BUSINESS IN BRIEF 21/11 Vietnam Airlines hosts SkyTeam meeting Vietnam Airlines is hosting the SkyTeam’s Governing Board Meeting for the first time in Hanoi. During the annual meeting on November 20, chief executive officers of SkyTeam’s member airlines will discuss development plans for 2015 with a focus on improving the services’ quality. Dialogue between Vietnam Airlines and others in SkyTeam will also be included. SkyTeam is a global airline alliance providing customs from member airlines access to an extensive global network with more destinations, higher frequency, and better connectivity than a single airline can offer. Currently, SkyTeam’s 20-member carriers offer more than 16,420 daily flights to 1,064 destinations in 177 countries and serve 612 million passengers per year, said its CEO Micheal Wisbrun at a press conference on November 19. Vietnam Airlines became a member of SkyTeam in June 2010. With close cooperation among members, the national carrier has been expanding its flight network to deeply penetrate the world aviation market while effectively connecting other members with its network in Southeast Asia. US experts share experience in fair competition A seminar on fair competition in the US, supply chains and cyber security was organised on November 19 by the US General Consulate and the American Chamber of Commerce (AmCham) in Ho Chi Minh City. Regional Intellectual Property Attaché for Southeast Asia Peter N. Fowler emphasized that US importers attach great importance to fair business practices, including the use of licensed software and the respect for IP rights. According to Fowler, in addition to its key strength in agricultural products, Vietnam is currently experiencing a surge in information technology exports to the US. Local suppliers should pay attention to these issues, as well as cyber security, with a view to reducing risks and creating long-term relations with US partners. Experts from the US shared information with Vietnamese business representatives on legal issues involved in exporting goods to the US market, as well as experience in limiting risks when joining international supply chains. Michael Mudd, Secretary General for the Asia-Pacific of the Open Computing Alliance introduced the Unfair Competition Act (UCA) as well as supply chains and cyber security issues to the participants. Vietnam, Germany hold talks to improve economic partnership Vietnamese and German officials and entrepreneurs participated in an economic dialogue in Hanoi on November 19 with a view to promoting the bilateral trade partnership as well as linkages between the two economies in general. Addressing the event, Minister of Planning and Investment Bui Quang Vinh said Vietnam had not yet fully tapped its opportunities in Germany, the largest European economy. The two countries’ comprehensive cooperation, especially on investment, trade and entrepreneurial training, played a crucial role, he noted, pledging that Vietnam would work more closely with Germany to maximise their economic relations in areas of strength. German Vice Chancellor and Federal Minister for Economic Affairs and Energy Sigmar Gabriel said his country considered Vietnam an important partner in the ASEAN region and was interested in fostering collaboration on investment, trade and training with the Southeast Asian nation. He suggested Vietnam improve its competitiveness and fine-tune policies to attract more German investors, adding that rising demand in all fields was turning Vietnam into a magnet for German businesses keen to expand their operations in Asia. Data from the Vietnamese Foreign Investment Agency (FIA) show an influx of German investments into Vietnam since 2011. While only seven German projects, worth 34 million USD, were registered in Vietnam during the first ten months of 2011, the figures for the same period in 2014 counted 21 projects worth 142 million USD. By the end of October this year, 239 German investment projects were registered in Vietnam with a total capital of more than 1.33 trillion USD, ranking 22nd out of all foreign investors. During the dialogue, FIA Director Do Nhat Hoang presented Vietnam’s investment potential to German entrepreneurs, highlighting the large proportion of processing and manufacturing facilities within the industrial sector. With its stable political situation, abundant workforce, favourable policies and prime geographical location, Vietnam hoped to welcome more foreign investments, particularly from Germany, he said. Meanwhile, German investors asked Vietnam to improve its business and investment climate and adapt its legal system to the World Trade Organisation’s requirements. During the dialogue, Minister Vinh and German Vice Chancellor and Minister Sigmar Gabriel signed a joint cooperation statement between the two ministries on entrepreneurial training between 2014 and 2016. Vietnamese enterprises join The Rice Trader 2014 An 80-member strong delegation from Vietnam is taking part in the World Rice Conference launched in Phnom Penh on November 19. The two-day event, the sixth of its kind, attracted 500 representatives of rice processing and exporting enterprises and associations from 40 countries and territories. During the opening ceremony, Cambodia’s Minister of Commerce Sun Chanthol stressed that rice played an important role in global food security. He asked exporting businesses to develop rice trade strategies with a view to ensuring food stability, which helps harmonise consumers, businesses and farmers’ interests. A number of activities are planned as part of the conference, such as trade promotion events and workshops on increasing rice production and export effectiveness, measures to tackle the difficulties in rice exports, and trends and challenges in 2015. In addition, the World’s Best Rice Award, with Cambodia currently as reigning winner, will be decided as part of the event. General Secretary of the Vietnam Food Association Huynh Minh Hue said the conference served as a forum for Vietnamese enterprises to promote their brands and connect with other rice exporting businesses. He added that Vietnam was focussing on improving rice quality, adding value to products, and increasing profit for producers, which all help boost the global image of Vietnamese rice. Southeast Asia is one of the most important rice producing areas in the world. In recent years, Vietnam became the world’s second largest rice exporter, with the main markets including China and ASEAN member states. The country aims to export 6.5-7 million tonnes of rice in 2014. Binh Duong expects trade surplus of 4 billion USD The southern province of Binh Duong is expected to gain a trade surplus of 4 billion USD by the end of 2014, according to the provincial People’s committee. This year, provincial export turnover is predicted to hit 17.741 billion USD, up by 17.5 percent compared to last year, with the foreign-invested sector making up 82 percent of the total export value. Exports of footwear, textiles, garments, and wood products are forecast to reach more than a billion USD. Meanwhile, Binh Duong’s imports are estimated at 13.732 billion USD, a year-on-year increase of 17.7 percent, of which the foreign-invested sector accounts for 78 percent. The locality’s biggest imports are raw material, machinery and equipment. Vo Van Cu, Director of the municipal Department of Industry and Trade said the export market is stable and continues to grow, especially in target markets, such as the ASEAN region, the US and the EU. The trade surplus could still exceed estimations, added Cu. Binh Duong, together with Dong Nai, Tay Ninh, Ba Ria-Vung Tau, Binh Phuoc, Long An and Tien Giang provinces and Ho Chi Minh City, form Vietnam’s southern key economic region. 300 firms participate in Vietbuild Hanoi 2014 The 2014 edition of Vietbuild Hanoi taking place on November 19-23 kicked off in Hanoi at the Vietnam Exhibition and Fair Centre in grand style with more than 300 local and international participating enterprises. Speaking at the event, Minister of Construction Nguyen Tran Nam said the national economy has shown positive signs of recovery in all sectors, with GDP on the rise and inflation effectively constrained. This year’s fair, which focuses on real estate, interior decoration, construction and construction materials gave businesses a chance to network, share experiences and fine tune their business strategies, Nam said. During the event, a business forum is planned to help businesses learn about consumer tastes and devise proper orientations for their business plans as well as several industry related seminars. Vietnam seeks Indian investment in all sectors Two-way trade turnover between Vietnam and India reached US$8 billion in fiscal year 2013-2014 and both nations have aims of striking a turnover of US$15 billion before 2020. While Vietnam has been cynosure of all eyes following its dispute with China over the latter's claim in East Sea, few would have noticed its recent economic growth and market opportunities that it presents. This growth has been based on foreign direct investment (FDI) and Hanoi has been keen to invite Indian investors to do business in the country as enunciated by Vietnam's PM during his trip to Delhi last month. Vietnam's GDP grew 5.62% in the first nine months of 2014. The performance of the economy has also been supported by investment in the manufacturing sector, which remains the most significant sector for foreign investment, accounting for almost 70% of total FDI. Textile and garments, chemicals, agriculture and fishery are the sectors where Vietnam has sought India's investments, Indian government sources informed ET. Vietnam has also been looking forward to Indian investment in new business sectors where India has advantages –  infrastructure and power generation and distribution, IT, education and pharmaceutical research, according to official sources. The present two way trade was $8.0 billion in 2013-14 and the two countries have targeted 15.0 billion before 2020. The two countries are contemplating to conclude the Preferential Trade Agreement (PTA) to reduce more custom tariff. The Republic of Korea has overtaken Japan as the biggest foreign investor. Samsung has invested nearly $8 billion in Vietnam while Lotte Mart plans to double its current number of stores to 2020. Besides manufacturing, the real estate sector is ranked second in FDI, accounting for 11%, equivalent to $1.2 billion. Currently there several large real estate projects, including Smart Complex by Lotte in HCM City's Thu Thiem Area ($2 billion) and Amata City Long Thanh from Amata in Dong Nai province ($530 million) have been undertaken in Vietnam where Indian investors could explore to invest, sources in Vietnamese government said. Vietnam's stock market has been among five markets with the strongest growth in the world. Vietnam has also quickly recovered from the impacts of the financial crisis in 2008-09 and over the last four years, the Vietnamese government successfully made use of macroeconomic stabilisation policy, thus keeping a high economic growth at 5-6% per year, attracting $23 billion in foreign direct investment (FDI) in 2013, contributing to promoting the national economic development. Vietnam has developed into one of the leading investment destinations in ASEAN and one of the top three ASEAN exporters to the US, ahead of Thailand and Malaysia. Vietnam accounts for 20% of ASEAN exports to the US, and if the present trend continues, it would have a market share of more than 30% by 2020. The Vietnamese economy has gradually stabilized, with macro-economic indicators improving as against that in 2013. This positive outcome has been attributed to the proper formulation of macro-economic policies by the Government of Vietnam. In the first nine months of 2014, the number of households living below the poverty line has reduced by 21.7% compared to the same period of the previous year. The US Chamber of Commerce in Singapore has claimed that Vietnam is the second most popular destination for US business expansion among the member states of the (ASEAN), stating that Vietnam's participation in negotiations to become RCEP and TPP membership would have a positive impact on investment activities by U.S enterprises in Vietnam. Vietnam accounts for 20% of ASEAN exports to the US and if present trends continue, it would have a market share of more than 30% by 2020. The country could achieve a growth rate of 6% in 2015 and then gain up to 6-7% in the period 2016-2017. Its inflation rate has dropped from over 20% in 2010 and 2011 to only 6% in 2013. Lazada’s e-commerce page now available in English Leading e-commerce player Lazada recently launched English-language version of its shopping platform in Vietnam, enhancing retail experience for expats. The introduction of the new bilingual page reinforces Lazada’s ambitious approach towards winning customer trust in Vietnam and becoming a preferred port of call for “one-stop” shopping. The English version has been available on both desktop and mobile version from November 12.  English-speaking customers simply have to click on the small icon on the upper right corner of the screen while on the Lazada website to change the language into English. Through this feature, expats living in Vietnam can enjoy an effortless shopping experience easily by clicking between the 300,000 product types in Lazada’s fabulous range. “After nearly three years in Vietnam, we came to the conclusion that the 80,000 plus foreigners that live here still faced huge difficulties in transcending the language barrier for both online and offline retail. Therefore, it was a priority for us to offer a convenient and accessible platform for shopping to all consumers regardless of nationality,” said Alexandre Dardy, CEO of Lazada Vietnam. Lazada has set its sights on becoming the leading one-stop online shopping portal in Southeast Asia, giving consumers access to the widest possible selection of international and local products. To stimulate excitement during the year-end shopping season, Lazada is launching its Online Revolution sale from November 11until December 12 in six countries across Southeast Asia including Vietnam. The event aims to be the biggest online shopping event of the year for Vietnamese consumers with 5,000 attractive deals, an 11 per cent discount on all electronics, a 50 per cent discount on the LZD fashion brand alongside thousands of vouchers and giveaways. Lazada is  the e-commerce service tailoring the shopping needs of customers with 300,000 products from more than 1,000 brands. It is the only international brand among the  top 5 retail websites in Vietnam with more than 1.5 million accesses per day. Vinci Construction and HCMC Polytechnic University enter in cooperation French-based Vinci Construction last week signed a two-year agreement with the Polytechnic University of Ho Chi Minh City in Vietnam. This partnership relates to the Buildings & Energy speciality option with very specific training on the use of the new design and construction technologies to enhance the energy efficiency of buildings. For Vietnam as well as the whole of South-East Asia, this is a major issue in the context controlling greenhouse gas emissions has become an imperative demand and fossil fuel resources are increasingly in short supply. Vinci Construction's subsidiaries in Vietnam, including Structure Vietnam, Bachy Soletanche Vietnam, Freyssinet Vietnam, Vinci Construction Grands Projets and Campenon, will offer internships and practical courses on their sites to students from the Polytechnic University of Ho Chi Minh City. As the Polytechnic University of Ho Chi Minh City has already established partnerships with two French engineering colleges- INSA Lyon and Ecole des Ponts ParisTech, Vinci Construction will also take on two Vietnamese students as interns, and they will complete part of their courses in those two colleges in France. VINCI Construction is France's leading construction company and a major global player, with more than 830 companies employing nearly 69,000 people in some 100 countries. Masan reports strong sales and earnings growth Masan Group Corporation, one of Vietnam’s largest private sector business groups, today reported its strong growth in the first nine months of 2014. Masan Group (HOSE: MSN) reported revenues of VND10,833 billion ($511 million) in the first nine months of 2014 (“9M2014”), up 44.3 per cent on year. Topline was supported by VND1,953 billion ($92.1 million) in revenues from the resources business as well as strong performance from the consumer business, enabled by new product launches across seasonings,  convenience foods and beverages. The group’s pro-forma operating EBITDA (Earnings before Interest, Depreciation and Tax) reached VND2,476 billion ($116.8 million) in 9M2014, up 72 per cent on year. Its margin profile has improved sharply, with operating EBITDA margin at 22.9 per cent in 9M2014 compared to 19.2 per cent in 9M2013. Cost reduction and productivity improvements in the consumer business resulted in gross margins of 43.6 per cent in 9M2014, up by 342 basis points against. 9M2013, while the resources business reported pro-forma EBITDA margins of 39.4 per cent in 9M2014. With successful new product launches across seasonings, convenience foods and beverages, the group’s consumer business reported an 18 per cent, 13.1 per cent and 13.8 per cent yearly growth in sales, operating EBITDA and pro-forma net profit respectively in 9M2014. Vinacafe grew 34 per cent on year in 9M2014, with “Wake-Up” emerging as a strong brand. The consumer business continued deepening its distribution network with the growth of its beverage platform, making it one of the few companies with both a strong on and off-premise presence for food and beverages. Masan’s Nui Phao mine achieved a significant milestone, with a positive contribution to net profit in 3Q2014. Another significant development was the completion of the drilling programme, which has resulted in the reserve life of the Nui Phao mine being extended by three years. The mine ramp-up is progressing well, achieving international benchmarks and securing a marquee customer base across continents for its products, including for value-added tungsten products through the joint venture with H.C. Starck. The group’s pro-forma net profit after tax for 9M2014 was VND 1,015 billion ($48 million), down 18.8 per cent against 9M2013. Pro-forma net profits for 3Q2014 were at VND457 billion ($21.6 million), down 12.6 per cent from 3Q2013. While profits in 1H2014 were affected by interest and depreciation costs as Nui Phao started operations, the net profit trajectory has started to improve as Nui Phao has crossed net profit break-even levels. Masan Consumer Corporation, a subsidiary of Masan Group, has announced that it will make a tender offer for up to 49 per cent of Cholimex Foods, through its wholly-owned subsidiary Masan Foods.  Cholimex Foods has a strong growing sauces and condiments business and well-recognised brands. Masan Group is one of Vietnam’s largest private sector companies focused on building market-leading businesses that capitalise on Vietnam’s structural consumption and resources stories. The group has a track record of actively building, acquiring and managing large-scale operating platforms, and is committed to being Vietnam’s local private sector champion in terms of scale, profitability and shareholder return and being the country’s growth partner and employer of choice. Distinct Taiwanese brands to showcase at Vietnam Expo 2014 After Taiwan Excellence Home & Leisure Experiencing Zone series in Hanoi and Ho Chi Minh City, Taiwan Excellence continues to make a bold presence at one of the biggest international trade events in the country, the 12th Vietnam International Trade Fair (Vietnam Expo 2014) which is slated to run from December 3-6, 2014 at the Saigon Exhibition and Convention Centre in Ho Chi Minh City’s District 7. More than 40 brands introduced in Taiwan Excellence campaign this year will take part in this special trade show. Under the sponsor of the Ministry of Industry and Trade, Vietnam Expo 2014 is expected to welcome 426 companies from 16 countries and territories. The exhibition- consisted of four main displaying areas including International Pavilions, Machinery - Electronics, Vehicles & Spare Parts and Home Living- seeks to offer Vietnamese and overseas enterprises an opportunity to experience latest innovation in different fields, exchange ideas and build up relationships for further collaboration. Taiwan is a familiar exhibitor of Vietnam Expo with companies joining this annual show in the past 12 years. Since 2013, leading Taiwanese brands having products awarded “Taiwan Excellence” has been put under the Taiwan Excellence booth, together showcasing the “excellent lifestyles” concept to visitors. Returning in the 2014 show, Taiwan Excellence Pavilion will be showcasing Taiwan’s award-winning products from 45 ICT, home-living, health & fitness and transportation brands. Some of notable names are HTC, Acer, Transcend, D-Link, Silicon Power and BenQ (technology), SYM, STRiDA, Tern and Kymco (transportation) and Cashido, Caesar and Sakura (home-living) and Johnson’s Health and Ucheer (Health & Fitness). A representative from the ICT industry is Acer, introducing its Aspire P3 ultrabook which can turn into a tablet in a second and the Aspire S7 laptop with the gorgeous yet tough Gorilla® Glass 2, improved 8 hours of battery life and enhanced auto-illuminating keyboard. Also featured at the Taiwan Excellence Pavilion will be HTC’s Desire and One’s smartphone family; latest innovation in the audio solution, power bank, gaming devices, and cooler from Thermaltake; StoreJet portable hard drive series combining the superior performance of USB 3.0, vast storage space, eye-catching enclosure, and a three-stage shock protection system that meets U.S. military drop-test standards from Transcend; BenQ’s smart projector that allows up to four students interact at the same time; and many other more. Coming to Vietnam Expo 2014, Taiwan Excellence especially presents a number of vehicle manufacturers and their new innovative concepts of moving such as SYM’s elegant yet strong and fuel-efficient motorbike models and Tern’s light and convenient folding bikes which are both considered smart choices for travelling in busy cities. Coming to Taiwan Excellence Pavilion, trade partners can search for B2B cooperation while consumers are able to experience many award-winning products. Representatives from participating Taiwanese companies will also present at the event searching for more business opportunities in Vietnam. “Vietnam and Taiwan have been strategic trade partners for a long time. Taiwan was one of the first foreign investors in Vietnam and remains in the top group since then with $28 billion in committed capital last year while Vietnam is currently the 13th largest trading partner of Taiwan and is in our top 20 import market,” said Tseng Hsien Chao, director of the Commercial Division, Ho Chi Minh City-based Taipei Economic and Cultural Office.   “Taiwanese companies consider exhibitions like Vietnam Expo a great opportunity to showcase their products, gather feedback from customers as well as seek more collaboration opportunities,” he emphasised. The symbol of Taiwan Excellence was established in 1992 by Taiwan’s Ministry of Economic Affairs, and subsequently the Taiwan Excellence selection was launched the following year. Products awarded “Taiwan Excellence” are judged based on five key indicators including  R&D, design, quality, marketing, and Made in Taiwan, as well as representing the “Innovation Value” from Taiwanese manufacturers, according to Elina Lee, executive director of Strategic Marketing Department of Taiwan External Trade Development Council (Taitra). Transport companies cut fees as fuel prices fall Transport and taxi companies have moved to cut fees amid decreases in petrol and oil prices this year and complaints about their slow response. The Ministry of Transport recently asked concerned organisations to implement measures to manage transport fee adjustments in line with fuel price decreases and required them to file reports with the ministry by year-end. After 14 adjustments this year, including five petrol price increases totalling VND1,430 (6.7 US cents) and nine decreases totalling VND4,250 (20 cents), the petrol price for RON 92 fell to VND21,390 ($1) per litre now. According to Bui Danh Lien, chairman of the Ha Noi Automobile Transport Association, about 50 taxi companies out of 114 companies in Ha Noi announced fee cuts of between VND500 (3.8 cents) and VND2,000 (9.8 cent) per kilometer since early this week. These include Mai Linh, Thanh Nga, CP Group and Thanh Cong, as well as Van Xuan and ABC Taxis. This was the first taxi fee cut after nine petrol price increases this year. Lien revealed that 50 taxi more companies were expected to cut fees in the coming week. Tran Nguyen Le Van, manager of vexere.com, the largest ticket booking website of Viet Nam with more than 1,000 transport companies, explained that with the Tet (Lunar New Year) holiday fast approaching, transport companies were afraid to lower their prices now because it would be difficult for them to ask for permission to raise prices ahead of Tet when the demand for travel was high. In response to complaints about transport companies' slow response to petrol price cuts, Lien said companies must proposed price adjustments to the finance departments 12 to 20 days in advance, adding that immediate price changes without the required registration with concerned departments would be fined. Some companies said they did not raise their transport fees after fuel price increases, so they won't be reducing their fees over the petrol and oil price cuts. Several import and export companies said transport fees should be cut by between 15 per cent and 20 per cent. However, Lien said, current fee cuts were reasonable as transport fees depended not only on fuel prices but also on other input factors such as wages, insurance fees and repair and maintenance fees. He added that companies with more reasonable fees would attract customers. Le Thi Lai head of the Price Management Division under the Ministry of Finance said the management of transport fee adjustments would be tightened to ensure rights of companies, the State and consumers. Meanwhile, Nguyen Tien Thoa, general secretary of the Viet Nam Valuation Association, said it was essential to calculate how much of the total transport fees come from petrol and oil prices to serve as a basis for management decisions. A transport ministry representative said transport companies that refused to adjust their fees following market changes to earn huge profits would risk losing customers. According to a World Bank study, Viet Nam's total transport fees were equivalent to 11.8 per cent of the country's gross domestic product, much higher than that of the US, which was below 4.5 per cent; Singapore, which was 4.8 per cent; and Japan, which was 6 per cent. Three German agencies open joint office in HCMC The German Agency for International Cooperation (GIZ), German development bank KfW Group, and the Federal Institute for Geosciences and Natural Resources (BGR) on Wednesday held a reception to mark the opening of a joint office on Wednesday in HCMC. The event was joined by Dr. Hans-Dieter Stell, Consul General of the Federal Republic of Germany; Jochem Lange, Director of GIZ Vietnam, and other international and local guests. The new office will coordinate and increase the number of joint programs run by the three institutions in the Mekong Delta and Ho Chi Minh City. At the opening ceremony, Consul General Stell praised the intentions of the three German institutions in developing relationships and partnerships with local businesses through the support of the new office in the economic center of Ho Chi Minh City. In development cooperation with Vietnam, the Federal Republic of Germany supported the efforts of the private sector in seeking business opportunities, Stell said. For years, Vietnam has been an important partner of Germany in its development policy. Both countries have focused on development cooperation policies in the fields of vocational training, power and environment, he said. The goal is to achieve economic growth in Vietnam in a sustainable manner, balancing social needs and being competitive in the regional and international markets, he added. GIZ is an international enterprise owned by the German Federal Government operating in many fields across more than 130 countries. It primarily works with states, state agencies and the private sector. The Federal Institute for Geosciences and Natural Resources is the central geoscientific authority providing advice to the German Federal Government in all geo-relevant questions. It is subordinate to the Federal Ministry for Economic Affairs and Energy (BMWi). KfW Group has been supporting change and encouraging forward-looking ideas in Germany, Europe and throughout the world since its founding in 1948, and according to its statutory mission, it has provided nearly one trillion euros in loans over 65 years. Gyeongsangnam-Do (South Korea) and SMEs- TAC ink deal South Korea’s Gyeongsangnam-Do recently inked a deal with the assistance centre for small and medium-sized enterprises in the south of Vietnam (SMEs –TAC) in a bid to support Vietnam’s small and medium-sized enterprises and promote trade links between the two sides. The two partners will accelerate the activities to assist Vietnam’s small and medium-sized enterprises (SMEs) such as organising exhibitions to introduce products, sharing information networks among enterprises and export promotion, according to Nguyen Van Tuat, SMEs –TAC’s manager in the south. Gyeongsangnam-Do is a coastal province located in South Korea’s southern region.  It is the centre of the global shipbuilding and marine industry. The province also has other important industries like textile and garment, shoe, aircraft and car accessories. Meanwhile, SMEs- TAC is currently managing 300,000 SMEs in 22 southern provinces, having advatanges to update information about SME members quickly and comprehend the strengths of each southern province. “Therefore, this agreement can solve the weaknesses of Gyeongsangnam-Do and expand growth opportunities for SMEs,” said Tuat. Yang Eun Ju, the representative from Gyeongsangnam-Do, said his province was looking forward to improving its commercial viability due to the shortage of market information. “We hope Gyeongsangnam-Do will cooperate with more provinces in Vietnam and promote trade links between Vietnam and South Korea,” he said. The cooperation agreement is a major step forward in assisting the SMEs in both countries. Bright prospects for agriculture Despite many natural advantages, Vietnam’s agriculture sector is suffering from a lack of advanced agricultural solutions and technologies. This leaves huge room for foreign agricultural companies with strong expertise and advanced technologies. Vietnam is currently the second biggest rice exporters in the world after Thailand, and also the second largest coffee exporter following Brazil. The nation, in addition, is the biggest pepper exporter. This reflects Vietnam’s global agricultural potential. Although Vietnam has great natural advantages, its agricultural products are often eyed as being low-quality in comparison with other countries like Thailand. Analysts blame these shortcomings on a lack of advanced solutions and technologies and foreign firms, including those from Germany are keen on the potential benefits. Germany’s BASF, the world’s leading chemical company, launched its crop protection business in Vietnam last year as part of their efforts to boost yields per hectare, breed drought resistant crops, control weeds, and improve crop quality. BASF has now dispensed with their local distributor, and will from now on market its crop protection products directly in Vietnam. These include the company’s AgCelence products, for example the Headline fungicide, which offers excellent disease control, as well as improved yield, stress tolerance and quality of crops. “Vietnam is one of the most important agriculture centres in the Asia Pacific,” said Raman Ramachandran, senior vice president, Crop Protection Asia Pacific, BASF, “and Vietnamese farmers are facing unique challenges, such as the need to increase the yields and quality of crops in a sustainable manner, high quality standards and tough to control weeds and diseases. We aim to provide Vietnamese farmers with the full benefits of our innovative crop protection products.” Germany’s Bayer CropScience is also active in Vietnamese agriculture sector. The company offers a wide range of products including high value seeds, innovative crop protection solutions based on chemical and biological modes of action, as well as an extensive service backup for modern, sustainable agriculture. Bayer Vietnam’s CropScience subsidiary underlined that the company would continue working with Vietnam’s government, localities and farmers to apply climate-smart agricultural technologies to act as a driver of green growth for the rapidly industrialising country, where 70 per cent of the population relies on agriculture for survival. The growing investment trend in Vietnam’s agriculture is also highlighted by companies in Vietnam and also from other countries like Japan and South Korea. The Hoang Anh Gia Lai Group, one of leading private companies in Vietnam since 2013 has felt justified in abandoning property projects to shift to agriculture. The company has also begun a new programme to raise 100,000 cattle. Doan Nguyen Duc, chairman of the company, estimated cattle-rearing would add VND4 trillion ($190.5 million) to the firm’s annual revenues. Tan Tao – an industrial group that has virtually no experience in agriculture – surprised business observers when it announced the launch of ITA Rice, a fragrant rice export and research company, to cultivate rice paddies on 60.3 hectares in the Mekong Delta province of Long An. The company plans to expand its cultivation to 5,000ha in the coming years. Major transnational groups are also increasing their participation in Vietnam’s agricultural sector. Metro Cash & Carry is increasing investment in seafood, while Nestle is targeting coffee, and consumer giant Unilever is dipping its toes in the tea sector. German firms offer green construction Many German firms are introducing their environmentally-friendly technology into Vietnam’s construction industry. ThyssenKrupp said it was seeking more local partners to sell its second-generation cement grinding solutions, which are already being implemented at the Cong Thanh cement plant in Thanh Hoa province. Last month, ThyssenKrupp began producing ammonium nitrate in Thai Binh province. Ammonium nitrate is predominantly used in agriculture as a nitrogen-rich fertilizer and in the production of explosives. The factory will be officially operational in early 2015, and will meet 80 per cent of Vietnam’s demand for the substance. Like ThyssenKrupp, Loesche Gmbh’s Southeast Asia business director Philipp Stolzengurg, said Loesche cement mills, with its unique and proven design concept, helped in the production of high quality cement. “We want more partners in Vietnam,” Stolzengurg said. “Our cement mills can fully satisfy the demand for cement fineness, particle size distribution, water demand, setting times and compressive strength.” Knauf Vietnam, a wholly-owned subsidiary of Germany’s Knauf Group, began construction of its first plant in northern Vietnam in July, 2014. Located in the Dinh Vu Industrial Zone in Haiphong city, the $40.5 million plant will produce 12 million square metres of gypsum board and 15 million linear metres of metal profile. “We believe that once it’s completed by mid-2015, the plant will secure a considerable market share in Vietnam,” said Knauf Vietnam general director David Thomas. “We’re planning to expand our relationship with key partners such as distributors, architects, developers, and government authorities to widely introduce our products.” Export growth drives logistics sector Vietnam’s strong growth in exports is pushing demand for logistics services, which has opened up lucrative business opportunities for foreign companies in this industry. DHL, the world’s leading cross-border express services provider, last week announced the latest enhancement to its Asia air network of a new DHL intra-Asia  flight, connecting Bangkok, Hanoi and Hong Kong five times per week. Operated by K-Mile Air of Thailand, a partner of DHL, the inaugural flight of this service took place on November 3. It uses a newly-converted Boeing B737-400SF freighter with a gross payload of 21 tonnes. An industry first, this new route shortens the transit time for shipments on the DHL intra-Asia network to and from Hanoi to just one day, allowing businesses and consumers to enjoy the earliest arrival time and latest departure time to and from the city. Its introduction also eases congestion faced by DHL’s bustling hub in Hong Kong. “The new intra-Asia flight will enhance our capability to provide a better service for a great number of customers in the north of Vietnam,” said George Berczely, general director of DHL-VNPT Express – a joint venture between DHL and Vietnam’s VNPT. “We will continue investing to maintain our leading position in the Vietnam international express market. This new flight, combined with the expansion of our direct pick-up and delivery capabilities to the Thai Binh-Nam Dinh area, allow us to better support the growth potential we see in the north of the country.” Having entered the Vietnamese logistics market in 1988, DHL is now the biggest player in Vietnam’s express market. In September, the company also announced its biggest investment in the market to date – the launch of a $10 million 2,500 square metre service centre in Ho Chi Minh City, and the biggest of its kind in the country. As the demand for logistics services in Vietnam increases sharply, DHL has seen other logistics firms from Germany join the budding market. DB Schenker, another German logistics provider, has also expanded its business in Vietnam to respond the growing demand. Last year, the company moved its Hanoi branch office to a bigger and better location. In addition, it also inaugurated a new corporate office in Ho Chi Minh City to expand its network in the country. Karl Gross, another German logistics firm headquartered in Bremen, last year set up a subsidiary in Vietnam called Karl Gross Logistics Vietnam Company – after opening a representative office in Ho Chi Minh City in 2008. “With such strong growth in export logistics, firms here have a great opportunity to operate in the Vietnamese market,” said Berczely. He cited the inflow of international manufacturing firms from China to Vietnam because of cheap labour costs and political stability. “Of course, the more foreign investment increases in Vietnam, the more opportunities open up for logistics companies.” According to figures released by the General Statistics Office (GOS), Vietnam achieved a trade surplus of $1 billion in the first quarter, $1.3 billion in the first half, and $1.7 billion in the first ten months. This trade surplus was led by foreign companies whose factories in Vietnam chiefly manufacture products for export. In the year to late October, trade surplus created by foreign companies stood at $13.8 billion. GSO, in its report, explained that this strong growth came from the recent boom in the export of garments and textiles, as well as information and communication technology (ICT) equipment. With increasing investment from global electronic companies over recent years, including Samsung, LG, Microsoft, Nokia, and Wintek, export turnover from ICT equipment reached $19.2 billion, making it the top-ranking export product in Vietnam. Meanwhile, the increasing orders and investments from global garments and textiles companies are making Vietnam a major hub of manufacturing for this sector. Export turnover for garments and textiles in the first ten months of this year was $17.6 billion, up 19.3 per cent year-on-year. Meanwhile, the export of footwear products reached $8.2 billion, up 23.1 per cent from one year earlier. Vietnam offers vital hub for German SE Asia entry Vietnam has increasingly appeared as an attractive destination for German companies wanting to expand their presence in Asia thanks to the country’s increasingly diverse range of industries. Data from Vietnam’s Ministry of Planning and Investment show a growing trend of investment from German companies into Vietnam since 2011. In the first ten months of 2011, German companies registered to invest into only seven projects with total investment capital of $34 million. But these numbers increased to 18 projects and $90 million in the same period last year. This year, German companies have committed to invest in 21 projects, capitalised at $142 million. Germany is now the biggest trade partner of Vietnam in Europe as two-way trade turnover amounted to nearly $8 billion, more than 20 per cent of total Vietnam-EU trade. Germany is also among the biggest official development assistance (ODA) donors to Vietnam. In a speech delivered by Prime Minister Nguyen Tan Dung during his visit to Germany last month, the premier stressed Vietnam would work closely with Germany to strengthen the economic relationship in areas where the two sides have advantages and demands such as energy, green and clean technologies, manufacturing industry, public transport, finance and banking, consumer goods, agricultural and fishery products. “We welcome investment inflows from Germany with high-quality direct investment projects that introduce advanced, innovative, and environmentally-friendly technologies. Siemens, Mercedes-Benz, B.Braun, Allianz, Bosch are some major German brands already successfully operating in Vietnam,” said Dung. Heinrich Hiesinger, chief executive officer of ThyssenKrupp AG, during his visit to Vietnam last month to mark the company’s 20 years of partnership in this country, said strong economic growth, high demand in wide ranges of industries and political stability were attracting Germany’s companies like ThyssenKrupp AG to Vietnam. He noted the increasing demand in manufacturing, mining, energy, construction and chemicals were offering lots of opportunities for ThyssenKrupp. Vietnam’s economy is forecasted to grow at around 5.8 per cent this year and 6.2 per cent in 2015. After a period of economic slowdown because of the global economic recession and also local economic uncertainties, the economy is steadily recovering with positive signs in construction and industrial manufacturing sectors. “Vietnam instead is known for its stability and continuous GDP growth. Moreover, the government’s effort in improving the administrative system and transparency is recognised by foreign investors,” David Thomas, general director at Knauf Vietnam Company Limited – a subsidiary of Germany’s gypsum board manufacturing Knauf Group. Knauft in July started construction of a factory in Dinh Vu Industrial Zone, Haiphong city, in order to expand business in this market. The $41 million factory will produce 10 million square metres of gypsum board a year, after 12 months of construction. “Whilst the Vietnam construction market shrank slightly in 2013, the gypsum board market in Vietnam experienced 10 per cent growth in the same period. Knauf is very positive of the Vietnamese gypsum board market and we believe our products are well suited to the local construction industry,” said Thomas. Healthcare product maker B. Braun Melsungen AG has planned to raise its compound investment capital in Vietnam to  $270 million over the next seven to nine years with most of the investment made within the next two to three years. Yusen Logistics opened new centre in Haiphong Yusen Logistics, a subsidiary company of Yusen Group Japan, last week opened a new logistics center in the northern port city of Haiphong, aiming to tap the rising logistics demand in the north of Vietnam. This facility has the total space of 100,000 square metres in the Dinh Vu Industrial Zone, with a container depot of 24,000 sqm and the parking lot for 100 trucks. Apart from normal warehouse, the Japanese company has prepared space for container-freight station and bonded warehouse as well. “Haiphong is one of the most vibrant city in Vietnam with outstanding economic growth, attracting great investments. Together with greater number of new investments, the transportation infrastructure will be critically improved in the near future with the completion of the Lach Huyen Port and the Hanoi-Haiphong expressway, so that we strongly believe Dinh Vu is becoming an important transportation area soon,” said Makoto Minoda, general director of Yusen Logistics Vietnam. In 2004, Yusen Logistics started its business in Vietnam with the first subsidiary company named Yusen Air Service, providing a wide range of services including sea and air transport, tariff and customs, warehousing, domestic transport and further with cross-border road transport services in Southeast Asia region. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR