BUSINESS IN BRIEF 9/12 Work permits dominate dialogue Work permits for foreign employees among other pressing issues took center stage at a dialogue in HCMC on December 4 between enterprises and the Ministry of Labor, Invalids and Social Affairs. At the dialogue held by the HCMC Investment and Trade Promotion Center (ITPC) and Nhan Viet Management Group (NVM Group), lawyer Miki Yasufumi at Vietnam International Law Firm (VILAF) asked why the validity of work permits for foreign workers is reduced to two years from three while their labor contracts can last three years. According to lawyer Veera Maenpaa from Pricewaterhouse Coopers Legal Vietnam, many corporate customers of this consulting company have had difficulty seeking work permits for their employees due to a prolonged registration process and complicated administrative procedures.   Ho Xuan Dung, who is in charge of human resources at Windsor Corp., said under Decree 102 of the Government, the issuance of a work permit requires judicial records from both Vietnam and foreign countries. It takes nearly two months to get the records in Vietnam and enterprises have to cover living costs for foreign employees as they do not agree to work until they receive work permits. Besides, the extension of work permits requires health certificates granted by designated hospitals. However, at some designated hospitals, doctors cannot speak foreign languages, so foreign laborers must be accompanied by interpreters in medical checkups. “Why is there such regulation? Enterprises do not want to recruit people with poor health in the first place?” Dung questioned. According to a representative of the Eastern International University based in Binh Duong Province, the health certificates of many designated hospitals are valid for only three months while the issuance of work permits may be longer than that. It is impossible to ask one to have two chest X-rays within a span of three months, this representative said. The judicial records are issued by the HCMC Department of Justice and the department’s officers must respond to those applying for such records within 15 to 20 days but they often tell applicants to inform them before coming to collect the records. A representative at Linh Trung Export Processing Zone in HCMC told the dialogue that State administrative agencies do not fully comply with regulations, causing difficulties for enterprises. Deputy labor minister Pham Minh Huan said the ministry has received business associations’ complaints that it takes a long time to process a work permit application, especially when seeking judicial records and health certificates. According to Huan, the ministry will consider proposing adjustments and amendments. Huan said Decree 105 on work permits for foreign workers is being reviewed by the Government and the application process would be made clearer next month. Huan noted the regulations on the validity of work permits and labor contracts are not clear and the ministry has reported to the National Assembly’s Standing Committee. More time for investors to change housing projects Investors are allowed to change the number of apartments at their housing projects or convert their apartment projects into budget housing or service buildings until the end of 2015, according to a new circular issued by the Ministry of Construction. HQC Plaza, which is a condo project of Hoang Quan Real Estate Joint Stock Co. under construction in HCMC’s Binh Chanh District, has been converted into a budget apartment project Circular 18/2014/TT-BXD gives investors one more year to complete changes of usage purposes of their commercial housing projects. In March last year, the ministry issued Circular 02/2013/TT-BXD guiding the changes for commercial condo and urban area projects and the conversion of commercial apartments into budget housing or service buildings. This circular applied to the projects approved by relavent agencies but yet to be developed or the projects under construction but their products no longer met market demand. When the circular came into force, the investors with large apartment inventories sought approval to divide apartments of their commercial housing projects into smaller units to make them more afforable. Reality showed there is high demand for small apartments with lower prices. However, the number of housing projects already allowed for purpose changes has been small since Circular 02/2013/TT-BXD took effect one year and a half ago. As of September, the developers of 21 housing projects in HCMC had applied for dividing 10,242 apartments into 13,599 units. But only five out of them had been approved with more than 3,800 apartments to be converted into 4,700. The authorities of HCMC have approved eight out of 11 housing projects for conversion into budget ones. Vietnam gets aid to overcome challenges The European Union on December 4 launched a new program worth 400 million euros to help Vietnam deal with development challenges in 2014-2020. The Multi-annual Indicative Program (MIP) follows the announcement by the EU and the Vietnamese Government during Prime Minister Nguyen Tan Dung’s visit to Brussels in October this year, the Delegation of the European Union to Vietnam said in a statement. The non-refundable grant for the next seven years will be used to support Vietnam’s socio-economic development with a focus on improving energy sustainability, governance and the rule of law. Pierre Amilhat, director for Asia, Central Asia, Middle East/Gulf and Pacific at the EuropeAid Office in Brussels, told reporters in Hanoi on December 4 that the 400 million euros will not leave any burden on the public debt that Vietnam is grappling with. Amilhat said the amount is small compared to the funds provided by other partners of Vietnam but it will contribute significantly to Vietnam’s economic growth and help the country attract investment capital from the private sector if it is used effectively. “That’s what the EU wants,” Amilhat stressed. Amilhat said the EU wants the Vietnamese Government to stabilize macro-economic issues and ensure transparent spending of official assistance development sources and its expenditure in line with the public spending criteria of the EU. He said it is expected that amendments to the Law on State Budget will be passed next year to ensure the transparency for public spending. The EU has affirmed the importance of its bilateral cooperation with Vietnam, underlying that its bilateral aid package has increased by more than 30% as compared to the previous 7-year period. Under the MIP 2014-2020, a number of new projects will be launched. In the energy sector, the EU support will contribute to a more sustainable energy sector by promoting efficient, clean and renewable energy. The particular targets will be to help the remaining 3% of Vietnam’s population without electricity and to create access to electricity for 64,577 households by 2020. In addition, 568,000 rural households will utilize electricity generated from renewable sources by 2020. In the fields of governance and the rule of law, the EU will finance strengthening the legal and judicial systems and support creating an enabling business environment. Some 15% of the 400 million euros will be channelled to improving public governance as well as the legal and judicial systems. Besides the MIP, a new agreement to the health sector was announced by Amilhat and Vietnamese Minister of Finance Dinh Tien Dung. The new EU Health Sector Policy Support Program - 2 will aid Vietnam’s health sector reforms and the implementation of plans and projects to roll out these reforms in 2015-2017 at a total cost of 114 million euros. In his opening remarks at the launch function in Hanoi, Amilhat said Vietnam has come a long way in eradicating poverty and raising the standards of living of its population but many development challenges still remain. “I am pleased to confirm the EU continued, and even stronger support to the country’s efforts to grow and raise the quality of life of its citizens,” he said. MHI marks the fourth-year nuclear engineering programme for Vietnam’s Electric Power University Japan’s Mitsubishi Heavy Industries(MHI) and the Electric Power University (EPU) last week marked the start of the fourth year of MHI’s supported nuclear engineering programme in the university. The programme, taught by the university’s nuclear power generation department, aims to enable Vietnamese students to master practical expertise in nuclear energy. MHI has contributed to building up the basic educational framework at the university’s Nuclear Power Generation Faculty, including cooperation in preparing course curriculums, since the faculty was established in August 2010. Besides its cooperation with the Electric Power University, MHI is also endowing courses in nuclear engineering at the Hanoi University of Science and Technology. The company intends to continue its involvement in nuclear engineering education projects of this type in Vietnam in the future. MHI, headquartered in Tokyo, is one of the world’s leading heavy machinery manufacturers, with consolidated sales of ¥3,349.5 billion in fiscal 2013, the year ended March 31, 2014. MHI’s products and services encompass shipbuilding, power plants, chemical plants, environmental equipment, steel structures, industrial and general machinery, aircraft, space systems and air-conditioning systems. To date MHI has constructed 24 pressurized water reactor type nuclear power plants in Japan, and the company has provided full support to the utilities in operating and maintaining these facilities. BioSpring Hoa Lac seeks suppliers of fermentation equipment BioSpring Hoa Lac JSC is looking for suppliers that can provide specific components or a turn-key set of equipment for the probiotics production lines in its new 1,000 tonnes per year fermentation factory in Hanoi’s Hoa Lac Hi-tech Park. The needed components include spore fermentation system 1000L, filter system, spore cleaning, heat system, collecting spore product; air compressed system, air filter system for fermentation, boiler and chiller for fermentation and autoclave system 1 or 2 doors. Suppliers who can provide a turn-key set are preferred. Overseas suppliers that have experience in supplying and installing such equipment are invited to submit their company profile, a list of clients in the fermentation/probiotics field and a catalogue with specifications of relevant equipment. Interested suppliers can contact Biospring by December 15, 2014 at ELCOM building, Duy Tan street, Dich Vong Hau ward, Cau Giay district, Hanoi, Vietnam, by telephone number +84 4 38 359 359 or by email at duc.nguyen@biospring.com.vn. Alternatively, they can contact the Vietnam Business Challenge Fund (VBCF) at Office 103, Building B1, Van Phuc Diplomatic Compound, 298 Kim Ma Street, Hanoi, Vietnam, by telephone number +84 4 37 265214 or by email at avutuan@vbcf.org.vn. BioSpring Hoa Lac produces natural probiotics. Its project to expand the use of probiotics in husbandry and aquaculture is one of the 20 projects funded by the Vietnam Business Challenge Fund (VBCF). It is the first company in Vietnam that has successfully produced bacillus on an industrial scale for use in pharmaceutical production, food production and husbandry. Vinmec and Sodexo cooperate to improve nutrition for patients Vinmec International Hospital has entered partnership with France’s Sodexo to provide food and nutrition services for patients. Sodexo will provide Vinmec with Healthcare Food & Nutrition services that meet the Joint Commission International (JCI) and world-class HSE standards. These services include in-patient dining, VIP and presidential patient dining, staff dining, tube feeding service to service patients that cannot be fed by mouth and out-patient snacks service. “Partnering with Sodexo – a world leader in food services, is an important progress in asserting the service quality at Vinmec, starting from caring about and standardising nutrition need of each single patient,” said Prof. Dr. Nguyen Thanh Liem, CEO of Vinmec International Hospital. Vinmec is located in Hanoi and was developed by Hanoi South Urban Development JSC (an affiliate of Vincom JSC – member of conglomerate Vingroup). Over the next five years Vinmec plans to have 10 hospitals nationwide with one each in Phu Quoc, Ho Chi Minh City and Nha Trang slated to start operations in 2015. Vinmec has also developed a medical university that has announced it will start admitting students in 2016. Founded in 1966, Sodexo now operates in 80 countries, has 428,000 employees throughout the world and serves 75 million consumers each day. It earned €18.4 billion in consolidated revenue in its fiscal year 2013 and is valued at €12.4 billion as of July 8, 2014. VTV and Canal+ signing joint venture contract Vietnam Television (VTV) and Canal+ Overseas last week signed a joint venture contract; accordingly, the former will become shareholder of Vietnam Satellite Digital Television Company Limited (VSTV), which bears the K+ trademark, instead of the previous shareholder, Vietnam Cable Television Corporation (VTVcab). The signing ceremony took place concurrently with the change of duly authorised representatives and senior personnel at K+, in a bid to facilitate K+ operation and bring better development opportunities. The capital share in VSTV will remain unchanged, meaning VTV retains 51 per cent of the JV’s charter capital while the remaining 49 per cent is kept by Canal+. In company with the change of capital owner, certain senior personnel in VSTV will also be changed by the two joint venture partners in conformity with new organisational structure and development period. Accordingly, Nguyen Thanh Luong, VTV’s deputy general director will take part in representing VTV’s capital and hold the position of VSTV’s chairman and Le Chi Cong, VTV’s deputy chief of Office will become VSTV’s general director in replacement of Cao Van Liet, VSTV’s current chairman and general director who has finished his term of office. “The change of capital owner and senior personnel of VSTV aims to innovate management and facilitate efficient operations of VSTV. However, VSTV will not change its development strategy. K+ Television will keep development of high quality pay-TV and hold the position of a leading satellite digital television operator in Vietnam,” said Luong. Jacques du Puy, chairman of Canal+ International Development said, “It’s our pleasure that VTV becomes our direct partner in VSTV. Canal+ is willing to share with and support VSTV in partnerships, technology and development experience, ensuring that K+ will always be the leading high-quality television operator in Vietnam.”   VSTV is currently offering satellite television service nationwide with two key service packages, i.e. Access+ (70 SD channels) and Premium HD+ (74 SD channels and 12 HD channels). Among outstanding contents and television rights of big events aired on four home-made K+ channels (K+1; K+PC; K+NS; K+PM), in 2015, VSTV will coordinate with world leading television broadcasters, further invest and develop many special entertainment programmes, satisfying increasing demands of Vietnam audience.  As scheduled, K+ will hold a press conference on December 11, 2014 in Ho Chi Minh City to announce new and attractive non-sport contents to be aired on K+ channels starting from December 15, 2014. Being established in May 2009, Vietnam Satellite Digital Television Company Limited VSTV (K+) is initially the joint venture between the two major partners, i.e. Technical Centre of Vietnam Cable Television Corporation VCTV (under VTV) and Canal+ International Development (a subsidiary unit of Canal+ Group). In implementation of the government’s guideline on innovating state management in enterprises and the direction of the Government Office, relevant ministries and industries, Vietnam Television ( VTV) will directly hold the capital ownership as well as rights and obligations in the VSTV joint venture as from now on. Vietnamese tea exports to reach $245m in 2014 Viet Nam is expected to earn US$245 million from tea exports by year-end because of efforts to accelerate trade promotion, reorganise production and improve product quality. Vietnam Economic News quoted Viet Nam Tea Association (Vitas) Chief Officer Hoang Vinh Long as saying that unfavourable weather conditions in the early months of 2014, including prolonged droughts and heavy rainfall in several tea-growing areas during the main cropping season, had a negative impact on tea production for export in many localities. During the period, tea exporters also encountered several difficulties especially after Taiwan, one of the major Vietnamese tea importers, applied stricter rules of origin, Long noted. Challenges also came from Pakistan, another important tea consumer, as many of its traders went directly to each enterprise in Viet Nam to negotiate the price, giving both tea businesses and farmers headaches, he revealed. To deal with these issues in the later months of this year, trade promotion activities were improved with a focus on organising more direct meetings between Vietnamese businesses and foreign importers and diversifying types of tea products to be displayed at international exhibitions. Last September, Vitas organised a business trip for domestic enterprises to participate in an international tea exhibition held in Moscow, which was described as a good opportunity for them to update themselves on international regulations on trade, food quality, hygiene and safety while expanding export outlets and seeking potential buyers in Eastern Europe. The Ministry of Agriculture and Rural Development reported that Viet Nam had exported about 109,000 tonnes of tea worth $186 million in the past 10 months.    Poor conditions take their toll on domestic coffee production The 2014-15 coffee crop will see output fall by 20-25 per cent due to drought and a large proportion of old trees with low yields, according to the Viet Nam Coffee and Cocoa Association. The last crop (from October last year to September this year) too had been seriously affected – by drought and diseases — but an increase in the area under coffee meant output had risen a bit, Nguyen Nam Hai, the association's deputy chairman, told a review conference in HCM City yesterday. The country has 622,167ha under coffee, with 126,000ha having old trees with low yields and unreliable quality. In the next five to 10 years 140,000-160,000ha need to be replanted, the association said. Tran Viet Hung, deputy head of the Central Highlands Steering Committee, said the replanting programme was launched a few years ago but its progress does not match the sector's expectations. According to the International Coffee Organisation, global production could fall short of demand by 800,000 bags (60kg each) next season, the association said. From the 2013-14 crop Viet Nam exported 1.66 million tonnes of coffee for US$3.4 billion, an increase of 17.2 per cent in volume and 12.5 per cent in value, Hai said. Germany was the biggest buyer, followed by the US, Spain, Belgium, Japan, and Russia. Luong Van Tu, the association's chairman, said raw coffee accounted for 90 per cent of the exports. Companies also exported three-in-one, two-in-one, and roasted coffee, but in limited quantities, he said. Coffee prices were rather low after the last crop, requiring the industry to focus on improving quality and developing brands to earn higher export prices, he said. The industry has set itself a target of increasing the output of instant and roasted coffee to account for 25 per cent of the total by 2020. Coffee consumption in the domestic market remains modest, at around 10 per cent of the annual output, and more should be done to boost consumption, Tu said. The ASEAN Economic Community will come into existence next year, creating a single market out of the 10 countries in the block. Companies in the region would then invest in Viet Nam's coffee industry, creating a challenge for domestic firms, he warned, adding the latter should therefore focus on improving their competitiveness. The association expects exports in 2014-15 to be only around 1.4 million tonnes. Real estate sector sees positive signs Credit in the property sector increased by 10.8 per cent in the first nine months of 2014, signifying recovery and good prospects from the market. It was released in the National Financial Supervisory Commission (NFSC)'s latest report on the country's economy. NFSC attributed the positive signs to credit, foreign investment inflows, overseas remittances and household investments. It revealed that the lending was much higher than the whole banking system's average credit growth of seven per cent. The NFSC survey last August showed that respondents investing in real estate made up 24 per cent, an 11-per cent increase over that of the previous survey six months ago. It added that the number of successful transactions had increased since the middle of 2013, leading to a decrease in inventory. By end-November, Ha Noi's successful real estate transactions numbered about 10,000, a whopping 200-per cent year-on-year increase, while those of HCM City numbered 8,850. The market has also witnessed increasing liquidity, especially the middle apartment segment, with an area of 60 to 70sq.m or less than VND1 billion (US$47,600) each. Figures from the Ministry of Construction also showed that property inventory was lower at VND77.8 trillion, a 39-per cent year-on-year decrease. Projects that have registered for an adjustment in apartment area numbered 74 while those that shifted from commercial to social housing numbered 60. Real estate investors have been rushing the launching of promotions in the year-end months to earn more revenue. Both the Ha Noi and HCM City markets have witnessed an abundance in housing supply. In Ha Noi, the market welcomed Vinhomes Nguyen Chi Thanh, Home City Trung Kinh, Helios Tower and Hoa Binh Green City. Several thousand apartments will be also offered in the market such as Vinhomes Central Park, Novaland and Phu My Hung. The Viet Nam Real Estate Association also reported recently that apartment supply would remain high in the future. In addition to several offers for sale, property investors have launched several promotions to attract high-end customers. For example, Vingroup will offer a $1-million luxury yacht to owners of Vinhomes Central Park while home buyers at the Lexington Residence project will enjoy zero interest rate within three years. Le Chi Hieu, general director of Thu Duc House, said the offer for sale of several projects showed that investors have paid much attention to advertising and providing more flexible payment methods to share the financial burden with customers. FLC builds roof for convention centre FLC Group on Wednesday completed the roof of its international convention centre at its FLC Samson Beach & Golf Resort complex in this central province. At the ceremony, Uong Chu Luu, National Assembly vice chairman, lauded the project's progress and expected the 1,300-seat convention centre with a golf club house to be operational this May, in time for the province's national tourism year 2015. FLC Samson Beach & Golf Resort is the largest golf course, resort and hotel complex in central Viet Nam, with a 450ha area and a total investment worth VND5.5 trillion (US$260 million). The complex will have an 18-hole golf course by Nicklaus Design, the world's leading golf course designer, as well as a culture and tourism area and resorts. HCM City IP opens for Japanese firms The Vie-Pan Techno Park for small and medium-sized Japanese firms in supporting industries opened its first phase at the Hiep Phuoc Industrial Park in HCM City yesterday. The 3ha, US$7.5 million facility has so far attracted two tenants. The developers, Japan's Vie-Pan Industrial Park Company Ltd and Hiep Phuoc Industrial Zone Company Ltd, said the park would also offer administrative services to tenants, some of whom may not have experience in doing business in Viet Nam. Tat Thanh Cang, deputy chairman of the city People's Committee, said the park is the first of its kind in the city and opens up an investment opportunity for Japanese companies in the city. Alphanam approved to delist The HCM City Stock Exchange approved Alphanam Investment Joint Stock Company (ALP)'s delisting request, making its last trading day December 30. The company has nearly 192.5 million shares on the market, equivalent to charter capital of VND1.925 trillion (US$90.4 million). Since debuting in 2007 with the initial listing volume of 30 million shares, ALP was considered a good mid-cap share. It closed the first trading day at VND63,500 each, a high price at that time. However, after two consecutive years of losses, the company decided to delist in order to focus on long-term development, a decision advocated by shareholders in May 2013. Speaking to shareholders, an ALP spokesperson said the company's focus was on mergers and acquisitions, targeting loss-making companies whose core businesses were in line with ALP. Therefore, in the short term, the company would record losses from these subsidiaries in its financial statements. The delisting would ease pressure to complete short-term goals, giving the company more resources to concentrate on long-term targets. The company reported an after-tax loss of nearly VND145 billion ($6.8 million) in 2012 and VND206 billion ($9.7 million) in 2013. HCM City's exchange put ALP stocks under control and halted trading on April 11 this year. Four days later, the exchange allowed trading of the stock again but kept it under control. Margin trading was not permitted. Despite projecting a net profit of VND5 billion ($234,742) for 2014, the company incurred a loss of VND9.5 billion ($446,000) in the first nine months of the year. If it continues to post losses by the end of this year, the delisting will become compulsory. In a filing to the exchange, ALP attributed the loss to short-term bad debts incurred by its subsidiary companies amid the gloomy real estate market. The company plans to develop new products and services, targeting essential consumer goods like food and beverages, and expects to see profits again next year. Fund restructuring helps equity market Reducing the number of inefficient fund management companies, coupled with enhanced operational quality, contributed largely to the stock market's ongoing restructuring, said the State Security Commission (SSC). The commission on Thursday announced the initial results of the restructuring of the fund industry. SSC's statistics showed that during the 2013-14 period, six fund management companies were eliminated from the market through their dissolution, suspension of work or ending of operations. Currently, there were 43 fund management companies which manage a combined VND100 trillion (US$4.72 billion) worth of assets. SSC said that these companies' capital adequacy ratio meets requirements. During the last two years, two new fund management companies under foreign insurance companies were given licences, SSC said, in order to encourage financial institutions and insurance companies to join the market to diversify products. The legal framework for the operation of funds were also improved during the last two years, said the commission, adding that restructuring was implemented with open-ended funds being encouraged to ensure transparency. Efforts to restructure securities firms will continue with the aim of eliminating those which did not ensure financial safety, said Pham Hong Son of the SSC at a meeting of the Ha Noi Stock Exchange last week. The development of the equity market, especially the impending foundation of the derivatives market, will require securities firms to enhance their capacities. So far, more than 20 securities firms have been dissolved or merged, reducing the number of existing securities firms to 84 firms, about 20 per cent of which are small-scale ones. The Prime Minister had issued decision 1862/QD-TTg to approve the project of restructuring of the stock market and insurance companies in December 2012. UAE a top export market for Vietnam agriculture In the 10 months leading up to November mutual trade between Vietnam and the UAE was worth more than US$11 million, according to figures from the Ministry of Industry and Trade (MoIT). With excellent infrastructure, modern business practices and low barriers to market entry – by regional standards – the UAE is a promising market for Vietnam.  The country has emerged in recent years as one of the top markets for Vietnam agriculture exports in the Middle East and North African region. Another recent development that should help to spur increased trade and investment between the two nations has been the opening of direct air routes to Vietnam by two UAE airlines, namely Emirates and Etihad.   Vietnam principally exports fresh fruit and vegetables to the UAE and has barely scratched the surface of the market’s full potential, according to the Africa, West Asia and South Asia Market Department under the MoIT . The MoIT postulates the rapid growth of these products has resulted from the booming population and cultural changes resulting in an increased demand for fresh fruit and vegetables in the region. Currently, the UAE imports from about 20 nations around the globe, principally apples, pears, and oranges from the US, Australia, the Philippines, Thailand and India. Interest rates lowered by 1.5-2 percent The interest rates on Vietnamese dong credits and deposits slashed by 1.5-2 percent over the previous year, helping remove difficulties for businesses, curb inflation and stabilise the monetary market. The latest statistics by the State Bank of Vietnam (SBV) showed that since the beginning of this year, the central bank has twice lowered the dong deposit interest rate while calling for commercial bank to cut the rates to 10 percent per year on mid-term and long-term loans and 7 percent on short-term loans for priority areas. It has also urged credit organisations to reduce lending interest rates to below 13 percent per year. As of November 6, Vietnamese dong loans with rates of over 15 percent per year accounted for 3.95 percent of the total loans, down from 6.3 percent seen at the end of 2013. Meanwhile, those with rates of over 13 percent per year made up 11.1 percent of the total loans, compared to 19.72 percent recorded late last year. Cutting interests rate is really a good news for businesses which said the current 7 percent rate is reasonable, helping them to reduce prices and then stimulate consumption. Dong Nai’s wood products export increases Dong Nai southern province has exported wood products to 80 markets worldwide, earning 884 million USD during the 11 month period, up 9.1 percent year on year. According to Le Van Danh, Director of the provincial Industry and Trade Department, the figure for November alone was 103 million USD, an increase of 17 percent compared to the same month last year. Wood products have become one of the four largest foreign currency earners of the provinces, besides footwear, garments and textiles, and fibre. The biggest markets of Dong Nai wood products are the US which bought 568 million USD worth of goods in the reviewed period, Japan with 103 million USD, the Republic of Korea (RoK) with 88 million USD, Canada with 37 million USD, Australia with 29 million USD and the UK with 26 million USD. Chairman of the provincial Handicrafts and Wood Industry Association Phan Van Binh said the association has organised a number of trade promotion programmes with a view to supporting local businesses in studying markets and taking part in exhibitions and fairs. He added that the member businesses are investing in planting forest in other provinces as well as in Laos and Cambodia, in order to ensure material supply for production. The provincial Industry and Trade Department projected that wooden product export will maintain its growth in 2015 as a number of local enterprises have received orders until quarter II next year. Key economic region coordination reviewed An online conference reviewing a decade of coordination of key economic regions and devising a future plan for the Steering Committee for the Coordination of National Key Economic Regions was held in Hanoi on December 6. Chairing the meeting, Deputy Prime Minister Hoang Trung Hai, the Committee’s Head, said that the Government has made great efforts to devise local development plans with the coodinative consultation. Beside such national projects as Nghi Son, Vung Ang and Dung Quat based in several localities, many industrial zones have been built in surrounding localities to serve the projects. Deputy PM Hai asked the Ministry of Planning and Investment (MPI) to collect ideas from localities, ministries and agencies to improve the effectiveness of coordination at the regional level, saying that coordinative responsibilities and functions of regional councils’ heads should be regulated. He stressed that Vietnam would conclude negotiations and sign new free trade agreements, thus the coordination of key economic regions would help the development and strengthen the economy’s competitiveness. As a result, ministries, sectors and localities should complete as soon as possible regulations on operation and organisation of key economic regions. According to the MPI, the committee’s standing agency, localities in key economic regions affirmed the necessity of coordination and economic connectivity among localities. The current coordinative model has helped key economic regions make achievements in economics, health care, culture and socio-economic infrastructure. The country now has four key economic regions covering 24 provinces and cities, including those in the north, the south, the central region and the Mekong Delta region. The annual GDP growth rate of the key economic regions is 8.8%, while the total export value accounts for nearly 90% of the country’s total. These regions have contributed more than VND800 trillion (US$37.6 billion) to the state budget and attracted 91.3% of Vietnam’s FDI projects and 82% of the total FDI capital. Workshop highlights scientific-technological application in agriculture The Ministry of Agriculture and Rural Development (MARD) and the Ministry of Science and Technology co-organised a workshop in Hanoi on December 6 to discuss science and technology for agricultural restructuring and new-style rural area construction. The workshop, which attracted over 500 delegates, was chaired by Deputy Prime Minister Vu Duc Dam, Minister of Agriculture and Rural Development Cao Duc Phat and Minister of Science and Technology Nguyen Quan. Speaking at the workshop, Deputy Prime Minister Vu Duc Dam said that scientific and technological development in agriculture should not only depend on the State’s investment, but bussinesses should also be attracted and encouraged to take part in studies, transfers and links with farmers. Scientific research centres should not only pay attention to modern technologies and large-scale investment, but also focus on small-scale initiatives in scientific and technological applications, in order to increase productivity, reduce costs, improve agricultural products’ quality for the ongoing globalisation and integration, Deputy PM Dam said. According to the MARD, the country now has 33,000 businesses operating in the agricultural field, of which 90% have capital below VND10 billion (US$470,000), thus the investment in scientific and technological renewals and studies accounts for small amount in the total turnover. In addition, among 350 businesses with potential to become scientific and technologically orientated businesses, merely 28 (8%) are in agriculture with a low effectiveness and commercialisation rate, a limited number of scientific-application products and weak competitiveness in quality. Export-import tax collections exceed target Export and import tax collections surpassed VND228.64 trillion in the January-November period, or 2.1% higher than the full-year target and up 14.8% over the same period last year, according to the General Department of Customs. Of the total figure, more than VND11.24 trillion was from exports, over VND60.7 trillion from imports, VND13.94 trillion from special consumption tax, VND142 trillion from value added tax, VND251 billion from environmental protection fee and VND299 billion from others. The department credited the strong increase to the country’s higher-than-expected exports and imports in the 11-month period, which rose 12.7% year-on-year to US$270.8 billion. Some products with higher import and export revenues included the export of 8.2 million tons of crude oil worth US$6.73 billion, rising 6.8% in volume and 1.2% in value respectively; and the import of 7.8 million tons of fuel with US$7.19 billion. The surge in completely built-up (CBU) auto imports also contributed to the high tax collections. In the first eleven months of this year, 61,532   CBU autos worth US$1.3 billion were shipped into Vietnam, soaring 95.3% in volume and 108.2% in value respectively. The tariff rates of petrol, diesel oil and heavy fuel oil increased to 18%, 14% and 15% respectively this year from the previous rates of 12%, 8% and 10% last year. The department has enhanced tax collection inspections to prevent smuggling and trade fraud from the beginning of this year, and this contributed much to the tax collections. The customs sector expected to collect VND248.5 trillion for the State budget revenue this year, or 10.9% higher than the year’s target and rising by 12.2% year-on-year. The department put total goods export and import revenues in the January-November period at over US$270.8 billion, increasing 12.7% year-on-year. Of which, exports stood at US$136.9 billion, up 13.6%, while imports rose 11.7% to around US$133.9 billion. Access to VND30-trillion loan package still complicated The VND30-trillion home loan package is expected to benefit more homebuyers after the central bank’s Circular 32/2014 and the Ministry of   Transport’s Circular 17/2014 took effect on November 25, but red tape remains to be cleared, heard a recent meeting. Those with a demand to borrow money from the loan package feel vexed when the package aims at low-income earners but banks still require them to prove payment capability. Meanwhile, those with higher incomes and able to prove their payment capability cannot borrow money as they are not low-income earners. However, Nguyen Duc Lenh from the central bank’s HCMC branch said at the seminar held by Bao Buu dien Viet Nam on Monday that the aforementioned requirement is reasonable. As explained by Lenh, as this is a loan package, borrowers have to meet all credit requirements. Therefore, those needing to buy apartments should carefully take into account their financial capability to decide whether to buy, hire houses or borrow long-term bank loans, he added. Meanwhile, according to Le Hoang Chau, chairman of the HCMC Real Estate Association, the Ministry of Justice and the Ministry of Natural   Resources and Environment permit home mortgage and there is no need to prove their incomes. Chau said borrowers have to advance 20% worth of the apartments they will buy and borrow the remaining 80% and mortgage the apartments to guarantee the loans, which means collateral for the loans is higher than the amounts they borrow. In addition, borrowers face difficulties in having their housing conditions certified by local authorities, making them unable to have sufficient documents to borrow money, according to Chau. Under prevailing rules, borrowers can only be eligible if they are certified by grassroots authorities not to own any houses. Speaking to local media on the sidelines of the seminar, Le Trong Khuong, an executive at Hung Thinh Corporation, said his company has many products fitting the VND30-trillion loan package but the package is beyond the reach of home buyers. According to Khuong, Hung Thinh often buys incomplete projects from other investors and complete the projects, and therefore the company is regarded as a secondary investor. Prevailing rules do not allow borrowers to buy homes from secondary investors. Hung Thinh reported the problem to the Ministry of Construction, which has then replied that the eligible property investors must be primary investors. According to Lenh, as of November 15, there were 1,658 loan contracts worth VND1.392 trillion signed in HCMC. Of these, 1,521 customers have had their loans disbursed with a combined VND823 billion. HCM City gov’t okays high-rise building PetroVietnam General Service Joint Stock Corp (Petrosetco) has just obtained the HCMC government’s approval for a high-rise building project named Cape Pear in Thanh Da Peninsula in Binh Thanh District. Cape Pear complex is expected to be developed on a total area of some 19,600 square meters, in which residential land will cover 8,094 square meters and non-residential land the remaining space. Huynh Xuan Thu, director of the Planning Information Center under the HCMC Department of Planning and Architecture, said the city authorities have approved all technical details for the project site with an expected population of around 2,100 people. As planned, a high-rise building with an area of 2,185 square meters will be built in the center of the area. With 44 floors in total and measuring 145 meters in height, the building will have seven floors for trading activities and 37 ones for accommodation. There will be 21 attached houses, each covering between 152 and 186 square meters. After completing the project, the investor of Cape Pear complex will sell 260 apartments of the building and 21 attached houses to individuals, while 260 other apartments will be sold to the People’s Committee of Binh Thanh District for the resettlement purpose. Central bank: Credit growth nears target The State Bank of Vietnam (SBV) on December 4 said credit had grown 10.22% in the year to November 27 compared to late last year, compared to this year’s target of 12-14%. The national credit growth rate is expected to reach 13% this year, said Governor of SBV Nguyen Van Binh at a regular government meeting in Hanoi on Tuesday. The central bank said the credit growth was supported by its efforts to remove hindrances to lending activities and approval for a number of credit institutions to revise up their credit growth targets. Banks continued to cut lending rates for old loans. As of November 6, the outstanding loans in Vietnam dong with lending rates of over 15% per annum accounted for a mere 3.95% compared to last year’s figure of 6.3%. Meanwhile, the outstanding loans in the local currency with lending rates of over 13% per annum made up 11.1%, much lower than 19.72% in 2013. Total money supply had risen by 13.28% as of November 27, according to SBV. Deposits expanded 13.33% over late last year with deposits in   Vietnam dong increased 14.74% mainly from individual customers. This meant that many individuals still deposited money at banks despite interest rate cuts. The central bank said liquidity at credit institutions was strong and inter-bank interest rates for loans in Vietnam dong stayed stable. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR