi Tuyet Nhung, sent a complaint directly to DTiNews. Her family left the car at the airport from August 22 to August 26 for a trip to the south. When they returned, they were surprised to be charged so much. “I was shocked at the fees for keeping my car for such a short time," she said. Subsequently, she called a hotline and spoke to Mr. Thinh, Deputy Director of the Northern Airport Operation Centre. His explanation was that she was charged by 15-minute blocks, and added that if she had complaints she should send them to higher-level agencies. Nhung was also not happy with the facilities themselves, saying, "The parking lot didn't even have a roof." Deputy Head of the Civil Aviation Administration of Vietnam (CAAV) Luu Thanh Binh was also amazed at the high fees. “It is unbelievable to me that she had to pay more than VND1 million for parking there for just four days,” he said. He added that he will ask Northern Airports Authority to investigate the case. Nguyen Huy Duong, Deputy Director of Noi Bai International Airport, said that the airport is not a parking lot, and has always discouraged those who would leave their vehicles for any extended period. "We have always maintained this policy. Anyone who still chooses to park here for a long time will be subject to high fees, which include security." He added that Noi Bai is facing an overload, since it was only designed to service six million passengers per year, but in actuality they service around 12 million. This has added to the recent discussion over services at Vietnamese airports, which started complaints of other high service charges. The Minister of Transport, Dinh La Thang, instructed airport management boards to examine the prices charged for services and improve their quality. Airports nationwide will be required to establish public hotlines to record customer complaints. Head of the CAAV, Lai Xuan Thanh, said that the department will issue a set of quality standards, clearly stipulating specific procedures to improve services. Based on these, Thanh added, authorities will be able to inspect, and if necessary, warn service providers. Japanese eye Vietnamese property Japanese investors continue to see fortunes made in Vietnam’s property market despite the most sluggish business in the sector in the last decade. EXS Capital, an independent investment firm dedicated to the Asia Pacific based in Hong Kong and Japan, decided to pour its first investment of $37 million into Vietnam’s real estate market. Talking with VIR, Kiyoshi Hirasawa, CEO of EXS Capital said that the ongoing construction of new metro lines of Ho Chi Minh City was one factor to make him decide to invest in this emerging destination. The investment, Hirasawa said, would be used to fund domestic Son Kim Land projects as well as other opportunities, including the acquisition of projects from other developers. “We think the demographics of Vietnam and the recent emergence of Vietnam as a preferred manufacturing location and logistics hub in Southeast Asia for international corporations support potential high growth in the real estate sector,” said Hirasawa. Moreover, he added that EXS Capital may increase its investment from $37 million to $50 million, with a further option to increase investment to $80 million based on the potential of the Vietnamese real estate market. Japan’s Aeon and Takashimaya are typical retailers which are implementing its first step into the domestic market. Aeon, Japan’s leading retail developer, will start construction of its first project in Hanoi within the next few months, and it is considering developing two more shopping venues in the capital city to catch the potential market expansion. Since entering Vietnam in 2011, Aeon has introduced two projects in Ho Chi Minh City and the southern province of Binh Duong. Aeon plans to complete the construction of its first shopping centre and general merchandise store in Vietnamin Ho Chi Minh City in the first half of 2014. The second Aeon store, to be located in Binh Duong, about 20 kilometres from Ho Chi Minh City, is expected to be launched in 2014. In Hanoi, Aeon planned to open AeonMall Long Bien in the first quarter of 2015 after one and a half year of construction while the second and the third are expected to be opened in 2016 and 2017 respectively. Meanwhile, Takashimaya has leased a 15,000 square metre space in Ho Chi Minh City to develop its retail system. According to Neil Macgregor, managing director of Savills Vietnam, despite the current difficulties, Vietnam’s real estate market still presents certain advantages compared to other regional countries. “Global commercial yields have shown declining trends across all sectors making relatively high yields in Vietnam very attractive. Both Ho Chi Minh City and Hanoi markets are at the bottom of the real estate cycle, whereas Indonesia, the Philippines and Malaysia are all approaching the top,” said Macgregor. The Savills Vietnam manager said that he was co-operating with Savills Japan to organise several conferences, presenting Vietnam potential and investment opportunities to Japanese investors. “We have received great level of interest in Vietnam, especially as a mid- to long-term investment destination,” Macgregor said. Happy Valley deals attract foreigners A large number of potential clients have enquired about Happy Valley’s third phase apartments despite the housing not being able until mid-September. Both foreigners and overseas Vietnamese have made enquires. The third phase’s sales gallery is already open for the public. Already 86 per cent of 511 apartments of Happy Valley’s phase 1 and 2 have already been sold. Located in the middle of Phu My Hung township in Ho Chi Minh City’s Saigon South, Happy Valley is situated near the Saigon South golf course, river, the city’s International Commercial and Financial Complex, and Crescent Quarter, which is home to the Star Light Bridge, Crescent Lake and Crescent Mall. Happy Valley is also just next door to 5.4-hectare park. Happy Valley is the first apartment project in the township with faces the golf course. For the third phase, Happy Valley will first offer 192 apartments in the K and M blocks. The apartments are available in 99 and 134 square metre variations. Larger sized apartments can be also in some duplexes or penthouses. Happy Valley sold well in the first and second phases thanks to reasonable prices and phased payments. In addition, Phu My Hung is offering finished apartments available for immediate use. Apartments are currently available in Riverside Residence, Riverpark Residence and Canh Vien 3. Foreigners can take long-term leases with Phu My Hung or can buy an apartment in this town if they are eligible as regulated. Hyundai dogged by resident rights row Residents in the high-end residential Hyundai Hillstate in Hanoi’s Ha Dong district have petitioned to the local authorities, claiming that the investor had imposed disadvantageous conditions on buyers in their draft purchasing contracts. Attorney Bui Quang Hung, representing the residents, sent a document to the Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade asserting that the draft purchasing contracts Hyundai RNC Hatay proposed to sign with its customers were not registered to the local authorities as regulated. “The conditions of the draft contracts have not only been untruthful and unfair to our clients but also contravened laws and regulations on land and housing of Vietnam,” the lawyer added in his letter of demands to Hyundai. In addition, a range of procedures which help to process housing ownership right certificates for customers were also not mentioned in draft purchasing contracts. As a result, the buyers at Hyundai Hillstate project, Hung claimed, would be facing difficulty in applying for housing-ownership certificates. Moreover, pressed by the downturn of the current domestic real estate market, in order to attract new buyers for the project, the investor has offered much more privileged incentives, resulting in conflicts between the old and the new customers. Hyundai RNC Hatay’s in-house lawyer told VIR when contacted for comments last week that it would take some more days for the company to respond to VIR’s questions. Hung wrote in the letter of demands to Hyundai RNC Hatay that in the event of the claim being received and judged by the court the investor would be aware that all evidence presented to the hearing would inevitably enter the public domain with possible negative consequences for the company’s reputation. “Further, our clients’ claims for the violation of the laws of Vietnam shall also be lodged to VCA. We hope that the matter may be amicably settled in the near future with a view to avoiding the pursuit of action against Hyundai RNC Hatay in the People’s Court of Vietnam,” the letter said. Meanwhile, Hung said that after sending the petition to VCA, he would start to take Hyundai RNC Hatay to the court if his clients did not receive an indication of goodwill from the investor. Located in To Hieu street in Hanoi’s Ha Dong district, some 16 kilometres from Hoan Kiem Lake, Hyundai Hillstate is a high-end apartment and villa complex which was got off the ground in 2009. It covers 4.67 hectares and has the total investment capital of $200 million. Hyundai Hillstate comprises two main components with 928 apartments in five buildings and 100 villas, all of which have already been sold. Hyundai Hillstate is the first real estate project of South Korea’s Hyundai Group in Vietnam and also its first project overseas. The project lies near the Cat Linh-Ha Dong metroline scheduled for completion in 2015. Pvcombank to make its debut A new bank born from the merger of PetroVietnam Finance and Western Bank is expected to make its debut in October this year. PetroVietnam Finance (PVFC) last week announced it would hold a joint shareholder meeting on September 8 to form the new entity, which would be named Vietnam Public Bank or Pvcombank. The merger, the first in Vietnam between a finance company and a bank, was guided by the State Bank’s efforts to restructure a banking sector heavily burdened by bad debt. Pvcombank would have an initial charter capital of VND9 trillion ($428.6 million), equivalent to 900 million shares valued at VND10,000 ($0.47) each. Its total asset value would be nearly VND100 trillion ($4.76 billion). The merged bank is expected to have 102 trading points, including one head office, 30 branches, 67 transaction offices and four savings funds. The head office of the newly-formed bank will be situated at PetroVietnam’s current headquarters in Hanoi. Plans envision Pvcombank to expand its equity to VND12 trillion ($571.4 million) and achieve profits of VND1.24 trillion ($59.05 million) by 2015. The new bank plans to prioritise loans in oil and gas, mineral exploitation and electricity, with a focus on exploiting, processing and trading petrochemical products. It expects to raise the proportion of lending to such sectors from 42.3 per cent as of the end of 2012 to 48 per cent in 2015. Plans further call for Pvcombank to gradually increase the proportion of credit for individuals, with the bank targeting a rate of 20 per cent for consumer loans by 2015. Pvcombank would maintain a minimal 1 per cent of its total loans for the agricultural sector due to low profitablity. It aims to cut lending to construction and real estate investments due to the weak outlook for market recovery and potential risks in the sector. The bank plans to gradually reduce credit to commerce, services, and other sectors while intending to increase lending for production. Pvcombank projected net profits of VND420 billion ($20 million) for 2013, VND756 billion ($36 million) for 2014 and VND1.235 trillion ($58.8 million) for 2015. Bad debts [loans of groups 3-5] are forecast to stand at 4.2 per cent by the end of 2013, down to 3.61 per cent in 2014 and to 3.34 per cent in 2015. It also aims to achieve an average annual credit growth of 9 per cent within three years of the merger. Pvcombank also plans to sell bad debts to the new Vietnam Asset Management Corporation (VAMC), the new state-backed entity to resolve the sector’s debt burden, or other credit institutions as one of ways to reduce its bad debt ratio in the period of 2014-2015. The merger is part of the central bank’s scheme to restructure lenders saddled with a high volume of non-performing loans (NPLs). Western Bank is classified as a weak bank with observers unsure about its true level of NPLs. Its equity is reported at VND2.3 trillion ($110 million), lower than the minimum equity of VND3 trillion ($144 million) regulated by the State Bank. Meanwhile, PVFC also has had some financial problems. The company had posted 2012 second-quarter profits at its lowest level since 2010, with securities investments making losses for six straight quarters. US-based Morgan Stanley is now PVFC’s foreign strategic shareholder, holding a 10 per cent stake. South Korean firms underline their social responsibilities Corporate social responsibility is becoming more familiar in Vietnam, with Korean businesses at the forefront. Korean businesses are the first foreign community to address in a master-oriented manner in 2012, with effective communications and pervasive positive effects for the Vietnamese society. The weekly columns in VIR and Dau tu newspapers co-conducted by VIR and the South Korean Embassy to Vietnam have received positive responses, adding momentum for corporate social responsibility (CSR) and its coverage in the long-run. The sponsorship of Cheil Jedang (CJ), a South Korea-based leading multi-sectoral group, for the Vietnamese Taekwondo team was among the first efforts in 2012. The Vietnamese athletes were funded by CJ for a full-serviced three-month training course in South Korea and a competition in London. Parallel to the training course a communications campaign was also carried out to promote the Vietnamese athletes. In May, CJ announced a six-year sponsorship for Vietnamese women’s Taekwondo team covering diverse areas as providing a coach, housing and training abroad for the team, as well as financial prizes for individual athletes. Also assisting sports activities in Vietnam is Lotte, which focuses on youth with two programmes: the annual TV reality show Cau thu ti hon and the Lotteria Cup. While Lotte’s Cau thu ti hon show aims to identify the most capable kids in the country for forming a pint-sized football team, the Lotteria Cup provides a tournament for 50 schools and young football clubs from across the country to compete. Lotteria also funded HIV/AIDS prevention and treatment, funding charitable housing in Ho Chi Minh City, and giving aids to storm-hit victims in the central city of Danang. Lotte’s another affiliate Lotte Mart Vietnam has demonstrated its commitment to CSR through a wide range of philanthropic activities. Jahwa Vina Company Limited is another case in making the dreams of local disadvantaged people come true since it arrived in the northern province of Vinh Phuc two years ago. In addition to providing a modern workplace environment, Jahwa Vina also provided a broad range of activities to support local employees, including visits and support to workers who suffer workplace accidents, rewards for exemplary workers on a quarterly basis, paying year-end bonuses and assisting them during harvest season. Social philanthropic activities not only soothe the hardships of people facing misfortune but also contribute to improving the image of the firm in the eye of the local community. Jahwa Vina plans to extend its CSR activities into the future to deepen ties with the local community. For Hana Bank, Korea’s leading commercial bank, activities related to CSR are more than an obligation but a reflection of the conscience of its employees. Hana Bank’s initiative in planting 1,000 apple mangrove trees, which are endemic to salt-marsh areas in northern Thai Binh province’s Tien Hai district, aimed to promote social well-being in Vietnam, as was the bank’s decision to finance construction of a standard baseball stadium in Ho Chi Minh City. In its home country, Hana Bank also helps children from mixed Vietnam-Korea families learn Vietnamese, provides classes teaching Vietnamese and provides an exclusive services counter to Vietnamese residing in Korea and has installed Vietnamese language in mobile banking services based on smart phones. Everpia Vietnam’s many community-oriented philanthropic activities included joining efforts to fund a therapeutic trip to Korea for a young heart disease sufferer and funded 100 beds at Van Lam District Health Centre in northern Hung Yen province. In the last four years, Everpia Vietnam has founded a specific fund dedicated to philanthropic activities on a large scale funded by 2-3 per cent of the company’s profits each year. “Contributing to community development through CSR depends on every person and every enterprise,” said Everpia Vietnam general director Lee Jae Eun. “Striving for a better society is what the company has always cherished.” Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR