BUSINESS IN BRIEF 5/3 HCM City hosts int’l packaging expo An Int’l Processing, Filling and Packaging Exhibition and Conference (ProPak Vietnam 2014) is taking place in HCM City from March 4-6, introducing the latest advances in the plastic industry. The event is attracting roughly 300 manufacturers from 23 countries around the globe including ABC Compressors, Amo-Pack (Asia) Co. Ltd, Battendfeld-Cincinnati Austria GmbH, Bricap Asia Pte Ltd. Additionally, ProPak Vietnam 2014 is featuring a series of seminars on how to improve packaging designs and marketing, along with ideas and solutions for improved packaging management. The event also promises to be an effective forum for enterprises to boost links and seek new business opportunities. According to the Vietnam Plastic Association (VPA), Vietnam now has more than 1,200 plastic businesses employing 120,000 workers. The plastic industry is set to earn US$2.15 billion in export turnover by 2015 and US$4.3 billion by 2020. Industrial production ups in first two months Nearly 90% of imports Vietnam made in the first two months of this year served production, such as fuels, raw materials and machines, showing signs of recovery of the national economy. The country spent an estimated US$20.82 billion on imports in the January-February period, presenting an increase of 17% year-on-year, Deputy Minister of Trade and Industry Le Duong Quang reported at the ministry’s meeting on March 3. Meanwhile, export is estimated at US$21.06 billion, up 12.3% from the same period last year. According to the ministry’s report, the industrial production index recorded a year-on-year rise of 5.4% in the reviewed period, with the mining, manufacturing and processing industries posting growths. At the meeting, Secretary General of the Vietnam Textile and Apparel Association Dang Phuong Dung expressed her concern over an official dispatch of the Finance Ministry, which will come into effect on April 1. The document, which requests exporters to gather their products at fixed areas before their customs declarations are processed, will make them miss their delivery deadlines and cost them more, she added. Ha Nam interested in developing dairy cow farming The northern province of Ha Nam will give its full support for the Dutch animal feed manufacturer De Hues to carry out its investment projects in the locality, Chairman of the provincial People’s Committee Mai Tien Dung has confirmed. De Hues will be allowed to join a pilot project on planting maize and raising cows imported from Australia, on an area of 66 ha in Moc Bac commune, Duy Tien district. During the March 3 working session with officials from the company, Dung pledged that his province will provide land for the Dutch producer to build a cattle-feed factory once they expand operations in the north. He introduced to the guests a plan to increase the province’s dairy herd to 6,000 heads by 2020 from the current 400 ones. Dung expressed his hopes for local breeders to receive technical assistance from De Hues, which boasts 100-year experience in the animal feed and cattle farming industry, to bring their dairy cattle quality to international standards. De Hues Vietnam Director Gabor Fluit said his company is running four cattle-feed factories in Vietnam, with three based in the south and one in northern Hai Phong port city. It plans to build three more plants in northern localities, including Ha Nam. Apart from undertaking a number of agriculture production models, like those on raising dairy cows and pigs, Ha Nam is persuading investors to build high-quality animal feed factories to help increase the locals’ income. Vietnam targets US$2 bil bilateral trade with Laos The Vietnam Business Association in Laos should promote exchange, support domestic businesses to approach the Lao market towards two-way trade of US$2 billion by 2015. Vietnamese business representatives stated this at a March 3 meeting hosted by the Vietnamese Embassy in Vientiane. Vietnamese ambassador to Laos Nguyen Manh Hung acknowledged the efforts of Vietnamese companies in overcoming difficulties and promoting the efficiency of investment activities in Laos. He said he hopes that Vietnamese businesses should be active in implementing investment projects in Laos, reinforce solidarity, share experiences and obey laws of the resident country. Vietnam has 412 investment projects in Laos with total registered capital of US$5.012 billion, ranking third among nations and territories investing in Laos. Its projects focus on mineral ores, hydroelectricity, agriculture, services, construction, banking and insurance. Last year alone, Vietnam poured US$138 million into 12 projects in Laos. Hi-tech glass outsourcing factory inaugurated SADO Group officially opened its hi-tech, glass outsourcing factory on March 3 in southern Dong Nai province’s Bien Hoa city in the presence of President of the Vietnam Fatherland Front (VFF) Central Committee Nguyen Thien Nhan. Nhan said the move will help Vietnam’s emerging glass manufacturing industry develop and compete for deeper and comprehensive international integration. SADO Group is one of the most modern glass outsourcing factories in Vietnam and the only company in the country which can produce high quality glass to industrial size measurements of 3,000mm and 6,000mm The factory’s high quality products include tempered glass, laminated glass, insulated glass, ceramic printed glass and aluminum which meet European and German standards and adapt to tropical climate in Vietnam. In its first phase, the project has a total investment of VND500 billion funded by the Bank for Investment and Development of Vietnam. The facility’s design capacity in this period will be 18 million square metre per annum. The production line will be transferred from the famous leading groups, namely LiSEC, Glaston, Benteler, Dip-Tech, TMB and RAPID. The factory’s engineers and skilled workers have been trained at major groups in Germany, Austria and the Netherlands. SADO Group General Director Nguyen Cong Chinh group believes that the factory will not only meet the domestic customers’ demand for high quality glass but also help boost foreign exports. Increased input imports stoke industry recovery A brighter economic picture has been painted thanks to a positive index of industrial production (IIP) and improved export turnover in the first two months of this year. The General Statistics Office (GSO) last week reported that the country’s two-month IIP surged 5.4% year-on-year. The IIP in February 2014 fell by 10.3% from the previous month but still increased by 15.2% against the same period last year. The modest increase shows a recovery in the domestic economy’s production sector, according to a Ministry of Planning and Investment (MPI) report. Meanwhile, in the first two months of year, Vietnam’s export turnover was estimated to have hit US$21.06 billion, up 12.3% year-on-year. Garment and textiles and phones remained the most popular exports, earning US$1.3 billion and US$1.6 billion, respectively. “Despite the quiet long lunar new year holiday, such figures are considered quite high, which mirrors the better performance of domestic business,” said economist Le Dinh An, former director of the National Centre for Socio-Economic Information and Forecasting under the MPI. In 2013, exports were considered the main motive force for economic growth to reach 5.42% and economists predicted the trend would continue this year. Although the government only targeted export growth of 10% or a US$13 billion year-on-year increase in 2014, it was very likely to exceed targets, he added. However, the country imported commodities worth some US$20.82 billion, up 17% year-on-year with a sharp increase for some production inputs. Specially, cloth imports rose by 26.7% or a US$270 million rise, machines and equipment grew by 39.2% or US$941 million, raw materials rose 39.4% or US$175 million and plastic products increased 36.8% or US$123 million. “For an economy which depends on imported inputs, these figures indicate enterprises are preparing production plans based on better orders,” said Bui Ha, director of the Department of General Economic Issue under the MPI. Economist Tran Du Lich said that with such positive indicators, the economy is showing signs of recovery but still facing many challenges. The economy still saw quite slow growth in the domestic market with weak demand in the past two months. In February, the total retail sales of consumer goods and services experienced a 2.28% decrease compared to January 2014. The GSO also reported that the Consumer Price Index (CPI) rose by just 0.55% in February month-on-month and 4.65% over a year earlier, marking the lowest price hike in the past 10 years, mainly off the back of decreased demand. Some 13,100 enterprises stopped operations in the first two months, up 12.2% year-on-year, up on the 8,600 recorded during the same period in 2013, according to the MPI. Garment exports up 44.9% in February Vietnam garment and textile exports in February nearly doubled over the same period last year and tallied in at US$1.3 billion for the month. The Ministry of Industry and Trade (MoIT) reported that Vietnam’s garment export markets show positive signs of improvement and production is picking up in pace following an unanticipated lull during the Lunar New Year (Tet) holiday. In the first two months, garment export revenue saw a rise of 30.1% from a year earlier thanks to a sharp increase of 33% in casual wear exports, 36.9% in natural fabrics, and 6.5% in polyester fabrics. The MoIT said that garment and textile businesses are reporting a solid upswing in export contracts and orders for the second and third quarters of this year. The local apparel sector is also implementing a large number projects and devising concrete plans to seize new opportunities created by the Trans-Pacific Partnership (TPP), which is expected to be signed in the near future. Prolonged Tet holiday takes toll on national start-up figures Over 4,000 enterprises were created in February this year with a total registered capital of VND19.18 trillion (US$913.3 million), a 5.5 per cent year-on-year decrease, the Ministry of Planning and Investment stated. The number of newly established businesses declined 42 per cent compared to January this year, and the registered capital was 56 per cent lower than the previous month, according to the Ministry of Planning and Investment's Business Registration Department. The department said the sharp reduction was due to the long Tet holidays. However, in the first two months of the year, the number of new enterprises and the value of the registered capital were higher than the same period last year. More than 10,800 registrations of new firms were recorded in the country in the two-month period, with a total registered capital of VND62.9 trillion ($3 billion), an increase of 13 per cent and 28 per cent in terms of the number of enterprises and amount of capital, respectively. In the first two months of the year, the total number of enterprises that had dissolved or halted operations was 13,124 units, an increase of 12.2 per cent compared to the same period last year. The department said the figures showed that businesses are facing difficult conditions. Supermarkets look to lure ladies With International Women's Day fast approaching, people are flocking to supermarkets and shops to buy gifts for their loved ones. Stores are hoping to take advantage of the day and boost sales of cosmetics, clothes and gifts, through in-store promotions. Big C has launched a special programme dedicated to honouring Vietnamese beauty in its 26 supermarkets. They are offering discounts of up to 49 per cent on 2,000 products, including, cosmetics, fashion and fashion accessories, until March 31. Alongside this, female customers can enjoy free skincare consultations, as well as celebrity and expert in-store demonstrations. They are also slashing prices on more than 1,000 essential goods such as household items, food, and confectionery. The supermarket is hoping for a 15 per cent rise in sales thanks to the promotions. Similarity, Co-opmart supermarkets and Co-op Xtra Thu Duc are offering discounts of up to 50 per cent on more than 830 products such as garments, beauty care products, and household appliances until March 9. Other supermarkets like Citimart, Maximark, and Vinatexmart have also cut prices on hundreds of cosmetics and fashion products. Fashion and cosmetics shops along Nguyen Trai Street in District 5, and Nguyen Dinh Chieu and Le Van Sy streets in District 3 are decked out with promotion banners, hoping to benefit from the shopping frenzy. According to sellers, more and more customers now prefer to buy practical gifts, however cosmetics remain first choice. Flower prices have remained high since the Lunar New Year holiday due to cold weather, but they are still expected to be a popular gift. According to a shop owner in Thi Nghe Market, currently, a single rose stem costs VND7,000, but this is likely to double by March 8. Vinatex in search of investment Viet Nam Textile and Garment Group (Vinatex) is seeking VND9.72 trillion (US$458 million) to invest in 57 projects, including fibre production, knitting, dyeing and garment production. Vinatex's General Director Tran Quang Nghi acknowledged that the $458 million investment capital was a very large amount and difficult to raise, especially when the group has only VND4 trillion ($189 million) in charter capital. In order to unlock the capital ties for investment, Vinatex proposed that the Government allow the group to hold incomes derived from State-capital sales in the equitisation process in five years. Vinatex eyes going public by the end of this June, which would increase the group's capital to VND5 trillion ($237 million). Also, the group asked the Government for more privileges, including lower land rent and looser environmental standards, to attract more investments into knitting and dying-finished processes. Among the 57 projects include 15 in yarn, 8 in weaving and 24 garment projects. Of these, weaving and dyeing projects would require a large amount of capital. When completed, 57 projects are expected to provide 7,000 tonnes of fibre, 1.1 million jackets, and 4,000 tonnes of knitted fabric. Le Tien Luong, Vinatex's deputy general director, said that investment in material production was pivotal for raising localisation ratios and added values of apparel products, as well as to increase the benefits in the textile, garment, leather and footwear sectors offered by the Trans-Pacific Partnership (TPP). TPP members account for 60 per cent of Viet Nam's textile and garment revenues, of which 43 per cent come from sales to the US, 12 per cent from Japan, and 4 per cent from other countries. Dong Nai seeks engineering funds The southern province of Dong Nai is looking to attract US$2.4 billion in manufacturing engineering investments by 2025, the provincial Department of Industry and Trade stated. According to the director of the department, Le Van Danh, under a recently-adopted development master plan for the sector until 2020, and continuing with a vision to 2025, Dong Nai will prioritise highly-competitive industries, such as electrical appliances, boilers and farming machinery. Simultaneously, it will also ramp up its ancillary industries to increase the local content of domestically-made machines and equipment. The mechanical engineering sector in Dong Nai has so far attracted 319 investment projects, in which 270 projects worth over $3.2 billion, saw investments by foreign companies, accounting for 22.2 per cent of the flow of total foreign direct investments into the province. Meanwhile, domestic enterprises poured more than VND5.6 trillion ($266 million) into 49 projects, which was more than investments in other sectors. Lowering interest rates remains a priority for SBV Lowering interest rates to support production and business activities will be one of State Bank of Viet Nam's priorities this year, according to Monetary Policy Department Director Nguyen Thi Hong. Making these remarks during an interview with VnEconomy, Hong added that interest rates were declining as the banking system experienced redundant liquidity after the Tet (Lunar New Year) holidays. Many banks had cut deposit rates by 0.3-0.5 percentage points for deposits with one-to-two month tenures and by 0.1 percentage point for deposits with longer terms. "This is an important premise for banks to reduce lending rates," she said. She remarked that the SBV would continue to ask lending institutions to adjust lending rates for existing loans to fall below a cap of 13 per cent. The central bank will also urge lenders to slash the preferential rate applied to the VND30 trillion (US$1.43 billion) property bailout package by 1 percentage point to 5 per cent, following an SBV decision issued in January, she noted. "Interest rates for loans in both the Vietnamese dong and the US dollar are now stable and reasonable. Many banks have offered lending rates for dong loans at below 6 per cent, even lower than [the popular] deposit rates," she said. SBV Governor Nguyen Van Binh reported at a government meeting, on February 28, that the central bank had released VND150 trillion ($7.1 billion) in January, and this decision has helped ensure liquidity as well as add $4 billion to the nation's foreign exchange reserve. However, while the official target for lending growth in 2013 was 12-14 per cent, total credit contracted 1.66 per cent in the first two months of the year. Hong said the decline was normal during the Tet season, evident from the experience in the past few years, and positive developments in the macro-economy will support monetary policies. She also remarked that brighter global prospects will benefit exports, while domestic conditions improve this year. Capital disbursement from foreign direct investment had increased 6.7 per cent, the total retail of goods and services had grown 6.2 per cent year-over-year and the consumer price index had expanded moderately by 1.24 per cent in the first two months. The central bank has urged lenders to design schemes to ensure credit growth reached its target and has also asked fragile banks to implement their restructuring plans, she said. Exports to Australia rise in January Exports to Australia rose to US$294.47 million in January, representing a significant year-on-year increase of 24 per cent, the General Department of Customs reported. Among export items, crude oil exports were the largest, with a value of $150.14 million (up 56 per cent), followed by telephone handsets and components at $26.78 million (down 6.2 per cent) and seafood with $19.58 million (up 32 per cent). Vinamilk starts construction of new dairy factory Vinamilk, or the Viet Nam Diary Products Joint Stock Company, began construction of the Thanh Hoa 2 Holstein Farm at Phu Nhuan Commune in Thanh Hoa Province's Nhu Thanh District last week. With a capacity of 3,000 Holstein cows, the farm will cover an area of 35,000 sq.m. It is expected to start operation this September, and reach an average capacity of 50 tonnes a day. In two years, Vinamilk has plans to open three new farms in Tay Ninh Province with 10,000 Holsteins, Ha Tinh Province with 3,000 heads, and Thanh Hoa Province with 20,000 heads, bringing Vinamilk's total to nine farms with 46,000 Holsteins. Kien Giang promotes agriculture exports The Mekong Delta province of Kien Giang is intent on realising its export goal of earning US$670 million in 2014. Of the total, the export of agricultural products is expected to reach $440 million, while aquatic products are hoped to bring home $175 million. Other goods will bring in an estimated $55 million. The locality will also strive to raise rice exports in the last months of the 2013-14 winter-spring crop. It will also promote shrimp export to the US as the country does not impose anti-dumping duties on Viet Nam's shrimp products. Big C to open four more supermarkets French supermarket chain Big C plans to open four new supermarkets across Viet Nam this year, said Duong Thi Quynh Trang, Big C's PR director. Trang noted that Big C Ha Long in Quang Ninh Province, to be launched in April, will be the first of these, and the second will be Big C Quy Nhon in the central Binh Dinh Province, which will be launched in May. The other two locations have not yet been confirmed. Italian businesses seek opportunities in Vietnam Twelve Italian manufacturers will take part in two exhibitions dubbed ‘Propak Vietnam 2014’ and ‘Plastics and Rubber Vietnam 2014’, scheduled for March 4-6 in Ho Chi Minh City. According to the Italian Trade Commission in Vietnam, these companies will introduce their technologies related to packaging, plastic and rubber manufacturing during the events, with the aim to seek business opportunities with Vietnamese partners. ProPak is an international processing, filling and packaging exhibition where processing machinery and technologies for food packaging, beverage bottling, printing and labelling are on display. Meanwhile, Plastics and Rubber Vietnam 2014, now its 5 th edition, provides a stage for manufacturers to showcase and market latest innovations, state-of-the art machinery and cost-effective solutions to Vietnam and its neighbouring countries. The two exhibitions are expected to attract more than 300 businesses at home and from abroad.- Mekong Delta province works to enter Netherlands market The Mekong Delta province of An Giang plans to shake hands with Netherlands firms to expand export markets for its fruits and farm products. During a working session with Vietnam Trade House and Padfood companies from the Netherlands on March 3, Doan Ngoc Pha, deputy head of the provincial Department of Agriculture and Rural Development, said the province is planning to expand its maize cultivation area to supply the Netherlands . He said with high quality varieties created from those from the US and Switzerland growing in over 11,000 hectares, the province can guarantee the origin and quality of its maize and maize products. Meanwhile, Theo Thiam The, General Director of the Padfood company, said his firm will coordinate with An Giang in developing material area for maize powder processing. The company will work with An Giang University to conduct research on maize varieties to suit the markets of the Netherlands and Europe as well. According to Theo Thiam The, his company plans to import fresh fruits for retails chains in the Netherlands and will study the purchase of mango from An Giang. Pham Hai, General Director of the Vietnam Trade House said sample products from An Giang have received good feedback from Netherlands customers. He proposed that local firms renovate their sale and delivery methods to gain easier access to the Netherlands market. According to Vuong Binh Thanh, Chairman of the An Giang People’s Committee, the province has assigned the Department of Agriculture and Rural Development and Antesco company as contact points for maize and mango export. The province will also offer loans with preferential interest rates to local firms which wish to broaden their production of for-export products, while sending its experts to the Netherlands for experience-sharing trips. Vietnamese businesses want more regular exchanges Vietnamese companies in Laos have proposed more regular meetings being held for both countries’ businesses to help them exchange experience and foster links towards realising the two-way trade target of 2 billion USD by 2015. They raised the ideas at a meeting with Vietnamese Ambassador to Laos Nguyen Manh Hung in Vientiane on March 3. Vietnam currently has 412 projects in Laos with a total registered capital of over 5 billion USD, being the third largest investor in the landlocked country. In 2013 alone, Vietnamese enterprises invested in 12 new projects totalling 138 million USD, focusing on mining, hydropower, agriculture, construction, banking and insurance. Ambassador Hung assured the businesspeople that he will come along with them while expressing his hope that they will stay proactive in implementing investment projects, promote unity and share information, contributing to developing the Vietnam-Laos special friendship and solidarity. Real estate market rebounds in central city The real estate market in the central city of Da Nang is showing positive signs with an increasing number of seaside tourism projects and sales programmes of local residential land lots, a local newspaper reported. The development of the local tourism sector has helped Da Nang emerge as an attractive destination for real estate investors from home and abroad , said the Da Nang Today Online. Most notably, many investors have poured their money into developing many seaside tourism projects, from the Son Tra Peninsula to the Marble Mountains. Last year, local seaside villas enjoyed room occupancy rates of over 60 percent during peak times, but they reached 90 percent during the recent Tet (Lunar New Year) festival. According to VinaCapital Da Nang, the city’s real estate market saw an improvement during the last six months of 2013. This positive sign was mainly attributed to the stability of Viet n am’s macro economy, as well as to the trust of foreign investors in the domestic real estate market. A total of 100 local apartments were sold last year, a 3-fold increase against the previous year. Developed by the FPT City Da Nang Joint Stock Company, the FPT City urban area project is under construction in Ngu Hanh Son d istrict. The company is a professional urban and real estate project developer. The city’s residential land market is seeing positive signs of the Hoa Xuan Eco-urban Area project, along with others in Lien Chieu d istrict. Chairman of the Board of Directors of the Da Nang-Mien Trung Investment Joint Stock Company Dang Thanh Binh said that his company has had good results from the Phuoc Ly Urban Area project. He added that the company launched 3 sales programmes for local residential land lots in late 2013. As a result, about 200 land lots were sold during each programme. The success of these sales programmes has helped to identify new realistic prices for local residential land lots, as well as to create a competitive environment for real estate investors. According to experts in this aspect, this will help those who are in need of housing now to find it easier to purchase land lots. Export sector struggling for sustainable growth The latest report of the General Statistics Office shows that Vietnam’s trade surplus in the first two months of 2014 was at 244 million USD, 1.2 percent of the total export revenue, reported the Nhan Dan (People) online newspaper on March 3. Export revenue during the period totaled 21.1 billion USD, outstripping the aggregate import value of 20.8 billion USD. In another encouraging development, the export revenue of domestic enterprises rose by 13.2 percent over the first two months of 2013, outpacing the 11.8 percent rise posted by foreign-invested enterprises. Mobile phones, garments, footwear, seafood and timber all made strong gains. Last year, the export sector was a bright spot, and this momentum continued in the first two months of 2014, which is a good indication for the broader economy. A closer analysis suggests, however, that many commodities that were formerly key exports have been on the decline. Coffee dropped by 16.9 percent during the period and rice declined by 2.3 percent, while rubber and cassava fell by 39.6 percent and 24.9 percent, respectively. Mobile phones remained the leading export industry in January-February, which are assembled using imported components, offering little added value to the economy. These trade figures cannot be considered sustainable, as the foreign sector recorded a surplus of 2.09 billion USD while domestic enterprises continued to net a deficit. Export growth is sustainable only when exports have high added value. Most exporters still have to import machines and materials as inputs to their production. The efficiency of exports is not expected to improve significantly so long as the domestic support industry continues to struggle to find a way forward. On the bright side, free trade negotiations with partners in ASEAN, the Asia-Pacific region and the EU have the potential to open new great opportunities for Vietnam’s exporters. However, these opportunities will become challenges if Vietnamese producers fail to source their materials locally and meet requirements on product origins as part of the terms of these trade agreements. More impetus for Vietnam's economy in 2014 Together with the determination of the business community and the measures by the Government, the Vietnamese economy will receive more impetus to move forward in 2014, said a weekly magazine of the Vietnam Chamber of Commerce and Industry (VCCI). According to the Vietnam Business Forum (VIB Forum), in 2014, internal movements of the economy as well as adaptability and response of Vietnamese enterprises to difficulties are getting better and better. Most specialists agreed that Vietnam’s economy would change significantly, adding there hve been positive signs. Chairman of the National Financial Supervisory Commission (NFSC) Vu Viet Ngoan said that the economic ship will continue to have more acceleration to move forward because it has all three good conditions, namely time, ground and human resources, in 2014. The world’s economic recovery is the “good time” condition. Vietnam’s economic achievement in the past years - especially the macroeconomic stability that creates new position and force - is the “good ground” condition. Vietnam's experience with crisis-overcoming policies and practices accumulated in the past six years is the “good human resources” condition. “Knowing how to utilise all these three factors will be an important driving force for us to overcome challenges," he added. Earlier, Prime Minister Nguyen Tan Dung, in his New Year Message, described the pattern of economic reform that Vietnam will pursue: Implementing market price mechanism for essential goods and services and fair competition. These two issues are closely inter-related together and associated with State-owned enterprises (SOEs), an area seen as an important factor to expose weaknesses of Vietnamese economy more clearly when the world economy falls into crisis in the past years. He said the market price mechanism for all goods and services must be consistently implemented. The pricing of essential goods and services by the State must be accurate and sufficient in terms of costs; price-formulating elements must be made transparent and the market price mechanism must be persevered with a suitable roadmap. He affirmed that businesses of all economic sectors must operate in accordance with market rules. Business monopoly, policies and mechanisms generating unfairness among businesses, especially access to resources, must be eliminated. Resolute efforts must be made to restructure State-owned enterprises, focusing on SOEs equitisation, including economic corporations; withdrawing capital from non-core businesses and selling shares that the State does not need to control even in profit-making enterprises under market rules. State-owned enterprises shall only operate in key, essential fields, important zones and in national defence and security area. Business tasks shall be separated from political and public duties. Although the State economy still plays a leading role, as stated in the Constitution, SOEs will still have to compete equally with enterprises of other economic sectors. The magazine quoted economic specialists as saying that in response to efforts of the entire political system and expectations of entrepreneurs and enterprises, Vietnam’s production is gradually accelerating and having many opportunities to access big markets like the EC and the US. Manufacturing is raising its important role in Vietnam's economy thanks to its robust growth and the significant decline of mining, quarrying, construction, real estate, agriculture and forestry sectors. Although the recent international financial crisis affected Vietnam’s economy to a certain extent, its impacts were not very clear because of Vietnam’s small-scale capital market. Vietnam's economy maintained growth while quantitative easing (QE) programmes in developed countries also brought many positive benefits to developing countries. The Government adopted a number of measures to tighten monetary and fiscal policies to cool its overheated economy, perfect financial system management capacity, started with bank classification, bad debt purchase, and growth obstacle assessment. Significantly declining domestic demand helped reduce imports and thus increase trade surplus. Inflation fell to a single-digit rate since May 2012. The exchange rate also steadied. Manufacturing growth is definitely a positive sign, especially when foreign capital flows are strongly poured into this sector. According to economists, the manufacturing growth is expected to raise Vietnam's GDP growth from 5.4 percent in 2013 to 5.6 percent in 2014. However, a competitiveness enhancement strategy for domestic enterprises is also important. Whether this strategy also helps increase relations of domestic enterprises with supply chains and improve added value to production in addition to cheap labour and materials or not requires the policy roadmap to ensure that local businesses are not being left behind. If it is not carried out seriously, economic development will not be stable, thus resulting in increasing labour costs. Manulife reports winged growth Manulife Vietnam, the life insurer wholly owned by the global financial services group Manulife Financial, has reported strong business growth in 2013. The company last week announced that its total premiums and deposits grew 22 per cent on year in 2013 to VND2.63 trillion ($125 million), in which the annualised premium equivalent (APE) insurance sales increased 18 per cent to VND846 billion ($40.3 million). Total assets under Manulife Vietnam’s management grew 31 per cent on-year to VND8.39 trillion ($399.9 million), and insurance sales of bancassurance continued their remarkable growth with 329 per cent over 2012. “I am very pleased that Manulife Vietnam has delivered a successful 2013 with outstanding performance despite a very difficult year for the business and is no doubt one of the growth engines for Manulife in Asia,” said Indren Naidoo, Manulife’s regional CEO for Thailand, Vietnam and Cambodia. “We have been demonstrating our capabilities and commitment to provide customers with products and services of international standards. I am confident that Manulife Vietnam will achieve even more impressive results in the Year of the Horse and become the brand of choice for Vietnamese families’ most significant financial decisions.” Operating in Vietnam since June 1999, Manulife Vietnam, the first 100 per cent foreign-owned life insurance company licensed in Vietnam, has grown into one to the top three largest life insurers in the country today. The company’s consistent business strategy is based on developing a professional agency team, expanding distribution channels and diversifying its product portfolio to meet customers’ rising needs. By the end of 2013, Manulife Vietnam has developed more than 13,000 professional agents, providing a wide range of innovative life insurance products and financial services. Manulife Vietnam is also co-operating with banking partners to meet increasing market demand. In addition, through the Vietnam Women’s Union, the life insurer has developed a micro-insurance programme for low-income women in support of the government’s goal to universalise insurance knowledge, contribute to social welfare, decrease poverty and promote savings among Vietnamese. On June 14, 2005 Manulife Vietnam Fund Management Company Limited, which was then renamed Manulife Asset Management (Vietnam) Company Limited in November 2010, a wholly-owned local subsidiary of Manulife Vietnam, was granted a license to operate a fund management and portfolio management services company, further expanding Manulife Vietnam’s product offerings for its customers. Vinacomin continues to delay restructuring Vinacomin chairman Tran Xuan Hoa at a conference in Hanoi on the restructuring of state-owned enterprises said one of the biggest challenges to the company’s equitisation would be resultant massive layoffs. “Vinacomin’s restructuring would result in 30,000 workers being made redundant,” Hoa explained. He added that severance packages for these workers could get as high as VND10 trillion ($476.2 million), a number the group couldn’t afford amid a difficult economic climate. According to the National Steering Committee for Enterprise Reform and Development (NSCERD), Vinacomin is listed in the group of state-owned enterprises (SOEs) with the slowest equitisation progress. It has not yet carried out a single IPO of the eight it was supposed to complete in the 2012-2015 period. Prime Minister Nguyen Tan Dung has instructed Hoa to ensure the company steps up its reform efforts. Of the eight Vinacomin companies set to be equitised, the company holds a greater than 51 per cent stake in seven of them. The exception is Vinacomin-Ship Building Mechanical Company in which it holds a 50 per cent stake. The companies have not even published their equitisation plans and they have less than a year to carry out the restructuring if they are to follow the prime minister’s roadmap. Two of the companies, Vinacomin-Material, Transport and Stevedoring Company Limited and Thai Nguyen nonferrous Metal Company, were supposed to be restructured into joint stock companies on January 1 this year. Obviously this didn’t happen. The NSCERD said Vinacomin’s equitisation was highly important to the overall national restructuring plan that aimed to transform 432 SOEs by 2015. Formosa pours huge money for its site clearance Taiwan’s Hung Nghiep Formosa Ha Tinh Steel Limited Company has poured $1.166 billion for its site clearing at its giant steel and port complex in the central province of Ha Tinh. According to the company’s latest report, it has poured that amount of money for its sucking sand as well as smooth the surface of its steel project, a 2.6 times higher than initial estimate. Formosa Plastics Group, the largest private conglomerate in Taiwan, gained an investment certificate for developing this mammoth integrated steelwork in the central Ha Tinh province six years ago. The construction was delayed till 2010 because of site clearance issue. Formosa started construction on the project in 2011. The project has the total registered investment capital of approximately $10 billion, and annual production capacity of 7.5 million tones of steel. Formosa is the dominant shareholder of the project with 95 per cent and China Steel – Taiwan's largest steel maker – holds 5 per cent. According to Formosa, the project will comprise six blast furnaces, a 32-berth seaport, and a 2,150 megawatt thermal power plant. Construction will run through 2020. The investor noted that 50 per cent of production would go to supplying the domestic market and the rest will be exported. Airport Corporation approved for equitisation The Airport Corporation of Vietnam has been approved by investment authorities to carry out its equitisation plan. “The Ministry of Transport [MoT] proposal to equitise the Airport Corporation of Vietnam [ACV] is correlative with our socio-economic development orientation,” said Deputy Minister of Planning and Investment Dang Huy Dong in a document on the government’s perspective of ACV’s development plans. The MPI also recommended the MoT consider policies to support ACV’s operations in the post-restructuring period such as a unified airport development strategy and classifying airport usage based on civil or defense needs for more effective management. ACV has a VND14.7 trillion ($700 million) chartered capital and manages 22 airports throughout Vietnam. It is a giant business that directly promotes aviation transport and received remarkable financial support for aviation infrastructure projects. Surprisingly, ACV was not listed among the transport sector’s state-owned enterprises slotted for equitisation by 2015. “The ACV desperately needs tremendous amounts of capital to get its major airport infrastructure projects rolling, including the construction of the Long Thanh International Airport in southern Dong Nai province,” said Minister of Transport Dinh La Thang. According to ACV’s latest financial statements, ACV raked in VND8.4 trillion ($400 million) in revenues in 2013, up 6 per cent on-year and VND1.3 trillion ($64.2 million) in pre-tax profits last year, down against 2012. HCM City to pilot gasoline purchase bill printing The HCMC Department of Science and Technology on Tuesday collected suggestions from gasoline trading companies to deploy invoice printing at filling stations. The invoice printing device is made in Vietnam with components imported from Taiwan. It can collect data such as the managing unit of the filling station, type of fuel, time of purchase, volume and price without intervention in the processing system of gas bumps. Phan Minh Tan, director of the department, said that the scheme will be piloted at five fuel trading companies in HCMC. The trial will run till mid April. This project realizes a notice of the municipal government in 2011 on measuring fuel quality in the city. It aims to protect benefits of consumers in case of disputes with fuel traders. In 2012, the department piloted the scheme at some filling stations. However, the invoice printing device made direct intervention in fuel bumps, so enterprises had to stop the project. Novaland gets involved in three new property projects Novaland Group on Sunday announced it would get involved in three half-done apartment and commercial property projects in HCMC, making its first foray into projects that have been hit by the country’s economic slump. Phan Thanh Huy, general director of Novaland, said his group would be injecting about VND3 trillion into Lexington Residence on Mai Chi Tho Street in District 2, Icon 56 on Ben Van Don Street in District 4 and Galaxy 9 on Nguyen Khoai Street in District 4. The combined number of apartment units in the three projects is around 2,000, with 1,300 of them at Lexington Residence, 200 at Icon 56 and the remainder at Galaxy 9. Huy described the locations of these projects as great and said their investors had not been able to proceed with construction work due to financial constraints sparked by the country’s economic slump. New financing and proper product development are one of the solutions to coping with the current hindrances to the property sector, he said, noting that given falling incomes, people could hardly afford to buy apartments at high prices. Novaland could offer affordable apartment prices at the three projects as it could cut capital costs, spend no time on approval procedures as required for new projects, and quickly put these half-done projects into operation. The firm said prices could be 20-40% lower than at other projects in the same areas. A Lexington Residence apartment costs around VND1.3 billion and moreover, buyers could choose a deferred payment plan without extra cost, in which they pay about VND19 million a month. The price is around VND2 billion per unit at Icon 56 and some VND1.5 billion at Galaxy. VND30-tril. package disbursement rate still low Local banks as of the end of January had disbursed just over VND1 trillion to customers given the VND30-trillion credit package for the property sector, Vietnam News Agency reports. Statistics of the central bank showed that lenders committed to provide VND2.3 trillion worth of loans as part of the program. Mega Residence houses launched at nearly VND2 bil. Khang Dien House Trading and Investment Joint Stock Company will launch the sale of Mega Residence project in HCMC’s District 9 on March 9 at prices from nearly VND2 billion each, Dien Dan Doanh Nghiep reports. The project includes 160 villas with facilities such as a swimming pool, park and badminton court. Danang offers villa land lots from VND500 mil. Tam Quang Minh real estate exchange center has launched the sale of house and villa land lots at Bac Son Tra residential area in Danang City at prices from VND500 million each, Dien Dan Doanh Nghiep reports. The land lots are measured from 100 to 150 square meters each. Tropic Garden customers get support Novaland Group has offered customers a sales program under which clients of Tropic Garden condo project in HCMC’s District 2 will have to pay only 60% of the apartment’s value to own the property, Vnexpress reports. The remaining 40 percent can be settled in 39 months. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR