BUSINESS IN BRIEF 5/11 Companies advised to exercise caution in choosing new partners Selecting strategic partners has become a serious concern for listed companies, as large shareholders have recently withdrawn from such partnerships, pocketing much profit but leaving behind operational shortfalls. Lately, PetroVietnam Drilling Services (PVD) announced that Mutual Fund Elite had reduced its stake in the company to 4.95 per cent and was no longer its large shareholder since October 27. The fund maintained a huge stake in PVD for only a month. After the divestment, the fund reportedly earned VND655 billion (US$30.8 million) in profits. Last September, Phu Nhuan Jewelry (PNJ) completely withdrew its 50 per cent stake in Saigon Fuel (SFC) and is estimated to have earned VND38 billion ($1.7 million). The jewelry trader reportedly helped SFC improve its productivity by providing management expertise. After PNJ sent its people to SFC's board, the energy company's profits more than doubled to VND53.7 billion ($2.5 million) in 2009. Since that time, its revenue has been steadily increasing. Remarkably, its first half profit has exceeded this year's target. Meanwhile, PNJ said it wanted to focus on its core business. PNJ's departure compelled SFC to seek new partners. This time, the company chose companies in the same industry to ensure a long-term partnership rather than a short-term financial investment. Nguyen Tuan Quynh, SFC general director, aims to transform his company into HCM City's leading fuel retailer in the next three to five years. However, the key to a successful partnership is the agreement to speak in one voice, regardless of whether the parties operate in the same industry. For example, PVI Holdings (PVI) and its strategic shareholder, Talanx Group of Germany, are both into insurance. Rumour has it that Talanx Group wanted to divest its entire 31.82-per cent stake in PVI. Nguyen Anh Tuan, PVI chairman, refused to grant Talanx's request to withdraw but admitted there were management conflicts. "We and our mother group, PetroVietnam, have agreed on the scheme to equitise PVI Insurance Corporation, but Talanx disagrees," Tuan said. Funds' financial status paints a bleak picture While a large number of companies listed on the stock exchanges have posted profits, the fund management firms remained stagnant in the third quarter. Among the funds which released their operational results in the third quarter, Vietcombank Fund's revenue reached VND18 billion (US$849,000), but securities investment accounted for only 2.4 per cent of the total. The revenue accumulated during the first nine months of this year reached VND24 billion ($1.1 million). However, due to high general administration costs, the fund suffered a loss of VND2.8 billion ($132,000). VinaCapital has announced that it will split its Viet Nam Infrastructure Limited Fund into two new funds. The new funds will be the open-ended VCG Partners Viet Nam Fund (VVF), which will invest in shares and bonds, and a fund comprising investment in private equity. Dai-ichi Life Viet Nam and the Asia Pacific Fund Management posted modest profits of just VND566 million ($26,600) and VND300 million ($14,100) respectively. Meanwhile, many other funds suffered losses, including Manulife AM, VAM Viet Nam and Viet Tin Fund. Several funds have not published their financial status for the period, but the prospects look bleak because their operations in the first six months were negative, and the three-month period of the third quarter was not long enough for them to revive their business. This is because the stock market was sluggish, and the funds could not develop their main operations. In the revenue structure, a large percentage came from bank deposits and share dividends rather than investment portfolios. However, the profits from these activities often comprise a small proportion. This happened to An Phat Fund Management, SynCapital and Viet Tin. As of September 30, the portfolios which will form the VVF were valued at $117 million, with primary investment in blue chips such as PetroVietnam Drilling Services (PVD), PetroVietnam Technical Services Corporation (PVS) and PetroVietnam Gas (GAS), as well as steelmaker Hoa Phat (HPG) and HCM City Infrastructure Investment (CII). Meanwhile, its private equity portfolio reached $108 million by September 30. Viet Nam Infrastructure Limited's net asset value as of August reached $238.2 million. VinaCapital expects to improve its value to $250 million within the next two years. Japanese funded tuna project hits the rocks A pilot programme in three central provinces to use Japanese equipment and technologies for fishing tuna for export to Japan has to be stopped temporarily, with fishermen and authorities blaming each other. The quality of the fish has been inexplicably low, causing the fishermen taking part in the programme to lose heavily. Tuna exports have dropped sharply to just US$410 million as of the end of October. On their first trip to sea with the new equipment and technologies in July Binh Dinh fishermen caught 54 tuna but only 10 were good enough to export to Japan at VND250,000 ($12) per kilogramme. The next time around this fell to a mere four out of 57. Many of the fishermen believe that the reason for the low quality is that they have not been taught properly. Now the department wants to temporarily stop the pilot project after just three months. "The number of good quality tuna to export to Japan was very limited and fishermen suffered big losses," Nguyen Huu Hao, its deputy director, told Thoi bao Kinh te Viet Nam (Viet Nam Economic Times) newspaper in explanation. "The worst thing is that fishermen don't trust it any more." But he blamed them for continuing to fish using traditional methods despite the new technology and equipment. "The province provided financial support to fishermen to buy the equipment at VND1.3 billion ($600,000) each and trained them carefully in how to preserve tuna after catching them, but they failed to do so." During the three-month trial, four boats each lost VND500 million ($24,000). Trips to sea would traditionally last 20 days, but to ensure the tuna remained in good condition, they were shortened by half. "We caught very small number of tuna and could not export them all," one ship owner said. "With the new technology, our expenditure doubled but prices were only 20 per cent higher." But Binh Dinh authorities and the Fishery General Department have insisted that the new tuna fishing technology is vital for the industry and the project should continue. The province plans to build a factory to process tuna based on Japanese technology. "We have already worked with the Japanese Hokugan company to build a five-hectare factory in Phu Cat or Hoai Nhon district," Le Huu Loc, chairman of the Binh Dinh People's Committee said. The ministry, which began the pilot project to exploit, purchase, and process high-quality tuna in Binh Dinh, Phu Yen and Khanh Hoa, hopes to double exports to $1 billion by 2020. HCM City, Ehime ink investment pact The management board of the HCM City Export Processing Zone Authority (HEPZA) and the Association of Small- and Medium-sized Enterprises in Ehime Prefecture in Japan signed a Memorandum of Understanding on investment cooperation during a meeting held in HCM City on October 30. Japanese and Vietnamese officials as well as representatives of enterprises from Ehime were meeting in the city to seek closer business ties. It is expected that the MoU will boost investment of enterprises from Ehime Prefecture to HCM City in upcoming years. Earlier this year, the governor of Ehime Prefecture visited Vietnam to discuss the possibility of future business between the two countries. HCM City has set up several industrial zones to attract Japanese investors, especially small- and medium-sized enterprises, and those operating in the support industry. Joko Toshifumi, the vice governor of Ehime Prefecture, said several Japanese enterprises in the high-tech manufacturing industry had opened factories in HCM City and the provinces of Tay Ninh and Long An. Under the MoU, the association will act as a bridge to introduce the city's industrial parks and export processing zones to Ehime's enterprises, while HEPZA will provide consulting services on legal and investment procedures to companies from Ehime Prefecture. HEPZA will also arrange for a business delegation from Ehime to visit industrial parks and export processing zones in HCM City. Murata Yuuji, deputy head of Japan's Ehime Prefecture's Association of Small-and-Medium-sized Enterprises, expects the visit to intensify economic cooperation between the city and Japan. The central association has 414 member associations with a total of 28,000 small-and medium-sized enterprises as members. Vu Van Hoa, head of the city's Export Processing Zone Authority's management board, said the city's 16 industrial parks and export processing zones had attracted 1,314 projects with total registered capital of nearly 9 billion USD, of which 5 billion USD was foreign investment. Japan is currently the biggest investor in the city's industrial parks and export processing zones, with $1.36 billion invested in 116 projects. Japanese enterprises have invested in mechanics, electronics, pharmaceuticals, chemicals and food industries. HCM City seeks to attract small- and medium-sized enterprises from Japan, especially those in the support industry that produce components for the electronics and automobile industries. Hoa said the city had prepared infrastructure to receive support-industry enterprises in Binh Chanh District's Le Minh Xuan 3 Industrial Park and Hiep Phuoc Industrial Park in Nha Be District. The two industrial parks are built on 304ha of land. He said the 13-ha Vie-Pan Techno Park would open in December to receive Japanese enterprises from Ehime now operating in Hiep Phuoc Industrial Park. Tax exemption for incomes from global Gov't bond Incomes from global Government bonds are exempted from corporate tax and personal income tax, according to a Government resolution issued on November 1. Accoording to the resolution, global Government bonds issued in 2014 will enjoy a zero tax rate. The Finance Ministry was asked to include this content into the Prospectus and documents for investors. The Ministry of Justice was also required to provide legal opinions for the issue of global Government bonds this year. Creating favourable conditions for Vietnamese investors in Laos Laos and Vietnamese Government leaders have discussed measures to remove a number of obstacles for Vietnamese firms operating in Laos. Vietnamese Deputy Prime Minister Nguyen Xuan Phuc and his Lao counterpart Somsavad Lengsavat on November 2 co-chaired a conference on economic and investment cooperation between Vietnam’s Central Highlands and southcentral provinces and Laos’ central and southern provinces. As many as 80 representatives of Vietnamese investors in Laos and delegates from ministries, agencies and localities from both countries attended the event in Quy Nhon city, Binh Dinh province, which was aimed at tackling barriers for Vietnamese firms in Laos. Up to now, Laos has granted investment license to 423 Vietnamese-funded projects with a combined capitalization of around US$5 billion which ranks second among foreign investors in the country. Investment from Vietnamese businesses in central and southern provinces of Laos makes up 95% of Vietnam’s total foreign direct investment (FDI) in the country. By the end of September, the two-way trade turnover between Vietnam and Laos reached nearly US$1 billion, with 82% of the figure went to Central Highlands and southcentral provinces. Vietnamese-invested projects in Laos have helped the country increase budget collection, boost economic growth and generate about 300,000 jobs. However, there remained some delay in the energy and mining sectors that need to be addressed in the coming time. Deputy Minister of Planning and Investment Nguyen Chi Dung said the two governments should issue incentive policies for investors in disadvantaged regions particularly in border areas. He drew participants’ attention to infrastructure upgrade, particularly power generation and transmission, water supply, and irrigation network. Meanwhile, Deputy PM Phuc highlighted huge cooperation potential between Laos and Vietnam in the fields of agro-forestry, energy, mineral processing, and tourism development. Vietnam has many advantages in seaports, tourism, and financial capacity, and this will help businesses increase two-way trade and foster bilateral tourism cooperation, he underscored. Phuc stressed the need to provide more support for Vietnamese and Lao firms and maintain regular dialogue mechanism between the two countries. It is also essential to speed up the completion of agreements related to trade and investment, create a legal framework, and give financial assistance to investment projects of both sides, he noted. The Deputy PM asked Vietnamese and Lao companies to take social responsibility, pay attention to job creation, apply advanced technologies, protect the environment, reduce poverty rate, and ensure social welfare. Authorities of border provinces should promote information exchange, and diversify cooperation models in order to make full use of advantages, Phuc suggested. A comprehensive cooperation agreement between Binh Dinh Youth Union of Vietnam and Laos’ Champacsak Youth Union was signed on this occasion. Six Vietnamese firms also donated 140 computers to Laos’ central and southern provinces. Savills property price index up in major cities The Savills property price index (SPPI) for residential and office markets here and in HCM City increased in the third quarter of 2014. Savills, the Viet Nam property service provider, reported yesterday that in the third quarter, Ha Noi's residential SPPI was 102.7, a 2.4-point quarter-on-quarter (QoQ) increase and a slight 0.6-point year-on-year (YoY) increase. According to Savills, the quarter witnessed a significant rise that can be considered as a positive signal from market. The inventory ratio declined sharply by 24 percentage points QoQ and 26 percentage points YoY because of the entire market's strong performance. This quarter, the absorption rate in Ha Noi was 38 per cent, a 15-percentage point QoQ increase. The average price in the third quarter was approximately VND25.2 million per square meter, a two-per cent QoQ increase. Hoan Kiem, Tay Ho and Ba Dinh districts had the highest prices because of their central location and numerous upscale projects. In HCM City, the residential index was 89.5, the same as last quarter and a 0.7-point YoY increase. The overall absorption rate was 19 per cent, a two-percentage point increase QoQ and a seven-percentage point increase YoY. Approximately 3,280 units were sold, a 29-per cent QoQ and 85-per cent YoY increase, representing the highest transaction volume since the fourth quarter of 2010. Slight increase seen in buying power The purchasing power of Vietnamese citizens increased slightly in October 2014, according to the General Statistics Office (GSO). GSO figures showed that the total value of goods and services reached nearly VND251.19 trillion (US$12 billion), a 10.7 per cent year-on-year increase. This is the highest figure for total value since the beginning of this year, said Vu Manh Ha, a GSO economist. Ha attributed the slight increase in sales to the price stabilisation of numerous goods and services. In October alone, the price of petrol was slashed three times and fell by 2.19 per cent. As a result, reductions were seen in the cost of transport, by 1.02 per cent, as well as housing rent and gas, by 0.08 per cent. Slight increases were seen in the cost of food, by 0.01 per cent; culture and entertainment services, by 0.02 per cent; and garments and footwear, by 0.19 per cent. Ha said that in the first 10 months of the year, the total value of goods and services reached around $114.2 billion, an 11.1-per cent year-on-year increase over the same frame last year. He noted that the rate of growth remained slow. According to the GSO, the total retail sales of goods accounted for 75.4 per cent of the total sales of goods in the past 10 months, bringing in a total revenue of $86.12 billion, an 11-per cent year-on-year increase. Meanwhile, the total retail sales of the private sector reached $98.8 billion, likewise an 11-per cent year-on-year increase. S Korea export potential mostly untapped South Korea has high demand for fisheries and farm produce, making it a promising market for Viet Nam, according to the Viet Nam Trade Promotion Agency (Vietrade). Speaking at a Korean market access seminar held in HCM City on Wednesday, Bui Thi Thanh An, deputy director of Vietrade, said however farm exports to Korea remain very modest, accounting for around 10 per cent of the country's total exports. To expand exports to the market, Vietnamese products need to meet strict requirements in terms of quality and technical standards, she said. "A number of firms have exported their products to difficult markets like the US, EU, and Japan, and I think they will do well in this market (Korea) in the coming time." Experts from leading Korean food companies like Shinsegae, CJ, and Pulmuone spoke to more than 100 local entrepreneurs about purchasing trends and procedures in the Korean agro-fisheries sector. Yeong Hun Kim, manager of Pulmuone Food Co Ltd, said Korea's seafood imports are rising every year. Viet Nam has surpassed China to become the biggest shrimp exporter to Korea, he said. White-leg shrimp is very popular in his country and Korean importers are looking for Vietnamese suppliers, he said. Processed products like shrimp crayfish, shrimp flake, butterfly shrimp, squid ring/bar/bal, fish, salmon, and squid cutlets are also in great demand, he revealed. To penetrate the Korean market, besides ensuring product quality, Vietnamese firms also need to focus more on packaging, he said. Since Korean consumers tend to be concerned about the health aspects of food and safety of packaging materials, the type of plastics used in packaging should be carefully considered and good materials should be used, he warned. Bui Thi Thanh Duyen, business development director at Thanh Thai Gia Trading Investment Company, who specialises in tea and coffee, said apart from studying the demand and consumers' taste in the market, knowing Korean language is also important. An said that the seminar, which was organised by Vietrade and the ASEAN-Korea Centre, was meant to help Vietnamese firms understand the Korean market and the specific requirements of importers there. The seminar also featured a training in packaging for local firms and business-to-business meetings. Chung Hae-moon, secretary general of the ASEAN-Korea Centre, said trade between Viet Nam and Korea has grown strongly in the recent past to reach US$27.3 billion last year, a year-on-year increase of 38 per cent, he said. Viet Nam exports garment and textile, farm produce, and fisheries products to South Korea and imports electronic components, machinery and equipment, and other capital goods. Oh Jae Hack, the South Korean envoy in HCM City, said the two countries are negotiating a bilateral free trade agreement, which is expected to be concluded by the end of this year. Once it comes into effect, the two countries would have more opportunities to boost investment and trade, he said. Bilateral trade is expected to top $70 billion by 2020, the target set by the two governments, he said. AEON Mall inaugurated in Binh Duong An AEON Mall, constructed at a cost of US$95 million on 6ha near the Vietnam-Singapore Industrial Park (VSIP) in Binh Duong, was officially inaugurated on November 1. With hundreds of specialty stores, boutiques, entertainment sites, restaurants and retail outlets anchoring the complex, the marvel is expected to attract 30,000 visitors daily increasing to 70,000 at weekends. The large-scale shopping centre, which has a Japanese style, should help stimulate the provincial trade, services and retail sectors as well as domestic purchasing in the coming time. As scheduled, after AEON Binh Duong, the group plans to open another mall in Hanoi in 2015. By 2020, AEON has targeted opening 20 shopping malls in Vietnam. Customs system under discussion A recent ASEAN Customs Transit System (ACTS) workshop in Jakarta, Indonesia focused on streamlining customs procedures for goods. ACTS aims to save cost and time for transporting goods by road within ASEAN. In addition, it is a prerequisite for transport agreements between ASEAN member nations. The system is scheduled to be launched on a trial basis in May 2016 and will become operational six months later. Participants said it was essential to set up risk management programmes at starting and arrival points as well as during the transit process. They stressed that in order to successfully deploy ACTS, governmental agencies and private companies should enhance mutual support and links. The event was organised under the ASEAN Regional Integration Support from the European Union (EU) (ARISE) programme. Mekong Delta plans to boost grapefruit output The Cuu Long (Mekong) Delta will grow two special grapefruit varieties on an additional 25,000ha by 2020, according to the Southwest Region Steering Committee. Nam Roi and buoi hong da xanh (green-peel and pink-flesh) grapefruits will be grown in more places in Tien Giang, Vinh Long, Ben Tre, Soc Trang and Hau Giang provinces and Can Tho city, taking the total area in the delta growing them to 36,000ha. Tien Giang, Vinh Long, and Ben Tre now account for 74 per cent of the two varieties in the delta. Farmers growing them will be provided with loans to buy seedlings and other materials and trained in farming techniques, according to the committee. The two varieties of grapefruit have fetched high prices for many years now because of high demand in foreign countries. Farmers earn at least VND200 million (US$9,500) a year from a hectare of Nam Roi, according to local agriculture departments. The green-peel and pink-flesh variety brings in double that. Farmers sell them to exporters in Ben Tre at VND36,000-38,000 ($1.7- 1.8) a kilogramme. Hai So, who has switched from longan to green-peel and pink-flesh grapefruit on his 1ha orchard in Quoi Son Commune in Ben Tre's Chau Thanh District, said the former could fetch an annual profit of VND100 million ($4,700) per hectare with bumper harvests and good prices, but the grapefruit fetches 5-6 times more. It also fruited all year round, he said. In 2000 the Ben Tre Agriculture and Fisheries Extension Centre encouraged the commune to set up the Phu Hoa Co-operative Team with 34 members. It has since grown, and its 85 members grow green-peel and pink-flesh grapefruit on a total area of 47.6ha. Their fruits were bought by Huong Mien Tay, a fruit export firm in Ben Tre, So, who is a member of the co-operative team, said. In 2010 members were taught how to grow the grapefruit to Vietnamese good agriculture practices (VietGAP) standards by the Southern Fruit Research Institute. Since 2010 Huong Mien Tay has signed contracts every year with the co-operative team, thus guaranteeing an outlet for its produce. Huong Mien Tay also signs contracts with 26 other co-operatives growing the fruit in Ben Tre. It has built a refrigerated warehouse with a capacity of 1,400 tonnes that can keep the grapefruit for up to 60 days until they are exported. Nguyen Van Xot, who has a half hectare orchard in Ben Tre's Mo Cay Bac District, said farmers no longer worried about traders pushing down prices since Huong Mien Tay buys all their green-peel and pink-flesh grapefruits. Phan Van Khong, director of the Ben Tre Agriculture and Fisheries Extension Centre, said Huong Mien Tay did well to buy grapefruits, benefiting everyone in a co-operation programme involving authorities, farmers, enterprises, and scientists. Of the 10,000ha under green-peel and pink-flesh grapefruit in the region, Ben Tre accounts for 7,000ha. Can Tho expands industrial parks The Mekong Delta city of Can Tho plans to expand and upgrade a number of industrial parks, Head of the Management Board of Can Tho Industrial Park Vo Thanh Hung said on October 30. The master plan aims to increase the locality’s total industrial area to 2.267ha and pave the way for Can Tho to become an industrial hub in the Mekong Delta region by 2025. Thanks to the city’s efforts to implement a number of special policies on administrative procedures, preferential credit, and human resources training, capital investment in industrial clusters has so far this year reached 1.91 billion USD, up by 50 million USD compared to the same period last year. To date, Can Tho is home to 214 investment projects, with 191 domestic and 23 foreign-invested ones. During the first ten months of this year, revenue from enterprises operating in the city’s industrial parks totalled 1.1 billion USD. Notably, foreign invested-companies posted increase of 10 percent and13 percent in turnover and export, respectively compared to the same period last year. Japan keen to invest in Vietnam’s support industries Japanese enterprises consider Vietnam’s support industries a prime opportunity for their investment. Japanese Consul General in Ho Chi Minh City, Nakajima Satoshi, announced this in a seminar in the city on October 30 with the objective of fostering links between enterprises in Japan’s Ehime prefecture and Vietnam. During the event, Joko Toshifumi, Deputy Governor of Ehime prefecture, briefed the host on the locality’s socio-economic development. The Japanese official also introduced the potential of local enterprises in the fields of chemicals, non-steel metals, electronics, machines, textiles and garments, adding that they were looking for investment opportunities in Vietnam. Head of the Management Board of the HCM City Export Processing and Industrial Zone Authority (Hepza) Vu Van Hoa highlighted the zone’s incentives for international firms in general and Japanese firms in particular to invest in the city, especially in the key sectors of electronics and information technology, mechanical engineering, chemicals, and food processing. On the occasion, Hepza and the Ehime association of small- and medium-sized enterprises signed a memorandum of understanding on cooperation on the support industries. According to Hepza, the city is now home to 16 industrial and processing zones, attracting 1,314 projects with a total investment capital of 9 billion USD, including 528 foreign direct investment (FDI) projects worth 5 billion USD. Japan is the biggest investor in Hepza with 116 projects and investments of more than 1.3 billion USD. Vietnam Airlines to launch IPO this month The national flag carrier Vietnam Airlines is set for its initial public offering (IPO) of shares worth 1 trillion VND (47.6 million USD) in Ho Chi Minh City on November 14, pledging to use the generated funds to provide a modern fleet and impeccable service. Nearly 49 million shares will be sold at a starting price of 22,300 VND (1 USD) each, Chairman of the Vietnam Airlines Board Pham Viet Thanh announced at a workshop in Ho Chi Minh City on October 30. Vietnam Airlines is now worth more than 57 trillion VND (2.7 billion USD), including over 32.6 trillion VND (1.5 billion USD) invested in aircraft. It recorded an annual growth of 20 percent in revenue and more than 11 percent in passenger volume, higher than the global average. The government will continue to work toward the goal of developing Vietnam Airlines into a carrier of regional standing between now and 2020, making it highly competitive and influential, Deputy Transport Minister Nguyen Ngoc Dong said. The carrier will convene the first shareholders’ meeting on March 12, 2015. As a SkyTeam alliance member, Vietnam Airlines remains the largest airline in the country, employing more than 10,000 members of staff. It now owns more than 80 aircraft and will purchase another 15 by the end of next year. Vietnam first began State-owned Enterprise (SOE) reforms in the 1980s and there has been talk of equitising Vietnam Airlines since the mid-1990s. Vietnam, Russia prioritise aquaculture development affiliation The Vietnam-Russia Joint Committee for Fisheries convened the 5th session in Hanoi on October 31, agreeing to give priority to cooperation in aquaculture development. The two sides will prepare for joint programmes on researching fishery resources in Vietnam’s exclusive economic zone, applying advanced technology in fishing and aquaculture, piloting the farming of Russia’s seaweed in Vietnam’s seas, and training personnel. Drafts of the cooperation activities will be finalised at meetings between the two countries’ scientists and experts next April and May. Additionally, Vietnam and Russia will consider providing each other with genetic materials from their respective tilapia and salmon and exchange experience in farming these two fish species. During the session, Vietnamese Deputy Minister of Agriculture and Rural Development Vu Van Tam spoke highly of Russia’s assistance to Vietnam in personnel training and capacity building as well as in raising cold water fish, especially sturgeons. Tam, who chairs the joint committee’s Vietnamese sub-committee, expressed his hope that the committee will maintain regular meetings in the coming time. Germany’s media spotlight Vietnam’s economic development Some German newspapers recently ran articles hailing Vietnam’s economic achievements and growth prospect as well as the active role played by the country in the Association of Southeast Asia Nations (ASEAN). The Dusseldorfer Abendblatt newspaper and the website Pressportal.de took note that Vietnam enjoyed a fast economic growth of 7-8 percent per year after the country applied its renewal policy and shifted to a market economy. They said Vietnam also quickly recovered from the impacts of the financial crisis in 2008-09 and over the last three years, the Vietnamese government successfully made use of macroeconomic stabilisation policy, thus keeping a high economic growth at 5-6 percent per year, attracting 23 billion USD in foreign direct investment (FDI) in 2013, contributing to promoting the national economic development. Vietnam’s inflation rate has dropped from over 20 percent in 2010 and 2011 to only 6 percent in 2013, while its trade balance continued recording a surplus, with export turnover hit over 132 billion USD and import turnover was at 131.3 billion USD last year. The articles also highlighted Vietnam’s efforts to integrate into the global economy by joining many economic organisations in the world such the World Trade Organisation, the International Monetary Fund (IMF) and the ASEAN Free Trade Area (AFTA). The country plays a crucial role in ASEAN, a region with a 560 million population and about 800 billion USD in GDP, the articles said, adding that Vietnam along with other ASEAN member nations agreed to accelerate regional economic integration through the formation of a ASEAN economic community by 2015. At the same time, Vietnam is participating in negotiations of a Free Trade Agreement with the European Union (EVFTA), which is expected to end late this year or at the beginning of 2015. The country is also in the negotiation progress of the Trans-Pacific Partnership agreement with the US and several other countries. The der Focus – one of the largest newspapers in Germany- delivered assessments of Vietnam’s economic prospect in 2014. The article said economic index in the first nine months of this year show positive prospects for Vietnam’s economy in 2014 as well as some following years. Thanks to flexible economic policies and a stable political situation, Vietnam is now one of the leading investment destinations in ASEAN, the newspaper said, noting that the country needs to resolve several issues related to rising public debt and bad debt in its financial and banking system. Vietnam is top investor in Laos Vietnam has 250 projects licenced in Laos so far, with total investments of over 5 billion USD, 96 percent of which are located in southern provinces, according to data from the Ministry of Planning and Investment. The figures were revealed at an economic cooperation dialogue between Vietnam’s Central Highlands and southern central provinces and Laos’ southern provinces that took place in Quy Nhon city, in the southern central province of Binh Dinh, on November 2. The projects, with a focus on agriculture, forestry and mining, make Vietnam the third largest investor in Laos. Meanwhile, Laos is the top destination for Vietnamese investors, out of 63 countries and territories worldwide where Vietnamese firms have operated, according to the ministry. By the end of September this year, bilateral trade between the two countries hit 995 million USD. Trade between Vietnam and the southern-central provinces of Laos contributed approximately 600 million USD to the total trade revenue, a 48.3 percent year-on-year rise. During the event, which is part of the preparations for the Vietnam-Laos economic cooperation conference in January 2015, Vietnamese investors voiced their difficulties in operating in Laos, including inefficient administrative procedures and complicated procedures for registering for land use licences. Addressing the event, Lao Deputy Prime Minister Somsavat Lengsavad pledged that the Lao Government will work harder to tackle difficulties and create favourable conditions for Vietnamese investors. The Lao Deputy PM, who is also head of the Laos-Vietnam Cooperation Sub-Committee, said the two governments will work together closely to instruct ministries on both sides to review bilateral cooperation agreements and solve all arising issues. Laos highly valued Vietnamese investments in its southern provinces, especially the projects run by Hoang Anh Gia Lai Group, the Bank for Investment and Development of Vietnam and Viettel, he said. Deputy Prime Minister Nguyen Xuan Phuc, head of the Vietnam-Laos Cooperation Sub-Committee, said the Government will continue to back Vietnamese investors in Laos. He also proposed the governments of Vietnam and Laos provide more assistance to investors by implementing support measures during their investment. The ministries and localities on both sides should exchange information regularly and coordinate closely with each other to review the implementation of Vietnamese projects in Laos, he suggested. He also highlighted the need for Vietnamese investors to ensure the progress, quality and efficiency of their projects as well as their responsibility to the community, he added. On the occasion, Vietnamese enterprises presented seven southern Lao provinces with 20 computers each. Earlier, Deputy Prime Minister Phuc and his Lao counterpart witnessed the signing of a cooperation agreement between the Youth Unions of Binh Dinh and Champasak provinces. Vietnam remains world’s leading pepper exporter Leading economists have forecast pepper exports to remain at high levels this year, amounting to 150,000 tonnes in volume and raking in more than US$1 billion in total revenue. At a four-day international pepper conference, which concluded in Ho Chi Minh City on October 30, they projected that Vietnam would retain its position as the leading pepper exporter in the global market. They also estimated Vietnam exporters would produce 30% of the world market share of peppers this year. Those in attendance discussed measures for sustainable development of the local pepper industry, with a focus on increasing product quality and export value, building the Vietnamese pepper trademark, and meeting requirements of importers from the US, Europe and Japan. They reported Vietnam currently has more than 60,000 ha under pepper cultivation in 28 provinces and cities nationwide, principally in the south-eastern and central highland regions. Despite its high export volume, the pepper export value of Vietnam has consistently been lower than other nations like India, Indonesia, and Brazil, they said. Chairman of the Vietnam Pepper Association, Do Ha Nam, said delegates shared valuable experience at the conference. He hoped that the Ministry of Agriculture and Rural Development, relevant agencies and local authorities would soon implement practical measures to help the pepper industry grow faster in the future. Vietnam: Most favoured partner of Japan Vietnam has retained its status as Japan’s second largest partner in terms of information technology since 2012 and the most favoured partner of Japanese businesses, according to the latest Technology Promotion Agency (IPA) report. The report said a recent survey of 30 Vietnam IT businesses showed that 89.30% of them have cooperated with Japanese partners in doing software outsourcing. Nguyen Ich Vinh, General Director of Tinhvan Outsourcing Company said two major issues that Vietnam needs to address in meeting the strict quality standards of Japanese firms are developing a long-term strategy and human resources. If these obstacles are properly dealt with, Vietnam has a tremendous opportunity to profitably expand IT cooperation with Japan, Vinh said. Attractive human resources In addition to its advantages in culture, the low-cost human resources in Vietnam are a crucial aspect attractive to Japanese investors. Nguyen Doan Hung, President of Vietnam-Japan IT Cooperation Club (VJC), says there is a shortage of qualified people who can speak the Japanese language. The problem is compounded due to the fact that a number of major projects being implemented by the Japanese Government have created a high demand for Vietnamese IT personnel. This year, Sapporo IT Front (SITF) signed a cooperative agreement with VINASA to carry out a project for human resources development for the IT industry in Hanoi. Earlier this year, the Japan International Cooperation Agency (JICA) committed to financing VND12.5 billion for a three year project from 2014 to 2016. It focuses on developing training curriculum in line with Vietnam and will train around 130 engineers and 10 university lecturers. Takayuki Kubo, Director in charge of IT of Sapporo Industrial and Economic Promotion Agency, says the project is key to developing personnel for Vietnam IT industry in the future. Junko Kawauchi, Japan Information Technology Services Industry Association (JISA) Vice President says that Japan firms want to cooperate with partners that have the human resources to carry out big projects. However, most Vietnam firms are small and medium, which find it sofdifficult to get projects from Japan, Kawauchi said. Slight increase seen in buying power The purchasing power of Vietnamese citizens increased slightly in October 2014, according to the General Statistics Office (GSO). GSO figures showed that the total value of goods and services reached nearly VND251.19 trillion (US$12 billion), a 10.7% year-on-year increase. This is the highest figure for total value since the beginning of this year, said Vu Manh Ha, a GSO economist. Ha attributed the slight increase in sales to the price stabilisation of numerous goods and services. In October alone, the price of petrol was slashed three times and fell by 2.19%. As a result, reductions were seen in the cost of transport, by 1.02%, as well as housing rent and gas, by 0.08%. Slight increases were seen in the cost of food, by 0.01%; culture and entertainment services, by 0.02%; and garments and footwear, by 0.19%. Ha said that in the first 10 months of the year, the total value of goods and services reached around US$114.2 billion, an 11.1% year-on-year increase over the same frame last year. He noted that the rate of growth remained slow. According to the GSO, the total retail sales of goods accounted for 75.4% of the total sales of goods in the past 10 months, bringing in a total revenue of US$86.12 billion, an 11% year-on-year increase. Meanwhile, the total retail sales of the private sector reached US$98.8 billion, likewise an 11% year-on-year increase. BIDV receives Asia Risk award The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) was honoured with the House of the Year award by the Hong Kong-based Asia Risk Magazine on October 30. BIDV is the only bank in Vietnam to receive this award. The bank won the prize in 3 straight years for its provision of derivative products and risk administration in Vietnam. Launching a package of derivative products in 2006, the BIDV holds a big share in the domestic derivative product market and has become the first Vietnamese bank supplying them to help customers prevent risks due to changes in foreign exchange rates, interest rates and commodity prices that may affect their business activities. House of the Year is an annual Asia Risk award hounouring the most prominent financial institutions in the Asia-Pacific region for their successful operations in the fields of risk management and trading in derivative products. Satra’s charter capital to reach VND 10trillion after equitization Ms Le Minh Trang, General Director of Saigon Trading Group (Satra) said on November 1 that 19 years ago, Satra had total capital of VND 893billion however this figure has been increased year on year and it has gained VND 6,800billion so far. Satra expects to reach VND 10trillion after equitization. Ms Trang reported this at the meeting to celebrate the 19th anniversary of its establishment. At present, Satra’s revenue and profit have increased an average of 10 percent per year and its market share has also been extended; staff’s life is stable and it is result of Satra’s restructuring process, Ms Trang added. Ms Trang said also that Satra is calling for investment capital to carry out some major projects such as moving and changing technology for Vissan manufactory; investing and enlarging Binh Dien wholesale market; developing Satra’s industrial complex area named Tax Plaza which is estimated to invest VND 20trillion. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR