BUSINESS IN BRIEF 7/9 VietGAP pilot models reap good results Pilot models for safe agricultural production and trading under the Vietnam Good Agricultural Practice (VietGAP)/Good Manufacturing Practices (GMPs) in eight provinces and cities will be applied across the country. A workshop was held in Ho Chi Minh City on September 5 to review and popularise the production models, funded by the Vietnam National Agro-Forestry-Fisheries Quality Assurance Department and the Canadian International Development Agency. After six years of implementation, all 13 pilot fruit and vegetable production establishments, 11 pig farms and nine out of 14 poultry breeding units have been granted the VietGAP certificate. All six abattoirs and five meat selling establishments meet VietGAP standards. Additionally, the Canada-funded Food and Agricultural Products Quality Development and Control Project has built a food safety control system for vegetable growing areas in the Central Highland province of Lam Dong and pork and poultry breeding areas in the Mekong Delta province of Dong Nai to reduce input costs and earn a higher profit. Hanoi backs support industries Vietnam has given priority to developing support industries because they play an important role in industrialisation and modernisation, said the Deputy Minister of Industry and Trade (MoIT) Tran Tuan Anh. Opening four exhibitions on support industries in Hanoi on September 5, Anh said the State has issued several policies in recent years to encourage technological transfer between local firms and foreign partners. The expos are the Reed Tradex Manufacturing Expo Vietnam, the fifth Vietnam-Japan Exhibition on Support Industries, the Japanese Monozukuri Technology Exhibition, and the Industrial Components and Subcontracting Vietnam. They aim to accelerate the expansion of business networks in the country, said managing director of Thailand Reed Tradex Chainarong Limpkittisin. Purchasing spare parts is one of the major challenges for Japanese enterprises perating in Vietnam, said Jetro executive vice president Daisuke Hiratsuka. A recent JETRO survey found that their use of local materials and industrial components in Vietnam is lower than other Asian nations. This means they have to import more materials and components from abroad leading to high production costs. The four expos will close on September 6. Russia’s UVZ looks to enter Vietnam market Russian machine building company Uralvagonzavod (UVZ) has proposed establishing a joint venture company in Vietnam to manufacture approximately 2,000 train carriages of various kinds annually. The proposal came after Vietnam had approved a plan for rail transport development, which has drawn much attention from Russian experts, especially those from the UVZ, said Director of the Department of Asia and Africa under the Russian Ministry of Economic Development Evgeny Popov. He added that the UVZ is willing to pour money into this project. The firm started producing railroad cars in 1936. Hanoi hosts Vietnam-Japan Economic Summit Party Politburo Member To Huy Rua has noted Japan’s US$22 billion in official development assistance (ODA) makes it Vietnam’s biggest donor during his September 5 address to the Vietnam-Japan Economic Summit in Hanoi. Rua said the two countries’ relationship has prospered in the years since diplomatic ties were first established. Japan is also Vietnam’s biggest investor, with capital totalling more than US$29 billion, and two-way trade of US$25 billion makes it the country’s third largest trading partner. Vietnam Chamber of Commerce and Industry (VCCI) Chairman Vu Tien Loc emphasised the strategic importance of the partnership with Japan. Despite recent economic difficulties, Japan has continued to provide significant aid and maintained the quality and quantity of its Vietnamese investments. Japan External Trade Organisation (JETRO) Vice Chairman Daisuke Hiratsuka acknowledged some Japanese businesses have some qualms regarding Vietnam’s investment environment but remains confident the friendship between the two countries will only thrive further in the wake of the ongoing economic summit. The summit has already witnessed firm commitments on improving Vietnam’s investment environment, restructuring its financial and banking system, accelerating infrastructure construction, developing its support industry, and incentivizing select prioritized fields. The summit was organised by VJES, VCCI, JETRO, Japan Economics Times, the Japanese Embassy, JICA, and the Japan-Vietnam Friendship Parliamentary Alliance. In addition to its overarching goal of boosting bilateral economic cooperation, the summit also marks the 40th anniversary of the two countries’ diplomatic ties. Vietnamese presence highlights Strasbourg fair Vietnam is among the honoured guests at the French city of Strasbourg’s 2013 European Fair, scheduled to take place from September 6–16. The fair is part of activities marking the French-Vietnam exchange year across 2013–2014 and the 40th anniversary of their bilateral diplomatic ties. This year’s fair is expecting 1,200 exhibitors and 200,000 visitors. It will offer an ideal forum for businesses to explore partnership opportunities and meet with customers. Vietnamese representatives will showcase the handicrafts of 13 local businesses and introduce the beauty of their land and compatriots to international friends. French Prime Minister Jean Marc Ayrautl has plansto visit Vietnam’s 400sq.m pavilion during the fair’s September 6 opening ceremony. France’s Vietnam Culture Centre Director Le Hong Chuong said a Vietnamese art troupe’s music and dance performance, employing traditional instruments and folk songs, is destined to earn the admiration of attending crowds. A brief description of Vietnam has been posted on the fair’s official website www.foireurop.com, presenting natural wonders like Ha Long Bay, historical and cultural heritage sites like the Temple of Literature, and a selection of traditional Vietnamese cuisine. DLR stamped ineligible for margin trading Da Lat Real Estate JSC (DLR) has been deemed ineligible for margin trading due to an audited net loss of VND5 billion (US$238,095) and undistributed loss of VND5.3 billion ($252,380) in the first half of this year, Ha Noi Stock Exchange announced. The decision took effect on Wednesday. Fund management firm to set risk strategies Fund management firms and self-directed stock companies will need to set up their own risk management systems prior to 31 March next year, according to the State Securities Commission. The Commission stated that strategies for risk management needed to be reviewed annually to keep up with market activities. Representatives of funds and authorized clients will have the right to approve the strategies. SCJ doubles charter capital Sai Son Cement Joint Stock Company (SCJ) will double its charter capital to VND195.16 billion (US$9.29 million) from VND97.58 billion ($4.64 million), according to an official announcement by the company. Ten per cent of the increase will be funded by issuing shares to pay dividends for 2011, while the company will issue bonus shares to fill the remaining 90 per cent. In the first six months of the year, SCJ reported VND143.67 billion ($6.84 million) in net revenues, up 12 per cent from 2012. VDB sells 2.25 per cent of bonds on offer State-owned Viet Nam Development Bank (VDB) this week sold 2.25 per cent of VND4 trillion (US$190 million) in bonds offered on Tuesday. VND90 billion ($4.28 million) of three- and five-year bonds were auctioned, at yields of 8.3 and 9.1 per cent per annum, respectively, while the bank failed to sell two-and ten-year bonds. Year to date, VDB has offered VND24.147 trillion in bonds via auctions. Quang Ngai IZ grants four licences The Management Board of Quang Ngai Industrial Zone on Wednesday approved licences for four new domestic and foreign-invested projects with a combined value of VND316.8 billion (US$14.8 million). The new projects cover shoe making, food catering, commercial and service industry, machinery, and seafood processing. Three out of the four new projects, located in the Tinh Phong and Quang Phu industrial zones, are scheduled to begin operations next year. So far this year, the board has granted investment licences to 13 projects with a registered capital of more than VND700 billion ($32.9 million). Car makers plead for Gov't help Xuan Kien Automobile Joint Stock Company (Vinaxuki) has asked the Government to reduce the 70 per cent consumption tax on its locally made cars from January. Vinaxuki said this would help expand the manufacturing of eight-seat vehicles, popular in rural areas and as taxis - as well as push up its localisation process. The company also wants to borrow VND250 billion (US$11.9 million) from Viet Nam Development Bank over seven years under the national mechanical engineering plan. It also wants to borrow long-term funds or delay paying tax from October this year so that it can invest in research, design, technology transfer and make its own engines.. Vinaxuki has been manufacturing and distributing models of buses and trucks. Its factories have a total capacity of 60,000 units per year. Its move follows the Government's acceptance of a request from the Truong Hai Automobile company (Thaco) to extend its deadline for paying import tax. Many other automobile businesses have since followed Thaco's move. Viet Nam Engine and Agricultural Machinery Corporation asked the Government to extend its deadline for import tax payments because it needed to concentrate on automobile industry development.. Other businesses, including Thanh Cong Joint Stock Company, TMT Automobile company, Hoang Tra Company Ltd, Vinaxuki and Dong Phuong Automobile Company Ltd, made similar proposals. State petrol management may loosen A new plan from the Ministry of Industry and Trade may ease State control of the local petrol market if petrol operators are seen to compete fairly, said Vo Van Quyen, head of the ministry's Domestic Market Department. Quyen said the aim of modifying Decree 84/2009/ND-CP was to ensure supply and demand, and create healthy competition between enterprises in the future. The ministry's amendment to Decree 84 would see the State withdraw control from the local petrol market over a 10-year period, said Quyen. In August, the ministry submitted the amended decree to the Ministry of Justice which has collected opinions on the amended law, he said. The Ministry of Industry and Trade has said it expects to receive the appraisal from the Ministry of Justice this week. Quyen said, the ministry submitted a schedule to the Government this month outlining the phased reduction in producing and trading petrol A83. Petrolimex, which commands a 50 per cent share of the local petrol market, gained a low profit in the first half this year. The company achieved a profit of VND388.22 billion ($18.4 million) in the first half this year ; 43 per cent of total profits of VND898 billion, he said. — VNS Quyen added the figures had been audited due to the company's joint stock status. Viet Nam growth outlook remains stable Viet Nam could see lower growth rates due to tighter US monetary policy and a slowdown in China's growth, but currency devaluation, robust consumption and government spending will help protect growth rates, according to the latest report from accountancy institution ICAEW. The report Economic Insight: South East Asia, produced by ICAEW (Institute of Chartered Accountants in England and Wales), provides its 140,000 members with a current snapshot of the region's economic performance and a quarterly review of Southeast Asian economies. Charles Davis, ICAEW economic advisor, said: "Both companies and individuals in Viet Nam and the region have benefited from low interest rates, which have fuelled consumption and borrowing against future income. "We are likely to see this gradually change as the US economy recovers and the Fed looks for an exit strategy from its very loose monetary policy stance. Consumers, businesses and governments will all now have to adjust to a period where loan availability drops and where the cost of borrowing money increases. However, we believe that this will pick up again in 2015 as investor capital returns to seek advantage of opportunities for growth." According to the report, annual growth in loans throughout the region is expected to fall from 2012 to 2015. Cheap money from the US Federal Reserve's exceptionally loose monetary policies has previously helped companies and governments to borrow easily, funding infrastructure and business projects, the report noted. This has also led to high inflation rates, property prices and impressive – though unsustainable – gains in local stock markets. The slowdown in capital inflow is acting as a serious pressure on regional markets. However, a return to the Asian financial crisis conditions, in which investors believe that ASEAN currencies will continue to depreciate more than previously anticipated, is not expected. "Currency movements suggest that there is already an element of wariness among investors, with ASEAN currencies depreciating across the board from their 2011 highs," Davis said. Export-wise, China's slowdown will continue to affect the region, both because it is ASEAN's largest trading partner and because of the impact it has on commodity prices. Domestic as well as intra-ASEAN consumption remains an important driver for the region's economies. Mark Billington, regional director for ICAEW South East Asia, added his comments on the region's outlook. "Growth will stumble in 2013 but ASEAN economies will stay on their feet. In Viet Nam, a firmer handle on inflation and a close watch on price growth should increase confidence within the economy. "The overall impact on lowering demand for exports should be mitigated by recent devaluation of the dong, while robust consumption and significant increases in government spending will help insulate growth rates from falling," Billington said. "According to the Economic Insight report, GDP in Viet Nam is expected to rise by 5 per cent in 2013 and 2014, and as global demand improves further, greater demand for exports will push GDP growth up to 5.5 per cent in 2015." he said. The report also analysed the impact on ASEAN from China's slowdown. ASEAN economies are closely integrated with China in the global value chain and the giant's slowdown will affect an already weak economy. It forecasts that the world's second-largest economy will grow by only 7.2 per cent in 2013, and this will dampen the demand for ASEAN's commodities and other exports that are traditional drivers for growth in the region. Conference to provide insight into green business in Europe The third Conference and Exhibition on European Green Business for Viet Nam, Green Biz 2013, will be held in Ha Noi from September 19 to20. It will offer Vietnamese businesses opportunities to network and exchange views with European counterparts on green business solutions and opportunities. Green Biz 2013, is being organised by the European Chamber of Commerce in Viet Nam (EuroCham), the Viet Nam Chamber of Commerce and Industry and the Ministry of Industry and Trade. Deputy minister Vu Cam Tu said Green Biz 2013 will be a great business opportunity for companies to develop green technologies and solutions in order to improve energy efficiency, productivity and competitiveness. "It should unite the country in making efforts towards sustainable development," he said at a press conference yesterday. He also noted existing measures geared towards sustain-ability including the introduction and implementation of a National Green Growth Strategy, national programmes on energy efficiency, environmental protection and responses to the impact of climate change. The Swedish ambassador, Camilla Mellander, said clean, green technologies and sustainable development was an area where European companies really had a cutting edge. "Shifting into a greener and more sustainable society is something that each and every country has to continuously work with," she said. Mellander attributed Sweden's position as one of most sustainable countries in the world to the working partnership between government and the private sector. Vital power line nears completion Work on the construction and installation of a 500kV electric grid connecting five southern provinces and HCM City is speeding up to ensure an on-scheme completion by the end of this year, according to Electricity of Viet Nam. The power line, named 500kV Pleiku-My Phuoc–Cau Bong, runs through HCM City, the southern provinces of Binh Phuoc, Binh Duong, and the central highland provinces of Gia Lai, Dak Lak, Dak Nong. The 437-km network will increase the electricity back-up capacity for the southern part of the country for the 2014-15 period. It will then boost power connectivity throughout Viet Nam, Laos and Cambodia after 2015. The project has total investment of VND 9.3 trillion (US$442 million), funded from the Asian Development Bank (ADB), Bank for Industry and Trade (Vietinbank), Viet Nam Development Bank (VDB) and other financial resources. The Project Management Board of Central Power Projects, a subsidiary of EVN, it is acting on behalf of the National Power Transmission Corporation (NPT) to implement the project. By mid August this year, affected localities made necessary land clearances and gave constructors space for 901 of the 926 electric poles needed for the project, the board reported. Out of 4,400 household in affected areas, about 3,730 households have received compensation so far. Earlier this year Prime Minister Nguyen Tan Dung urged the southern and central highland localities to co-operate with the construction of the 500kv power line. Previously, work was delayed due to reported difficulties in completing land clearances to make room for the expansive construction project. Fifteen out of the sixteen contractors making foundations for the poles, are projected to complete their work in November this year. However, according to NPT chairman Dang Phan Truong, contractors have made just over one third of the poles needed. "If the power line project fails to follow the construction timeline, it will affect the power supply to HCM City and the southern region as of next year," Truong said. Nguyen Duc Tuyen, head of the project management board of Central Power Projects, said a shortage of poles could hinder the progress of the whole project. Tuyen urged contractors to speed up and ensure they could provide enough of the crucial poles on time. “Tuan Chau Island’s King” unveils USD7.5-billion casino project Dao Hong Tuyen, Chairman of Tuan Chau Group and also named as “Tuan Chau Island’s King” said various partners are keen on cooperating with him on a USD7.5-billion casino project on the island in Quang Ninh Province. “We plan to implement the project on a marina which is expected for completion this October. The project has received management agencies’ approval,” he said. He added, “We finished procedures to prove our financial capacity, design and planning of the project over the past two years. We intend to submit these to authorities soon.” Tuyen also revealed plans, with partners, to open another casino in Van Don Island District, saying that Singapore is a good model for development of the tourism trade. “Casinos are necessary for Vietnamese people and the management for this service is simple. Any Vietnamese person who wants to go to a casino would have to pay USD200,” he said. Currently, more than 80% of Vietnamese people who go to Cambodia, Hong Kong and Macau gambled at casinos, “This is a drain on the Vietnamese economy. Why not take advantage of these revenues?" he said. Minimum wage increase proposed The Vietnam General Confederation of Labour has just proposed to raise the minimum wage by 21-36% next year. The country has different wage brackets covering four regional zones. Zone One covers urban Hanoi and HCM City. Zone Two covers rural Hanoi and HCM City along with urban Can Tho, Da Nang and Hai Phong. Zone Three covers provincial cities and the districts of Bac Ninh, Bac Giang, Hai Duong, and Vinh Phuc. Zone Four covers the remaining localities. According to the most recent survey conducted by the Institute for Workers and Trade Unions at 68 firms across the country, wages in three out of four zones are lower than VND4 million (USD192) per month. 5.2% of monthly wages are even lower than VND2 million. Meanwhile, minimum daily expenses are around VND3.3 million per month for a family and VND2 million for a single person. Some workers cannot make savings while others simply live in poverty. Beginning in 2014, the Institute for Workers and Trade Unions forecast the minimum daily expenses for all groups will be around VND2.4 - 4.1 million per month. Based on this statistic, Vietnam's Labour Federation has proposed two plans to improve workers' lives: Plan one will increase the monthly minimum wage by 24-36%, from VND400,000 - 850,000 to VND2.05 - 3.2 million. And plan two will only increase the minimum wage by 21-32%. Vu Quang Tho, head of the Institute for Workers and Trade Unions said their proposal met with oppositions from Vietnam Co-operative Alliance and Vietnam Chamber of Commerce and Industry. They said that firms are unable to pay more because of the economic downturn. The National Wages Council will collect opinions to find the most suitable solution for both parties and submit the plan to the Prime Minister. VSIP’s construction to kick-start in Quang Ngai The construction of the Vietnam-Singapore Industrial Park (VSIP) will commence in the central province of Quang Ngai on September 13. The project, the fifth of its kind in Vietnam, is a joint venture between the province and the Sembcorp Industries, a leading corporation in Singapore. The first was established in the southern province of Binh Duong in 1996. Apart from VSIP I and VISP II in Binh Duong, another two are located in the northern province of Bac Ninh and Hai Phong port city. The 6-billion-USD VSIPs have attracted nearly 490 investors from 25 nations and territories, and generated jobs for over 140,000 labourers nationwide. Quang Ninh province seeks tourism investment with Thai company On September 4, in Ha Long City, the Quang Ninh provincial People’s Committee worked with Thai Nakorn Patana limited company from Thailand to seek cooperation and investment in tourism in the province. The Thai Nakorn Patana limited company is famous in the pharmaceutical, tourism and television sectors in Thailand. After studying and conducting factual survey at the Van Don Economic Zone, the company has made some contributions to developing tourism in Quang Ninh province, of which it said that Quang Ninh tourism should target the domestic market. Together with tourism, the province should develop the educational sector and water sports, becoming an attractive destination for tourists. After surveying the situation in Quang Ninh province, the company will promote Quang Ninh tourism, as well as projects calling on investment from Thailand, to attract more and more Thai investors to the province. Speaking at the working meeting with the provincial People’s Committee, Vu Thi Thu Thuy, Vice Chairwoman of the provincial People’s Committee, said that the company’s ideas are precious suggestions for the province to develop its tourism strategy. She said she hoped that with its potential and experience, the company will invest in Quang Ninh in general and in Van Don in particular in the future, while introducing Quang Ninh province to other Thai investors. Earlier, the delegation from the company visited Van Don district to study investment opportunities in tourism. Fund management firm to set risk strategies Fund management firms and self-directed stock companies will need to set up their own risk management systems prior to 31 March next year, according to the State Securities Commission. The Commission stated that strategies for risk management needed to be reviewed annually to keep up with market activities. Representatives of funds and authorized clients will have the right to approve the strategies. Vung Tau attracts hikers Apart from swimming, enjoying seafood, visiting pagodas, and conquering the towering statue of Jesus Christ in Vung Tau, visitors should also try hiking up Nho (Small) Mountain to admire the lighthouse as well as the panoramic view of the city and the ocean. To reach the lighthouse, visitors can take a taxi to the foot of the mountain and walk up to the top where the white lighthouse is situated at a height of 170m They can also rent a motorbike and reach the top in just 10 minutes. The two-storey lighthouse was built in 1862 and renovated in 1913. It is 18m high and its light can be seen 30 miles away at sea. The top offers a wonderful view of the sea, a lake, mountains in the distance, immense green trees and colourful buildings and houses in the town below. Malaysia Week sets stage for year-long promotion The Malaysia Tourism Promotion Board in Viet Nam will organise Malaysia Week 2013 in HCM City from September 12-22 as part of the run up to the nation's Visit Malaysia Year 2014 campaign. Themed "Colours of Malaysia", the event will include an exhibition booth at the International Travel Expo 2013 (September 12-14) offering visitors tour packages and air tickets to Malaysia at attractive prices. They can also witness performances by Malaysian artists. The tourism board has partnered once again with the New World Saigon Hotel to bring a taste of Malaysia to HCM City from September 12-22, which will include specialties like Nasi Lemak, Chicken Masak Merah, Mutton Curry and Melaka Chicken Rice Ball. A Malaysia Tourism Day for the youth will be held at Galaxy Nguyen Du, the cinema complex, on September 15. Quang Ngai sets up hotline as tourism revenues soar The Department of Culture, Sports and Tourism of Quang Ngai Province has launched a cell phone hotline 0916424679 to receive and handle complaints from tourists. According to the department, in the first six months of this year, the province welcomed 252,402 tourists, a year-on-year increase of 15 per cent, accounting for 56 per cent of the annual plan. Of these, more than 20,000 were international tourists, up 40 per cent year-on-year. Tourism revenues during this period reached VND237.6 billion (US$11.3 million), up 48 per cent year-on-year. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR