BUSINESS IN BRIEF 26/6 Vietnam becomes member of int’l timber body The Ministry of Agriculture and Rural Development (MARD) on June 24 announced that Vietnam has become the 69th official member of the International Tropical Timber Organisation (ITTO). Deputy Director of the Vietnam Administration of Forestry (VNFOREST) Nguyen Ba Ngai said that Vietnam’s admission into ITTO is a reflection of Vietnam’s advancement in the international integration process. It also evidences Vietnam’s willingness to cooperate with nations in the region and world in the sustainable management and development of tropical forests. Ngai said that the country’s wood and wooden product sector has become one of ten sectors which have posted the largest turnovers, reaching US$5.5 billion last year, comprising 4% of the world’s market share. Vietnam is the second largest exporter of wood and wooden products in Asia, he added. Vietnam Timber and Forest Products Association General Secretary Nguyen Ton Quyen, in turn said that the country’s entry into ITTO will contribute to improving transparency for importing wooden products. Last but not least, Collins Ahadome, ITTO Assistant Director has affirmed that the ITTO Secretariat will do their utmost to approve capacity building projects to help the country actively participate in the ITTO. Overseas remittances to HCM City to hit US$2 bil Overseas remittances to Ho Chi Minh City over the past six months of the year are estimated to reach US$2 billion, equaling the figure of the same period last year, according to the State Bank of Vietnam’s branch in Ho Chi Minh City. The sum is mainly coming from the European Union and America, and channeled into production and business (70 percent) and to the real estate (21 percent), Vietnam Government Portal quoted the source as saying. The city expects to receive total overseas remittances of US$5 billion for the whole year. In 2013, the figure hit US$4.8 billion. The total capital mobilisation of credit organisations in the city reached VND1.178 trillion (US$55.2 billion), up 0.61 percent compared to the same period last year. Ninety-seven projects have been approved with a total investment of VND7.5 trillion. Giant electronics plant in Binh Duong takes shape Taiwan’s Kingtec Group has entered into a lease arrangement for 16 hectares in the My Phuoc 3 Industrial Park located in the southern province of Binh Duong on which it plans to manufacture electronic goods. In the first phase of construction, a new US$30 million facility specialising in producing LED lamps and bulbs for export will be erected on the site. Soddy Huang, President of the Kingtec Group’s Management Board said the group was established in 1985 and currently manufactures lighting equipment, interior decoration, power generators for automobiles and electronics equipment from facilities located in Shenzhen, Guangdong, and Shanghai. Huang said the Group, like that the Taiwan business community, is bullish on the Vietnam market as evidenced by the roughly 5,000 Taiwanese businesses investing in Vietnam. Over 1,000 of the businesses are located in Binh Duong province, he said. In the first six months of the year, Binh Duong province has attracted US$990 million in foreign investment, accounting for 99% of the annual plan for the year. The province has issued74 investment certificates for new projects capitalised at US$378 million and 60 certificates increasing supplementary capital byUS$612 million. The province has cumulatively so far attracted 2.305 foreign businesses with registered capital of over US$19.8 billion. Tay Ninh sees nearly threefold increase in foreign investment The southern province of Tay Ninh has attracted US$432.3 million of foreign investment in the first six months of the year, up 2.6 fold against the same period last year. Foreign-invested projects in the province are mostly from China, the Republic of Korea, Hong Kong, Brunei and Thailand and specialise in such fields as garments and textiles, fabric production, automobiles, paint and cattle feed. The province has cumulative to date, 217 foreign-invested projects capitalised at US$2.4 billion. Roughly 176 of the projects are fully operational, with the remainder in various stages of implementation. Disbursement capital has reached US$1.160 million, making up 47.2% of total registered capital. In the reviewed period, revenues from the foreign-invested projects were estimated at US$426 million, up 21.8% against the same period last year.   Seminar highlights Vietnam’s agricultural advantages Vietnam has a comparative advantage in agriculture production, said deputy minister of Agriculture and Rural Development Le Quoc Doanh at a seminar in Can Tho city on June 24. The seminar focused on the urgent need to restructure the agricultural sector to raise the farmers' incomes in the region.  The comparative advantage of Vietnam in the increasingly competitive agriculture export market is that the country has distinct cost advantages when compared to the rest of the world, Doanh said. Doanh continued on to say that the cost of producing rice is Vietnam’s most distinct comparative advantage and it plays a pivotal role in ensuring food security, reducing poverty, generating jobs, increasing revenues from foreign currencies and helping the country make the transformation to international economic integration. Many delegates attending the event said that the seminar provided a forum for managers, researcher, policy-makers, and representatives from businesses and farmers to share ideas and thought on the most appropriate solutions to restructure crops and the agriculture sector in the Mekong Delta. Vietnam, Laos boost socio-economic development A conference aimed at formulating and implementing an action plan for bolstering Vietnam, Laos socio-economic development was organized by the Laos Ministry of Planning and Investment in Vientiane on June 24. At the event, Vietnamese former Minister of Planning and Investment Vo Hong Phuc and former Deputy Minister of Planning and Investment Cao Viet Sinh and many Vietnamese experts gave lectures on their visions for Vietnam’s long-term development. They also dilated on a few major issues pertaining to Vietnam’s socio-economic development strategy by 2020 with a vision to 2030 and the construction of Laos’ development strategy by 2025 with a vision to 2030.   Through the conference Laos had more information and lessons in the draft strategy forsocio-economic development during 10 years (2016-2025) and the eighth five-year plan (2016-2020) to submit to the 10th Congress of the Lao People's Revolutionary Party scheduled for early 2016. The two sides expressed their strong desire to strengthen cooperation and exchange experiences as well as a strategic vision for national development helping cultivate special Vietnam-Laos relationship. VPBS wins Best Debt Capital Market House Award 2014 by FinanceAsia Hanoi-based VPBank Securities just won the Best Debt Capital Market House Award 2014 by Finance Asia, one of the leading financial magazines in Asia. This is the second consecutive year the company (VPBS) has received this prestigious award. The Best Debt Capital Market House award is held annually to honor securities firms or investment banks that have secured a large number of debt capital market deals with significant transaction values. The approval is based on evaluation criteria that include the institution’s background, its positive influence on the development of the local debt capital market, the most significant transactions and their relevance to the market and its development. Since 2010, VPBS has advised on nearly VND23 trillion ($1.09 billion) worth of debts for clients across the country. VPBS clients are both financial and non-financial clients including leading conglomerates, state-owned enterprises and private companies in Vietnam. VPBS’s DCM team has significant experience and expertise in arranging and book-running the issuance of straight bonds and convertible bonds. The team also assists clients on arranging loan syndications with customized financing solutions. This award continues to confirm that VPBS is a leading securities company in the Vietnam’s bond market. The success of VPBS in debt capital market advisory service has also contributed remarkably to the level of liquidity in Vietnam’s bond market. “At a time when capital markets in Vietnam are struggling, VPBS’s effort to improve liquidity reflects its leading role and commitment to enhancing both the quality and transparency of Vietnam’s bond market”, said Nguyen Lam Dung, VPBS CEO, founding member and board member of the Vietnam Bond Market Association. Tra fish export contract registration requirement delayed Exporters do not have to register their tra fish export contracts as the Ministry of Agriculture and Rural Development has told the Vietnam Pangasius Association (VN Pangasius) to reschedule the registration requirement, originally effective from June 20, until a guiding circular comes out. The ministry explained a draft circular guiding the execution of Government Decree 36/2014/ND-CP on farming, processing and export of tra, or Pangasius, fish was still awaiting comments from relevant ministries and government agencies. The Vietnam Association of Seafood Exporters and Producers (VASEP) has described the Pangasius export contract registration requirement as unnecessary and unbeneficial for exporters. Nguyen Huu Dung, vice chairman of VASEP, said registering tra export contracts with VN Pangasius was an unnecessary job as it would not bring any benefits to enterprises. Some tra exporting firms have also dismissed the requirement as troublesome. Nguyen Thi Anh, chairwoman of Tien Giang Province-based seafood firm Ngoc Xuan, said there was no need to register export contracts with VN Pangasius as it is already done with the customs. However, other seafood firms have disagreed. Hung Ca Co. Ltd. does not share Anh’s view. Hung Ca general director Tran Van Hung said the registration measure would help cope with the current chaotic tra export activity. To make it a success, Hung proposed, those VN Pangasius management members whose enterprises also export tra fish should be left out. Meanwhile, VN Pangasius reasoned the registration requirement was aimed at accurately gauging demand to help set appropriate farming orientations that could prevent an oversupply and thus ensure sustainable tra farming development. Therefore, according to VN Pangasius, the registration form contains such contents as export market, fish category, volume, price and delivery time. Other papers that should be enclosed with the registration form include the commercial tra fish farming registration certificate (applicable to enterprises having their own farms), the material fish purchase contract (applicable to businesses buying fish from farmers), the VietGap certificate (effective from end-2015) or an international equivalent, and the food hygiene certificate for processing enterprises. Minister of Agriculture and Rural Development Cao Duc Phat said enterprises failing to register their export contracts as required would lose their export licenses. Concerns remain over real estate law Many concerns still remain despite the debate on the new Real Estate Business bill held in National Assembly last week Deputy Phung Duc Tien from Ha Nam said that the revised law that had expanding rights for Vietnamese overseas and foreigners to do business in real estate was the right decision. According to the current law, foreigners and overseas Vietnamese are permitted to do business in real estate under through investing in building housing and constructions for selling, renting and leasing, rent land, and to invest in land improvement and construct infrastructure on such land but are currently not permitted to buy and lease properties then sell or re-lease them. The new law will remove these restrictions. However Tien said during the past time some projects which had been granted licences to Vietnamese overseas and foreigners had revealed weak financial capability and could not been implemented. Tien added the legal and financial capability of foreign and Vietnamese overseas investors must be carefully analysed in order to ensure the feasibility of any project. Moreover, Tien also said that foreign investors doing business in the real estate sector should be forced to buy insurance for their projects. Than Duc Nam, a deputy from Danang said that the revised law should impose simpler regulations on permitting overseas Vietnamese to transfer projects to domestic investors without having to change the function of the project. “This permission will help reduce procedures for both buyers and sellers,” Nam said. Meanwhile deputy Le Cong Dinh from Long An province expressed his concern that the revised law still faced problems as deposits put down by clients were being used by developers to invest in other projects. Tien argued that this loophole meant that the real estate market could still be prone to speculative behaviour and instability and developments could be delayed due to a lack of capital. Another argument focused on the current regulations that force real estate activities to be conducted by trading floors. While Dinh agreed that the abolishing such trading floors was reasonable because it only added red tape to already complicated procedures. However Tran Duc Dien, director of the Maxland Transaction Floor unsurprisingly said that the transaction floors have proved useful as a link between the sellers and the buyers. The floors had helped many buyers successfully chose suitable properties. Vu Cuong Quyet, director of Dat Xanh North said that the transaction floor shouldn’t be abolished and instead become more professional in order to serve customers. Regarding the project transaction, Pham Van Tan from Nghe An province said that the procedures to transact projects must be simplified, especially for projects which had cleared land and already drafted detailed plans. In terms of selling off projects, Tan said the current law only allowed transactions when projects faced difficulties and could not be implemented. Instead he thought the revised law should make sales easier via acquisitions, mergers or buy-outs. FTA forces Vietnam to allow firms to issue C/Os Vietnam will have to permit exporters to issue certificates of origin (C/O) for goods shipped to the EU and European Free Trade Association (EFTA) when it concludes a free trade agreement with the EU and EFTA. Speaking at a seminar on C/O in HCMC last week, Tran Trung Thuc, head of the negotiation delegation on the FTA between Vietnam and EFTA which consist of Switzerland, Norway, Iceland and Liechtenstein, said the EFTA members have long allowed businesses to issue C/Os and now they want Vietnam to do the same. C/O issuing enterprises must be responsible for accuracy of the certificates and customs agencies will check C/Os in case of suspicion. Arthur Muller, a delegate of the FTA negotiation of the Swiss Customs Administration, said the EFTA nations always ask their partners to follow the C/O self-issuing scheme and they have been successful so far. Vietnam has conducted eight rounds of negotiations on the FTA with the EFTA. Vietnam may apply the current C/O issuing scheme and build a C/O self-issuing system at the same time, Muller said. Tran Ngoc Liem, deputy director of the Vietnam Chamber of Commerce and Industry (VCCI) in HCMC, said this issue has been raised in the current FTA negotiations, such the Trans-Pacific Partnership (TPP). ASEAN nations also have plans to deploy the system next year, Liem added. Many delegates at the seminar agreed that enterprises using the mechanism will be able to save time and reduce fees on C/O procedures. They will also greater chances of promoting exports as the responsibility of granting C/Os for export goods would move from authorities to enterprises. However, enterprises must obtain permission from the customs to issue C/Os on their own. They will have to meet requirements such as capability, export revenue and clear knowledge of the mechanism, Thuc said. Svein Grønlie from the Norwegian customs agency said it will be difficult for businesses to get approval for C/O self-issuance. Enterprises must prove that they know clearly about product origins and those cheating the customs will lose their license forever. PV Gas cuts deal to buy Shell gas PetroVietnam Gas Corporation, or PV Gas, has signed an agreement to purchase liquefied natural gas (LNG) for a terminal in Ba Ria-Vung Tau Province from Dutch oil and gas giant Shell and a memorandum of understanding (MoU) to develop a gas import terminal in Binh Thuan Province. PV Gas said in a statement that the agreement and the MoU were signed in Hanoi on June 16 under the witness of Vietnam Prime Minister Nguyen Tan Dung and Dutch Prime Minister Mark Rutte. PV Gas said Thi Vai LNG terminal in Ba Ria-Vung Tau and Son My LNG terminal in Binh Thuan are two important projects of the corporation in its strategy to diversify gas supplies and ensure the country’s energy security in the coming years. Set for operation in 2017, Thi Vai LNG terminal has a capacity of one million tons per year while Son My terminal is expected to operate in 2019-2020 with an annual capacity of more than 3.6 million tons. Shell Group now owns one of the biggest LNG supply networks in the world with 43 vessels transporting gas, accounting for 12% of the total LNG fleet capacity of the world. Laos continues building hydropower dam in Mekong River Laos is continuing to build Don Sahong dam in the mainstream Mekong River regardless of objections and consultation requests from neighboring countries, the International Rivers Network said in a statement. At the second Mekong River Commission (MRC) Summit held in April in HCMC, Cambodia requested Laos to delay its damming work for further environmental impact assessment. However, Laos claimed the dam did not lie in the mainstream, so there was no need to consult other member countries of MRC. Dr. Le Anh Tuan, deputy head of Can Tho University’s DRAGON Institute, which is a cooperative scientific effort between the U.S and Vietnam on climate change, told the Daily last week that the dam would affect the living environment of fish in the Mekong River, and change water flows. According to Trinh Le Nguyen, executive director of People and Nature Reconciliation, other countries in the Mekong River basin have expressed concerns over the project, Laos has been pressing on with Xayaburi dam and now Don Sahong. One dam may not have great impact but 10 more dams planned in Laos and Cambodia will have disastrous effects. If more dams were built, negative impacts would be huge, threatening ecology, fishery, water flows, alluvium and agriculture, and Vietnam’s Mekong Delta will suffer the most, Nguyen said. Having a designed capacity of 256 MW, Don Sahong dam is in southern Laos’ Champasak Province. MRC will have a meeting in Bangkok, Thailand late this month. Yamaha recalling 36,000 motorcycles Yamaha Vietnam is recalling nearly 36,000 Sirius Fi, Jupiter Fi and Gravita Fi motorcycles made between March 31 and May 22, 2014 to replace a faulty stoplight switch, said Hoang Ha, marketing director of the firm. The company early this month discovered the defective stoplight switch on Sirius Fi and Jupiter Fi motorcycles. It wrote to Vietnam Register on June 11 asking for approval to replace the switch for free. The plastic used for this switch does not meet standards, so it can be easily melted by heat and nearby parts can also be affected, according to the firm. Replacement work will be done at all 3S/2S agents and service centers nationwide. Prices of dairy products publicized The Ministry of Finance has announced wholesale and retail prices of dairy goods for children under six years old as suggested by seven companies, with effect from June 21. Six businesses have recommended prices of 181 products, with 34 of them belonging to Mead Johnson Nutrition (Vietnam), 42 to Abbott distributor 3A Nutrition, 18 to Nestle Vietnam, 34 to Mead John distributor Tien Tien Distribution Co. Ltd., six to Organic Vietnam and 47 to FrieslandCampina Vietnam. The retail price of Similac GainPlus IQ (enhanced with Intelli-Pro) of Abbott is the highest among the 181 products, at VND727,000/1.7 kg can, while its wholesale price is VND692,000. It is followed by Baby’s Only Organic for infants up to 12 months old with a suggested retail price of VND710,000/900g can and a suggested wholesale price of VND621,271. EnfaGrow A+4 Vanilla – 360o Brain of Mead Johnson retails for VND700,759/1.8kg can and wholesales for VND683,900. Nestle’s Friso Gold 4 comes with a retail price of VND648,000/1.5kg can and a wholesale price of VND584,100 and the respective prices of Nan 2 BL InfMPwdr LEB011A-2 VN, also of Nestle, are VND377,100/800g can and VND323,000. For 35 milk products of Vinamilk, including 25 infant formula items and 10 cereal power products, their retail prices are 6% higher than their wholesale prices. For instance, Optimum Step 1 HT 900g retails for VND375,562/can, the highest among Vinamilk products subject to price controls, and of Dielac Alpha 123 HG 400g for VND76,274/paper box, the lowest price. The Ministries of Finance and Industry-Trade have announced hotlines which consumers can use to lodge complaints about prices of milk products for children less than six years old. To report on violations of retail and wholesale prices, consumers should contact Vu Van Hoa at the Markets Department of the Ministry of Industry and Trade on 0913020529, and Hoang Thanh Hai at the Price Management Department of the Ministry of Finance on (04) 22202828 (ext: 4227) or 0932240509. VMS South appointment of deputy CEO said invalid The Ministry of Transport has told Southern Vietnam Maritime Safety Corporation (VMS South) to nullify a decision to appoint a deputy general director as the appointment has not gone through a proper procedure. VMS South issued a decision on February 19, 2014 appointing Pham Tuan Anh, head of the corporation’s maritime safety department, as deputy general director of the company. However, according to the ministry, this decision failed to abide by the current regulations on procedures for personnel appointments. According to the Prime Minister’s Decision 80/2004/QD-TTg dated May 12, 2004, the number of deputy general directors and deputy directors of state-owned enterprises that are not listed in the special group and of those entities converted into holding companies is capped at four. If there are more than four, SOEs must ask the agencies that issued their establishment decisions for approval. Before Pham Tuan Anh was picked as deputy general director, VMS South already had four deputy general directors but it did not seek approval from the ministry for Anh’s appointment. Therefore, the Ministry of Transport told the corporation to withdraw the appointment decision and submit a report on this irregularity to the ministry prior to June 30. In an unrelated development, Vietnam National Shipping Lines (Vinalines) has decided to suspend Vu Khac Tu, deputy general director, from June 16 so that he could have time to report on his alleged involvement in the alleged falsification of documents and embezzlement of more than VND8 billion by the former director of Quang Ninh port. Goldsun seeks to acquire advertising firms Goldsun, a major advertising firm in HCMC, has chosen a strange way to acquire other advertising firms and outdoor billboards by placing notices along major streets in the city saying it wants to take over others or outdoor billboards. Tran Thi Thanh Van of Goldsun Focus Media Corporation said her firm started its campaign to acquire other advertising companies and outdoor boards early this month and so far some potential enterprises have reached Goldsun for negotiations. Goldsun’s notices are seen these days along major streets such as Vo Thi Sau and National Highway 13. “In this campaign, we seek to acquire the commercial rights to sizeable outdoor advertising boards, and will consider taking over other advertising firms,” she said. According to advertising agencies, adveritising by large outdoor billboards cost lower than other methods and therefore it is suitable for small and medium enterprises. Aeon to open shopping center at health park The government of HCMC on Saturday awarded an investment certificate to Japanese retailer Aeon for construction of a US$128.5 million shopping center in the Hoa Lam-Shangri-La Healthcare Park in the outlying district of Binh Tan. Yasuo Nishitohge, general director of Aeon Vietnam, said the project would cover a total of 4.6 hectares, larger than the Aeon Tan Phu Celadon center which has been operational since early this year. The Aeon undertaking is one among five foreign-invested projects that have won approval from the city government with a combined investment of US$220 million. Aeon has also secured approval to revise up capital for Aeon Tan Phu Celedon by US$43.3 million, taking to US$235.7 million the total capital committed to the project. Nishitohge said Aeon had poured US$512 million into Vietnam over the past four years. The Japanese firm is also developing two more projects, Aeon Binh Duong Canary and Aeon Mall-Hanoi Him Lam, which are expected to be up and running in November this year and 2015 respectively. Aeon’s strategy is to open shopping centers in outlying areas and gateways to large cities, he said. Tran Thi Lam, chairwoman of the Hoa Lam-Shangri-La Healthcare Limited Liability Company, said the project includes areas for education and training and auxiliary works such as commercial centers, high-class apartments, offices, hotels, convention centers and parks. Aeon is a partner of Hoa Lam Shrangri-La to develop a commercial center here. In a related development, Hong Kong’s Freetrend Industrial A Co. Ltd., which was impacted by the violent worker protests in mid-May, has got approval to inject an extra US$8 million in its factory at Linh Trung Export Processing Zone in HCMC, raising its total pledged capital for the project to US$58.2 million. Nikken Vietnam Co. Ltd. has got the green light to invest over US$711,000 in a mechanics project in Tan Thuan Export Processing Zone. According to the HCMC Department of Planning and Investment, 169 projects have been issued new investment certificates with total pledged capital of US$967 million since early this year, much higher than in the same period of 2013. Vinh Phuc lifts FDI competitiveness The northern province of Vinh Phuc has attracted increasing numbers of foreign investors, especially Japanese businesses following improvements to the province’s investment climate. Provincial Party Secretary Pham Van Vong stressed Vinh Phuc was trying to lay foundation for its industrialisation by 2015 and was ready to welcome investors keen to explore opportunities in the province. In addition to the incentives stipulated by the government, Vinh Phuc has issued specific incentives and policies to bolster support industry projects and vocational training improvements. The province has also shortened bureaucratic delays on investment procedures by a third. Vinh Phuc has driven forward reforms that have boosted its provincial competitiveness index and focused on removing difficulties for investors in the province. “Vinh Phuc pledges to continue simplifying administrative procedures, improving infrastructure and upping the quality of the labour force with an aim to creating a stable, transparent and open investment environment, which will help investors carry out large projects in the province,” said Vong. Last year, Vinh Phuc attracted $331 million worth of foreign direct investment (FDI), an on-year increase of 116 per cent. The province is currently home to 21 Japan-invested projects with total registered capital of $717 million, with Japan ranking second among foreign investors to Vinh Phuc in terms of registered capital and first in terms of disbursed capital. Motorbike and car giant Honda has expanded its investment to $410 million from an initial $104 million in 1996. Since its presence in Vinh Phuc, Honda has contributed more than VND20 trillion ($952.3 million) to the province’s coffers, creating nearly 10,000 direct jobs and tens of thousands of indirect jobs. In addition to Honda, rivals Toyota officially began operations in the province in 1996 with a capacity of 36,500 units per year. Toyota Vietnam has created direct jobs for roughly 2,000 workers and contributed nearly $3 billion to the state budget. Other Japanese companies such as brake maker Nissin Vietnam with registered capital of $49 million, Kohsei Multipack Vietnam with $30 million, Maruichi Sun Steel with $21.4 million or Exedy Vietnam with $12 million are obtaining successful performances in Vinh Phuc, making considerable contributions to the province’s socio-economic development over the years. In March 2014, Suzukaku Vietnam Co. Ltd broke ground of its new $5 million factory at Ba Thien II Industrial Park to produce auto and motorbike spare parts, marking a highlight in the province’s objectives to boost support industry development in the province. The new factory is scheduled to come into operation in August. Almost all the Japanese businesses in the province said they were planning to expand operations despite the on-going global economic crisis. Japanese businesses have picked Vinh Phuc for their investments as they realised that the province has a developed industrial sector, a raft of attractive incentive policies, a qualified workforce and adequate infrastructure network. Phung Quang Hung, chairman of the provincial People’s Committee said Vinh Phuc was determined to improve the provincial investment climate and would focus on improving infrastructure and resolving barriers to foreign investment. VietJet receives new aircraft with VISA symbol VietJet received another new aircraft at Tan Son Nhat Airport in HCM City late last week. The new plane will help the private carrier expand its flight network to meet increasing demand over the summer. This Airbus A320-200, bearing the credit company Visa's trademark symbol, will boost VietJet's capacity to over 12,600 seats per week this summer. VietJet and Visa recently formed a new alliance to encourage more customers to make travel plans online, especially when purchasing air tickets. Thanh Thanh Cong Tay Ninh and Gia Lai Sugar may merge Thanh Thanh Cong Tay Ninh Co (SBT), the sugar arm of the Thanh Thanh Cong Group, plans to merge with Gia Lai Sugar-Thermal Power Co (SEC). This was revealed by Dang Van Thanh, chairman of the group at a conference on sugar-cane and agriculture in Viet Nam last Thursday. The group is seeking a consultancy company to help make the deal, Thanh said. This is the second merger and acquisation among sugar companies. Earlier this month, Ninh Hoa Sugar Co (NHS) and Bien Hoa Sugar Co (BHS) announced a similar plan. Thanh said mergers were a trend among strong sugar firms because it can help them find materials and products from other areas. Thanh Thanh Cong Group has five main businesses, sugar, real estate, tourism, energy and financial investment. The group, which has 20 subsidiaries and affiliates, has total charter capital of VND8.26 trillion (US$391.5 million). Its total assets are VND23 trillion ($1.1 billion). This year, the group projects pre-tax profit of more than VND800 billion ($37.9 million). The group's growing area this year is 50,000 hectares which produces an average sugar-cane yield of 65 tonnes per hectare. Apart from sugar, there are byproducts such as electricity and food alcohol. In 2013-14, total sugar output of the group was 295,000 tonnes. Dong Nai exports 3,100 tonnes of pepper in first six months The southern province of Dong Nai exported some 3,100 tonnes of pepper within the first half of this year, generating US$23 million in turnover, the provincial General Statistics Office announced. Currently, pepper prices on the international market have reached $7,100 per tonne, $50-60 higher than those seen in the same period last year. Dong Nai is the country's third-largest pepper-growing province, with approximately 8,300 hectares assigned for production, mostly located in the Cam My, Tan Phu, Xuan Loc and Trang Bom districts. Knauf Viet Nam announces new gypsum board retailer Knauf Viet Nam yesterday introduced Duc Nam Construction and Trading Company as its first gypsum board distributor in Ha Noi in northern Viet Nam. This is the company's second overall distributor in the country after assigning one in Cuu Long Delta region. Having received an investment license in 2013, Knauf Viet Nam is building a gypsum board manufacturing facility worth 30 million euro (US$40.7 million) with a capacity to produce 12 million sq. metres of plasterboard products in the northern province of Hai Phong. Vietnam looks for closer trade link with France Vietnamese businesses and their French counterparts, especially those from Val-de-Marne province, gathered at a meeting on June 23 to explore potential and opportunities for forging their trade links. The event was co-hosted by the Trade Promotion Agency under the Vietnamese Ministry of Industry and Trade and Val-de-Marne province’s Development Agency. Speaking at the event, head of the Trade Promotion Agency Bui Huy Son introduced participants to Vietnam’s key exports as well as the country’s import demand for equipment to serve its economic development. Talking to the Vietnam News Agency, Son said the event was designed to support domestic firms accelerate exports to the French market with 65 million consumers. Two-way trade between the two countries in 2013 hit 3.5 billion EUR. Vietnam enjoyed a trade surplus of over 2 billion EUR with France in the same year. Vietnamese key export lines are textiles and garments, aquatic products and electronics. As one of Vietnam’s leading European markets, France provides an important gateway for Vietnamese goods to reach other European nations, Son noted. He added that Vietnamese exporters see bright prospects in France because of stable and transparent policy issued by the French Government. During the meeting, representatives from Val-de-Marne gave details about local enterprises’ financial potential and strength, as well as the province’s legal incentives for foreign firms operating in the locality and those, which seeks to bolster cooperation with local firms. Quang Nam enjoys high economic indicators The central province of Quang Nam’s Gross Regional Domestic Product (GRDP) increased 11 percent in the first half of 2014 while other indicators remained stable. The province collected 3.72 trillion VND (174.76 million USD) for the State budget in the reviewed period, up 26 percent. Meanwhile, its social investment capital totaled 6.67 trillion VND (313.25 million USD) or 25 percent of the GDRP. The province’s industrial production value recorded more than 23 trillion VND (1.08 billion USD) and agro-forestry and fisheries production surged by 5 percent against 2013 to 5.84 trillion VND (274.36 million USD). Quang Nam raked in over 297 million USD from its exports while its imports were more than 433 million USD. The province is striving to take practical measures to fulfil socio-economic development goals set for the year. Local departments, agencies and districts are urged to mobilise all possible resources, focusing on hastening the administrative reform, luring domestic and foreign investments and ensuring disbursement for national target programmes.- Real estate market shows recovery signs After a long freefall of the real estate market, some real estate segments have now started to warm up, the Vietnam Business Forum Magazine (VBF) said, adding that many real estate experts believe that the real estate market has passed bottom and entered a period of recovery. Dang Duc Thanh, Director of the Vietnam Economist Club (VEC), said that if the government continues to support real estate businesses in solving inventory and bad debts, right in the third quarter of 2014 and early 2015, the real estate market will occur a price increase, along with that, the liquidity of the market will be improved. Neil MacGregor, CEO of Savills Vietnam said that Vietnam's real estate market was in an attractive period when the market reached the bottom and the signs of recovery were becoming more visible. Vietnam real estate market is in the bottom point of the development cycle, whereas in many other Asian markets, their cycles are at the highest position, so they are likely to fall sharply in the coming years. For the reasons stated above, Neil MacGregor believed that Vietnam would become an important destination for real estate investors in the region and around the world. Neil MacGregor said that currently, some customers of Savills Vietnam from Japan, Singapore and the Republic of Korea were planning to develop long-term residential projects with large scale in Vietnam in the coming time. This is seen as proof of the attractiveness of the real estate market in Vietnam for foreign investors. Phan Thanh Mai, General Secretary of Vietnam Real Estate Association also stated that Vietnam's real estate market was coming out of the bottom period. After a long period of time facing difficulty in liquidity, the investors listen more and are willing to cooperate and negotiate with foreign investors. Accordingly, the mergers and acquisitions (M&A) also took place. The market has been screening out potential investors in finance with extensive experience in real estate towards a more professional real estate market in the future. Mai said that in the integration trend, with increasingly intense competition, domestic investors have made transparent their projects through the audit report, transparent information, creating opportunities for M&A between big companies. This is beneficial for long-term development and stability on the property market. In recent years, thanks to the efforts of the foreign investors and management agencies in the country, the events of M&A have been held more often to create opportunities for foreign and domestic investors to meet, exchange information and learn each other's needs. Phan Thanh Mai added that 8 major banks piloting the linked programme between 4 players, namely investors - constructors - suppliers of building materials – banks, with the purpose of overcoming difficulties and boosting consumption of inventory and building materials was obtaining positive signals. The Vietnam Construction Bank has implemented appraisal and lent a total capital of 5,000 billion VND to about 20 projects with interest rates around 12 percent/ year. This amount will be disbursed according to time schedule of each project.- HCM City offers incentives for reducing material imports The Ho Chi Minh City authority has proposed incentives to reduce garment and textile sector's heavy reliance on material improts from China, according to the Saigon Times Daily. Le Van Khoa, Director of the HCM City Department of Industry and Trade, told a seminar held in HCM City last week that the city government had given approval to Vietnam National Textile and Garment Group (Vinatex) and Saigon Agriculture Incorporation to develop an industrial park for suppliers of materials for the textile and garment sector. The 80-hectare industrial park in Binh Chanh district, worth more than 100 billion VND, would have its infrastructure development completed in the next three to five years, said Khoa . The director also said the city government was seeking a number of special incentives including corporate income tax exemptions for four years, 50 percent tax reductions for nine following years, land rent breaks for 20 years and import tariff exemptions for the goods which were not made domestically to support infrastructure developers. For material producers, the city would offer corporate income tax exemptions for four years, 50 percent tax reductions for nine following years, land rent breaks for 11 years and import tariff exemptions for the machines and equipment which were not made in Vietnam, added Khoa. “The city government will submit the incentives to central-level agencies via the Ministry of Finance. These incentives will likely be approved as the ministry has okayed similar projects, including a project to develop supporting industries for the textile and garment industry,” Khoa said. Le Dong Trieu, General Director of Gia Dinh Textile and Garment Company told seminar participants that apparel firms currently have had to import nearly 70 percent of their materials from China. “Though we have talked much about developing our own material sources to lessen dependence on imports from China for years, the import proportion from China has remained high due to its cheap prices and supply is diverse,” Trieu said. Gia Dinh Textile and Garment has invested in a 400-billion VND yarn factory with 40,000 spindles at Tan Tao Industrial Park. Le Quang Hung, Chairman of Saigon Garment Manufacturing Trading Company, said the most concern of the sector was dyeing due to its high costs for treating chemicals and wastewater. Hung proposed the Government have preference policy for foreign enterprises with financial capability and high technology to invest in textile and garment material production. Vinatex forecast apparel exports will reach 23.5-24.5 billion USD this year compared to 20.4 billion USD last year. Hanoi IPs and EPZs call for better business environment Vice Chairman of the Hanoi’s Management Board of industrial parks (IPs) and export processing zones (EPZs) Nguyen Thai Long said with the advantages of capital and technology, FDI enterprises in Hanoi have made major contributions to the city’s economic development, the Vietnam Economic News reported. To improve the efficiency of import- export activities of foreign direct investment (FDI) enterprises in Hanoi’s industrial parks and export processing zones, the Import-Export Department under the Ministry of Industry and Trade recently coordinated with the municipal management board of IPs and EPZs to organise a conference on removing obstacles and difficulties to boost business activities. According to the Hanoi’s management board of IPs and EPZs, there are about 300 FDI enterprises operating in IPs and EPZs. In 2013, these enterprises posted total export revenue of 2.8 billion USD, accounting for 58 percent of total export revenue of the entire FDI enterprises in Hanoi while the import revenues reached nearly 2.4 billion USD, accounting for over 50 percent. The FDI enterprise block was also the only sector in the capital that recorded a trade surplus in 2013. However, these companies have recently faced difficulties due to the economic slowdown with increasingly high raw material prices. In addition, they also had to confront many barriers regarding administrative procedures in their export and import activities. At the conference, many companies such as Tajima Steel Vietnam Co., Ltd., Panasonic Vietnam Company and TOA Vietnam Co., Ltd reflected that businesses were still confused in meeting customs procedures as they have not been fully aware of all the administrative procedures and kept up with updates of the information technology system of Hanoi Customs. In addition, premise rentals in Hanoi IPs and EPZs are much higher compared to adjacent localities. Nguyen Thai Long said: “If the rental of IPs and EPZs in Bac Ninh only costs about 50 USD/sq.m for a period of 50 years, those costs in Hanoi range from 150-200 USD/sq.m, which make IPs and EPZs in the city less attractive to investors.” At the conference, representatives from the Import-Export Department, the Hanoi Customs and Taxation Department listened and answered many queries relating to import export procedures of enterprises. In the long term, to improve the efficiency of import export activities of FDI enterprises in Hanoi IPs and EPZs, the Hanoi’s management board of IPs and EPZs will open more training classes to train highly skilled technicians to meet the human resources demand of FDI enterprises. Specifically, the management board will boost the implementation of the Governmental Decree 164/ND-CP dated November 12, 2013, which supplemented Decree 29/2008/ND-CP dated March 14, 2009, providing regulations on IPs, EPZs and economic zones. Accordingly, the management board will do its state management jobs for goods subjected to conditional business and manage the grant of certificates of origin for goods produced in IPs as directed and authorized by relevant ministries. As for land rentals, the management board, the Hanoi’s management board of IPs and EPZs has requested Hanoi People's committee to reduce land rentals for enterprises. The request will be considered and settled in the coming time. Can Tho focuses on ethical aquaculture The Mekong Delta city of Can Tho is carrying out several projects that comply with the Ethnical Aquaculture Food Index (EAFI) standards set by Vietnam, Thailand, China and Bangladesh. The index seeks to ensure high-quality products and sustainable livelihood for farmers as part of climate change adaptation activities. Pham Van Quynh, director of the municipal Department of Agriculture and Rural Development, said the projects will pay special attention to hi-tech applications, international cooperation, human resources training, and food safety management. He said the city will improve irrigation systems and expand its aquaculture area to 26,000 hectares by 2020. Local businesses will be urged to take a more active part in meeting the ethical aquaculture standards as they strive to increase production to nearly 300,000 tonnes and earn export revenues of more than 7 billion USD by 2020, he added. Can Tho’s seafood production for this year is projected at 180,000 tonnes. In the first five months of this year, the city’s seafood production topped 55,000 tonnes, dominated by tra fish (44,000 tonnes). It has so far exported 41,000 tonnes of processed seafood worth nearly 170 million USD. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR