BUSINESS IN BRIEF 11/2 Circle K convenience store chain opens 100th store in VN US-owned 24-hour convenience store Circle K has opened its 100th outlet in Viet Nam and expects to have 150 by the year's end. Viet Nam CEO Tony Yan was optimistic about achieving the target, saying Viet Nam's modern retail industry was in the initial development phase. While modern retail represented only 13 per cent of the total market share in the country compared to 50 per cent elsewhere in Asia, Viet Nam was a promising market of 90 million people with rising incomes, he said. Other international retailers have been strengthening their presence here, including Japan's Aeon, which has four supermarkets in HCM City and Binh Duong Province and expects to open a new one in Ha Noi this year. The company also acquired major stakes in successful local retailers Fivimart and Citimart. BJC of Thailand made an abortive attempt to buy German-owned Metro Cash & Carry Vietnam, but instead bought a convenience store chain, which it plans to turn into a 94 B Mart chain. Retailers despair as discounts fail to attract more customers Consumers do not seem to be excited about the numerous promotional schemes offered by stores and supermarkets in major cities, in view of the Tet (Lunar New Year) holiday. Along busy shopping streets in Ha Noi and HCM City, eye-catching banners with discount rates of up to 50 to 70 per cent or buy one get one free, have been hung, especially by fashion stores and electronics supermarkets. Their aim is to attract buyers, stimulate purchasing demand and clear stocks. However, the results have not been as good as expected. Several shop owners said their sales were still very slow. Nguyen Mai Ngoc, the owner of a clothing store in Ha Noi, said her store's revenue had not been very good last year, which she said "was much lower than previous years." She had even announced a discount of 50 per cent on all items to boost sales and recover capital ahead of Tet, but sales were still not very good. "There were days when my store was very crowded, but many shoppers were just window shopping." Several electronic shop-owners said purchasing power was low last year, forcing them to offer promotions to boost sales during the weeks approaching Tet. However, customers were being even more cautious with their spending this year. Le Viet Hong, a consumer, said she is not as interested in discounted products as in previous years, partly due to the quality of the products, and because she had bought discounted products several times already. A representative from the Viet Nam Standard and Consumer Protection Association said consumers must check the quality of discounted products carefully before buying. Another consumer said her bonus for Tet was not as high as previous years and that she needed to spend even lesser this Tet holiday, even when it came to buying discounted products. While many shop-owners are worried about their sales for the forthcoming Tet holiday, the Government's data showed that consumer demand is up. The total retail sales and service value touched more than VND275.4 trillion (US$13 billion) in January, representing a 13 per cent year-on-year rise. Economic expert Nguyen Minh Phong said the extraordinary fall in the consumer price index (CPI) in January was not due to the drop in aggregated demand, but could be mainly attributed to plunging oil prices. HCMC aims to equitise SOEs in 2015 By the end of 2015, 19 State-owned enterprises (SOEs) operating in HCM City expect to complete the equitisation process. This is expected to help the city achieve its target of equitising 31 SOEs under a 2013 to 2015 Government initiative. The municipal People's Committee must approve the enterprises' decisions to equitise. The committee will study the companies' asset value announcements, equitisation plans, the organisation of their initial public offerings (IPOs) and first-time shareholders' meetings before giving their approval. Le Manh Ha, vice chairman of the municipal People's Committee, said the enterprises should stick to their commitments, as the deadline is approaching. Companies must retain their trade names during the equitisation process. This will help increase production and business efficiency. Local authorities will focus on simplifying administrative procedures to create favourable conditions for the enterprises to accelerate equitisation. According to the municipal People's Committee, the city had converted 11 SOEs into shareholding companies as of the end of 2014. Equitisation has helped create a new investment climate, attract social investments and form more multi-sector companies. It has also encouraged investors to use new governance methods and technologies in their business development efforts, according to the committee. SMEs need to revamp strategy for integration Small and medium-sized enterprises (SMEs) in Vietnam need step up their efforts and revise their strategy for improving competitiveness in the regional and global supply chains, speakers at a conference in HCM City recently said. They stressed the need for SMEs to take advantage of internal human and financial resources to overcome difficulties and challenges posed by both regional and global integration. Moreover, they suggested the State should provide more incentives to facilitate them making the transition. The ASEAN Economic Community (AEC) is set to be formally established by the end of 2015 in the context of a year in which the nation is also expected to sign six other important free trade agreements (FTAs). Speakers at the conference said these FTAs will force SMEs to become more competitive or else they simply will go out of business. The other alternative is that they will be stuck in the lowest rung of the chain doing assembly and outsourcing for foreign companies. They said the lackadaisical attitude by many SMEs is why there is so much concern by businesses and government agencies about the nation’s preparedness for integrating widely and deeply into the world economy. The country’s SMEs have a low comparative advantage coupled with limitations in business vision and strategy, and lack of financial resources they said, which puts them at a severe disadvantage competing for market share. According to the speakers, the world economy is likely to become completely integrated over the next few years. Therefore, they said it is vitally important for Vietnamese SMEs to start preparing as soon as practical. Speaking at the conference, Deputy Prime Minister Pham Binh Minh said Vietnam is dealing with newly-emerged issues in its integration process and the nation’s SMEs need to sharpen their competitiveness. Minh advised local businesses to install the latest technologies and take a more proactive role in negotiating cooperation agreements with foreign partners to acquire the necessary funds to invest in advanced technologies. The strategy for SMEs, with their limited finances, technologies, and market understanding, should be to work closely with multinational companies involved in the regional and global supply chain to learn international practices before thinking about directly trying to compete in foreign markets. For her part, Nguyen Nguyet Nga, Head of the Vietnam Ministry of Foreign Affairs’ Multilateral Economic Cooperation Department, said since early 2015, the country has been entering a new period of development. Having a clear business strategy, developing strategic products, and understanding target markets are among the factors that enable businesses to access the global market, she said. Nga also recommended Vietnamese SMEs to devise along-term development strategy in a creative and sustainable manner. In the reform process, Vietnam should renovate institutions, fine-tune the legal framework and increase capacity building. Last but not least, Central Institute for Economic Management (CIEM) Deputy Director Dr. Vo Tri Thanh said to achieve successful integration, it is essential to have strong support from the government and effective cooperation mechanism between state agencies, businesses and the whole community. Lam Dong records 33 percent export surge in January The Central Highlands province of Lam Dong generated 45.13 million USD in exports in January, a 33 percent increase from the same month last year. According to the provincial Department of Industry and Trade, alumina and coffee remained Lam Dong’s key export products. Last month, the province shipped abroad more than 40,000 tonnes of alumina worth 14 million USD, mainly to China, alongside 7,179 tonnes of coffee beans exported to Singapore, the United Kingdom, Italy, Belgium and the Republic of Korea worth 14.2 million USD. Several other export products are on the rise, including tea, flowers, and vegetables, generating 3.5 million USD, 3 million USD and 1.7 million USD, respectively. Foreign remittances remain robust in 2014 International remittances from Overseas Vietnamese (OVs) for 2014 remained strong for 2014 tallying in at US$12 billion from roughly four million transactions, according to the State Bank of Vietnam (SBV). Remittances were a key source of external cash inflows for the nation, far exceeding official development assistance and more stable than private debt and portfolio equity flows. There is no doubt that these inflows acted as an antidote to poverty and promoted prosperity the SBV said, adding that the remittances for 2014 were principally channeled into business ventures. This was a change from prior years where they primarily went into real estate, stock and saving accounts. Vietnamese American David Duong said OVs want to contribute to the national development and he hopes the State will devise more incentives to encourage them to do so. Mekong Delta expands seafood, rice export markets The Mekong Delta region earned US$850 million from seafood and rice exports in January, equal to 8.3% of this year’s plan and accounting for 75.2% of the region’s total export revenues. It aims to fetch around US$10.2 billion from exports of the two products this year. To fulfill the plan, the region will use 800,000ha water surface for aquaculture, aiming to yield around 3.7 million tonnes to meet material demand of 198 local processing plants. Meanwhile, 4.2 million ha will be put under rice cultivation, 80% of which will be under high-quality rice. The quality of trade promotion activities will be improved. Local authorities will help businesses conduct surveys and advertise their products in Asian, African, Oceania, European and North American markets. Businesses will also be updated with global experience in risk management during the import-export process and in applying special financial solutions. They will also be provided with VND56,000 billion loans to invest in technological renovation, expansion of production scale and restructuring of the processing industry to have more competitive products for export. These measures will help the Mekong Delta increase the quantity of high-graded rice for export by 20% and seafood by 5% this year against last year. In 2014, the region boosted trade promotion activities in many Asian, European and North American countries, and improved the production of high-graded rice for export to demanding markets like Japan, the EU, the US, Singapore and Australia. Exports of the two products hit US$8.9 billion, up nearly US$700 million compared to 2013. Changes in investment promotion in 2015 Many changes in investment promotion activities and in attracting foreign direct investment (FDI) will take place this year. Promotion programmes will focus on infrastructure development, agriculture, and high-tech to anticipate advantages brought about by free trade agreements, including the Trans-Pacific Partnership (TPP). They will also concentrate on key markets like Japan, the Republic of Korea, Taiwan, Singapore and the G7 nations. In addition, promotion activities will access major groups, banks, investment funds, investment consulting firms and business associations. The basic principle is to ensure the national interests and restructure the economy after the new growth model. Sacramento City Vice Mayor visits HCM City Allen Wayen Warren, Vice Mayor of Sacramento City, California, the US on February 7 visited the Da Phuoc Solid Waste Treatment Complex in Binh Chanh district during his visit to HCM City. After making a fact-finding tour of the complex, Warren showed his deep impression on the use of advanced US technologies in solid waste and waste water treatment, which has contributed to HCM City’s development. He revealed that this is his first visit to HCM City and hoped to return in the near future with American US investors and businesspeople to seek cooperation and investment opportunities. The complex is invested by the Vietnam Waste Solutions Inc. (VWS) owed by David Duong, a Vietnamese American. At a meeting with overseas Vietnamese (OVs) on the same day to mark the Lunar New Year (Tet), VWS was awarded a Prime Minister’s certificate of merit for its contribution to environment protection. Quang Binh province urged to develop agro-forestry-fishery The central province of Quang Binh should fully tap its natural advantages to develop agriculture, forestry and fishery industries, Party General Secretary Nguyen Phu Trong said in his visit to the province on February 6. The Party leader told provincial officials that with mountains making up 85% of the province’s natural area, a 116-km coastline, and a vast continental shelf and economic exclusive zone, these sectors have great potential to develop along the path of industrialisation and modernisation. He also suggested that QuangBinh should pay more attention to tourism development, noting that besides the UNESCO-recognised world natural heritage PhongNha – Ke Bang National Park, the province boasts numerous destinations for cultural and spiritual tourism. The Party General Secretary hailed the province for its good performance in implementing the Party Central Committee’s Resolution on Party building. He required the local authorities to focus their efforts on organising Party Congresses at all levels in preparation for the 12th National Party Congress. He urged more attention to the Party building work at the grassroots level, particularly in businesses, organisations and poor and ethnic minority regions, stressing that nothing can be done without capable cadres. At the same time, the Party leader said QuangBinh, which shares over 200km of border lines with Laos, should foster the special friendship between Vietnam and Laos, contributing to safeguarding national independence and sovereignty, maintaining a peaceful and stable environment for national development. During his tour to QuangBinh province, the Party chief presented gifts to the Vietnamese heroic mother Lai ThiSen in Dong Hoi city and visited PhuQuy export wooden processing factory. In 2014, QuangBinh achieved an economic growth target of 7.5% and harvested a record food output of 300,000 tonnes. The province has 12 communes recognised as meeting all 19 criteria of new-style rural areas. The tourism sector has gradually become a local economic spearhead, welcoming over 2.7 million visitors, nearly doubling the previous year, and grossing VND1.6 trillion (US$76.19 million) in revenue. The rate of poor households was reduced by 5.5% last year. Firms told to better prepare for increased trade with Russia The targeted US$10 billion two-way trade between Vietnam and Russia by 2020 will be feasible if domestic businesses work out thorough market research and marketing strategies. The local firms were warned of the market’s inaccessible distribution network, particularly big supermarket chains, the fierce competition from other countries, the tough negotiation on means of payment, and time-consuming goods transport. They were advised to update their technology so as to improve product quality and enhance brand and product promotion and take part in more fairs and exhibitions to seek trustworthy partners and distributors. The two countries’ trade turnover hit US$3 billion for the first time in 2014, data from the Vietnamese Ministry of Industry and Trade (MoIT) show. The MoIT’s Europe Market Department said Russia is a traditional market of Vietnam, buying mainly agro-products like seafood, coffee, pepper, tea, vegetables, cashew, and rice. However, bilateral trade accounts for only a small proportion in both sides’ total trade revenue while their direct investment into each other remains modest. Vietnam and Russia had reached an agreement on building the first nuclear power plant in Vietnam. Besides, their oil and gas production affiliation has been productive. The bilateral economic and trade relations will be fostered with the conclusion of the negation on a free trade agreement between Vietnam and the Eurasian Union, which groups Russia, Belarus and Kazakhstan. The deal is expected to be signed this year. Export plan looks to wipe out trade deficit by 2020 Vietnam targets average export growth of 11-12 per cent a year until 2020 and gradual reduction of imports to wipe out the trade deficit by then and achieve a surplus by 2030, according to its overseas market development plan. Asia will account for 46 per cent of the exports, the EU for 20%, the America for 25%, Oceania for 4% and Africa for 5%. The establishment of the ASEAN Economic Community this year would strengthen investment and trade ties between countries in the bloc, Le An Hai, deputy head of the Asia-Pacific Market Department, told a meeting held in HCM City last week to collect opinions from companies, business groups, and official agencies about the plan. Vietnam would strengthen trade promotion in ASEAN to ensure exports to the bloc increase by 10% a year on average to at least US$31 billion by 2020, he said. Besides, efforts would be made to boost exports to other Asian markets like Korea, Japan, and China, he said. The economic recovery in the EU along with the upcoming free trade agreement with it would open up opportunities for Vietnamese exporters, he said. Exports to the EU are expected to rise by 15% a year to US$58 billion by 2020. The country will also try to increase exports to the US and Canada by 15% a year and strengthen trade promotion to boost exports to countries in Africa, Latin America, and Oceania. The plan also contains measures to achieve the targets, including strengthening of international co-operation and communication to help businesses understand and capitalise on the opportunities brought by the FTA, he said. Vietnam will strive to improve the quality of its export items and boost exports of processed goods with high value-addition and key agricultural products like rice, foodstuff, coffee, rubber, and seafood and reduce exports of crude oil and coal. Delegates at the meeting appreciated the necessity for the plan, but urged the Government to take measures to help exporters, especially small- and medium-sized firms, to improve competitiveness. Le Thi Giau, chairwoman and general director of the Binh Tay Foodstuff Joint Stock Company, said companies need policy support to facilitate exports. Nguyen Truc Van of the HCM City Institute for Development Studies said the plan drafters should research into demand as well as consumer tastes in foreign markets to enable businesses to create suitable export strategies. Tran Vinh Nhung, deputy director of the HCM City Department of Industry and Trade, said the plan should consist of concrete action programmes for each market and region to improve the efficiency of trade promotion programmes. Vietnam has trade relations with over 200 countries and territories. Businesses asked to finance more rural, farming projects The Ministry of Planning and Investment (MPI) wanted local businesses to invest more in agriculture and rural areas in Ha Noi, Nguyen Van Hieu,   deputy minister of Planning and Investment, told participants in a conference last Friday in Ha Noi. The conference sought to collect feedback on Decree 210/2013/ND-CP (December 19, 2013), which sets out incentives and assistance from  the State for businesses investing in agriculture and rural areas. This support consists of providing human resources and assistance in market development, application of science and technology, medicinal  herb plantation and agro forest and aquaculture processing for northwestern provinces and poor districts. At the conference, representatives from provinces discussed difficulties in implementing the policy, such as the fact that their provinces still  lacked balanced budgets. Circular 5, which guides the implementation of the decree, needed to clarify the scale of investment projects so as to help provinces evaluate   investment capital from the State and local budget, they said. The circular also needed to include a list of agro and seafood processors and  manufacturers who would receive assistance under the policy. Hieu said that over the years, businesses in rural areas had created more products and boosted their competitiveness by creating high-quality  and value-added products. He expected that issuing decrees and circulars guiding the implementation of the decree would stimulate the  development of sustainable and competitive production. The Government also issued Circular 09 on April 25, 2014 to ask ministries and agencies to instruct businesses to adapt their investment to the  situation. The Deputy Minister said that the ministry would use feedback from the conference to make a report to the Government recommending the  revision of contents that were inconsistent with reality. Stalled projects likely to be re-sold The trend of selling stalled property projects to new investors will grow strongly this year, helping the market revive, the chairman of the HCM City Real Estate Association has said. Le Hoang Chau told a recent review meeting of the association that there are around 1,400 projects in HCM City of which almost half have been suspended, offering acquisition opportunities. He expected the new Law on Real Estate Business, which takes effect in early July, to facilitate this. Last year many stalled housing projects changed hands or saw investors buy stakes. "Novaland [for instance] acquired several projects in HCM City including the Lexington, Galaxi 9, Icon 59, Tressor, and Rivergate," Chau said. Hung Thinh bought out projects such as Thien Nam, 12View, and Thoi An while Dat Xanh acquired CT 15, Riverside Garden, and Green City. Foreign companies were also part of the trend. Japan's Creed Group has invested several projects by Nam Bay Bay Investment JSC, buying out City Gate Towers and picking up 50 per cent stakes in two other projects — NBB Garden II and III. Asked about the city housing market, Chau said while it is not yet out of the woods it is on the path to recovery. He said apartments of 70sq.m or less priced at around VND15 million per square metre (US$700) would see stable demand and growth, and high-end properties in good locations and with reasonable prices built by prestigious developers would also have takers. The amended housing and real estate laws that will take effect in July will facilitate market activities including by foreigners, who can buy units in commercial housing projects. The Law on Housing stipulates that total ownership by foreigners should not exceed 250 individual houses in a ward or 30 per cent of condominiums in case of an apartment block. Chau said the Government should have separate policies for areas with high density of foreigners like Ha Noi, HCM City, Da Nang, Khanh Hoa, Binh Duong, and Dong Nai. Aussie beef cattle imported to City Vissan Company Ltd, a domestic meat processor and supplier, and Hoang Anh Gia Lai Joint Stock Company (HAG) will sell 2,000 Australian cows to the local market to serve the Tet (Lunar New Year) holiday. These are the first products to be marketed locally under the cooperation of the two companies, the company said last week in HCM City. Doan Nguyen Duc, chairman of HAG, said the cows, which were imported from Australia, are 18 months old and over, weighing 200-250kg each. They have been fed at HAG's farms in Viet Nam, Laos and Cambodia. Each will weigh about 500-550 kg when it is sold. At the ceremony to introduce the first product to the market, a representative of Vissan said the demand for beef in Viet Nam was about 3,000-4,000 cows per day. In HCM City, the figure is 600. To meet demand, each year the country imports 1 million cows. Co-operation between the two companies has played an important role in localising cow feeding in Viet Nam. This year, HAG plans to feed 100,000 cows, and the figure is expected to increase to 200,000 in 2016. Duc said the company plans to invest more in feeding oxen as the sector has been very profitable. The Australian beef products of Vissan and HAGL are sold at Satra, Saigon Co-op Marts and Vissan's outlets for about VND320,000 (US$16) per kilo. A promotion from February 10 to 25 will offer the products for VND8,000 per kilo. HAG has shifted their investments to agriculture. In mid-2014, it signed co-operation agreements with Nutifood and Vissan to develop a project to raise cows and oxen, and to build a processing plant. Him Lam owns most shares of LienVietPostBank Real estate firm Him Lam Corporation has replaced Vietnam Post to become LienVietPostBank's biggest shareholder by increasing its stake to 14.98 per cent, according to the bank's recent report. During the first six months of last year, Him Lam purchased some 13 million shares of LienVietPostBank, followed by another 16.4 million in the second half of the year. As of the end of 2014, the real estate company owned 96.8 million shares or 14.98 per cent of the bank, an increase of 4.54 per cent compared to the beginning of the year. Duong Cong Minh, chairman of Him Lam, holds the same position in the bank. Focusing on the real estate industry, Him Lam also has subsidiaries and affiliate companies investing in other sectors, including banking and finance, entertainment services and golf course development. The second-largest stakeholder, Vietnam Post, holds 12.54 per cent of LienVietPostBank. Last year, the bank planned to offer a private placement of 18.7 million shares to Vietnam Post, but the transaction was not conducted. The third-largest shareholder is office leasing company HTH Co Ltd with a 4.95 per cent stake. By the end of last year, the bank's vice chairman Nguyen Duc Huong increased his holding from 3.32 per cent to nearly 3.4 per cent. According to the bank's Q3 financial statement, its total assets reached VND89.2 trillion (US$4.19 billion), while revenue was over VND1.4 trillion ($65.7 million). The bank made a loss of VND20 billion ($939,000). BIDV proposes changes to lending bill The Bank for Investment and Development of Viet Nam's (BIDV) research centre has requested that authorities review regulations called for in Circular 36. As it is now written, Circular 36 calls for limiting money flows to the stock market through curbing bank loans, which took effect on February 1. Specifically, the circular states that banks shall not be allowed to offer loans for securities investments beyond 5 per cent of the charter's capital. According to BIDV, this will adversely affect not only the stock market, but the domestic economy in general. "A tightened investment resource will hammer the growth of the market in the short – and medium-term, thereby slowing the process of equitising State-owned enterprises (SOEs) and restructuring the economy," the bank noted. The bank explained that lower liquidity due to a shortage of money would reduce investors' interest in the initial public offerings of SOEs. In addition, the domestic appetite would, in turn, make foreign investors hesitate as they consider investing in Vietnamese shares. Therefore, BIDV proposed three recommendations. First, the lender proposes that the Government should revise the implementation time of the circular's provisions. "The process of arranging margin financing needs a longer time […] to avoid a shock to the market," it wrote in the report. Second, BIDV proposed that the State Bank of Viet Nam gradually reduce the securities lending rate. As the domestic stock market is moving toward becoming an emerging market, the State should encourage providing more financial resources, noted the bank. And third, the amendment for increasing foreign ownership in public companies should be enacted soon. Previously, the Viet Nam Association of Securities Business and other banks also recommended a delay in the enforcement of the circular. However, the central bank decided to implement the regulation as planned. Infonet.vn cited Tran Dac Sinh, president of the HCM City Stock Exchange, as saying: "I support the changes in the circular, but we should have a relevant roadmap." The stock market was intended for raising funds in the long term, according to Sinh. He agreed that banking resources should not be used for securities businesses. However, the drastic measures called for in Circular 36 would agitate the market for some time. Economy projected to grow faster this year The Vietnamese economy will grow at around 6.2 per cent this year, but continues to face a lot of challenges, a seminar heard on Thursday. Nguyen Xuan Thanh, director of the Fulbright Economics Teaching Program, listed three reasons for why economic growth would speed up this year. "Manufacturing and construction account for 46 per cent of the GDP and this year the two sectors are expected to grow." "Weak domestic demand has led to low imports, and has, along with high exports created a trade surplus. "Public spending increased by 11.5 per cent last year and this will take GDP growth above 6 per cent." The higher public spending had seen the revival of many stalled projects, he said. But he said public debt had reached 60 per cent of GDP and warned it would soon reach 65 per cent above which it is not considered safe. "If Viet Nam continues with its old development model of borrowing for development, public debts would pose a risk, not high inflation or monetary policy." Pham Chi Lan, a senior economist, said: "Viet Nam grows thanks to high investment and not high productivity. This model should be stopped and changed to boost productivity." While the economies of most members of ASEAN have moved to the innovation stage, Viet Nam, along with Cambodia, Laos and Myanmar, has not yet been able to move beyond the production productivity stage, according to Lan. She also called Viet Nam's export structure poor since raw materials and semi-processed goods make up 70 per cent of it. The corresponding figure is 49 per cent for Indonesia and 13 per cent for the Philippines. "This is a warning ahead of integrating into ASEAN: other countries' products might dominate the Vietnamese market," Lan said. She pointed out a worrying fact that in 2012 the amount of investment and number of workers in the private sector had fallen to half size of 2002 levels. "If the private sector cannot develop, the economy will not grow." She said Viet Nam faced hurdles to its efforts to achieve stable growth including poor human resources and slow restructure of the economy. "In the medium and long terms, Viet Nam still has huge potential to develop with its large population, rapid urbanisation, rising life expectancy and more mobile phones." she said. Ocean Group to divest from non-core units Financial conglomerate Ocean Group (OGC) has announced it will divest several of its companies and sell some of its real-estate projects, the Tri Thuc Tre reported. The group will particularly seek buyers for the stakes it owns in Fafilm Viet Nam (69 per cent) and Dai Duong Natural Resources Development (34 per cent). Also, it no longer wishes to remain the owner of three realty projects. The Lega Fashion House, with an expected investment capital of VND800 billion in HCM City, is a joint venture of the group with Gia Dinh Investment and Development and garment company Legamex. It was initially agreed upon that the Ocean Group will contribute 75 per cent of the investment value. Meanwhile, a building project on Tran Khanh Du Street, Ha Noi, valued at VND774 billion, will also be sold by the Ocean Group. Another project in Ha Noi that the group is selling is the HH – StarCity Centre. In September 2014, the Ocean Group had also sold its retail arm – Ocean Retail – to property giant Vingroup. The supermarket chain owned by Ocean Retail was later renamed VinMart. OGC shares have been continuously declining since Ha Van Tham, former chairman of OceanBank, was arrested for regulatory violations. The company's stock closed at just VND5,000 yesterday, sliding 3.8 per cent. According to the HCM City Securities Company, the group is making the sales to collect money for its debt payments. Ha Noi to open bonded warehouse for seafood The General Department of Viet Nam Customs released a decision on Wednesday to establish a bonded warehouse for seafood preservation at Quang Minh Industrial Zone in Ha Noi's Me Linh District. The warehouse will be built on a site of 1,470 sq.m, comprising a 1,020 sq.m depot with seawater holds and a 450 sq.m supporting construction. The owner is Phuc Dong Co, Ltd. Coffee exports drop off in January Viet Nam's January coffee exports are estimated at 120,000 tonnes, decreasing 14.4 per cent year on year, according to the Viet Nam Industry and Trade Information Center under the Ministry of Industry and Trade. The figure is lower than the expectation of 150,000 tonnes. Germany and the US are still the biggest importers of Vietnamese coffee, with market share of 14 per cent and 10 per cent respectively. Vietnam enjoys nearly 35% surge in exports to Canada Vietnamese exports to Canada expanded by 34.55 percent year-on-year to US$2,08 billion in 2014, said the Vietnam Industry and Trade Information Centre under the Ministry of Industry and Trade. Among Vietnam’s key exports to the North American country, garments grew 25.9 percent to hit US$492.51 million, accounting for 23 percent of the total value. Meanwhile, the country racked up US$263.25 million from aquatic products, up 45.8 percent compared to last year. Canada is a growing market for Vietnamese products. Two-way trade has experienced sustainable growth in the past few years with the trade balance favouring the Southeast Asian nation. Two-way trade is expected to reach approximately US$3 billion in 2015. Vietnam is among the 25 countries to benefit from support programmes for accessing the Canadian market and it is also one of the six key target countries prioritised in Canada’s education co-operation programme. South Korean firm sets up plastic JV in Vietnam South Korea’s National Plastic (NPC) on February 5 clinched a contract with Toda Industries Vietnam to establish a US$30-million joint venture to produce industrial and hi-tech plastic products. The joint venture, NPC TODA Co. Ltd., will start operations in July this year at the Vietnam Singapore Industrial Park 2A (VSIP 2A) in the southern province of Binh Duong using energy-saving hybrid technology. The project is expected to produce hundreds of thousands of products a year, including 288,000 pallets, for supply to foreign-invested firms in Vietnam and export to ASEAN countries. NPC is now the supplier of industrial plastic products for many multinationals in the country. In Asia, the company has set up joint ventures in Singapore, Thailand, Malaysia and Myanmar. Le Minh Tien, general director of Japan-invested firm Toda Industries Vietnam, told the Daily that the joint venture company will produce plastic items mainly for the domestic market. In the past years, local demand for industrial plastic has increased by 20% a year and Vietnam has had to depend much on imports due to limited supply on the domestic market. Almost all plastic firms in Vietnam are foreign-invested enterprises and mostly produce household plastic items and packaging, Tien said. He added that making industrial plastic products requires large investments and advanced technologies. According to Jason Park of NPC, the South Korean firm has seen great potential for logistics development in Vietnam and new business opportunities when the country signs more free trade agreements such as the Trans-Pacific Partnership (TPP) . According to the Vietnam Plastic Association (VPA), Vietnam earned more than US$2 billion from exporting plastic products last year, a year-on-year increase of 15.8%. Of which, industrial plastic products accounted for US$109.2 million, up 19.9% against 2013. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR