BUSINESS IN BRIEF 10/9 Ministry announces banned trades The Ministry of Planning and Investment has released a list of 11 trades that are banned for investors, and had also lifted bans on 40 others. The list was submitted to NA deputies on September 8 during the process of revising investment laws. The list will go through one final review during the 8th National Assembly meeting session to be held late this year. Some of trades to be banned are weapons and military equipment, addictive drugs, some chemicals, certain fireworks, prostitution, human organ trafficking, trade in human organs, endangered species, activities related to human reproductive cloning, genetically modified animals, sub-quality products, those that are harmful to health, or those that could damage national security or social ethics. Vietnam has already banned 51 trades from investors. On August 19, the Ministry of Planning and Investment proposed to retain the ban on only 8 trades. The proposals were approved. The ministry then decided to keep bans on 11 businesses. The prime minister ordered agencies to review which trades should be banned and those which should be lifted. The Ministry of Planning and Investment has reprimanded many agencies for being slow in submitting their lists. The minister said they would come up with a list of names of specific trades instead of a blanket ban on four fields. The new laws will also remove and revise some business terms that have proved to be ineffective. Real estate experts forecast further decline in housing market Professor Dang Hung Vo, a senior Vietnamese real estate expert, has predicted that housing prices in Vietnam will drop as the year comes to an end. Professor Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, cited a report by released by Savills, which said that the supply of apartments and offices in July of this year increased by 3% to 5% against the same period of last year. Higher supply has contributed to a fall of real estate prices. According to Savills, in the second quarter of 2014, around 2,500 apartments were sold in Hanoi, and 3,800 in HCM City, which was a rise from last year. According to experts in the industry, government policies in regards to the real estate market are showing their effectiveness. In particular the disbursement of VND30-trillion (USD1.41 billion) in the form of a financial support package. Professor Vo said that from now to the end of the year is an opportunity for companies to boost their revenues, which should decrease prices in real estate. Many commercial and residential projects have been cutting their prices per square metre and banks have also launched programmes to boost demand with preferential loans. The Vietnamese tourism property sector has benefited from a wave of investment, including projects in Quang Ninh Province’s Halong City and Phu Quoc. According to Vo, this sector holds more promise than other sectors. He added that, in the past Vietnamese tourism sites lacked large hotels, and investors, a fact not ignored by investors, who have poured money into these neglected areas. The combination of building hotels and resorts at tourist destinations is good for Vietnam's tourism industry, according to Vo, who also predicted a burgeoning of high-end establishments in the near future. This helps t bring more tourists to tourism resorts. Experts encourage young entrepreneurs To develop the economy requires innovation and young entrepreneurs should take the lead, Viet Nam Young Entrepreneurs' Association chairman Bui Van Quan said on an online talk show organised by Business Forum newspaper yesterday. During the show, executives offered advice to aspiring entrepreneurs. Lawpro Ltd director Doan Thu Nga said that young entrepreneurs should acquire more information about the markets, while Agricare Viet Nam general director Dam Quang Thang said they should take advantage of their education and try to learn from their predecessors. "Young entrepreneurs are very creative and eager to realise their ideas," he said. Asked whether students should drop out of school to create startups, Quan spoke out in favour of education, saying that schools were built for a reason and young people should learn when they were young. However, others took a more pragmatic approach. "You should realise your ideas whenever you feel confident and competent enough, or the chance will pass you by," Nga said. Chu Duc Luong, Chief Executive Officer of Phu My Group, agreed. "With or without a university degree, the most important things are what you have learnt and what you will do in the future," Luong said. Participants saw difficulties ahead for domestic companies in the context of global integration. Facing strong competition from foreign players, firms would have to find niche markets to develop. Overall, however, they were optimistic about the future of the country's economy. Luong and Thang said the government should provide practical policies and a stable environment for small- and medium-sized enterprises. The policies should be transparent, public and well-organised for all businesses, since the current ones were quite difficult for the companies to access. Nga added that there was no need to develop a supportive law for small- and medium-sized companies. The companies would need a specific procedure from the government to prepare for the Trans-Pacific Partnership (TPP), which Viet Nam was in the process of joining, Thang said. Dak Lak Province's coffee exports enjoy robust growth Coffee produced in the Central Highlands province of Dak Lak found its way into 80 countries and territories this year, 20 more markets than the number reported early this year. Export turnover stands at US$440 million so far this year, a year-on-year increase of 23 per cent and nearly 59 per cent of the annual goal. The top 10 importers of Dak Lak coffee were Germany, Japan, the US, Italy, Switzerland, the Republic of Korea (RoK), India, Spain, Indonesia and Russia. The September 2 Import-Export Company, Dak Lak's leading coffee exporter, brought in $147 million from shipping 73,657 tonnes overseas, 114.23 per cent higher than earnings from the same period last year. Dak Lak boasts over 200,000 ha of coffee plantations that produce up to 400,000 tonnes of beans annually, accounting for 30 per cent of the nation's coffee land. In order to satisfy the quality requirements and increasing demand of foreign markets, local authorities have worked out measures to improve the quality and output of exported coffee. Farmers are being encouraged to clean up production in order to meet the increasingly strict demands of importers. An estimated 41,000 farms in Dak Lak are now following standardised coffee-growing models, such as the 4C Code of Conduct, Rainforest Alliance, Fair Trade and UTZ Certified. The province plans to continue expanding coffee-growing areas licensed to use the PGI and will seek support from the European Trade Policy and Investment Support Project (EU-MUTRAP) to help Buon Ma Thuot coffee enter the European market. Viet Nam exported 1.04 million tonnes of coffee in the first half of this year, earning $2.12 billion, an annual increase of 31.7 percent in volume and 24.7 percent in value, according to the Ministry of Agriculture and Rural Development. Goods prices same as petrol falls The petrol price has fallen fourfold by a total of VND1,900 per litres but consumer goods remain unchanged, partly caused by higher transportation fees, Tin tuc (News) newspaper reported yesterday. Transport fees can account for 10-15 per cent of the price of goods. Though petrol prices fell last month several times, transport prices were not adjusted. Vu Vinh Phu, chairman of Ha Noi supermarket association, said that prices of food and vegetables had not changed. A supermarket in Ha Dong region said household appliances had seen higher prices because of increased transportation fees. Suppliers are not offering lower prices even though petrol charges have fallen. Kim Xuyen of Nam Thanh Cong House Complex in Ha Noi said lean pork was priced at VND100,000 (US$4.8) per kg, beef VND240,000 ($11.4) per kg, and carp VND70,000-80,000 ($3.3-3.8) per kg. These stayed the same throughout August. Xuyen said: "I do not understand why food prices do not drop while petrol prices have decreased." She said that when petrol prices went up, sellers increased prices. At the Truong Dinh market in Hoang Mai District, egg prices jumped by VND500 -700 each a month ago, but now are unchanged. For instance, industrial chicken eggs are VND2,200 each and duck eggs are VND3,200 each. Small traders at the Hom market in Hai Ba Trung District said that vegetable prices had increased slightly. Bui Danh Lien, chairman of Ha Noi Transport Association, said that transport businesses had suffered high costs, such as electricity fees, road fees, and parking fees. Thus, transportation fees will not fall as quickly as petrol prices. Transport firms frequently readjust their fees. When the petrol prices increase or decrease by 10 per cent, they consider an adjustment. Lien also said if transport firms reduce fees, the firms could face losses if they cut prices. Goods prices in supermarkets are more stable, but prices in traditional markets fluctuate more. Food & beverage exhibit to open The 18th International Exhibition on Food & Beverage (Vietfood & Beverage 2014) and the 18th International Exhibition on Food Processing, Packaging Technology & Equipment (ProPack Vietnam 2014), will take place here from September 10 to 13. At least 305 businesses from 19 countries and territories will take part in the four-day annual exhibit, to be held at Tan Binh International Exhibition and Convention Center (TBECC), 446 Hoang Van Thu Street. The participants will open 378 booths that will showcase products, ranging from food and drinks, seafood, raw materials and food additives, as well as machinery, equipment and technology; and restaurant, hotel and catering equipment, supplies and services. Event sponsors include the Viet Nam National Trade Fair and Advertising Company and Food and Foodstuff Association of HCM City, and Viet Nam Beer, Beverage and Alcohol Association. Binh Dinh embarks on implementing fishing development decree The central coastal province of Binh Dinh on September 6 held a meeting to discuss ways to implement the Government’s Decree 67/2014/ND-CP, which provides a spate of basic policies supporting the development of modern off-shore fishing methods. Decree 67, issued on July 7, 2014, provides a full, systematic and synchronous set of basic policies to encourage fishermen building high-capacity and iron-covered ships capable of fishing offshore, a practice that could earn fishermen higher incomes, and at the same time contribute to protecting the country’s territorial waters. Commercial banks have pledged about 14 trillion VND (658 million USD) in loans for organisations and individuals wishing to build new or upgrade their fishing vessels under the decree. The Ministry of Agriculture and Rural Development has decided that as many as 2,079 new off-shore fishing ships and 205 logistics ships will be built under this decree. Of that number, Binh Dinh will build 280 fishing and 25 logistics ships. Chairman of the provincial People’s Committee Le Huu Loc asked local authorities to survey fishermen’s demand, help them choose the suitable ship model and facilitate their access to bank loans. With a coastline of more than 134km, Binh Dinh has three major ports, namely Tam Quan, De Gi and Quy Nhon. The province has a fishing fleet of over 7,400 vessels including nearly 3,000 offshore fishing ships with capacity ranging from 90 to over 1,000 CV each. Slow economic growth jeopardises annual goal The country's economic growth could end up at 5.6 or 5.7 per cent this year, lower than the target of 5.8 per cent, the National Financial Supervisory Committee (NFSC) warned in a report released yesterday. Viet Nam was likely to see continued economic growth in the latter part of the year, driven by improved production, higher export turnover and optimistic signs of consumption, the report said. However, demand was not recovering steadily. In August, core inflation was estimated at 3.34 per cent, lower than headline inflation of 4.31 per cent and core inflation of 4.43 per cent in the same period last year. Headline inflation measures the total inflation within an economy and is affected by areas of the market that may experience sudden inflationary spikes, such as food and energy. Core inflation removes the CPI components that can exhibit large amounts of volatility month to month, which can distort the headline figure. In the first eight months of 2014, total sales value reached VND1,900 trillion (US$90.5 billion), an 11.4 per cent year-on-year increase. Retail sales accounted for more than 75 per cent of sales value at VND1,400 trillion ($68.14 billion), a 10.7 per cent year-on-year increase. Dong Nai sees 97% increase in investment The southern province of Dong Nai attracted VND12.7 trillion (US$597 million) in newly-registered and added funds as of August, a 97 per cent increase year-on-year, according to the provincial Department of Planning and Investment. The total includes 1,340 newly-registered firms with capital of VND5.3 trillion ($249 million), a year-on-year increase of 25 per cent, and 421 that registered to increase their additional investment with VND7.3 trillion ($343 million). In order to encourage small- and medium-sized enterprises, the province plans to boost trade promotion programmes and help enterprises cope with credit and export difficulties, said Bo Ngoc Thu, director of the department. OceanBank to install POS system in Mai Linh taxis Ocean Commercial Joint Stock Bank (OceanBank) and the Mai Linh Taxi Group signed a co-operation contract under which OceanBank will install its POS system, which accepts international cards and domestic debit cards, on the group's taxis. Meanwhile, the taxi group will use the financial and banking services of OceanBank and introduce the services to the group's customers. Bac Lieu holds exhibition to attract investors A handicraft and fine arts exhibition opened in the southern province of Bac Lieu yesterday. Two hundred stands belonging to 90 domestic companies will exhibit products for agricultural and industrial industries, as well as fashion, food and beverages. The exhibition aims to introduce the province's strengths to potential partners and attract investors. India remains largest supplier of pharmaceutical products India continued to be Viet Nam's leading pharmaceutical supplier in the first seven months of this year. The South Asian country exported US$155.1 million worth of pharmaceuticals to Viet Nam, an increase of 319.84 per cent from 2013. France ranked second with $131.7 worth of imports, followed by Germany with $112.6 million. In term of raw and ancillary materials, India ranked second after China with total revenue of $34.4 million, increasing 19.75 per cent from last year. Animals released into wild in Quang Ninh Van Don Veterinary Centre officials and local rangers in the northern province of Quang Ninh have returned 127 wild animals to Ba Mun island in Bai Tu Long National Park. The animals, including two bobcats, two crested serpent eagles, two big-headed turtles, 103 Malayan snail-eating turtles and 18 Bengal monitors, were rescued in July of this year and had been looked after by the Bai Tu Long National Park Wildlife Rescue Centre. Intellectual property discussed at int’l workshop An international workshop on intellectual property and trade names was held in Hanoi on September 8, attracting delegates from the World Intellectual Property Organization (WIPO), Cambodia, Laos, Myanmar and Vietnam. At the event, National Office of Intellectual Property of Vietnam (NOIP)  Deputy Head Tran Huu Nam said intellectual property plays an important role in boosting economic development particularly the knowledge-based economy Vietnam and other nations are targeting for. Building a trade name strategy is an effective tool to increase the prestige, status and competitiveness of businesses as well as economies in the globe, he stressed. Intellectual property becomes more and more important in the current trend of international economic integration. The protection of a trade name will help businesses sharpen competitiveness, and raise profit, Nam noted. Doctor Nguyen Quoc Thinh from Vietnam University of Commerce said the recent survey shows most enterprises are unaware of the potential of franchise and other similar commercial activities. Few enterprises have registered for tradename protection. Nearly 39% of enterprises don’t know how to register for intellectual property (IPs) rights. CEO of Generation Alliance, an Australian strategic brand consultancy David Faulks suggested Vietnamese businesses should determine key products in connection with local geography, communities and ways to lure target customers before building strong trademarks to support business goals. Vietnam to participate in WEF annual meeting The Deputy Minister of Science and Technology Pham Cong Tac will lead a delegation of prominent Vietnamese businesses attending the Annual Meeting of the New Champions 2014 from September 10-12 in Tianjin, China. Businesses currently planning to accompany the Deputy Minister include leaders of iVivu, Vingroup, VNG, Vietcombank and Navibank Stock Company. Established in 2007 as the foremost global gathering on science, technology, and innovation, the Annual Meeting of the New Champions convenes the next generation of fast-growing enterprises shaping the future of business and society together with leaders from major multinationals as well as government, media, academia and civil society. Meeting under the theme Creating Value through Innovation, more than 1,500 participants from 90 countries will focus on how innovation can generate more and better value for all – for the people we serve, the organizations we lead and the societies to which we belong. 140 sessions in the forum will discuss many topics such as China and emerging markets, Sustainability and Social, Breakthrough and Industry and Creative and Culture. US$188 mln invested in VSIP Quang Ngai The Quang Ngai-based Vietnam-Singapore Industrial Park (VSIP) has attracted 8 Foreign Direct Investment (FDI) projects with totalling US$188 million as of September 2014. Three licensed projects include a US$35 million food processing factory by the Philippines’ URC Central Company, a US$38 million fabric textile factory by Xindadong Textiles Printing and Dyeing Company of China and a US$30 million footwear factory by the UK’s King Riches Vietnam Company. Procedures for setting up businesses and running investments under five projects are underway. These projects invested by Philippine, Hong Kong and Korean businesses focus on the processing industry, footwear, garments and textiles with total registered capital of US$85 million. Construction of the Quang Ngai VSIP commenced on September 13, 2013. During the first stage, the industrial park covers an area of 458 hectares, including an industrial park (408 hectares) and a complex service area (50 hectares) at a total cost of US$125 million. HCM City’s IT and electronics firms want tax procedures further cut The time required for preparing, filing and paying taxes should be further reduced, heard a meeting held on September 4 between HCMC authorities and information technology (IT) and electronics companies. Many opinions over some circulars on value added tax (VAT) and export-import requirements for IT products were raised at the meeting. Administrative procedures in Vietnam are not suitable for certain specific business conditions in IT and electronics industries, participants said. Vu Anh Tuan, general secretary of the HCMC Computer Association, raised a question on regulations on temporary export and import of IT and electronics products that are sent abroad for after-sale maintenance services. Many companies have been fined because their exported products for maintenance overseas were different from the imported ones. In fact, the companies abroad have replaced defective items with new ones in line with their warranty terms and conditions. Meanwhile, the HCMC Department of Customs said that if the items imported into Vietnam are different from the exported ones, companies would have to pay import tariff plus an administrative fine. The city’s authorities and relevant agencies have issued a number of new rules to address hardships faced by companies. “IT is a key industry that fuels economic growth. Therefore, it is very important to support IT firms to deal with difficulties,” HCMC vice chairman Le Manh Ha told the meeting. According to Tran Thi Le Nga, deputy head of the HCMC Department of Tax, Circular 119 issued by the Ministry of Finance is designed to reduce the time for filing and paying taxes. VAT payers are entitled to tax deductions from the beginning of this month. Vice chairman Ha said there should be appropriate measures taken to make life easier for companies to file and pay taxes. He suggested reconsidering how much time companies need for tax payment to set out a meticulous roadmap on a reduction of tax procedures. Work starts on aluminum electrolysis plant Tran Hong Quan Trading Co., Ltd. on September 4 broke ground for Dak Nong aluminum electrolysis plant with total investment of VND12 trillion in the Central Highlands province of Dak Nong. As scheduled, the plant will be commissioned by the end of 2016 and use electrolysis technology supplied by France’s Rio Tinto Alcan Corporation to turn out 350,000-450,000 tons of aluminum a year. The Government approved the project in line with a master zoning plan for exploring, exploiting, processing and employing bauxite ores in 2007-2015, with a vision toward 2025. As reported by the Daily in June, the Government approved supporting power prices and other incentives for Dak Nong aluminum electrolysis plant. The plant will pay a special power price of VND1,052 per kWh, exclusive of some five U.S. cents per kWh in value added tax (VAT) in the first 10 years from the date of operation. After this period, market-based electricity prices will be applied to the project but the investor will be assisted to ensure return on investment and reasonable profit. Vietnam Electricity Group (EVN) will develop a 220-kV power line and transformer station to supply electricity for the project. An energy expert analyzed building an aluminum electrolysis plant will help reduce transportation costs and shipping alumina to foreign markets, including China. AEC expected to create wider labor market The establishment of the ASEAN Economic Community (AEC) in 2015 will help raise the number of jobs in Vietnam by 10.5%, said the International Labor Organisation (ILO) and the Asian Development Bank (ADB). According to the report on the joint ILO-ADB study “ASEAN Community 2015: Managing integration for better jobs and shared prosperity” announced on September 4 in Hanoi, Vietnam is among countries gaining more benefits from regional integration as its economy is wide open to foreign trade. Major products of Vietnam such as footwear, apparel and agriculture products are mostly for export, said Yoshiteru Uramoto, director of ILO for the Asia-Pacific region. The report also predicted strong growth of jobs in construction, transport, apparel and food processing sectors. In the 2010-2025 period, sectors that need medium-quality workers rises the fastest at 28%, offering oppportunities to millions of people. At present, more than half of Vietnamese laborers are working in the agricultural sector, where capacity, income and working conditions are at a lower level compared to other ASEAN countries. A large number of people involved in agriculture can create an imbalance in the country’s labor market and aggravate shortcomings on the market such as low-quality jobs, informal jobs and physically harmful jobs, said Uramoto. Phu Huynh, economist of ILO in the Asia-Pacific region, said ASEAN has just allowed laborers of eight careers including auditors, architects, engineers, dentists, doctors, nurses, investigators, and tourism workers to travel freely among countries for working after the AEC is established. Initial estimates showed that those jobs make up only 1% of the total workforce and therefore, the number of high-quality laborers who take the chance to work abroad will not be sizeable, Huynh said. However, the ASEAN Secretariat is considering expanding the number of jobs in the group by adding careers that require medium-quality laborers. In the long term, laborers from Vietnam and other countries in the region will enjoy more benefits when medium-quality laborers are allowed to move freely among ASEAN countries. Enterprises want to talk ‘Tra Fish Decree’ over again Enterprises continue to ask for changes to regulations on tra fish quality and export procedures though Decree 36/2014/ND-CP, also called “Tra fish Decree”, came into effect on June 20. However, management agencies are determined to retain all issued provisions related to tra fish. The Vietnam Association of Seafood Exporters and Producers (VASEP), in a written request sent to the Prime Minister and the Ministry of Agriculture and Rural Development (MARD) last Wednesday, required another dialogue about this decree. According to VASEP, some provisions related to quality and export procedures­ will cause many difficulties for processing and exporting tra fish. Therefore, this association asked the Prime Minister for approval to organize a seminar to discuss such rules. This seminar should be attended by representatives of MARD, the ministries of Finance, Justice, Industry and Trade, the Government Office, the Chamber of Commerce and Industry, local governments and tra fish companies. In response to VASEP’s proposal, deputy agriculture minister Vu Van Tam on September 4 said that the ministry had discussed and answered directly all questions in previous conferences and seminars, as well as in written replies. The ministry also reported the implementation progress of Decree No.36 to the Government. He asserted Circular 23/2014/TT-BNNPTNT issued on July 29 guiding the implementation of Decree No.36 has taken into account all actual operations in tra fish breeding, processing and exporting. Administrative procedures are simple and convenient for farmers and traders, he said. MARD therefore asked VASEP to encourage its members to conform to the new rules to develop the tra fish industry. Earlier, the “Tra fish Decree” has faced stiff opposition from businesses and VASEP due to the applications of ice-rate regulations, Vietgap standards and mandatory registration with the Vietnam Pangasius Association. Decree 36/2014/ND-CP aims at controlling the input, planning, breeding process, processing and exporting of tra fish to attain sustainable development, said the deputy minister. VND22-trillion G-bonds sold in August The Hanoi Stock Exchange (HNX) mobilized around VND22 trillion from seven government bond auctions last month, according to Vietnam News Agency. Of the total, the State Treasury raised over VND19.5 trillion, Vietnam Bank for Social Policies VND300 billion and Hanoi City’s People’s Committee over VND2.2 trillion. A report of HNX showed that bond mobilization volume on the primary market fell 5% in August against the previous month with coupons going down. The two-year tenor saw coupons down by around 0.17 percentage point to 5.08% per annum, three years by 0.26 percentage point to 5.42-6%, five years by 0.31 percentage point to 6.37-7.26% and 10 years by 0.68 percentage point to 7.8-8%. On the secondary market, G-bond trading volume under normal mode hit more than 447 million units valued at VND47.4 trillion. Trading volume under repo mode was over 260 million units worth over VND26.8 trillion. Foreign buying value registered VND6 trillion while selling was VND6.3 trillion in normal mode. For repo trading, foreign buying value was over VND575 billion while selling value was over VND97 billion. For the secondary treasury bill market, trading volume in normal mode was five million units worth over VND480 billion and that in repo mode was 9.5 million units worth VND898 billion. Treasury bill trading by foreign investors under normal mode was over VND114 billion while there was no foreign transaction in repo mode. Pepper prices seen rising on output fall Bad weather has struck many pepper farming areas in southeastern and Central Highlands provinces, and output will be affected early next year, leading to price rises. Tran Duc Tung from the Vietnam Pepper Association (VPA) said around 600 hectares of pepper in Dong Nai Province has dried up. Pepper farmed in the Central Highlands as well as in Ba Ria-Vung Tau Province has also been found dead due to bad weather and counterfeit fertilizer. As a result, next year’s overall pepper output will decline while Vietnam supplies 50% of the world’s commercial pepper volume and thus falling output is likely to affect prices next year. Pepper harvests in Vietnam normally begin after the Lunar New Year holiday. “I think the pepper price will remain stable or rise next year,” Tung predicted. The current price in the Central Highlands and southeastern regions range between VND184,000 and VND187,000 per kilogram, up VND42,000-45,000 against the price recorded last April. Statistics of the Ministry of Agriculture and Rural Development showed Vietnam exported 126,000 tons of pepper to earn US$926 million in January-August, up 38% in volume and 24% in value respectively. The association earlier forecast Vietnam this year will export around 150,000 tons with US$1 billion in export value. Tung said of 150,000 tons forecast to be exported, there is around 20,000 tons imported from Indonesia. However, according to statistics of the General Department of Customs, pepper is not listed as an item imported from Indonesia. According to the association, as the pepper price in Indonesia is almost equivalent to Vietnam’s, temporary imports of pepper for re-export do not bring in big profit for enterprises but only aim to offset insufficient supplies of the signed contracts. Vietnam government to pump more money into problematic steel firm The State Capital Investment Corporation (SCIC) has been ordered by the prime minister to pump at least VND1 trillion ($47.4 million) into loss-making Thai Nguyen Iron and Steel JSC (UPCoM: TIS). The prime minister has allowed a revival of the project to expand TIS’ production, according to the Government Office, and asked the Bank for Investment and Development of Vietnam (BIDV) to restructure TIS’ current debts and lend more to the group so that it can complete phase two of the project. TIS reported consolidated losses of VND109 million ($5,166) in the first half of 2014, compared to a loss of VND844 million ($40,000) in the same period last year. As of June 30, TIS, whose equity stood at VND1.71 trillion ($81 million), had liabilities of VND7.541 trillion ($357.4 million), of which VND2.2 trillion ($104.2 million) was short-term debts. The project to expand TIS started in 2007 but has been suspended twice due to capital shortages and unfavourable market developments. The cost for phase two has risen from the initial VND3.843 trillion ($182.1 million) to VND8.104 trillion ($384 million). The value of the partly finished phase two is VND4.330 trillion ($205.2 million), according to TIS’ first half financial statement. The Vietnamese steel market is led by two firms, namely Hoa Phat Group (HOSE:HPG), which has 18 per cent market share, and Pomina (HOSE:POM), which has 15.9 per cent market share, both as of the first half of 2014. HPG plans to expand its capacity to become Vietnam’s biggest steel firm by output within the next two years. Port expert advises on Cai Mep efficiency Member of the Vietnam Logistics Association Executive Committee and board member of leading port and logistics operator Gemadept Corporation, Vu Ninh provided VIR with an action plan on how to transform the Cai Mep-Thi Vai port complex into a world class venue in the not too distant future. Despite a several billion dollar investment and installation of cutting-edge equipment and technology, the operational efficiency of the southern province of Ba Ria-Vung Tau’s Cai Mep-Thi Vai deep-water seaport complex has proved below-par. The question is, how can this situation be turned around? First, it is crucial to form common price sets for port services, diverse charges, synchronised development policies and the setup of a port authority model as well as links between ports in transport and associated infrastructure. In fact, after five years of construction, a road project providing transport to the Cai Mep-Thi Vai area has not yet been completed. Another problem that needs to be tackled is that there are a number of mini terminals in Cai Mep area which are distant from each other, so it is important to shape a terminal chain, which helps to limit the time for processing and thereby attracts more vessels. Second, there is a need to reduce the cargo volumes between Ho Chi Minh City and Ba Ria-Vung Tau. In fact, traffic congestion and stuck commodities at Ho Chi Minh City ports have plagued transporters and have been more frequent over recent months. Lines of trucks sitting idle along the Hanoi highway and specifically inter-provincial route 25B had significant social and economic impacts. Once ports are opened in Cai Mep, management has a broader vision to dredge and expand into the sea. The port system however has yet to realise this vision and containers are still concentrated in Ho Chi Minh City ports. Thailand once faced a similar situation. Initially, ports in the inner city held back Bangkok’s development and stressed already-existing traffic problems. To remedy the situation, the Thai government built a new deep-sea port, Laem Chabang, in the suburbs, about 90 minutes southeast of the city. From that lesson Vietnam should take away the need to find suitable solutions, such as limiting the cargo volumes going through Ho Chi Minh City and moving them to Cai Mep-Thi Vai port complex to boost its efficiency. Third is promoting connectivity between domestic inland waterways and ports in Cambodia, which shares the Mekong River with Vietnam. To turn Cai Mep-Thi Vai into a vibrant port venue, it is a must to ensure smooth transport to the Mekong Delta and links with ports in Cambodia’s Phnom Penh. That is one way to offset overloaded road transport and ease congestion at the Moc Bai Bordergate. Towards this end, both countries’ transport authorities need to sit together to tackle administrative procedures, allowing ships to make entry/exit at river-way border gates. At present, port authorities and other agencies at the border work regular hours, they need to work later. Vietnam’s seaport system and logistics supply chain is integral to the marine economic growth strategy and makes a remarkable contribution to the country’s GDP growth. In a broader sense, as Vietnam becomes a charming investment venue to multinationals and a destination of global ship alliances, the benefits will be enormous, not only economically, but also in terms of sovereignty and sea and island security. PM realigns building material plan The domestic building materials market is expected to be knocked into shape following the recent governmental approval of the sector’s master plan until 2020 with a vision towards 2030. Oversupply within the construction market has prompted the government to place limits on certain sectors The prime ministerial Decision 1469/QD-TTg to green-light Vietnam’s building material development has ordered limiting investment into certain materials that are currently in oversupply. Accordingly, the prime minister has suggested stopping investment in building new ceramic tile production units from now until 2015. In the period from 2016 to 2020, this line of investment will get the go-ahead to reach the total designed capacity of 570 million square metres of ceramic tiles per year. Statistics from the Ministry of Construction (MoC) showed that the total designed capacity of tiling materials should reach 450 million square metres per year in 2015, increasing to 570 million square metres per year in 2020. In respect of natural masonry veneers, the government has set the target for the total designed capacity of 15 million square metres per year in 2015, doubling to 30 million square metres per year by 2020. It expects to achieve these targets through production expansion or new investments. The prime minister also demands using state-of-the art technology in the extraction process with minimal usage of explosives to limit environmental damage. Masonry veneer businesses are also encouraged to cooperate with calcium carbonate production units to reduce waste and alleviate environmental pollution. Le Van Toi, head of the MoC’s Building Materials Department told VIR that of the major building materials only cement had a detailed development plan based on actual market needs while most others did not, leading to the oversupply of many building materials in the market. “In past years, building material units have used less-than-modern technologies and equipment which are high on fuel consumption and harmful to the environment. As well as that, the management of natural resources has been lax,” Toi said, adding that the enactment of the new decision would help tackle these problems. With regards to clay bricks, the prime minister has encouraged the production of large hollow clay bricks using modern technologies. Centrally-governed localities are required to work on a roadmap to gradually discontinue the use of furnaces that employ obsolete technologies. The approved planning also forecasts that Vietnam’s total cement consumption will be 93 million tonnes by 2020. In the next period from 2020-2030, cement investment must follow the prime minister-approved cement development plan and the plan on exploration, extraction and use of minerals for the production of building materials. SHTP, Japan’s Shiga ink hi-tech cooperation deal Leaders of Saigon Hi-Tech Park (SHTP) in HCMC and Japan’s Shiga Prefecture Department of Commerce, Industry, Tourism and Labor have signed a memorandum of understanding (MOU) on attracting high-tech firms from Japan. Haizumi Hiroshi, director of the department, said Shiga is a leading industrial prefecture in Japan in terms of electronics, power, machinery and automotive manufacturing, plastics, health and pharmaceutical sectors. Hiroshi said many small and medium enterprises (SME) in the high-tech sector in Shiga – a locality between Japan’s economic zones of Kansai and Tokai – are looking to expanding their operations to overseas markets, especially HCMC and other parts of Vietnam. Le Hoai Quoc, head of SHTP management, said the hi-tech park has always regarded Japanese companies as among the potential high-tech investors in the first place. To get ready for the coming investment flows from Japan in general and Shiga in particular, SHTP is preparing an area of 20 hectares for Japanese SMEs active in supporting industries. SHTP and Shiga will jointly hold a conference on high-tech investments in the Japanese prefecture on the occasion of an investment promotion mission visiting Shiga at the end of this month or early next month, Quoc said. The hi-tech park will collaborate with Shiga in developing human resources with an aim to attract more high-tech investors, Quoc said. Besides the recruitment of skilled workers, Japanese investors need to hire managers to replace their countrymen working in Vietnam. The two sides will also foster human resources training and call on Vietnamese students studying in Japan to work for Japanese firms at SHTP and HCMC. Despite a small number of Japanese investors at SHTP, their investment pledges rank second after the US$1 billion project of U.S. chipmaker Intel, Quoc said. Subway Vietnam looks for franchisees With five restaurants already in place in HCMC, Subway Vietnam has started seeking franchisees as part of a plan to further promote the brand of U.S. sandwich chain Subway to the local market with a population of over 90 million. The company is looking for franchise partners for more Subway restaurants in Vietnam, Mark McGrath, general director of Subway Vietnam, said last week when the company took part in International Franchise Business Opportunities (IFBO) Vietnam 2014 in Tan Binh Exhibition and Convention Center in the city. Subway has had five restaurants in HCMC three years after it entered Vietnam. Now is a good time for the firm to find franchisees in addition to opening more its own shops in this market, McGrath said. The partners will have to pay a franchise fee of US$110,000 for the first restaurant and US$5,000 for each subsequent facility. Each restaurant should cover at least 60 square meters. McGrath said Subway Vietnam targets to have 20 restaurants in this market in the next three years. Most of the ingredients used to make foods at Subway restaurants in Vietnam are imported, except for vegetables the company buys from Dalat City in the Central Highlands province of Lam Dong. Besides Subway, many foreign fast-food and beverage firms want to have franchisees in Vietnam, including Singapore’s The Manhattan Pizza, Malaysia’s Coffee Nowhere and The Chicken Rice Shop, Round Table Pizza and Dulce Café of the United States, Taiwan’s Tino’s Pizza Express and Japan’s Miz Restaurant. David Lo, international business development manager of Sun Spark Co., Ltd., said young consumers account for the majority of more than 90 million people in Vietnam and this is an opportunity for fast food franchisees here. The IFBO, which ended last Saturday, attracted 83 brands from 14 countries and territories, including Australia, Canada, Hong Kong, Indonesia, Malaysia, Singapore, Britain and the U.S. Fuel trading firms to have longer time to adjust prices The Government has issued a decree requiring local fuel trading enterprises to ensure the interval between two price adjustments should be at least 15 days, or five days longer than allowed by existing regulations. The new decree, which replaces Decree 84/2009/ND-CP, states that fuel trading firms are permitted to revise up prices in a minimum interval of 15 days and adjust down prices in a maximum interval of 15 days, according to the Government portal chinhphu.vn. The new decree clarifies when the base price drops, fuel traders must lower their retail prices within a maximum of 15 days and report their decisions to the ministries of industry-trade and finance. When the base price picks up within 3%, they can adjust their retail prices accordingly and submit documents to these ministries. In case the base price goes up more than 3% to 7%, enterprises should write to the ministries seeking approval for their fuel price hikes. If the base price increase is more than 7% and impacts on socio-economic aspects, the ministries will report to the Prime Minister. Fuel trading firms are allowed to set their wholesale prices. However, they should help stabilize prices on the market in line with current regulations and will get support from the Government in return. The new decree says fuel trading firms should make price adjustments transparent, based on market principles and in line with instructions of the Government. BIDV MetLife announces CEO BIDV MetLife Life Insurance Limited Liability Company announced Dustin Ball has been picked as its chief executive officer (CEO). The announcement followed the approval of an operational license for the joint venture from Vietnam’s Ministry of Finance in July this year.   Ball will be responsible for executing the corporate strategy to drive growth for MetLife’s joint venture business in Vietnam and accelerating shareholder returns while ensuring the operational effectiveness of the business. Ball joined MetLife in August 2010 as its Asia Pacific Head of Strategic Development. Since October 2013, he had been MetLife’s country manager for Vietnam where he played an instrumental part in establishing the business there. Prior to MetLife, Ball was with Sun Life Financial, where he was vice president of strategic initiatives in Asia and responsible for strategy and mergers and acquisitions for the region. Before that, he held several senior strategy and M&A roles over seven years at American International Group (AIG) in New York, Taiwan, and Hong Kong. BIDV MetLife is a joint venture between MetLife Limited, the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), and BIDV-affiliated Bank for Investment and Development of Vietnam Insurance Joint Stock Corporation (BIC). The company will leverage the strengths of MetLife and BIDV to create a strong insurance provider in this market. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR