Thứ Năm, 26 tháng 3, 2015

BUSINESS IN BRIEF 26/3


More foreign owned banks to open in Vietnam
The State Bank of Vietnam (SBV) has allowed Malaysia’s Public Bank Berhad (PBB) to acquire all stakes owned by Vietnamese lender, the Bank for Investment and Development of Vietnam (BIDV), in their joint venture VID Public Bank.
In the recent document No. 1721/NHNN-TTGSNH, the SBV Governor agreed that after the acquisition, PBB will turn the VID Public - the biggest joint venture bank in Vietnam - into a 100-percent foreign owned bank in the country.
VID Public and PBB have been requested to meet all conditions and requirements to make the adjustment.
In the instance PBB cannot meet conditions stated in the document, the SBV will withdraw the establishment license and suspend operations of the VID Public Joint Venture Bank in line with legal regulations.
Decree to spur Vietnam investment across borders
Vietnamese investors can transfer foreign currency abroad as payment for activities relating to their projects before getting investment licences from foreign local authorities under a draft decree of the Ministry of Planning and Investment.
The draft decree on direct overseas investment, released recently to garner public opinion, says payment in foreign currency can be made for activities related to investors' projects abroad, including market and investment opportunity research, field study and related document research, collection and purchase.
The money will also cover the assessment, appraisement, choosing and hiring of foreign consultants to help assess and appraise their projects.
The capital will be earmarked for activities such as organisation and participation in related conferences, establishment of representative offices related to the setting up of the projects, participation in international bidding and paying deposits, bank guarantees or other kinds of financial guarantees to procure an entity, as well as buying or hiring of assets for the projects.
These expenses are part of the total investment capital of the projects registered by investors.
Deputy Director of the ministry's Foreign Investment Agency Vu Van Chung said the new regulations would create favourable conditions for Vietnamese businesses to invest abroad.
However, he said, the decree would also have regulations to tighten control over capital sent abroad from Vietnam, following the Foreign Currency Ordinance and other related laws.
The draft decree stipulates the transfer of foreign currency abroad must be made in line with regulations governing foreign currency management and other related regulations.
Investors will also be required to commit to balance their sources of foreign currency or to prove their investment capital capacity as part of requirements for granting of investment licences.
Under the existing regulations, investors are allowed to transfer foreign currency broad only when they receive investment licences from local authorities of the countries where the projects are located, or when the projects are approved by the foreign local authorities.
According to the planning and investment ministry, Vietnamese businesses invested in 930 projects abroad as of December last year, with a total registered investment capital of US$19.5 billion.
The draft decree can be viewed on the ministry's foreign investment agency's website at fia.mpi.gov.vn for discussion.
VN-Singapore Industrial Park remains a monument to Lee Kuan Yew
During his lifetime, former Singaporean Prime Minister Lee Kuan Yew was especially concerned about the implementation of the Vietnam-Singapore Industrial Park (VSIP) – which has later become a symbol of friendship and cooperation between the two countries.
Twenty years ago, when the southern province of Binh Duong was known as Song Be, Lee Kuan Yew arrived in the province to examine the VSIP construction site in what is now Thuan An commune, Vice Chairman of the provincial People’s Committee Tran Thanh Liem reminisced.
Upon his arrival in Binh Duong, Mr. Lee encouraged local authorities to develop industry and foster their belief that the province would grow more strongly in the future, Liem said.
The province was honoured to welcome the former PM another four times since the VSIP was commissioned.
Lee Kuan Yew was considered a key figure in the establishment and development of cooperation between Vietnam and Singapore, Liem said.
In 2007, in his capacity as Singapore’s Minister Mentor, visited the VSIP for the second time to study the human resources, industrial development, administrative reform, and education-training work in Binh Duong.
He wrote in the visitors’ book that he could see considerable progress had been made in the previous decade.
Lee Kuan Yew also visited the VSIP II in the Binh Duong industry-service-urban complex on the occasion of his visit to Vietnam in April 2009, at the invitation of Prime Minister Nguyen Tan Dung. Once again, he made it clear how impressed he was at the rapid progress that had been made.
The VSIP was shaped on the basis of friendship and economic cooperation between Vietnam and Singapore. With the support of the two governments, the Binh Duong Becamex Industrial Development Corporation (IDC) and Singapore Sembcorp Development led infrastructure and real estate businesses to carry out the project from 1996.
The VSIP is developing five linked projects across Vietnam , with a total land area of over 6,000 hectares spread across the provinces of Binh Duong, Bac Ninh and Quang Ngai and Hai Phong port city.
It is attracting investment projects worth 7.4 billion USD from 30 nations and territories and generating jobs for 140,000 local workers.
Lee Kuan Yew served as Singapore’s Prime Minister from 1959 to 1990. He passed away in the early hours of March 23 at the age of 91. He is widely credited with turning Singapore into one of the most affluent economies in Asia within three decades.
HCM City pushes exports to ASEAN market
Ho Chi Minh City will focus on furthering product penetration in the ASEAN market in 2015 as it has been a key market for the municipality’s exports in recent years.
Since 2010, the city has organised numerous promotion activities to help local enterprises access the Cambodian market, set up product distribution channels and introduce Vietnamese products to Cambodian consumers.
According to statistics from the General Department of Vietnam Customs, Vietnam’s exports to Cambodia reached 2.6 billion USD last year out of two-way trade value of nearly 3.3 billion USD.
However, Vietnamese products face strong competition from similar products from Thailand and China in terms of quantity, brands and prices, underscored Pho Nam Phuong, Director of the municipal Investment and Trade Promotion Centre (ITPC).
She added that enterprises in Ho Chi Minh City and other regions are promoting exports to this traditional market as a number of Vietnamese products are favoured by Cambodian consumers, citing as example Duc Phat confectionery, Vissan processed food and Sai Gon cosmetics.
In 2015, Ho Chi Minh City will focus on Cambodia’s northwest market as a densely populated region with stable politics, Phuong said, stressing that Vietnam will gain a large market share in this region if it injects capital into commodity transportation and improving brand recognition and reputation.
Apart from Cambodia, Myanmar is a target market in the municipality’s promotion programme in 2015.
The city’s export revenue to the market in 2014 reached 77.3 million USD, an annual increase of 5 percent.
The best-selling products were CADIVI’s electric wire and cable, Dien Quang bulb, Saigon cosmetics, Rang Dong plastic goods and Hoa Sen corrugated iron. Vietnamese plastic products have been especially prominent in Myanmar plants.
The results were buoyed by efforts made by the ITPC to promote trade and investment in Myanmar since its doors opened in 2011.
Myanmar is also a target market for enterprises producing fertilizer, industrial electricity, pharmaceuticals and building materials.
Vietnamese businesses need to be patient and serious to enter the Myanmar market, Phuong said.
Can Tho leaders set big development goals
Authorities in Can Tho are aiming to transform the Mekong Delta metropolis into an industrial city by 2020, with gross regional domestic product (GRDP) growth targeted to reach 7.3 percent annually, according to the municipal Party Committee.
The city will also strive for per capita GDRP of 96.2 million VND (4,425 USD), total import-export and service value of 11 billion USD each year. The plans, outlined in a draft report, were revealed at a conference in the city on March 23, where Can Tho’s former leaders were invited to provide their feedback.
The ratio of highly-trained labourers in the locality is expected to reach up to 80 percent, while 26 communes are aiming to become new-style rural areas according to the report, which will be submitted to the city’s 8 th Party Congress for approval.
In the 2015-20 period, Can Tho is hoped to become a national-level city catering for industry, trade, tourism, education, health care and culture in the region. The plan states that it will be developed into a hub for domestic and international transport, while also being turned into a strategic regional and national defence-security provider.
To fulfil these ambitious goals, the city will focus on a number of specific measures, including transforming the economy towards industrialisation and modernisation, improving the investment environment, and strengthening regional connections with the Mekong Delta’s key economic regions.
Meanwhile, the city will roll out measures to attract high-quality human resources, lure more foreign direct investment and official development assistance, and enhance its competitiveness.
The draft report also includes review of the city’s socio-economic performance in the 2011-15 period, with 20 out of 22 goals completed.
Vietnam’s Q1 inflation sluggish in decade
Vietnam’s March consumer price index (CPI) inched up 0.15 percent from a month earlier, pushing first-quarter inflation by 0.74 percent.
Contributing to the rise were food and restaurant services (up 0.36 percent), housing and construction materials (0.16 percent) and culture-entertainment-tourism (0.18 percent), partly due to increases in a broad range of items during the Lunar New Year (Tet) holiday, according to the General Statistics Office (GSO).
Major dips included beverages & cigarettes, garment & headwear, transportation, and telecommunications with respective decrements of 0.11 percent, 0.04 percent, 0.31 percent, and 0.02 percent.
Meanwhile, little change was seen in household appliances and utensils, medicine and medical services, and education.
Comparing quarters, restaurant and dining services registered an annual hike of 1.17 percent, below that recorded in previous years.
Vice Director of the GSO’s Price Statistics Department Do Bich Ngoc said the simultaneous upward adjustment of electricity and fuel costs in mid-March will have implications for the April CPI figure.
GSO Director General Nguyen Bich Lam warned of the risk of fuel hikes, which he said would potentially deter the government’s deflationary efforts.
He urged the government to direct the Ministries of Finance and Industry and Trade to monitor market prices, especially of necessities, while carefully considering the timing for price adjustments.
RoK enterprises seek opportunities in Vietnamese electrical sector
A seminar to examine cooperation opportunities in the electrical sector between Vietnam and the Republic of Korea (RoK) was held in Ho Chi Minh City on March 24.
The event was co-hosted by the Vietnam Chamber of Commerce and Industry (VCCI), the Korean Trade Investment Promotion Agency (KOTRA) in HCM City and the Korea Electric Power Corporation (KEPCO).
At the event, Head of KOTRA’s commercial affairs in HCMC Sang Hyup Park highlighted that a number of RoK enterprises are interested in cooperative opportunities in Vietnam’s electrical sector.
According to the diplomat, the RoK’s electrical industry has made significant achievements and as a result, its enterprises can contribute to the growth of Vietnam’s electrical sector in terms of quality and quantity through intensifying commercial activities and investment projects.
RoK enterprises at the event praised the Vietnamese Government’s support for the industry, playing an important role in its economic development and growth.
Participating RoK enterprises work primarily in electricity industrial development such as dynamo, transformer, and wind energy system.
Other trade promotion activities included market research, meetings and information exchanges during the event.
The RoK’s electricity production has surged over 240% from its 1,770 million kilowatt-hours in 1961.
Workshop seeks closer Vietnam-Japan digital content partnership
Favourable conditions are now in place for cooperation between Vietnamese and Japanese companies, including those in the digital content and software industry, said Bui Huy Son – Director of the Ministry of Industry and Trade’s Vietnam Trade Promotion Agency.
Speaking at a workshop on digital content and software cooperation on March 24, Son cited the fact that Japan currently has the most partnership frameworks and agreements with the Southeast Asian country, demonstrating the Government commitment to supporting businesses’ collaboration.
Japan is also the second largest investor and trade partner of Vietnam with bilateral affiliation in digital content generating strong outcomes over the past years, he noted, adding that he hopes the companies will continue to foster connections in this area.
Vietnam is considered one of the region’s leading countries in software outsourcing and digital content, deemed a priority industry by the Party and State.
Yoshikumi Ohnishi, Secretary General of the ASEAN-Japan Promotion Centre on Trade, Investment and Tourism, said to enhance its digital content trade with regional countries, Japan organised several game shows. The latest of which, Tokyo Game Show, attracted 34 enterprises from nine ASEAN member nations, including five from Vietnam.
To further reinforce information technology collaboration, representatives from 15 Japanese software companies are currently visiting Vietnam to evaluate business and investment opportunities, he added.
Russian firm to build Vietnam's first solar power plant
Russian energy company Arman Holding is working with the sole power provider in Vietnam EVN on a solar plant worth US$140 million.
A source from Quang Nam Province in central Vietnam said the Russian firm, the main investor of the project, is surveying for a location with its partners – Singapore’s finance company Royale Star Holdings and Vietnam’s Natural Energy Investment & Development JSC.
The 100-megawatt plant is expected to be the first solar power project in Vietnam connected to the national grid network.
The partners are discussing with EVN, fully known as Electricity of Vietnam, about market prices.
Further details and timeframe of the project are not available.
Vietnam has been putting solar panels on large buildings across the country, but the generated electricity mostly serves the buildings themselves.
The country is still depending on hydro and thermal plants for most of its electricity demand.
ADB forecasts Vietnam’s GDP to grow 6.1% in 2015
Vietnam’s Gross Domestic Product (GDP) growth is likely to edge up to 6.1% in 2015 and 6.2% in 2016, according to the Asian Development Outlook (ADO) 2015 released by the Asian Development Bank (ADB).
Although Vietnam’s economic performance has slowly improved, a number of structural factors continue to limit its ability to reach its full growth potential, said Tomoyuki Kimura, ADB Country Director for Vietnam at a press conference announcing the ADO in Hanoi on March 24.
The report highlighted that priority should be placed on strengthening the banking system and outlining a clear strategy to tackle bad debts in short term.
In addition, Vietnam needs to speed up divestment of state-owned enterprises and accelerate their equitisation process, according to the report, which also urged the local enterprises’ greater participation in global value chain to leverage the fullest growth potential.
Dominic Mellor, country economist for ADB Vietnam said that investment potential, the key drive of Vietnamese GDP growth, is spurred by sliding inflation rate, growing credit rating and commodity exports.
He said that Vietnamese small and medium-sized enterprises (SMEs) are lack of capacity to integration into global value chains, adding that only 36 percent of the enterprises take part in production network oriented to exports, and 21 percent of the SMEs join the global supplying chain.
According to the report, GDP growth in the 10 ASEAN member states is expected to stand at 4.9% in 2015 from 4.4% in 2014. The figure is likely to go up to 5.3% in 2016, one year after the ASEAN Economic Community (AEC) is established.
A DB, based in Manila, is dedicated to reducing poverty in Asia-Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it now has 67 members, with 48 from the region.
US investors interested in business expansion in Vietnam
US-owned Intel Corporation recently announced plans to expand production in Vietnam to enable it to produce most of its chips here.
After unveiling its Haswell central processing unit (CPU) in 2014, Intel said the first Ho Chi Minh City-made CPU has shown Vietnam’s potential in the field of technology.
Haswell is Intel's codename for the fourth generation of processing chips found in nearly every laptop, desktop and mobile phone.
The company plans to produce 80% of CPUs for the global market in Vietnam by mid-2015, Sherry Boger, general director of Intel Products Vietnam, said.
In preparation for the expansion, the company has sent 105 Vietnamese engineers to its Malaysian factory for training.
Intel is just one of many US companies to increase investment and expand production in Vietnam.
Last November clothing company Hanesbrands opened its third factory in Vietnam. The US$15 million plant is expected to hire 5,500-6,000 workers.
Oil and gas giant Exxon Mobil Corp is preparing to make a massive investment in a gas-fired power complex in Vietnam.
Do Van Hau, who retired as CEO of Vietnam Oil & Gas Group (PetroVietnam) last October, said last year his company could reach an agreement in 2015 with Exxon Mobil for a US$10 billion natural gas and power project, the country’s biggest of its kind.
Exxon is interested in investing in a gas field, a pipeline to bring the gas to shore and a processing plant, Hau was quoted by Bloomberg as saying.
“ExxonMobil is in ongoing discussions with PetroVietnam and Vietnamese government agencies and businesses to evaluate the feasibility of developing central Vietnam’s natural gas resources,” the US oil company had said in a statement last August.
Talking about the reason for the trend of expansion by US firms, Nguyen Mai, chairman of the Vietnam Association of Foreign Enterprises, said that country is boosting investment abroad again amid a strong economic recovery.
Its economy is forecast to grow at 3.1% this year after 2.4% growth in 2014, according to the New York Times.
Between 2008 and 2012 the US government, to cope with unemployment caused by the economic recession, stopped supporting businesses that invested abroad and took fiscal stimulus measures to encourage companies to expand in the domestic market, Mai said.
The trend is also attributable to a shift by US companies from China, where labor costs are rising, to Southeast Asian nations, including Vietnam, he said.
Besides, US firms expect more opportunities as a result of the US-led Trans-Pacific Partnership (TPP), which is expected to be signed this year. US firms in Vietnam will then have easier access to countries that are signatories to the deal, with tariffs on Vietnamese exports to those markets reducing to near zero.
The TPP is expected to throw up more opportunities for Vietnamese firms to expand investment in the US.
They are competitive in fields like telecom and construction. Some Vietnamese firms in the US have won contracts for software development in Silicon Valley, Dang Duc Dung, former deputy chairman of the Hanoi Young Entrepreneurs, said at a recent conference.
Scott Thomas of Wolverine Worldwide, an American footwear manufacturer, said 75% of the company’s inputs come from China, but that would fall to 33% by 2020. Vietnam, which now supplies 14.5% of the inputs, would then fill the gap, he added.
Wages in Vietnam are equivalent to just 38% of that in China though workers here offer the same productivity and even higher skills in certain fields.
Being the country with the largest investment abroad in the past several years, the US is likely to become the top investor Vietnam, Mai, chairman of the Vietnam Association of Foreign Enterprises, said.
According to the 2015 ASEAN Business Outlook survey by the American Chamber of Commerce in Singapore that polled nearly 600 US firms, Vietnam is the second priority market for US firms’ future business expansion after Indonesia.
Two thirds of the surveyed firms expected profits to increase in 2014, and this rose to 82% for 2015.
Corruption was their biggest concern, with 69% of the firms saying they were not satisfied with the issue in Vietnam.
Mai said: “Corruption has affected Vietnam’s FDI inflows. If it is not resolved, Vietnam will become less attractive to foreign investors.
“Attracting investment from the United States is very important in the context that we want to attract higher quality projects. Obviously, corruption can be found everywhere in the world, but we should make more efforts to reduce it.”
The growth in US investment in Vietnam is not commensurate with the trade between the two sides, he said. Of the Association of Southeast Asian Nations (ASEAN) member countries, Vietnam is the US’S biggest trade partner. Trade between the two countries was worth some US$35 billion last year.
Vietnam ranked behind Singapore, Thailand and Indonesia in attracting US investment. By the end of last year the US, with nearly US$11 billion in registered capital, was the seventh biggest out of 101 countries investing in Vietnam, according to the Foreign Investment Agency.
“Initial interest from potential foreign investors too often does not materialize due to continued problems with corruption, human resource constraints, and the country's overly-complicated, restricted, and unclear licensing and regulatory environment,” Gaurav Gupta, chairman of the American Chamber of Commerce (Amcham) in Vietnam, said.
AmCham members look to the government to foster a more competitive environment where decisions are made faster and legal procedures are less complicated, rules are fairly enforced, and companies compete on their merits -- including for access to capital, land and opportunities, he said.
PetroVietnam feels concerned for impending FTAs
Vietnam’s oil giant PetroVietnam has just raised concerns over the country’s impending implementation of free trade agreements, claiming this could negatively affect budget contribution of the country’s first oil refinery at Dung Quat and the profitability of the group.
PetroVietnam recently estimated consumption at the Binh Son Refining and Petrochemical Limited (BSR) which manages Dung Quat oil refinery taking into account the country’s raft of free trade agreements and other international commitments likely to take effect during the 2015-2018 period.
According to PetroVietnam, the import tariff applied to BSR in setting the company’s tax rate as regulated in prime ministerial Decision 1942 is set based on current import preferential tariffs.
The Ministry of Finance, however, late last year enacted five circulars presenting special import preferential tariffs Vietnam needs to follow in order to meet its free trade agreements commitments during 2015-2018, such as Circular 165/2014/TT-BTC on the implementation of the FTA with the ASEAN.
PetroVietnam argued that the tariff rates enclosed to Circular 165 applied to imported petroleum products from ASEAN countries were set significantly lower than those set in current preferential import tariffs.
For example, in the tariff enclosed to Circular 165, petrol incurs 20 per cent import duty during 2015-2018 and diesel oil for engines subject to 5 per cent import duty in 2015, falling to zero per cent during 2016-2018.
Meanwhile, in the current preferential import tariff that the BSR currently applies, petrol is subject to 35 per cent import rate, diesel oil 30 per cent, liquefied petroleum gas (LPG) 5 per cent and PP resin 2 per cent.
“This means that BSR products would struggle to compete in the domestic market when other state-controlled petroleum import enterprises could import products of ASEAN origin with much lower import duties,” PetroVietnam claimed in a recent statement.
If BSR applies the lower import rates enclosed to Circular 165, PetroVietnam claimed it could leave a hole in Dung Quat oil refinery’s tax payment during the period.
The state-owned oil giant claimed this would leave a VND14.3 trillion ($668 million) tax hole this year, increasing to VND16.2 trillion ($759 million) annually during 2016-2018.
Once these lower rates were applied, PetroVietnam claimed it would need to subsidise part of the rates for BSR as regulated in Decision 1942.  
PetroVietnam estimated that if the oil price stood at $60 per barrel, its payment would be VND1.06 trillion ($49.7 million) this year, increasing to VND3 trillion ($140 million) each year during 2016-2018 as subsidy for BSR.
“This could seriously affect the capital balance of PetroVietnam when handing operations during the period,” said Ninh Van Quynh, PetroVietnam’s deputy general director.
Vingroup launches into organic farming
Vingroup has announced a strategic investment into the agriculture sector of Vietnam with the formation of a wholly owned subsidiary, VinEco, infused with VND2,000 billion of charter capital.
Vingroup is excited to be able to expand our presence into the agriculture marketplace and become accessible to the nation’s farmers, a company spokesperson said in making the announcement.
We have witnessed change all over Vietnam and feel that the time is right to get on board with partners in a continued common goal of better farming through better soil cultivation methods.
Biological farming is good for the environment, our food supply and leads to healthier food on all our tables. We will offer a full range of fresh organic fruits and vegetables for the market in full compliance Viet GAP and Global GAP standards at a reasonable price for every home.
Our goal is to bring modern agricultural technology to the nation and the most innovative production processes in order to optimize efficiency and ensure quality agricultural products, which we will sell through our supermarkets.
We also plan to provide Vietnamese farmers training in order to develop a team of highly specialised agricultural experts capable of applying the most advanced cultivation technology, the spokesperson said.
Japan pushes eco-urban area growth partnership
The Japanese government will help Vietnam develop and operate its eco-urban areas through the use of new technologies, credit and provision of training and sharing of experiences, according to Japanese experts in a recent meeting in Hanoi.
In a seminar to discuss on eco-city development and carbon reducing technologies, Japanese experts confirmed  that assistance from  Japan was aimed from 2020 to 2015, with the focus to transfer the experiences and operating practices developed in Japan over the last decade while taking into account Vietnam’s specific characteristics.
According to Do Viet Chien, director of the Urban Development Department under the Ministry of Construction (MoC), the cooperation programme between Vietnam and Japan to develop eco-city and non-carbon urban areas has been in implementation for many years.
The focus of this programme is on achieving a greener living environment and applying public infrastructure solutions, transferring technologies for water and solid waste treatment, the promotion of LED lighting and smart-biking systems and to explore how to provide credit for building environmentally-friendly infrastructure network.
Japanese specialists spoke about Japan’s eco-urban area standards, applied technologies and shared ideas about how to bring technologies like solar energy to Vietnam’s urban areas.
“Co-operation with Japan has seen more finance being pumped into eco-urban areas and cities in Vietnam”, Chien said.
The issue of developing eco-cities in Vietnam has long been a topic of discussion and Vietnamese government and companies.
During the past years, many Japanese private developers led by the Japanese Conference for overseas Development of Eco-cities (J-CODE), have visited Vietnam to seek opportunities to co-develop eco-cities.
According to Bui Manh Tien, deputy director of the Hanoi Architecture and Zoning Department, Hoa Lac Urban Area, Phuc Tho and Quoc Oai eco Towns, are all potential sites for Japanese investors to consider.
Japanese developers are reported to be keeping an eye on potential project sites in Binh Duong New City in the southern province of Binh Duong and in Ho Chi Minh City.
Vietnam has experienced a rapid urbanisation process. According to the MoC, as of this year’s end, the country will have 850 cities and this figure will reach 1,000 in 2015. With the fast increasing population in urban areas, increasing services and processing waste are offering major challenges.
Hanoi, Ho Chi Minh City, Haiphong, Danang, and Can Tho are already targeted cities for eco-development. Other pipelines projects are mapped in other province such as Bac Ninh, Thai Nguyen, Dong Nai, Binh Duong, and Hoa Binh.
According to a prime ministerial decree issued in April 2009, Vietnam’s socio-economic development master plan until 2015 must develop urban system with modern, high-quality and environmentally-friendly technology and infrastructure.
VinaCapital partners-up on new South Hoi An deal
After over two years of searching, Vietnam-focused asset management firm VinaCapital has finally found prestigious partners including Macau-based SunCity Group and Hong Kong-based Chow Tai Fook Enterprises Ltd to replace Malaysia’s Genting Group for their proposed US$4 billion integrated casino resort in Quang Nam province.
A source at the Chu Lai Economic Zone Authority, Quang Nam, said the provincial committee would issue an amended investment certificate for this project, officially recognizing SunCity Group and Chow Tai Fook Enterprises as stakeholders working in conjunction with VinaCapital.
The Hong Kong-based Chow Tai Fook Enterprises is engaged in property development, hotels, casinos, transportation, and jewelry. Meanwhile, the SunCity Group is a casino operator at the world’s largest casino hub Macau.
“They completed the deal and are ready to resume this long-delayed project,” said the local source.
However, as yet, the details of SunCity and Chow Tai Fook’s role in the project have not been revealed. If the investors receive a new investment certificate this week and resume construction on the project in the coming months it will confirm a statement made by Don Lam-co-founder and CEO of VinaCapital-to the media last October in which he stated that construction on the development would begin in mid-2015.
South Hoi An is the largest tourism property project in the popular holiday destination of Quang Nam, already home to several luxury coastal resorts.
The project was initially developed by VinaCapital and Genting Malaysia Berhad and was intended to include five-star hotels, villas, and gambling facilities.
But in September 2012 Genting suddenly announced its withdrawal from the project during site clearance work, forcing VinaCapital to find other partners to jointly develop the project.
To make the project more attractive, VinaCapital proposed the local authorities reduce the site to 1,000 hectares from 1,538 hectares. The developer also asked permission to extend the project’s lifetime to 50 years.
In addition, the developers also asked for permission to expand the scale of the gaming facility in the project. Specifically, they want 90 gaming tables in the first phase of the project, a 20-table increase on the current investment certificate, and a number equal to those provided at Ho Tram Strip in Ba Ria-Vung Tau province.
Over the past two years, VinaCapital has tried to find partners that have casino industry experience. US-backed Peninsula Pacific expressed interest in the project at one point, but eventually withdrew. As such, the completed deal with SunCity Group and Chow Tai Fook Enterprises comes as some relief to VinaCapital.
“We expect the new investors can push the development forward because both of them are experienced industry players,” said the source at Chu Lai Economic Zone Authority.
Vietnam firms reap success through branding
The Ministry of Planning and Investment (MPI) recently unveiled that as of December 31, 2014 it had approved 930 outward foreign direct investment (FDI) projects registered at VND14.85 billion.
In calendar year 2014 alone, the MPI reported it approved domestic businesses request for 90 new and supplementary outward investment projects calling for total investment of US$4.93 billion.
According to the report, Vietnamese businesses chiefly focused on investment projects in telecommunication sector followed by the agro-forestry-fishery sectors.
It also reported that many Vietnamese businesses are achieving a high level of success competing in overseas markets.
Vinamilk – Vietnam’s largest milk producer – is one of the success stories. With an aggressive overseas marketing campaign aimed at developing its brand, the company reportedly is on target to realising US$3 billion in overseas revenue by 2017.
One of its more high profile projects is a US$3 billion dairy project in Poland, which the firm considers as the gateway to the European market. The company also has a controlling (51%) interest in a US$23-million dairy plant in Cambodia for which it recently announced expansion plans.
Military-run telecom group Viettel has also had success in the Cambodian market. In 2009 it initially dumped millions into a Met-fone project in its Southeast Asian neighbour.
With a well-thought out and innovative marketing plan it is well on its way to becoming a major player in the international telecommunications and information industry.
Last year, the group launched a number of telecom services in Peru and Cameroon. So far, Viettel has been conducting business in nine countries and has achieved an average growth rate of 25% in recent years with revenues approximating US$1.2 billion annually.
Leading market analysts have said the key to the success of the aforementioned three companies is that they implemented a strategic marketing campaign aimed at building their brand.
In an integrated world, Vietnamese companies need to make the case to the consumers who they want to buy their product that it is high quality and distinctively different than all of the other products.
Companies that can’t make the case that their product is uniquely different and innovative can’t compete are at a severe disadvantage in a highly integrated marketplace.
The importance of building a brand is a lesson that spills over to competing in the domestic marketplace as well.
Take the case of Da Lan toothpaste, Tribeco beverage and Bibica confectionery. All three of these companies failed to brand their products and instil in the consumer a brand loyalty.
That mistake opened the door to companies like Uni-President of Taiwan and Lotte of the Republic of Korea to move in and takeover.
On the other hand Bidrico strategically marketed their brand both at home and abroad in since it was first establishment in 1995. At present, Bidrico’s products are available at over 100 supermarkets nationwide and exported to more than 15 countries and territories-including the US, Germany, Japan, Myanmar, Laos, and Cambodia.
ITA RICE is another successful model of branding that other domestic businesses should follow. The company invested heavily in its brand and it is paying huge dividends.
Today the company’s name is synonymous with Vietnamese Good Agricultural Practices (VietGAP) and Global GAPand internationally-recognised set of farm standards that follows GAP.
The firm pays meticulous attention to ensuring food hygiene and safety and increasing product quality by applying modern farming techniques and advanced technology for post-harvest preservation.
Lien Viet Post Bank is another prime example of the importance of branding as its name conjures up an immediate image of a company with a strong corporate social responsibility (CSR) and that is what branding is all about.
Construction technology new to Viet Nam piles on the advantages
An urban-friendly technology from Japan that is also friendlier to the environment is expected to make installation of steel piles for bridges and flyovers a much quieter, stronger and cheaper process.
The NS Eco-Pile, a screwed steel pile developed by Japanese firm Nippon Steel and Sumikin Engineering, was transferred to a Vietnamese partner yesterday.
It has helical blade welded of the edge which performs the digging as it is rotated, driving the pile into the ground like a wood-screw.
Takashi Takeuchi, Director of the Japanese firm's Building Construction and Steel Structures Division, said the technology has many advantages that matches urban conditions in Viet Nam.
First of all, it can be used in narrow areas and does not require a big construction site and also produces lower noise and vibrations compared to technologies currently in use, he said.
He cited the production of lower dust and total avoidance of waste soil as other significant advantages.
Do Le Khang, Deputy General Director of the Ha Noi-based Thang Long Construction Joint Stock Corporation, which received the technology, said the NS Eco-Pile was an advanced technology highly suitable for constructions in Viet Nam's urban areas like Ha Noi and HCM City.
"Once constructed, the area occupied is half that of other existing technologies. It also shortens the construction period, which means the total construction cost can be lower," Khang said.
He said in other technologies, including the currently popular bored pile, the construction of one pile may take 2.5 to three days while with the new technology, the construction of five piles will take just 1.5 to two days.
He also emphasised the new technology's recycling capacity, saying it could be removed and recycled as temporary piles, which means it was very convenient for building temporary bridges for major urban constructions in the country.
Speaking at the handover ceremony yesterday, Deputy Transport Minister Nguyen Ngoc Dong said that the ministry welcomed all new technologies that were eco-friendly and suited Vietnamese conditions.
Three additions to vital projects list
Deputy Prime Minister Hoang Trung Hai has agreed to add three more projects to the list of key transport projects, given their significance for socio-economic development.
The three projects are: the Deo Ca Pass Tunnel (including sub-projects), the Tan Vu – Lach Huyen Highway and upgrading of the Cho Gao Canal.
Nguyen Hoang, Director of the Planning and Investment Department of the Transport Ministry, told Viet Nam News that the projects' inclusion in the list would require all agencies concerned to step up efforts to ensure that they are completed on time.
The four-lane Deo Ca Pass Tunnel on National Highway 1, connecting Phu Yen Province and Khanh Hoa Province, will have a total length of 13.4km.
The project combines several components including the Deo Ca tunnel itself (3.9km), the Co Ma tunnel (0.5km) and approach roads and bridges (totaling 9km).
The project is slated for completion in late 2016 or early 2017.
The tunnel will shorten the travel distance between either side of the Deo Ca Pass by half and the travel time by one-fourth, project documents say.
The project to build the 15.km Tan Vu-Lach Huyen Highway last February. It will run from Cat Hai Island to Hai Phong City through the Dinh Vu peninsula, and connect the Lach Huyen Port with the Ha Noi – Hai Phong Expressway as well as Highway 5.
The project to upgrade the Cho Gao Cannal by dredging and embanking will run for 28.68km, starting at the Vam Co River convergence and ending at the Tien River convergence.
The VND2.263 trillion (US$105 million) project aims to facilitate rising traffic on the two major rivers.
Vinh Phuc Province chases business investments
The northern province of Vinh Phuc is seeking investment in a bid to develop its local industries.
According to a report from the provincial Department for Planning and Investment, Vinh Phuc has licensed five foreign-invested projects with total registered capital of more than US$48.37 million in the first three months of 2015.
The province has provided investment certificates for three domestic projects, with total registered capital of more than VND1.5 trillion ($73 million).
To date, the province has been home to 189 foreign-invested projects with total registered investments of more than $3.1 billion and 578 domestic ones worth more than VND41 trillion ($1.9 billion).
Looking forward, the province will help investment-promoting activities to potential overseas markets that boast advanced technological and engineering capabilities.
Capital city retailers enjoy strong first quarter sales
Sales of goods and services in the capital city hit VND442 trillion (US$21 billion) in the first quarter, an 11.9 per cent rise compared with the same period last year, according to vietnamplus.vn.
Retail earned more than VND104 trillion ($4.9 billion), an annual increase of 11.7 per cent.
Retailers in the private sector sold the most goods and services, followed by foreign-invested enterprises and state-owned businesses.
Source : VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

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