BUSINESS IN BRIEF 27/3 Shipper initiates bankruptcy process Vinashin Ocean Shipping Company (Vinashinlines) has requested for bankruptcy procedures to be initiated at the Ha Noi People's Court. This is seen as the first legal step for the company to take towards halting its operations. Earlier, Vinashinlines informed the concerned agencies about its bankruptcy and confirmed that its operations would continue normally during the period when the court considers and guides it on completing the legal procedures. Vinashinlines is one of two subsidiaries of Viet Nam National Shipping Lines (Vinalines) to go bankrupt, said Minister of Transport Dinh La Thang at a recent conference in Ha Noi. The second one is the Viet Nam Oil and Gas Transportation Company. The declaration of bankruptcy by the two companies is part of the Vinalines equitisation plan scheduled for this year. DOC issues preliminary decision on shrimp duty The US Department of Commerce (DOC) made a preliminary decision on the anti-dumping tax of certain frozen warm water shrimp from Vietnam, for the 8th period of review (POR8) from February 1, 2012 to January 31, 2013. This was revealed by the Vietnam Competition Authority (VCA) under the Ministry of Trade and Industry. Accordingly, temporary tax rates will be 4.98% and 9.75% respectively for two mandatory respondents, 6.37% for voluntary respondents and US$25.76% for the remaining respondents nationwide. These are considered relatively high tax rates compared to the previous PORs. During these administrative reviews, the tax rate was below 4.57% for both mandatory and voluntary respondents. During the POR7, DOC made a final decision on the anti-dumping rate of zero percent for both mandatory and voluntary respondents. VCA said that DOC will announce a method to calculate the dumping margin in the POR8 for related parties during the administrative review of five days, since March 18. Interested parties can send a comment on these preliminary results within 30 days since the date of publication of this notice. DOC is expected to issue the final decision within 120 days of the preliminary decision published on the Federal Government Gazette. Local shipbuilder exports tugs to New Zealand Song Thu shipyard has launched the first of a four-Azimuth Stern Drive Tugs (ADS) project for New Zealand's Port Otago Limited company. The ASD Tug, which is 24m long and 11m wide, will start operation in Port Chalmers. In co-operation with Damen Shipyards Group from the Netherlands, the Da Nang-based shipbuilder has produced 40 vessels for export, including fast crew supply ships, rescue ships, salvage tugs, drive tugs and patrol boats. They are shipped to the Middle East, South America and Europe with annual export volume totaling US$55 million. Vietbuild 2014 opens in Hanoi An international exhibition featuring real estate, interior and exterior design, and construction materials – VIETBUILD 2014 – opened in Hanoi on March 26. The event will be staged to two phases. The first phase will be held from March 26-30 with the participation of 450 businesses from 18 nations displaying their products at 1,350 pavilions. The second phase is scheduled for November 19-23 with the involvement of over 400 businesses from 17 nations. The exhibition focuses on introducing the latest products in the field of construction, electric equipment and real estate, and interior decoration. A business forum, offering opportunities for the business community to meet and learn about consumers’ tastes and methods of devising effective business strategies, is also part of the event. A series of seminars are also being conducted to encourage businesses to incorporate the latest products and technologies in construction of projects, especially urban housing. Lam Dong urged to capitalise on hi-tech farming Deputy Prime Minister Vu Van Ninh has recommended the Central Highlands province of Lam Dong capitalises on its agriculture using hi-tech innovations as a way to pursue sustainable growth, saying that their products can reach out to bigger markets. At a working session with the provincial authorities in Lam Dong on March 25, Ninh requested the locality to spread effective production models and its value chain involving farmers, cooperatives and enterprises. He also asked for more attention to the construction of new-style rural areas, with a priority given to planning. According to the provincial People’s Committee, the local economy expanded by 11 percent year on year in the January-March period, with 35,000 hectares of hi-tech farmland that generates over 4.2 trillion VND (200 million USD) in annual revenue. Last year, its agricultural industry grew 7.8 percent while the rate of poor households was brought down to 4.13 percent. Lam Dong has so far raised more than 13 trillion VND (610 million USD) to build new rural areas. It has upgraded 976km of rural roads, 146 irrigation works and 161 transformer stations. Sacombank shareholders greenlight merger Sacombank shareholders yesterday agreed to the bank's plan to merge with Southern Bank which will be implemented this year if the feasibility study is approved by the authority and shareholders. Addressing the annual shareholders' meeting yesterday, newly-appointed chairman Kieu Huu Dung said the merger would help the bank increase its competitive advantage, expand operations and have more resources to carry out future business plans. The management board has been tasked with compiling the feasibility study to submit to the authority and shareholders. Sacombank (STB) yesterday reported pre-tax profit of nearly VND2.84 trillion (US$134.5 million) last year, surpassing its yearly goal by 1.3 per cent and up 115.9 per cent against 2012. Including profits from the bank's subsidiary units, total pre-tax profit reached over VND2.96 trillion ($140.3 million), an increase of 116.4 per cent over the previous year. The bank's vice chairman, Nguyen Mien Tuan, said the bank had reached its profit target despite losses incurred from closing gold accounts following the central bank's regulation. Tuan said most business targets rose over the previous year, of which charter capital was up 15.7 per cent to VND12.425 trillion ($588.7 million), while total assets increased 5.9 per cent to VND160.17 trillion ($7.6 billion). At the end of last year, deposits totalled VND140.77 trillion ($6.67 billion), up 13.8 per cent, and total outstanding loans reached nearly VND110.3 trillion ($5.22 billion), up 13.7 per cent. The bank's bad debt ratio was low at 1.44 per cent. The bank will pay shareholder dividends at 18 per cent, of which 8 per cent was already paid in cash last year. This year, the lender has set a profit target of VND3 trillion ($142.2 million), up 6 per cent over 2013; total assets of VND183 trillion ($8.71 billion), up 14 per cent; total deposits of VND160.5 trillion ($7.64 billion), up 14 per cent; and total outstanding loans VND124.6 trillion ($5.9 billion), up 13 per cent. It projects a dividend rate of 10-12 per cent of charter capital and plans to limit bad debt to under 3 per cent. 2014 coffee exports rise in volume, value Vietnam grossed US$1.17 billion from exporting 601,000 tonnes of coffee in the first three months of the year, up 24.8% in quantity and 13.8% in value against the comparable period last year. In other statistics released by the Ministry of Agriculture and Rural Development, Vietnam’s largest two coffee consumption markets continue to remain Germany and the US with market shares of 14.53% and 9.78% respectively. The world’s coffee price has increased sharply in recent times due to serious droughts, leading to a decrease in output of Arabica coffee, especially in Brazil, the world’s No 1 coffee exporter. The price of coffee in the Central Highlands in Vietnam has been hovering at a relatively high since February this year, at around VND42,000 per kilo. Vietnam is the world’s second largest coffee exporter and the No 1 Robusta coffee exporter and exported a significantly higher volume of coffee at a high price in March. Government economists forecast there will be a shortage of the global coffee supply source in the 2014-2015 period as Brazil’s coffee output decreased by only 51.5 million packages due to drought. However, the price of coffee is projected to continue to rise due to the increasing demands. Mekong Delta city to up trade in Belgium The Mekong Delta city of Can Tho will promote trade in Belgium on the occasion of the forthcoming Accenta Trade Fair which is slated to take place in September in the Belgian city of Ghent. Vice Chairman of the municipal People’s Committee Vo Thanh Thong made the remarks at a working session with local businesses on March 25. Thong highlighted the international trade fair that will showcase a variety of products such as handicrafts, fine arts, seafood and footwear. He described this as an opportunity for local enterprises to seek partners and expand markets in Belgium and Europe. Can Tho and Belgium have enjoyed cooperative ties over the past three decades, based on the collaboration between Can Tho and Ghent universities. The latter has helped Can Tho University apply scientific achievements in seafood, agriculture and environment. Belgium is Vietnam’s sixth biggest European trade partner. Two-way trade is estimated at 1.2 billion EUR (1.7 million USD) each year. Vietnam mainly exports footwear, garment-textiles, fruits and vegetables to Belgium while importing transport and telecommunication services. Belgian businesses in Vietnam have more actively engaged in the fields of waste treatment, environmental sanitation and medical equipment. Both countries are also working together in the aerospace industry. As the fourth largest city of Vietnam, Can Tho has trade relationships with over 80 countries and territories from across the world. Besides the traditional markets of Japan, the US and the EU, the city has also expanded its export markets to the Middle East, North Africa and Eastern Europe. Saudi Arabia, Vietnam seek for broader cooperation Vietnam-Saudi Arabia cooperative relations have grown considerably, particularly in trade, finance and labour since the first session of the joint committee for economic, scientific, and technical cooperation but is still not on par with each country’s potential. The statement was made by Saudi Arabia’s Deputy Minister of Economy and Planning, Ahmed H.Salah at the second session of the Vietnam-Saudi Arabia joint committee for economic, scientific, and technical cooperation in Hanoi on March 25. At the meeting, both sides briefed each other about recent socio-economic development, reviewed cooperative relations between the two nations since the first session and devised practical solutions to enhance cooperation in trade, industry, oil and gas, agriculture, finance, banking, investment, labour, transport and communications. Deputy Industry and Trade Minister Le Duong Quang underscored the need to implement cooperative programs to ensure energy and food security between the two countries as well as measures aimed at carrying out Saudi Arabia’s initiatives on overseas investment. He also said Vietnam attaches importance to future cooperation and investment in the field of agriculture and oil and gas. In addition both parties agreed to accelerate negotiations and the signing of agreements on visa exemption for diplomatic and official passports holders, an agreement on investment encouragement and protection, a cooperative agreement between the two foreign ministries and a deal among central banks of the two nations and the official signing of an air transport agreement. According to statistics from the Ministry of Industry and Trade, two-way trade turnover increased from US$1.04 billion in 2011 to US$1.71 billion in 2013. In 2013 alone, Vietnam’s exports to the market was estimated at US$471.4 million with a focus on export staples -  farm produce, seafood, machines, equipment, tea, rice, coffee, cashew nuts, pepper, processing industry, garments and textiles, wood products, and sanitary equipment. On the contrary, imports reached over US$1.2 billion with key products such as crude oil, fuel, liquidized gas, plastics, iron and steel. Quang put forth some proposals to strengthen bilateral cooperation by promoting reciprocal delegation exchange and trade promotion in each nation. Quang also asked Saudi Arabia to continue to implement a protocol on cooperation in oil and gas and mining industry as well as creating favorable conditions for the Vietnam National Oil and Gas Group to expand cooperation with Saudi Arabian partners. He encouraged Saudi Arabian enterprises to invest in Vietnam-based industrial projects and intensify agricultural investment to contribute towards ensuring mutual energy security. In response, Mr Ahmed H.Salah agreed on Vietnam’s proposal to actively implement future cooperative plans. Central Highlands businesses invest in Laos, Cambodia Businesses from the Central Highlands have injected over 1.5 billion USD into 35 investment projects in Laos and Cambodia over the past two years. The majority of the money has gone into agriculture, forestry and seafood under 25 of such projects worth 1.2 billion USD, followed by mineral mining, industry and hydropower, according to the region’s Steering Committee. Nearly 50 percent of the total registered investment capital of these projects has been disbursed, the committee said. Hoang Anh Gia Lai Joint Stock Company (HAGL Group) is the largest and most effective foreign investor in the fraternal countries from the Central Highlands. The total import-export turnover between the region, southern Laos and northeast Cambodia was estimated at 480 million USD during the reviewed period, an average annual increase of 12 percent. The region mainly exported machinery, equipment, construction materials, medicine and crop varieties, while it imported wood, rubber latex and farm produce from the markets. Covering an area of 54,700 square kilometres, the Central Highlands encompasses Gia Lai, Kon Tum, Dak Lak, Dak Nong and Lam Dong provinces. The region is endowed with rich and unique cultural and natural conditions and striking scenery for tourism development. It has a key strategic position in the country’s cross-border cooperation and the Vietnam-Laos-Cambodia development triangle.- Vietnam-Brazil aim for US$3 billion trade The two-way trade turnover between Vietnam and Brazil was estimated at US$490,071 million in the first two months of this year, up 122% from the previous year. Vietnam Customs reported that Vietnam earned US$215,477 million from exports to Brazil, up 52.9%, while spending US$274,594 million on Brazilian goods, demonstrating an annual increase of 244%. Vietnam’s key export items included telephone and spare parts (US$65.31 million, up 594%), seafood (US$26.69 million, up 52%), computers and electronics (US$19.07 million, up 43.9%), and garment and textile products (US$10.5 million, up 55%). Local importers purchased various Brazilian products such as maize (US$202 million), input materials for footwear and garment industries (US$19.14 million), and foodstuff for animals (US$5.67 million). According to the Vietnam Office for Trade Affairs in Brazil, many Brazilian businesses are resuming their operations in the post-crisis period. Vietnamese firms are also increasing their import volume from this largest South American economy. The Office revealed that seminars on bilateral trade ties will be held in five Brazilian localities, with a view to boosting export market expansion and realising the set target of achieving a two-way trade turnover of US$3 billion in 2014. Can Tho promotes trade links with Belgium Can Tho city is set to boost trade promotion in Belgium by attending Accenta 2014 Fair, in Ghent city, Belgium this September, announced Vice Chairman of Can Tho Municipal People’s Committee, Vo Thanh Thong at a March 25 meeting with local businesses. The upcoming event will showcase rice, seafood, garments, leather shoes and handicrafts and is an excellent opportunity for the city to expand markets in Belgium and Europe he added. Can Tho and Belgium have maintained their cooperative relations over the past 30 years based on cooperation between Can Tho University and Ghent University During this period, Ghent University has helped Can Tho University apply scientific advances in raising the numbers of tiger shrimps, protecting the environment and coping with climate change. Belgium is Vietnam’s sixth largest European trade partner with two-way trade exchange reaching EUR1.2 billion each year. The country’s Vietnamese imports include leather shoes, hats, garments and textiles, fruit and vegetables. Belgium’s key exports to Vietnam are automobiles, telecommunications, and other services. In addition, Belgian enterprises in Vietnam have increasingly engaged in new fields such as waste treatment, environmental hygiene, and medical equipment. Vietnam and Belgium are also working on the space industry with an innovative project to provide a small hi-tech satellite to Vietnam. Viet Nam works to facilitate foreign investment Foreign direct investment (FDI) enterprises have asked the Vietnamese Government to shorten the time and simplify procedures involved in granting investment certificates. During a dialogue with authorities in HCM City on Monday, foreign company representatives said it took too much time to obtain an investment certificate since investors are required to hand in other auxiliary permits as well. A representative of Pizza Hut, for instance, said the company had spent 14 months to get an investment licence to open its first branch in Ha Noi. Earlier this month when the company applied to open three more restaurants in Ha Noi, besides completing auxiliary certificates for food hygiene and safety, environment, financial demonstration and audit reports, licence-issuing agencies asked the company to submit comments from localities where the restaurants will be built. A representative of LNT & Partner, a law firm, said that when applying for investment licence, investors take up too much time fulfilling procedures required by licence-issuing agencies. Licensing agencies process necessary documents one by one, instead of together. Le Manh Ha, deputy chairman of the HCM City People's Committee, said the city had faced a lot of difficulties in granting investment certificates. Last year, the city received 2,218 applications for new business licences. Despite much effort, the city missed the deadline in giving certificates to many investors, he said. He attributed the situation to the time spent in consulting ministries, and completing other auxiliary procedures. As regulated, ministries have to comment on an investment license within 15 working days, but in most cases, they reply after one or two months, he said. To overcome the problem, he suggested that the Government allow localities to ask opinions of ministries on investment projects, if necessary. In addition, Ha said starting next month the city would make public the progress of handling investment procedures on the internet so that both management agencies and investors can follow. Bui Quang Vinh, Minister of Planning and Investment, said after three dialogues held in the north, centre and south to collect opinions on amending the Investment Law, the ministry had received mixed feedback, with some foreign firms expecting the issuance of investment certificates to be scrapped but others wanting it to stay. Most firms in the latter group wanted to keep this certificate so that they could enjoy the Government's incentives prescribed on the certificate, including incentives for land rental and bank loans. The ministry would consider removing the issuance of investment certificates, except in four sectors: a conditional business sector like banking; those sectors that use a lot of land; polluters of the environment; and sectors that need licences to get investment incentives. The ministry wants to simplify investment procedures to make investing in Viet Nam more appealing, Vinh said. Vietnam’s new e-customs system proves effective Vietnam’s new national electronic one-stop customs clearance system has been applauded by the business community for its prominent features and efficiency. “Instead of waiting for at least 30 minutes or even the whole day to conduct customs clearance after submitting declaration, we now just have to wait for five second at the longest”, said Nippo Mechatronics representative Nguyen Thi Quynh Mai at a business conference on March 25 on the e-customs using the Vietnam Automated Cargo and Port Consolidated System and the Vietnam Customs Information System (VNACCS/VCIS). Nippo has submitted 800 customs declarations, and 80 percent of them were reported success, said Mai of the system which was built with Japan’s assistance and trialed earlier this year. According to Phung Quang Minh, member of the management board of the VNACCS/VCIS project of the Hanoi Customs Department, the most eminent feature of the system is stable and time saving. The system was applied in Japan for a long time and upgraded many times to minimise its shortcomings, while being made to suite Vietnam’s demands, said Minh. As of March 17, as many as 2,732 enterprises nationwide had registered to join the system, he added. Meanwhile, Duong Thu Ha from Thanh Long Daiwa Plastics said the VNACCS/VCIS is much more automated than the previous system, which helps firms avoid errors during the data input procedure. The system can finish data processing in some seconds, thus saving time for customs clearance, while reducing the dependence on printed documents, she said. The Hanoi Customs Department plans to officially apply the system on March 29. Nghe An employs resources to evolve infrastructure The central province of Nghe An plans to harness all social resources to develop key infrastructure works of transport, electricity, education and healthcare. From now to 2020, the province will upgrade Cua Lo port and Vinh airport along with building Dong Hoi port, roads in mountainous districts and three railway overpasses. It will also prepare for the construction of the North-South Highway section that runs through the locality. In terms of power facilities, efforts will be made to attract investment for the 2,400 MW Quynh Lap power plant and set up 220kV substations and 286.5km of 110kV lines. Nghe An will expand the power network to rural areas during the period. Meanwhile, upgrading the Nghe An University of Economics, Vinh Medical University and some junior colleges is the province’s educational focus. Notably, Vinh University will be improved to meet international standards during the period. More investment will also be poured into bettering medical facilities to soon turn Nghe An into a high-tech medical hub of Vietnam’s northern central region. In 2014 and 2015, the province plans to raise 20 trillion VND (952.4 million USD) for infrastructure works by overhauling investment encouragement policies, calling for social engagement in infrastructure building and increasing the effectiveness of capital use. The provincial People’s Committee said as of present, three trillion VND (142.8 million USD) has been mobilised for 10 projects. As many as 458km of national and 330km of inter-provincial roads have been completed, while a 700-bed general hospital is being constructed - expected to be operational in the second quarter of 2014, it added.- Sumitomo penetrates deeper into Vietnam with $44 mln flour mill Japan’s Sumitomo Corporation, which exports some 100,000 tons of wheat supplied by a Melbourne-based subsidiary to Vietnam annually, has announced plans to penetrate further into the Southeast Asian flour processing market by setting up a multi-million-dollar mill outside its southern hub. The mill will operate under a joint-venture agreement the Japanese trading house has sealed with CJ Cheiljedang, one of Korea's biggest flour millers. This was reported in a statement released Monday by Emerald Grain, an Australian grain trading company entirely owned by Sumitomo. The mill broke ground in late February and is expected to commence operations by May 2015, Vietnamese-language economic news website Saigon Times Online reported, adding that it is capable of manufacturing 150,000 tons of wheat flour per year for Vietnam and Cambodia. The facility, named CJ-SC Global Milling and located in Ba Ria – Vung Tau Province, over 100km east of Ho Chi Minh City, is worth US$44 million and will be equipped with the latest flour processing technology from CJ Cheiljedang, according to the news website. Sumitomo has a 49 percent share in the facility, Emerald Grain reported. Vietnam currently imports around 2.5 million tons of wheat per year, mainly for bread and noodle manufacturing, it said. The Australian company also said it already exports close to 100,000 tons of wheat to Vietnam annually through Sumitomo. Sumitomo increased its stake in Emerald Grain to 100 percent last month, The West Australian reported. The Vietnamese facility will also provide “new opportunities for Australian wheat growers,” Hideki Hijiya, a Sumitomo official, said in a statement. “This mill is part of Sumitomo Corporation’s plan to build integrated supply chains across Asia and provide new pathways for Australian grain into the market.” Sumitomo will target wheat from West Australian growers to supply the new flour mill in Vietnam while it “has not ruled out investing in local port infrastructure,” The West Australian said in its Monday report. CJ Group first arrived in Vietnam in 1996 and is operating in a wide range of sectors in the Southeast Asian country, ranging from home shopping and cinema operation to logistics and food processing, while multi-faceted Sumitomo has invested in some 20 projects in Vietnam, according to Saigon Times Online. Foreign investors bullish on Vietnam prospects Nguyen Duc Tai was happily busier than usual last week as the Mobile World Company CEO took part in a high-profile Vietnam investment event in Ho Chi Minh City. During the four-day networking event, attended by almost 400 guests, investors and speakers, his company, Vietnam’s largest mobile phone store chain, showcased itself to opportunity-seeking investors. “The stock market has been on the up this year,” Tai said, adding that the company planned to list this June. He joined the Vietnam Access Day forum, held during March 18-21 to introduce his company to the participants. The firm, with Best Buy International’s former CEO Robert Willet currently sitting on its board of directors, reported 2013 revenue of VND7.82 trillion ($372.4 million), a 25 per cent increase against 2012 with profits nearly doubling to VND250 billion ($11.9 million). Mobile World was not the only company to introduce itself at Vietnam Access Day. The event, organised by Viet Capital Bank, Viet Capital Securities Company and Viet Capital Asset Management, also saw displays and presentations from Masan Group, property developer Nam Long, Bao Viet Holdings, Vietcombank, Eximbank, leading fertiliser producer PVFCCo., Hoang Anh Gia Lai, FPT, Hoa Sen Group, Traphaco and Vingroup. Viet Capital chairwoman Nguyen Thanh Phuong said Vietnam Access Day was held mainly to connect international investors with companies in Vietnam. “Networking creates value,” she added. The Vietnam Access Day event was also designed to provide a panorama of the Vietnamese economy, to help foreign investors evaluate the investment environment and market opportunities, as well as to connect capital with strong potential investments. Outlining the panorama Dr. Nguyen Xuan Thanh, director of the Fulbright Economics Teaching Programme Vietnam said, “The crisis has been averted and the macroeconomic situation is improving with low inflation, stable exchange rates, and rising foreign exchange reserves.” Rupert Clifton-Blight, investment director of Singapore’s Duxton Asset Management, running the DWS Vietnam Fund, told VIR that the fund had already invested $330 million into both listed and unlisted enterprises. “Yes, we’re bullish on the market,” he said. The fund’s primary investment objective is to seek long-term opportunities. Its holdings include blue chips such as Vinamilk - Vietnam’s largest dairy company, FPT and Hoa Phat Group as well as investments in unlisted businesses such as Anova Group. DWS, which started investing in Vietnam in 2006, invests only in Vietnam. Andres Calderon, portfolio manager of Consilium Investment Management from the US said, “This is the first time I’ve been to Vietnam and I think there are many opportunities for us as foreign investors. Many friends of mine have invested here. I’ll be back again and again to catch the opportunities.” Calderon said his company was a global emerging markets investment management firm with a capacity limit of $350 million for frontier market equity and a capacity limit of $1 billion for emerging market small cap equity. Singapore’s Temasek Holdings also pledged to continue investing into areas of interest, the firm’s Hanoi representative office director Vu Thi Thu Le commented to VIR. Declining to specify which areas, she did say they were highly competitive companies in fast growing sectors. “However, there are not many good shares to invest in now. We’re hoping the Vietnamese government’s will to equitise state-owned enterprises will release more strong products into the market.” Also from Singapore, asset management firm Hansabay was looking at the consumer goods sector in Vietnam, said CEO Florian Weddinger. Hansabay has thus far only bought fund certificates from funds already investing in Vietnam, but it is looking for opportunities to buy shares of local companies. Tan Tao Group seeks BOT power plant partners The long-delayed Kien Luong thermal power project could be pushed forward as the domestic investor Tan Tao Energy Corporation is seeking partners for it. The firm (TEC), a subsidiary of Tan Tao Group, is seeking partners after it has been allowed to convert the investment form of Kien Luong 1 thermal power plant project from build-own-operate (BOO) into build-operate-transfer (BOT) after a two year delay due to financing trouble. An executive of Tan Tao Group who declined to be named said that the firm wanted to partner with “a strong consortium”. “They may hold the majority stake to carry out the project. Our aim is to complete the project on time as per our promise,” the source told VIR. On its website the group states that bidders to submit proposals demonstrating an interest will have to prove capability, experience in investment and construction of thermal power plants, financing arrangements, proven experience in operating thermal power plants, and provide added value to the project. Bidders will be audited by TEC based on a thorough evaluation of their proposals. Shortlisted parties will participate in a limited bidding process for the engineering, procurement and construction (EPC) contract or will become a nominated EPC contractor. Leading French energy company EDF, and Korea’s Samsung and Hyundai groups have expressed interest in the project. Previously, the Kien Luong thermal power project was also considered by UK investor Graham Bell & Associates Limited. Under the government’s electricity master plan for 2020, Kien Luong thermoelectricity centre would start commercial operations in 2018. The Tan Tao Group was approved as the investor in Kien Luong electricity plant in 2008. The site for the plant is located in Kien Giang province, approximately 300 km south of Ho Chi Minh City. The project, once completed, would make it one of the largest power generation plants in Vietnam with a total capacity of 4,400-5,200 MW. The power plant, which would also include a deep seaport Nam Du, would cost an estimated $7 billion under the old plan. Tan Tao’s executives previously explained that the firm was stalling the construction because it had not yet received a government guarantee and undertaking agreement (GGU). According to Tan Tao, without the GGU, the project would be deadlocked as the investor would not be able to arrange funding from financial institutions. Quang Binh awaits investment rush A score of huge domestic firms are mulling over plans to invest in the central province of Quang Binh. Last week, the Quang Binh Provincial People’s Committee and the state-owned commercial bank BIDV had a meeting with investors including Vietnam National Garment and Textile Group (Vinatex), Vietjet Air, Sun Group, FLC Group, Hanoi Beer, Alcohol and Beverage Joint Stock Corporation and Truong Thinh Group. This led to a commitment to devote large amounts of investment capital to the province. At the meeting, Dang Minh Truong, general director of Sun Group, which specialises in tourism and real estate, said that over the past two months, Sun Group has conducted field research in Quang Binh. Early next month, the group will do the final stage of research. With participation from foreign consultants they want to further understand the local tourism potential. Truong stressed the group’s determination to invest in tourism in Quang Binh. Pham Duy Hanh, deputy general director of Vinatex, the country’s leading textile and garment maker, stated that the group planned to develop a garment factory in the Le Thuy commune of Quang Trach district. Vinatex also asked the local authority to provide at least 500 hectares of land for the purpose of piloting cotton farming in the area employing new Israeli technology. Budget carrier VietJet Air is researching the opening of a route between Ho Chi Minh City and Quang Binh’s Dong Hoi city. Pham Nguyen Tung, director of Vietjet Air, said he expected this to become operational in June. Besides Sun Group, Vinatex and Vietjet Air, some other faces such as FLC Group and Truong Thinh also committed to invest in real estate projects in the province. On April 5, in collaboration with BIDV, Quang Binh will open its first investment promotion workshop in the province. Le Van Phuc, director of the Quang Binh Provincial Department of Planning and Investment, said that during 2014-2015, the province would invest in 40 projects focusing on six attractive sectors, namely infrastructure network, industrial park infrastructure, tourism and trade, industry, agriculture, healthcare and education. BIDV has partnered with the province in securing investment. Phan Duc Tu, general director of BIDV said the bank would supply loans with the best rates and for the longest term to encourage large scale investment in the province. BIDV and the local authorities expect to have seven or eight investment agreements signed between investors and the province at the investment promotion workshop on April 5. “The Foreign Investment Agency (FIA) will help invite foreign investors to seek investment opportunities in Quang Binh in the future,” said Dang Xuan Quang, FIA’s deputy director. Red-fleshed dragon fruit rises Prices of red-fleshed dragon fruit has drastically risen, said Nguyen Van Than, chair of Dub My Cooperative in Cang Long District, in the Mekong delta province of Tra Vinh on March 24. Traders have agreed to buy the fruit at VND 47,000 per kilogram at the farms but the cooperative does not have enough supply. In 2013 the cooperative exported 3.7 tons of the fruit to the US. Farmers in Duc My Commune in Cang Long District started planting the fruit in 2007. The fruit adapts to the soil, environment and weather in the province extremely well yielding in large quantities of 4-5 tons per acre. Farmers can profit VND100-120 (US$ 4,744- 5,693) million per year per acre. The cooperative has 36 members working on 32 hectares of land for growing the red-fleshed species of dragon fruit. Twenty four hectares of land is grown following VietGap Standard (Vietnamese Good Agriculture Practices). Each Vietnamese bears USD886 in public debt With public debt accounting for 48% of the GDP, each Vietnamese citizen currently owes VND18.6 million (USD886). The Vietnamese public debt has been estimated at USD80 billion, spread over a the total population of 90.5 million people. Vietnam’s public debt increased by 11.2% on year by the end of 2013. Early this year, the Vietnamese government issued Resolution No.1, requesting a curbing of the state budget deficit at no more than 5.3% of the GDP and controlling loans without government guarantees. The government has also asked the Ministry of Finance to take measures to manage public debt and use loans more efficiently in order to keep debt at manageable level, below 65% of the GDP. With the above-mentioned figures, Vietnamese public debt is still considered manageable, but the country faces the risk of a debt increase. At a National Assembly meeting, held in November 2013, Prime Minister Nguyen Tan Dung said with the state budget deficit would be around VND224 trillion (USD10.6 billion) in 2014 and government bonds would total VND170 trillion (USD8.1 billion), Vietnam’s public debt is expected not account for 65% of the GDP this year and repayment is a major concern. At a seminar in late 2013, Dr. Pham The Anh warned that the biggest potential risk for the Vietnamese public debt is not the debt on paper, but bad debt from state-owned enterprises (SOEs) which may require the state budget for their repayment. Dr. Anh cited a report submitted to the National Assembly by the government which said that the total debt of wholly state-owned enterprises was estimated at VND1,550 trillion (USD73.8 billion) in late 2012, equal to around 52.5% of the GDP. After deducting 11.7% of the debt guaranteed by the government, 40.9% of the SOE debt was not guaranteed. Despite not receiving government guarantees, the government still supports SOEs, in hopes of saving them from bankruptcy. If SOE debt, which is not guaranteed, as well as the debts accrued in the construction sector are included, Vietnam’s real public debt will account for 98.2% of the national GDP, Anh said. Strong inflow of FDI into Haiphong in Q1 The northern port city of Haiphong has attracted more than US$235 million in new and added foreign capital during the first three months of the year, ranking it second among localities in the country. The city licensed 11 newly registered projects and five existing ones registering to increase investment capital. These projects were focused on the support industries, housing construction, services, trade, and automobile spare parts manufacturing. To meet this year’s US$1 billion FDI target, the city gives priority to environmentally friendly and support industry projects, and those bringing back high added value. Pham Huu Thu, spokesperson for the Haiphong People's Committee, said that the city obtained gross domestic product (GDP) growth of 7.11% in the first quarter. He added that Damen Song Cam Shipyard Co., Ltd, a Vietnam-Netherlands joint venture, is listed in the top 50 taxpayers, contributing VND30 billion to the local budget. Haiphong climbed up 35 notches in the provincial competitiveness index (PCI) to 15th position in the country and third in the Red River Delta thanks to its drastic reform efforts. The city will put in place 10 socio-economic development solutions, with a focus on easing business difficulties, organizing trade promotion conferences, facilitating large projects, and supporting land clearance. It will also speed up the implementation of investment projects which have a major impact on the city’s economic development. Russian group to manufacture wagons in Vietnam UralVagonZavod, a Russian machine manufacturer, will team up with a Vietnamese company to build a wagon assembly factory in Vietnam, said CEO Oleg Sienko. Vedomosti, a Russian language business daily, quoted Sienko, as saying the joint venture will churn out between 1,500 and 2,000 containers, Liquefied Petroleum Gas (LPG) tanks, and minerals wagons a year. The project has a total investment of around EUR40-50 million funded by the Vietnam –Russia Joint Venture Bank (VRB). UralVagonZavod and VRB signed a memorandum of understanding on cooperation in November 2013 during Russian President Vladimir Putin’s visit to Hanoi. The UralVagonZavod representative has yet to define its Vietnamese partner and the location of the factory. A launchpad for IT park development Experts in the information technology (IT) sector have said Government Decree No. 154/2013/ND-CP on concentrated IT parks that took effect on January 1, 2014 is a foundation for creating a better environment for domestic and foreign IT businesses in the country. At the seminar on Decree No. 154/2013 ND-CP held by Quang Trung Software City (QTSC) Development Corporation last Friday, representatives of the IT Department under the Ministry of Information and Communications, HCMC, QTSC and IT businesses threw their weight behind the decree. They believe it will create a beneficial environment for IT and software parks. The seminar provided participating enterprises from QTSC with the opportunity to review the benefits offered by IT parks, enterprises operating in these parks and incentives on corporate income and import taxes, and customs procedures. Among those matters, tax incentives received the biggest attention. In line with the decree, enterprises implementing new IT investment projects in IT parks are subject to a corporate income tax of 10% for 15 years, tax exemption for four years, and a 50% reduction of payable tax in the following nine years. Notably, in specific cases, the time for application of preferential tax rates may be extended. However, the total time for the 10% tax must not exceed 30 years. Enterprises in the parks are exempt from import tax on goods imported as fixed assets and serve production of IT products and services—including machinery, equipment, components and parts. Addressing the audience, Nguyen Anh Tuan from the IT Department said these are the latest incentives for enterprises and investors in IT parks. The Government hopes that the new initiatives will support enterprises and investors and attract more domestic and foreign IT investors into QTSC in particular. Le Quoc Cuong, deputy director of the HCMC Department of Information and Communications, said according to Decree 154, enterprises in IT parks like QTSC will receive incentives on investment credit, or be allowed to select between land allotment with land-use fees and land lease. Moreover, Decree 154 stipulates that investors in IT parks will get State support in the form of technical infrastructure inside and outside the parks (roads, power and water supply, drainage and other utilities), and public passenger transport to concentrated IT parks. They will also enjoy a 50% reduction of land-use fees or land rentals depending on their selection of land allotment or land lease. What’s more, IT parks are permitted to have a customs clearance point if they meet the requirements for export scale. Chu Tien Dung, chairman of QTSC Development Corporation, said QTSC will strengthen cooperation with provinces neighboring HCMC in establishing a concentrated IT park chain. In the near future, QTSC will become an international standard IT park that will be more appealing to foreign investors. Dung said tax incentives or benefits for enterprises committed to IT parks in line with this decree are top priorities of enterprises. The first such decree for IT parks, he added, should also create a better environment for sustainable development. “We will organize many seminars this year to help enterprises better understand the benefits brought by the new decree,” he said. Few provincial decisions on investment incentives get beyond limits Last year saw few provincial governments deciding to offer greater incentives for investors than permitted by law to attract new capital, according to experts of Vietnam Provincial Competitiveness Index (PCI) 2013. Edmund Malesky, lead researcher of PCI 2013, said the spirit of moving beyond the regulatory restrictions among provincial authorities to fuel growth has been waning. This used to help Binh Duong, Dong Nai and Binh Phuoc provinces gain impressive growth but it was on the wane. Speaking to the Daily at a ceremony held in Hanoi City on March 20 to publicize the PCI 2013 report, Malesky mentioned reform breakthroughs in the past, such as handing over land to farmers without prior permission from the central Government, which helped the nation pass through tough periods. Creativity is still out there but at a slower pace, he said. Malesky noted a number of local governments have made information about land and land use much more accessible. Dau Anh Tuan, a member of the research group, noticed another breakthrough, saying Ninh Thuan Province’s government has established a ‘one-door’ office, thereby allowing investors to visit one place to get everything done. However, Tuan said it is not easy to run the model as it heavily depends on local government. “I’m afraid this model would continue to be in place when present leaders take up new jobs,” he said. According to the report, provincial authorities have reached limits in simple reforms such as issuing business registration certificates and processing market entry procedures. In many localities, it takes investors just one day to get an investment certificate. Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry (VCCI), said that while the easiest reforms have been almost exhausted, the reforms that are deemed as most difficult have remained undone. Nearly 10 years ago, 33 provinces and cities offered investment incentives beyond regulatory limits set by the central Government to lure investors but central authorities prevented them from doing that, he said. Speaking at the announcement of the PCI report, business executives expressed concerns over the issue, saying the active and pioneering spirit of provincial authorities in favorable treatment towards the private sector has declined steadily since 2007. They said they were concerned that the private sector has yet to enjoy a level playing field. Enterprises having connections with local authorities, especially joint stock companies and those whose leaders used to be state officials, often have priority to gain access to land and capital, and win contracts. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR