BUSINESS IN BRIEF 16/6 Prices of white-leg shrimp continue to plunge Local farmers in the Mekong Delta region are suffering huge losses as a global glut of white-leg shrimp has caused the sales price to nosedive 50% over the past year. In Soc Trang and Bac Lieu provinces, farmers are in mid-harvest of white-leg shrimp, and are worried that the sales price may not cover the cost of production, forcing them out of business. Ngo Dang Hiep, a shrimp trader in Bac Lieu, said the price of big shrimp (50/kg) now stands at VND120,000/kg, while last year’s figure was VND220,000/kg. A kilo of smaller 100 shrimp currently sells for VND78,000, almost half of last year’s price (VND150,000), he added. With such low prices, local farmers are facing heavy losses, which many are financially incapable of absorbing. Faced with rising input costs for food, medicine and stock, many may be forced to shut their doors. Leaders of some provincial departments for agriculture and rural development attribute the decreasing price of white-leg shrimps to overabundance of supply in the world marketplace, far exceeding demand. Bac Lieu Provincial Department for Agriculture and Rural Development Director Luong Ngoc Lan revealed that some Asian markets have remarkably improved their own production of white-leg shrimp. In turn their success has led to reduced import of this product. In addition, he said, some shrimp importing nations are creating technical barriers that impose increased obstacles, negatively affecting demand and the sales price. Milk prices at supermarkets decline Government officials recently announced that milk prices and related products at supermarkets are falling from between 10% and 20% as a result of a recent decision.  A few prices are even exceeding a 20% decrease they report. According to the Ministry of Finance (MoF)’s decision, the revised wholesale and retail price of milk guidelines technically go into effect as from June 10 and June 21, respectively. The decision creates a new floor price list for a select list of milk products and directly impacts the prices of products by milk producers such as Abbott, Friesland Campina Vietnam, Mead Johnson, Nestlé, and Vinamilk. A representative from Co.opmart said that the supermarket has already implemented the new pricing guidelines on 12 milk products it sells by Abbot, Mead Johnson and Nestle.  The new prices have decreased by up to VND35,000 for each tin, the representative said. Big C External Director Ho Quoc Nguyen said that starting in early June, Big C adjusted the retail prices of milk products by Abbot and Nestle and a number of other providers under the MoF’s floor prices. Sales prices have been reduced from 10% to over 20% depending on each product, Big C reports. Milk stores said that there are few Enfamil A+ and Enfa Grow A products which are in the floor price list in the local market. However, they report that a few milk products which are not in the floor price list, have actually risen in price, up VND 45,000-50,000 for each tin. Vietnam Standards and Consumer Rights Protection Association Vice President Nguyen Manh Hung said that there are positive signs in the price of milk products in the domestic market these days. The milk prices for children under six years of age have decreased remarkably, he said. Especially, the prices of Abbot’s milk products have been falling as a result of the MoF’s decision. Can Tho announces plan for industrial park The Mekong Delta city of Can Tho is soliciting investment to back the construction of a new large-scale US$10.2 million high-tech industrial park in Thanh Phu in Co Do district. Strategically located, the proposed industrial park spans 100-ha, with a layout aimed at guaranteeing business efficiency.  The design includes a production area, an exhibition centre, a trade and service area, and an area specifically targeted at supporting modern agriculture. To incentivize investment, the Can Tho Department for Planning and Investment is providing preferential credit loans and reducing land-use tax for investors in the park. The Department will also provide assistance to those businesses choosing to participate in collective advertising campaigns. Foreign investors will enjoy corporate tax exemption for two years and have their taxes for the subsequent three years abated by 50%. Can Tho Department for Agriculture and Rural Development Director Pham Van Quynh said the Thanh Phu high-tech park will be equipped with the most advanced and innovative farming and technological equipment. High-quality varieties of fish and shrimp will also be developed to meet the strictest of requirements for food hygiene and safety in the Mekong Delta region, he added. Vietnamese market attracts multinational groups Vietnam is one of three nations to capture the most attention from European and US multinational groups looking to invest in small-scale newly-emerging markets. The information was unveiled by research conducted by the US’ Frontier Strategy Group (FSG). According to the Frontier Markets Sentiment Index, under which FSG has conducted a survey on 200 multinational groups, Vietnam ranked third with 24.72% of the surveyed businesses saying that they are keen on investing in the country in the coming future. Topping the list are Nigeria (29.57%) and Argentina (25.54%). The surveyed businesses include Coca-Cola, General Electric, Novartis, Dell and Azko Nobel. In general, the sentiment index of multinational groups in frontier markets has been reduced. “Frontier markets” are used to mention small-scale newly emerging economies which have reaped huge profits for investors.  Foreign firms boost trade promotion in Vietnam The British Business Group Vietnam (BBGV) opened an information centre in HCM City on June 10, with the aim of creating more trade and investment opportunities for UK and Vietnamese businesses. BBGV Chairman Nick Holder said the newly-built centre - part of a cooperation agreement between the BBGV and the UK Trade & Investment (UKTI).is designed to provide them with updated information on market research, seeking partners, and trade transactions, he added. The centre will function as a prestigious venue assisting small-and-medium sized UK enterprises to operate efficiently in Vietnam with its market research, consultancy, and information services. The same day, the Italian Chamber of Commerce (Icham) officially announced the name of four Vietnamese restaurants winning “Golden Q” certificate for their excellent quality- La Hostaria, Pendolasco Italian Garden Restaurant, Pendolasca Italian Restaurant, and Gourmet Shop Pomodo. An ICHAM representative said the certificate honours those Vietnamese restaurants meeting Italy’s quality standards. A certificate presentation ceremony scheduled to take place in HCM City on June 12 will provide an opportunity for Vietnamese and Italian businesses to meet and establish a partnership in various fields, particularly economics and trade. Foreign exchange market to be stabilised The State Bank of Vietnam (SBV) has said it will keep a close watch on the forex market and make a timely intervention if necessary to stabilise the market. The exchange rate between the US dollar and Vietnam Dong of commercial banks hit the ceiling level on June 9 after SBV governor Nguyen Van Binh’s statement one day earlier. In a weekly Q&A session run by the Government portal on June 8, Binh said there is no reason for adjusting the exchange rate at the moment given the economy’s trade surplus and abundant foreign currency reserves in the first half of the year. However, the governor revealed the central bank might adjust the rate at an appropriate level to stimulate exports. “We guarantee that the forex market will be stabilised from now till the end of the year, and if there is any adjustment, it cannot exceed the 2% margin level,” Binh said. Immediately the exchange rate fluctuated sharply in the market. At the Vietnam Export Import Commercial Joint Stock Bank (Eximbank), a US dollar was exchanged on June 9 for VND21,240, close to the VND21,246/US$ ceiling level announced by the SBV, up VND20 compared to late last week. The rate at the Bank for Foreign Trade of Vietnam (Vietcombank) was VND21,240/US$, up VND20 against last week. Financial expert Tran Hoang Ngan attributed the market fluctuations to residents’ psychological worries over recent East Sea tensions following China's illegal oil rig placement in Vietnam's territorial waters rather than market demands. In the first five months of this year, Vietnam enjoyed a US$1.6 billion trade surplus while its foreign currency reserves kept increasing.   “That’s why the central bank did not adjust the rate, and if the exchange rate rises, it [fluctuation] does not last long,” Ngan predicted. Regarding the rate fluctuations, SBV deputy governor Nguyen Phuoc Thanh did not rule out the possibility that several commercial banks upped the rate to anticipate the central bank’s upcoming moves. However, the central bank did not intervene in the market as the new rates are within the limits and have not caused any chaos, he said.     Nguyen Tri Hieu, another financial expert, noted that besides the psychological factors, market speculation is another reason for the recent fluctuations in the exchange rate. Several banks hesitate to sell US dollars for fear that East Sea tensions could negatively the national economy that eventually fuels foreign currency demands. Yet, Hieu echoed Thanh’s view that the rise in the exchange rate is within the SBV margin range. Head of the SBV’s Monetary Policy Department Nguyen Thi Hong said the central bank will closely monitor market developments to flexibly address arising issues to stabilise monetary, foreign currency and gold markets. With its large reserves, the SBV is capable of intervening in the market if there are any sharp fluctuations, in order to keep the exchange rate stable, she said. She went on to say the SBV and relevant ministries and agencies will intensify foreign currency management measures, timely detect and punish market law violations. A representative from Hong Kong and Shanghai Banking Corporation (HSBC) said the SBV is powerful enough to step in to stabilise forex market if necessary. The central bank plans to adjust the exchange rate within the 1-2% margin this year, and HSBC is confident that the range will be kept until the end of this year, he said. Economic experts also suggested that the central bank keep its eye on fluctuations in the gold market in order to stabilise the forex market. An increasing demand for foreign currencies to import gold will cause the forex market to overheat. Furthermore, the SBV should focus on policies aimed at filling the gap between domestic and foreign gold prices, they said. Billion dollar projects awaken central region Many large Foreign Direct Investment (FDI) projects in the central coastal region are bringing fresh impetus to local socio-economic development, giving the region a facelift. Phu Yen province recently confirmed that a US$3.2 billion oil refinery project of UK Technostar Management Ltd in Vung Ro is set to get off the ground this August. “We are pinning much hope on the project stimulating local socio-economic development,” said Nguyen Ngoc An, vice chairman of the provincial People’s Committee. As a matter of policy, the People’s Committee is committed to creating the best conditions for investors to implement projects on schedule, he added. When the Vung Ro project is fully operational, it should contribute about US$111 million per annum to the state budget and generate jobs for roughly 1,300 labourers. Production at the refinery should also buttress the nation’s economy which is highly dependent on importing oil from foreign countries. The new refinery will allow Vietnam to greatly reduce its dependency on foreign oil. In the past week, the Binh Dinh provincial People’s Committee also worked with Thailand’s Petroleum Corporation seeking for a US$27 billion Nhon Hoi oil refinery project. “If the project is approved, it will create numerous advantages for attracting investment into support industries for the petrochemical industry and other services,” said Man Ngoc Ly, head of the management board of the Nhon Hoi Economic Zone. The two projects hold great promise for the future economic landscape in the region, acting as a catalyst for propelling its economy forward and improving its investment environment. Since the Dung Quat oil refinery was constructed in Quang Ngai province, the central coastal region has been "awakened", and these projects are contributing to reshaping the oil refinery industry in the entire nation. Tran Duy Dong, a senior official of the Ministry of Planning and Investment (MPI), said the central coastal region also holds great potential for developing other industries, such as power generation, steel making, tourism and seafood processing. The US’s Exxon Mobil Corporation recently announced it is planning to invest in a gas-power complex project in the region to bring gas ashore and build gas and power plants. With a scheduled investment capital outlay of US$20 billion, the economic benefits are bound to reverberate throughout the region. Le Van Dung, deputy head of the management board of Dung Quat Economic Zone, noted that other projects such as Guang Lian steel plans to raise their investment capital by US$1.5 billion to US$4.5 billion and planned thermoelectric Semcorp bumped up their capital by US$2 billion. Additionally, preparations for constructing two nuclear power plants in Ninh Thuan province are underway. Once these projects are put into operation, they will sow enormous benefits local and national economies, helping ensure national energy security. The provinces of Quang Nam, Danang, Hue, Ninh Thuan and Binh Thuan provinces are increasingly becoming more attractive to domestic and foreign tourists and the tourism industry is starting to blossom. There are a series of tourist resort projects underway along Vietnam’s most beautiful coastline. The largest project in this area is South Hoi An in Quang Nam province, which is still being constructed at a total cost of US$4 billion. The tourism sector promises to bring many benefits for localities, especially in job creation, contributing significantly to budget revenue and stimulating local economic growth. Vietnam to sell 30,000 tonnes of rice to Iraq The Vietnam Northern Food Corporation (Vinafood 1) recently won a contract to provide 30,000 tonnes of jasmine rice for Iraq worth US$668 per tonnes (C&F). The US and Uruguay also won bids to ship 30,000 and 60,000 tonnes of rice to Iraq respectively at the price of US$717 a tonne (C&F). Vinafood1 recently paid a working visit to Mexico where they held working sessions with the Mexican Produce Foundation, plant veterinary agency, and some rice importers. The two sides reached an agreement on quality assurance of rice to be imported into Mexico. This year Vietnam plans to export 70,000 tonnes of 5% broken rice to Mexico. Good times ahead for Vietnam hotel industry Demand for hotel rooms in Vietnam has grown at 7-8% a year for the last three years, and occupancy rates in large cities are catching up with those in major cities across the region, a seminar heard in HCM City on June 9. A report by real estate consultancy CBRE tabled at "Hotel Investment & Management in Vietnam – Lessons from Across Asia" also said there is greater interest in investing in the country's hotel sector partly due to the improving outlook of the Vietnamese economy. Genuine buyers are becoming apparent, especially with investor interest in looking for quality hotels growing in Southeast Asia, it said. Buyers are propelled to look for investment opportunities outside of Hong Kong, Singapore, and Tokyo as prices continue to rise in these countries and investors try to identify good and attractive yields. International tourism has been growing in Vietnam, albeit at slowing rates, over the last three years. In the first five months of 2014 it has skyrocketed to over 26%. One of the reasons for the interest in Vietnam could be attributed to Thailand's political turmoil as tourists shift their gaze to other Southeast Asia countries. Hotel occupancy rates across Vietnam have generally been strengthening over the last three years. Occupancy rates in HCM City and Hanoi are now inching closer to that of cities such as Jakarta and Kuala Lumpur. While there is an increase in hotel supply predicted for both Hanoi and HCM City over the next three years – around 8% in total – this is less than the number of projects proposed for Kuala Lumpur and Jakarta, where supply may grow by 20% and 40% respectively if all the proposed projects proceed. Resort destination Danang has performed particularly well over the last few years but its exposure to the China market may present challenges in the very short term. Robert McIntosh, executive director, CBRE Hotels, Asia Pacific, said, “The longer term outlook appears positive at present.” “The quality of the infrastructure and hotels has improved considerably over the last few years and this has led, and will continue to lead, to a more stable and resilient tourism market,” he noted. “Hotel performance is expected to improve in the medium term and foreign investors are increasingly attracted to the opportunities and returns Vietnam offers," added Robert. The conference moves to Hanoi on June 10 and hotel operators, lawyers, financiers, and consultants will continue to discuss the climate of investment in Vietnam. Strategy to give Vietnam competitive edge All relevant ministries and agencies must actively participate in the government's strategy to improve business climate and national competitive edge, experts suggested at a workshop in Hanoi last week. The workshop was held because only a mere one-third of the localities across the country have come up with plans to realise the strategy, known as Resolution 19, which was initiated in March to enhance administrative reforms and help firms save processing time and costs. Under the strategy, the country sets the goal of meeting the standards of the ASEAN-6 group—Singapore, Thailand, Malaysia, Indonesia, the Philippines and Brunei—in terms of business licensing and insolvency; tax payment; customs formalities; and access to electricity supply and credit, as well as investment protection, by 2015. Experts stated that Vietnam has had some tax procedure reforms but still has a long road ahead to keep pace with ASEAN countries. Hoang Thi Lan Anh, deputy director of a committee responsible for the modernisation and restructuring of tax procedures under the General Department of Taxation, pointed out that Vietnam has made progress in cutting the tax time, adding that businesses had to spend 1,050 hours per year to pay taxes a few years ago. However, Anh also admitted that the reduction in time was not satisfactory enough. Director of the Central Institute for Economic Management Nguyen Dinh Cung stated that the government's Resolution 19 has approved many objectives in cutting tax-related red tape, but what is important is whether relevant ministries and agencies are determined to get things done. Cung added that businesses currently take 22 days to have customs cleared for their exports in Vietnam. If the duration could be cut to only seven days, Vietnam's GDP will increase by US$11 billion. Similarly, if the time to complete import procedures is reduced to seven days from the current 21 days, another US$15 billion will be added to the GDP. Therefore, the GDP can increase approximately US$26 billion only by reducing the export–import red tape by 29 days, he estimated. Experts stated that businesses in Vietnam take much more time to declare and pay taxes because they are required to submit very detailed tax files. The Director of the US Agency for International Development, Joakim Parker, noted that his agency is willing to assist Vietnam in implementing the strategy. If successful, Vietnam will be able to strengthen its global trade commitments, including those made within ASEAN, the World Trade Organisation and the Trans-Pacific Partnership deal, Parker added. The workshop was hosted by the Central Institute for Economic Management. Banks entice local, foreign firms With bank lending rates falling sharply in recent months, companies should grab this opportunity to borrow to develop their business, analysts said. Since banks are awash in liquidity, they are offering loans at 9-10% to companies and household businesses, with some even going lower. HDBank said it has earmarked VND500 billion (US$23.7 million) for lending to foreign firms from now through September. The companies can get medium-term loans to modify or build plants and buy equipment and materials but are not required to produce collateral. Those affected in the recent riots will get priority. An official at the State Bank of Vietnam's HCM City branch said five foreign enterprises affected by riots in the city have outstanding bank loans, and the lenders are considering ways to support them, including reducing interest rates. The central bank has instructed banks to continue stepping up credit and other activities at export processing zones and industrial parks, he said. Last week 10 banks in HCM City signed a credit contract worth VND718 billion (US$34.03 million) with 34 companies in District 10 at 7% interest rate. They are Sacombank, VietinBank, Agribank, Vietcombank, DongABank, ABBank, HDBank, MHB, SCB, and VID Public Bank. Besides this, the banks also have their own programmes to lend to companies in various fields. SeABank is offering VND loans at 6.5% and dollar loans at 4% to import-export companies under a credit programme worth VND300 billion and US$20 million. Besides, borrowers under this programme will enjoy a 20% reduction in fees for international payments and free foreign fund transfers. The bank is also lending to small and medium-sized enterprises and household businesses at 8.5% through a VND4 trillion preferential credit programme. The programme will go on until December 31. Agribank has earmarked VND10 trillion for lending at 6-8% to enterprises involved in exports and imports of agricultural products, food, and items used for agricultural production. The programme will run from June through September. HCM City seaports apply new automated customs system Customs branches of three seaports in Ho Chi Minh City officially applied a Japan-funded automated customs system on June 9. They are the Saigon zone 1 and Saigon zone 3 ports and the Tan Cang customs branch. The Vietnam Automated Cargo and Port Consolidated System and the Vietnam Customs Information System (VNACCS/VCIS), funded by the Japanese Government, is worth nearly JPY2.7 billion (US$21.2 million). Rolled out since April 1, 2014, the system will be running in all 34 provincial and municipal customs sub-departments across the country by June 30. It has been to date applied in 32 out of the 34 customs sub-departments, said Nguyen Ngoc Tu, Director of the Customs of Vietnam. The new automated customs system is able to deal with declarations within three seconds, according to the Customs of Vietnam under the Ministry of Finance. Via VNACCS/VCIS, businesses can make customs declarations at anytime and anywhere, thus saving time and paper procedures. After a three-month trial period since November 15, 2013, up to 18,196 enterprises nationwide have registered to join the system, and 10,154 have run it on a trial basis. US highlights Vietnam’s safety measures The US business community has praised Vietnam’s efforts in stabilising production and business activities in industrial parks in the south, following riots and civil unrest in response to China’s actions in the East Sea. This view was shared by representatives from the Board of the Emergency Committee for American Trade (ECAT) at a meeting with Vietnamese ambassador to the US Nguyen Quoc Cuong on June 11. Addressing the annual ECAT conference, ambassador Cuong highlighted progress at the meeting of Trans-Pacific Partnership (TPP) chief negotiators in Ho Chi Minh City and the TPP ministerial meeting held in May in Singapore. Cuong called on continued, support of US businesses to accelerate and conclude negotiations. The Vietnamese diplomat also mentioned tension in the East Sea after China’s illegal positioning of drilling rig Haiyang Shiyou-981 in Vietnam’s exclusive economic zone and its provocative acts of deploying escort vessels in the area. US business representatives voiced deep concern over the East Sea tension, in particular the interruption of trade activities. They expressed hope that concerned parties will take the necessary steps to ease tension in the region. They also hailed the Vietnamese Government’s measures in ensuring security and safety of property and interests of individuals and foreign organizations and businesses in Vietnam. The US also praised Vietnam for stabilising orders in affected industrial parks and export processing zones in Vietnam as businesses resumed their normal operations after disturbances by rioters. Auto sales stay strong in May Sales by members of the Vietnam Automobile Manufacturers’ Association (VAMA) continued rising high last month with nearly 10,000 automobiles sold, the Saigon Times Daily reported. VAMA has yet to release the official figure. However, according to statistics of VAMA members, they sold around 9,850 autos in total last month, up by nearly 1,650 units year on year and roughly equivalent to the figure recorded in April. Notably, Truong Hai Auto Corporation (Thaco) maintains its strong grip in the first position. Thaco sold 3,568 units last month, up around 50 units compared to April and nearly 1,000 units compared to last year’s same period, and held a market share of 36.2 percent. Meanwhile, the sales by Toyota Vietnam was around 2,800 units in the same period and accounted for 28.4 percent. Toyota had for many years on end taken the lead in the domestic market. This is the fourth month in a row Thaco has topped the sales chart so far this year with a total of over 14,360 units sold. Other members of VAMA also posting high sales in May are Ford Vietnam with 932 (up 314 units), GM Vietnam 412 (up 84 units) and Honda Vietnam 457 (up 170 units). Overall, VAMA members sold around 44,100 units in total in the year’s first five months, rising by nearly 9,300 units against last year’s same period. Sport utility and multi-purpose vehicles sold well in the period with 10,650 units, up 33 percent. In related news, Toyota Vietnam on June 10 unveiled Yaris 2014, the completely built-up hatchback imported from Thailand. The 1.3G and 1.3E editions of Yaris 2014 are priced at 669 million VND and 620 million VND respectively. Toyota Vietnam targets to sell 120 Yaris cars each month to increase its market share in the compact hatchback segment. Three years after Yaris was launched in Vietnam, as many as 2,500 units have been sold. KOICA helps Vietnam improve competitiveness A ceremony was held on June 11 to officially announce the successful completion of a specially designed US$1.5 million integrated information system aimed at improving the competitiveness of Vietnamese businesses. The system, developed by the Korean International Cooperation Agency (KOICA) in collaboration with the Vietnam Competition Authority (VCA), was funded with official development assistance (ODA) from KOICA. The system is expected to enhance the effectiveness and convenience in handling competition cases and improving the quality of services to customers in Vietnam. At the ceremony, Kim Sik Hyun, Deputy Resident Representative of KOICA Vietnam, expressed his hope that the project will help create the free and fair economic environment, contributing to promoting trade and investment, and further protecting Vietnamese consumers. Over the past 20 years, through KOICA, the Korean government has funded a number of projects in Vietnam such as establishing stock exchanges, assisting the economic research institute, and giving advice on competition and investment law drafting. In 2008, KOICA invited Vietnamese staff to the RoK to train in the competition law. Developers remain uncertain of local property market Vietnam's property market is revising but depending too much on the financial market, which makes investment still risky, so developers should take prudential steps towards the market. The warning was delivered at a member meeting of the Vietnam Real Estate Association (VNRE) earlier this week. Statistics by the HCM City Department of Planning and Investment revealed that enterprises only own 15–20% of the total investment capital, and the remaining 70–80% capital is sourced from banks. The system's outstanding loans allocated in the real estate sector as of December 2013 reached VND268 trillion (US$12.6 billion), and non-performing loans were escalating at fast paces, stated Tran Kim Chung, deputy head of Central Institute for Economic Management. On the contrary, the ratio of Return on Asset (ROA) and Return on Equity (ROE) of real estate, construction and construction material production companies is 50% lower than the average ratio of the top 500 enterprises in Vietnam. However, their financial leverage ratios are 50% higher than the average ratio. "No country earning very low income per capita uses such high financial leverage ratio like Vietnam," independent economist Le Xuan Nghia noted, adding "Risks caused by financial leverage are unpredictable." The dependence on the financial market becomes worse when the money movements go through downturn periods. In the last decade, there were four financial crises and this pace was a real danger to all markets, especially real estate. Banks tightened lending policy and charged high interest rates, which pushed many property investors into troubles, such as debt burden, stockpile or no capital for project completion. "That is the reason why real estate companies should never together inflate prices of real estate projects despite a recent rebound. Pricing must be done very carefully," Nghia pointed out. Experts noted that developers should focus on feasible projects and stop digging for new projects, and also cut average apartment price to VND500–700 million (US$23,580–33,000) each, and to VND2–3 billion (US$94,300–141,500) per terrace house. Despite obvious risks, a large number of economists remarked that the real estate market of Vietnam appears attractive after bottoming out and showing signs of recovery, the government news portal reported. Dang Duc Thanh, dean of the Vietnam Economists Club, stated that real estate prices in Vietnam fell by a half against 2007 and costs of numerous departments bottomed out. Experts assumed that in the period from the third quarter of 2014 to early 2015, the domestic real estate market will improve if the government continues to support enterprises to handle high inventory levels and non-performing loans and raise liquidity for the real estate market. According to Neil MacGregor, managing director of Savills Vietnam—a real estate developer, the domestic real estate market is in an attractive period. Neil MacGregor claimed that Vietnam is standing at the bottom point of a real estate cycle while other Asian markets remain at the other side and are likely to be on the decline in the next few years. Hence, Vietnam is believed to serve as an important destination for investors in Southeast Asia. He also revealed that customers of Savills Vietnam from Japan, Singapore and the Republic of Korea are intending to join long-term and large-scale projects on housing development in Vietnam. VNRE general secretary Phan Thanh Mai stated that eight commercial banks are working on a pilot programme to connect investors, bidders, material providers and banks to remove difficulties and handle high inventory levels in the real estate market. The move has defrosted the real estate market. Finland learns about Danang’s development advantages A delegation led by Deputy Director General for the Department of Asia and the Americas in Finland, Eija Rotine, held a June 11 working session with Danang leaders. Phung Tan Viet, Vice Chairman of the municipal People’s Committee, introduced the guests to the city’s natural conditions and socio-economic achievements in recent times as well as its potential and strength. EiJa expressed her admiration for a young, dynamic and creative city in the Renewal process. She revealed that her delegation will work with the city’s relevant agencies to gain a better understanding about issues of their concern to find measures for long-term cooperation between Finland and Danang. Currently, Danang University has established cooperative ties and conducted training projects with some Finish universities. For instance Satakunta University of Applied Sciences (SAMK) and Danang University signed memorandum of understanding on exchanging students and teachers and building a “maritime training centre” project at Danang University. Danang College of Information Technology in coordination with Turku University is implementing a EUR601.346 programme on the Higher Education Institutions Institutional Cooperation Instrument (HEI ICI) funded by the Finland Ministry of Foreign Affairs. Furthermore, the Finland International Development Agency (FIDA) has provided EUR70,000 for Danang to carry out a project to enhance capacity for disabled people. Danang was chosen as one of the four pilot localities to build innovation models under the Vietnam-Finland Innovation partnership programme (IPP). Japanese businesses explore Vietnam’s ICT market A Japanese business delegation led by leaders of Fujitsu Group arrived in Vietnam on June 11, as part of a programme to seek cooperative opportunities and business development in Vietnam. Japan is the biggest foreign direct investor in Vietnam with a combined investment capitalisation of US$35.4 billion. Two-way trade turnover between the two countries hit a staggering US$25.3 billion in 2013, of which Vietnam’s trade surplus was US$2 billion. Many Japanese businesses have been operating in Vietnam since Vietnam implemented its open-door policy in the late 1980s. According to the 2014 survey conducted by the Japan External Trade Organisation (JETRO), around 60% of Japanese businesses based in Vietnam gained profits and 70% of them plan to expand their operation because of the country’s high growth potential. Fujitsu Group entered in Vietnam in 1993 as a pioneer in information and communications technology (ICT). The Japanese delegation included representatives of 24 businesses in IT, banking, transport, production and distribution. They are particularly interested in ICT development in Vietnam. Upon their arrival in Hanoi, they visited the Thang Long Data Centre (TLDC) of the global distribution system (GDS) company at Thang Long Industrial Zone to inquire into its operation. They said they are satisfied with the services and ICT infrastructure supplied by GDS. ICT has made significant progress in Vietnam in recent years. Vietnam ranked fourth in Southeast Asia in the ICT Development Index, creating a firm foundation for the country to expand cooperation with foreign businesses, including Japanese. During their stay in Vietnam until June 14, the Japanese delegation will also visit some domestic businesses and ICT centres. UK firm Laird opens first plant in Vietnam London-based Laird, a global technology business on wireless communication and smart systems, launched its first manufacturing facility in the northern province of Bac Ninh, on June 11, to expand its presence throughout Asia. The newly-established plant will bolster Laird’s global design and manufacturing capabilities. It is expected to better serve manufacturers of smart phones, portable electronics and other devices in Vietnam. Its state-of-the-art facility in Bac Ninh is one of more than 50 Laird facilities in Asia, Europe and the US.  “Vietnam has grown to become a leading manufacturing centre for many global technology companies, and we’re very glad to be among them,” Laird CEO David Lockwood said at the inauguration ceremony. “Laird Vietnam plant is our latest investment in Asia, and brings the number of regional facilities to 15. Approximately 80% of our employees are in Asia working in all disciplines including technology, engineering and production as well as sales,” he noted. According to Lockwood, one great advantage of joining the Vietnamese market is being closer to key customers, enabling the company to provide full support and deliver products and services in really short time scales. With an initial investment of US$4.7 million, the plant in Bac Ninh demonstrates Laird’s long-term commitment to the Vietnamese market, he added. “We are also proud to be part of the Vietnamese manufacturing industry. Vietnam has become a significant contributor to the global economy and we look forward to a long and healthy relationship with our Vietnamese friends here today,” he said. He expressed his belief that his firm will increase investment in Vietnam, creating more jobs and expanding operations to other areas of wireless systems. The plant will complement Laird’s new design centre and its newly acquired Model Solution prototype business, both in Seoul, the Republic of Korea, and other Laird facilities in China and Malaysia. The company currently has more than 9,000 employees worldwide, and joins a growing chorus of the world’s leading multinational corporations making foreign direct investment (FDI) in Vietnam. PM green-lights strategy for industrial development Vietnam will prioritise the development of its processing, electronics-telecommunication and renewable energy industries, according to a strategy on industrial development to 2025 with a vision to 2035 approved by Prime Minister Nguyen Tan Dung. The sectors will focus on applying advanced technology, churning out high-quality products of international standard, and joining the global value chain. More attention will be paid to ensuring energy efficiency, creating competitiveness in international integration, enhancing personnel competence and staying proactive in the researching, designing and production stages. Industrial production value is expected to record annual growth of at least 12.5% by 2020. Industry and construction will account for 41% of the nation’s economic structure, with more than 90% of products destined for foreign markets. Vietnam highlights investment from Russian oil and gas firms Russia’s new Turn East energy policy opens up huge opportunities to exploit Vietnam and Russia’s advantages in the oil and gas field, said Russia’s Deputy Minister of Energy Yury P.Sentyurin. The Russian Deputy Minister made the statement at a working session with the Party Central Committee's Commission for Economic Affairs in Hanoi on June 10. At the working session, Vuong Dinh Hue, Chairman of the Party Central Committee’s Commission for Economic Affairs said that the Russian delegation’s visit is part of a programme to implement an agreement on strategic comprehensive cooperation between Vietnam and Russia. Vietnam is devising a strategy to develop energy in general and oil and gas in particular to strengthen energy cooperation between the two nations. Vietnam is set to become an oil refinery centre in the region and to develop other oil refinery projects, especially the upgrade of Dung Quat Oil Refinery factory with a design capacity of 8-9 million tonnes per year, doubling the current figure. “Therefore, Vietnam highlighted further investment from Gazprom and Russia’s major oil and gas companies.” For his part, Sentyurin said that his delegation discussed withthe Ministry of Industry and Trade and Vietnam Oil and Gas Group (PetroVietnam) about a  project to upgrade Dung Quat oil refinery factory and consider some major energy projects. The Deputy Minister introduced Russia’s advantages of the energy and oil and gas sector, noting that the Ministry of Energy will give priority to supporting energy projects with Vietnam Hue highlighted the Russian delegation’s initiatives and emphasised that both sides have great potential for energy and oil and gas cooperation. Vietnam welcomed cooperation from international groups including Russian oil and gas firms in exploiting Vietnam’s continental shelf in accordance with international laws as well as the UN Convention on the Law of the Sea (UNCLOS). Denmark provides US$90 million ODA to Vietnam Danish Ambassador to Vietnam John Nielsen announced that the Scandinavian country will provide US$90 million in official development assistance (ODA) to Vietnam during the 2014-2015 period. At a press conference in Hanoi on June 10, Ambassador Nielsen stated the funding will focus on the fields of green growth,  adaptation to climate change, economic private sector development, safe water and sanitation, culture, and public governance. The Danish diplomat also pledged to support Vietnam in its struggle to combat poverty and achieve sustainable economic development. Nielsen stressed that Vietnam is on the right track and its business environment is seeing noticeable improvements, however, there still remains obstacles such as bureaucratic hurdles, corruption, and lack of skilled labourers. Since 1994, Denmark has provided over US$1.3 billion in ODA for Vietnam. The country is the largest provider of non-refundable aid among EU member states to Vietnam. Bkav SmartHome makes its debut in HCM City Bkav Corporation has recently collaborated with Phu My Hung to launch its complete smarthome solutions in HCM City. Bkav SmartHome is a complete smarthome system which incorporates the latest intuitive 3D interface technology , enabling users to manage and control devices within the home such as lighting, curtains, and boilers, via tablet or smartphone. Compared to the world’s leading technology companies like Google, Samsung and Apple, Bkav SmartHome has taken a huge leap with its complete smarthome system, connecting all household devices. At present, Bkav Corporation has implemented its projects in Europe, Singapore, India and Myanmar. According to the world’s leading technology consulting company Gartner,Bkav is the first Vietnamese enterprise among the list of cool vendors in newly-emerging markets across the globe It has already set up Bkav Singapore and Bkav USA in Silicon Valley, Mountain View, California. Semen Indonesia’s cement factory shaping in Vietnam State-run cement producer, Semen Indonesia plans to invest US$250-300 million to build a new cement plant in Vietnam next year, as part of its strategy to expand business in Southeast Asia (SEA). Semen Indonesia Director General Dwi Soetjipto said Indonesia’s leading cement producer will increase production capacity of its Vietnamese subsidiary Thang Long Cement Company (TLCC), by building a new factory with a design capacity of 1.5 million tonnes per year. Mr Soetjipto said that constructionis expected to begin in early 2015 and will take three years to complete. The investment capital for the new plant is mostly sourced from bank loans. The Director General said that as TLCC’s current design capacity stands at 2.5 million tonnes per year, building the facilitywill meet the increasing demand for cement in Vietnam and other ASEAN statessuch as Singapore, Cambodia, Laos and Myanmar. Semen Indonesia holds 70% of TLCC’s shares while the remainingbelong to Geleximco. It aims to become the leading cement producer in SEA and boost its exports to new Southeast Asian markets such as as Bangladesh and Sri Lanka. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR