BUSINESS IN BRIEF 21/8 Jan-Jul trade deficit with China at US$19.4 billion HCMC - Vietnam had a trade deficit of US$19.4 billion with China in the first seven months of this year, according to data of the General Department of Customs. The department was cited by the local news site VnExpress as reporting that in the year to July 31, Vietnam exported US$9 billion worth of products to China but imported goods worth nearly US$28.4 billion from the northern neighbor. Goods imported from China made up 30% of Vietnam’s total in January-July while shipments to China accounted for only 10% of Vietnam’s total exports. The trade deficit with China was equivalent to 67% of the figure recorded in all of last year. Materials for apparel and footwear, steel, machines and equipment, phones and accessories and computers were the major import items from China in the period. Vietnam spent US$696 million buying over 18,000 autos from China, mainly trucks, tripling the volume in the first seven months of last year. China remained a major importer of Vietnamese farm products including vegetables, rice and seafood in the period. Farm produce exports to China had neared US$2 billion as of July 31, nearly unchanged from the year-ago period. Overall, Vietnam’s exports reached some US$91.7 billion in January-July, up 9% year-on-year. Meanwhile, the country spent nearly US$95.3 billion on imports, so its trade deficit stood at around US$3.5 billion in the first seven months. The trade deficit is equivalent to 3.8% of the country’s export turnover and within 5% of the country’s total exports set by the Government. Prudential announces fifth bonus payment Prudential Vietnam has announced the distribution of a new special bonus totaling VND43 billion to 21,000 long-time customers with participating policies. This bonus will be added to contracts upon maturity or interest payment in 2014. This is a result of Prudential Vietnam’s operations and a gift for its long-term customers. Prudential Vietnam is the only life insurer in Vietnam giving special bonus to clients. The enterprise has announced five rounds of bonus distribution in 2007, 2012, 2013 and 2015 with the total amount of over VND2.2 trillion. The firm has won over four million contracts over the past 15 years. DHL extends interconnecting road network to Vietnam DHL Global Forwarding has extended its integrated road freight network to connect Singapore, Malaysia, Thailand, Vietnam and China to help customers save cost and time for their goods transport and delivery. The global air, sea and road freight services provider said in a statement that the network was delivered under DHL AsiaConnect’s less-than-truckload service and links Singapore, Penang, Bangkok, Hanoi and Shenzhen. It offers a seamless interconnecting delivery service with improved time and cost efficiencies, and assures a consistent level of service quality regardless of the destination. “DHL AsiaConnect was launched in 2011 connecting Singapore, Malaysia and Thailand and now links to the existing Vietnam-China connection,” the statement said. DHL explained road freight offers an alternative to other transportation modes, providing a more cost-effective option than air freight as well as faster shipment than sea freight. The company gave an example that the transit time for ocean freight between Shenzhen and Bangkok takes around 13 days while the road freight option only takes five days. Air freight takes a shorter transit time of four days but will cost significantly more. Kelvin Leung, chief executive officer of DHL Global Forwarding Asia Pacific, said DHL’s integrated road freight network touches the five crucial Asian markets, which are expected to play prominent roles in China’s ‘One Belt, One Road’ and other initiatives in the region such as the ASEAN Economic Community. Leung said DHL is confident that intra-Asia trade will continue to grow and its road freight network stands ready to support the potential trade expansion from these initiatives. Clement Blanc, managing director of DHL Global Forwarding Vietnam, said Vietnam has seen rapid growth over the past decade, with gross domestic product (GDP) almost quadrupling from under US$50 billion in 2004 to US$186.2 billion last year. “Our customers need to ensure they can tap this development. With our AsiaConnect LTL service, all of our clients, including small and medium enterprises, have added flexibility and reduced lead time even with small shipment volumes so they can look to DHL for continuous support throughout the lifecycle of their business growth,” Blanc said. DHL’s road freight network features GPS-equipped trucks to ensure customer goods are monitored for safety and tracked every step of the way. Road vehicles are also armed with anti-hijacking tools. Many localities struggling with agricultural restructuring Two years after the Prime Minister approved a national agricultural restructuring scheme, 16 provinces and cities have yet to draw up their own restructuring plans to improve productivity in the sector. The scheme with a focus on increasing added value and sustainable development for the agricultural sector has borne initial fruit, heard a review meeting on two years of agricultural restructuring in Hanoi last week. Figures indicated that the proportion of added value in total agricultural production value picked up from 57% in 2010 to nearly 64% in 2012, 64.7% in 2013 and 67.8% last year. However, Minister of Agriculture and Rural Development Cao Duc Phat said despite the initial positive result, agricultural restructuring had just begun and had yet to bring about drastic change and sustainable growth for the sector. Private and foreign investments in agricultural restructuring have remained limited. Besides, there are big problems with expanding production scale and building a strong processing industry to increase the added value of agricultural products. The major causes of the problems, according to the minister, are slow change in the mindset of local leaders and little attention paid to agricultural restructuring. “Sixteen provinces and cities have not passed their agricultural restructuring plans. Some others have mapped out their plans but have not implemented them,” Phat said. Pham S, vice chairman of Lam Dong Province, told the meeting that labor productivity in the agricultural sector remained low and finding markets for local farm produce was a big challenge. Many Vietnamese enterprises are still grappling with Vietnam’s deeper international integration. Agricultural farm produce consumption contracts between farmers and enterprises in the past time have not been well carried out, affecting farmers’ incomes. Deputy Prime Minister Hoang Trung Hai said Vietnam had not been able to make the most of the world’s huge demand for farm produce. “During my recent visit to Africa, I found the continent was a big market but Vietnamese farm products have not made their way there,” Hai said. Vietnam’s further international integration also posed many challenges and the local agricultural sector would lose if it is unable to improve its competitiveness quickly, Hai warned. Phat requested relevant ministries and agencies as well as localities to coordinate in drafting proper policies to attract more investment in the sector. In particular, the Ministry of Finance was asked to review and lower added-value tax on agro-forestry-aquaculture products, and offer preferential corporate income tax for enterprises in the sector, especially those in remote and rural areas. Meanwhile, the Ministry of Industry and Trade is expected to propose policies to promote agro-aqua-forestry exports and help enterprises expand markets and manufacturers to turn out machines and equipment for farming and processing. Phu Yen, Lam Dong to scale down IP areas Phu Yen and Lam Dong provinces will reduce the areas of six industrial parks (IPs)  in line with their new master zoning plans for development of industrial parks until 2020 as approved by the Prime Minister. As for the Central Highlands province of Lam Dong, the Prime Minister approved scaling down the areas of Phu Hoi IP from 174 hectares to 109 hectares, Loc Son from 185 hectares to 183 hectares and Tan Phu from 415.49 hectares to 328 hectares, and renaming Tan Phu Urban-Industrial Park as Tan Phu Agriculture Park. Regarding the central coastal province of Phu Yen, the Prime Minister agreed on reducing the areas of Hoa Hiep 2 IP from 221 hectares to 106 hectares; Hi-tech IP from 370 hectares to 251.6 hectares and An Phu IP from 100 hectares to 68.4 hectares. The Prime Minister also approved removing Multi-functional 1 IP in Phu Yen Province from its zoning plan for IPs but adding Dong Bac Song Cau 2 IP covering 82 hectares. In 2012, the Prime Minister told localities to suspend establishing new industrial zones until further notice. The Ministry of Planning and Investment reported in March that Vinh Phuc, Hai Duong, Hung Yen, Ba Ria Vung Tau, Long An, Khanh Hoa and Ninh Thuan had planned to invalidate the licenses of many industrial parks due to the absence of tenants and site clearance problems. As of 2014, 295 industrial parks had been approved with a total area of nearly 84,000 hectares including 56,000 hectares or about 66% of the total acreage for lease to tenants. Of the approved IPs, 212 IPs covering 60,000 hectares had put into operation and 83 spanning 24,000 hectares were under site clearance and construction. ILRI helps Vietnam develop husbandry sector The International Livestock Research Institute (ILRI) will support Vietnam to develop the value chain and gene sources, and raise productivity to enhance the competitiveness of Vietnamese meat products. The areas of cooperation between the two sides were detailed at the signing ceremony of a memorandum of understanding (MOU) between the Ministry of Agriculture and Rural Development and ILRI in Hanoi yesterday. Shirley Tarawali, deputy general director of ILRI, said the institute would help Vietnam apply modern technologies and methods to increase the value of meat, milk and eggs to meet local demand and achieve sustainable development. She said Vietnam is a potential consumption market for husbandry products thanks to its large population and the growing middle-income citizens. However, the domestic husbandry sector is coping with mounting pressure from imported products. Therefore, with ILRI’s aid in technology application and gene sources improvement, Vietnam’s husbandry sector will be able to improve its competitiveness. Regarding food safety, ILRI will coordinate with Vietnam to evaluate the country’s value chain to remove risks related to food safety. The MOU outlines a target for sustainable development in the agriculture sector by combing the husbandry and farming fields. Deputy Minister of Agriculture and Rural Development Vu Van Tam told the MOU signing ceremony that technology is among the key solutions to restructure the agriculture sector. Therefore, the ministry has paid much attention to cooperation with international organizations to study and apply new technologies. Tam added the local husbandry sector has faced rising pressure as a result of globalization as Vietnam must open up its market to foreign husbandry and milk products in line with the free trade agreements signed with partners. To gain a better competitive edge, the nation has to use advanced technologies and partner with international organizations. Since the establishment of relationship with ILRI in 2007, the agriculture ministry has cooperated with the institute in some research projects and programs in the husbandry sector, with a focus on the value chain for pig farming, gene sources, food safety and animal feed, among others. New research projects of ILRI in Vietnam are related to climate change adaptation in pig and poultry farming. This is one of the targets of the ministry’s restructuring plan for the husbandry sector. Key northern economic area to be converted into tourism centre The key northern economic region – including Hanoi, Hai Phong city, and the provinces of Vinh Phuc, Bac Ninh, Hung Yen, Hai Duong and Quang Ninh – will be developed into a leading tourism centre in the country with various highly competitive products, reinforcing the national cultural identity. According to a recently approved master plan on developing culture, family, sports and tourism in the area by 2025, tourism in the zone will be a spearhead economic sector. Hanoi , Hai Phong and Quang Ninh will become cultural, sport and tourism centres of the nation, thus promoting the region’s development and its connection with others nationwide and with international counterparts. The master plan focuses on preserving and upholding tangible and intangible cultural heritage values, and embellishing and upgrading regional relic sites. Movements to build new-style rural area and modern urban areas will also be promoted. The plan aims to construct and upgrade cultural and sporting centres, residential quarters, new urban areas with high-standards, and industrials parks and export processing zones with leisure centres for children. The region will also intensify promotion activities within the country and in foreign markets while developing specific tourism products such as cultural and spiritual tourism and sea and island-based tourism. The plan targets the strengthened development of a number of national tourist sites including the Vietnamese Ethnic Groups Culture and Tourism Village, Ba Voi-Suoi Hai, Huong Pagoda and Thang Long Royal Citadel in Hanoi; Tam Dao in Vinh Phuc; Con Son-Kiep Bac in Hai Duong, Cat Ba and Do Son in Hai Phong, Ha Long, Van Don, Tra Co and Yen Tu in Quang Ninh; and Pho Hien in Hung Yen. By 2025, ihe region aims to greet around 9 million international tourists and serve over 26 million domestic visitors with revenue reaching 170 trillion VND (7.65 million USD). Better business enables banks to hire another 2,000 workers Better business performance in the first half of this year has helped many commercial banks enlarge their human resources. According to the latest financial reports from six large banks, namely Vietcombank, Vietin-Bank, Exim-bank, Military Bank, ACB and Sacom-bank, the number of their employees surged by 2,234 in H1, more than the total increase of 2,112 reported in the entire last year. Sacombank topped the list with a 5.6 per cent increase or 712 employees added in the period. ACB and Military Bank followed with an addition of 471 and 399 employees, respectively. Employees' monthly salary also rose by 7 per cent against the same period last year on an average, up from VND15.6 million (US$718) in H1 last year to VND16.7 million ($769) in H1 2015. With VND18.7 million ($861), Vietcombank's employees gained the highest monthly salary. However, the rate remained unchanged at the same level as last year's. Compared with the same period last year, the monthly salary of employees in Military Bank and Sacombank came down from VND18.3 million ($843) and VND16 million ($737) to VND17.5 million ($806) and VND15.4 million ($709), respectively. According to the financial reports, the banks' total pre-tax profit in the first half of the year rose 2.1 per cent against the same period last year to VND11.68 trillion ($538.24 million). It was reported that increasing provisional funds whittled away significant profits of the banks in the first half of this year. It was estimated that 12 banks, including the ones cited above, had to provide up to VND14.414 trillion ($664.23 million) for provision in H1, accounting for 46 per cent of the banks' total profits. According to the State Bank of Viet Nam, the increase in provisional funds was due to new regulations related to debt classification and risk provision, such as Circular 09 that came into effect early this year. Under the new regulations, aimed at helping the Government make an accurate and adequate appraisal of the lenders' non-performing loans (NPLs) to control bad debts better, more loans have become NPLs, and banks need more provisional funds to support the risk of bad debts. Petrolimex reports 172% rise in profits Despite a loss in revenue, the Viet Nam National Petroleum Group (Petrolimex) reported after-tax profits of VND1.125 trillion (US$50.8 million) in the second quarter, an increase of 172 per cent over the same period last year. The group released its consolidated financial statement on August 15, saying that it had reached VND 43.565 trillion ($1.97 billion) in net revenue, down 22 per cent compared to the same period last year. However, it said the cost reduction had helped it gain better after-tax profits for the second quarter. Similarly, though sales in the first half of the year were VND81 trillion ($3.66 billion), falling 20 per cent over the same period, the after-tax profits reached VND1.586 trillion ($71.7 million), as much as 137 per cent higher than in the same period last year. The group recorded VND124 billion ($5.6 million) in after-tax profits, and its joint ventures and affiliates, as much as an increase of 33 per cent over the same period last year. The report said the group's financial costs had risen by 54 per cent, and the cost of sales and administration expenses had slightly increased by 1 and 8 per cent, respectively. The group has charter capital of VND10.7 trillion ($484 billion) and 1.07 billion shares traded in the over-the-counter market. Established in 1996, Petrolimex is one of 19 wholesale fuel traders in the country. With 27 joint ventures and affiliates, it now holds nearly 50 per cent of the retail market. Petrol prices this year have risen four times and fallen five times. The price of one litre of the most popular fuel, petrol RON 92, is VND1,420($0.06) higher than the price at the end of 2014. VN imports more Australian cattle Viet Nam was the second largest live cattle importer of Australia in the fiscal year 2014-15 with 309,505 heads, up 136 percent, according to the Meat & Livestock Australia Limited (MLA)'s website on August 13. During the period starting July 1, 2014, Australia exported a total of 1.38 million heads of cattle, up 22 percent compared to a year earlier, and brought home US$1.4 billion, a 29 percent rise. Indonesia continued to be the largest importer with 746,193 heads last year, representing a 20 per cent increase. According to the Ministry of Industry and Trade, Viet Nam consumes meat from about 4,000 cows a day. The ministry said in recent years, Viet Nam had reached a strong growth in beef imports from the US, Australia and Japan. The Livestock Department under the Ministry of Agriculture and Rural Development said last year, Viet Nam imported 150,000 heads of cow from Australia for domestic consumption and some thousands of heads from Thailand, Laos and Cambodia. The department said the import value of beef to Viet Nam was estimated to reach $300 million this year, $50 million higher than last year. Since May of 2015, Viet Nam has allowed businesses to import boneless beef under 30-month-old from France, the Ministry of Agriculture and Rural Development has announced. PV Gas value plunges as oil slumps A sharp decline in global oil prices over the past year has helped wipe out almost US$7 billion worth of PV Gas's (GAS) market capitalization, as investors eye the company's falling revenue. Shares of GAS have fallen more than 60 per cent since last August and more than 17 percent since July 23. The stock closed yesterday at VND49,300 ($2.26), the lowest in the company's trading history, from a peak of VND126,000 ($5.78) on August 28, 2014. The company's market cap yesterday fell to VND93.4 trillion ($4.3 billion). West Texas Intermediate traded below $42 a barrel early yesterday on the New York Mercantile Exchange, down 60 per cent from its peak of over $106 a barrel on August 1, 2014. GAS is also no longer the largest company traded on the HCM Exchange, relinquishing the top spot to Vietcombank (VCB) on June 1. Last week, the company said revenue slid to VND31.3 trillion ($1.4 billion) in the first half of this year, down 10 per cent year-on-year. Its net profit also dropped 18 per cent during the same period to VND5.34 trillion ($245 million). Earlier this year, PV Gas said it expected revenue of VND69.54 trillion ($3.2 billion) and a profit of VND11.53 trillion (nearly $529 milllion) for the whole year, based on the assumption that oil prices would average about $100 a barrel in 2015. GAS is the sole gas distributor in Viet Nam. It buys gas directly from owners and sells to power plants (consuming 83 per cent of dry gas) and fertiliser and industrial companies. Budget deficit prompts spending crackdown Faced with a large deficit, the government is cracking down on the usage of the state budget. Last week, the Ministry of Planning and Investment (MPI) submitted a draft prime ministerial decision to the National Assembly Standing Committee, regarding principles and norms for allocating development capital sourced from the state budget for the 2016-2020 period. Under the draft, state budget capital will be prioritized for public-private partnership projects, while also serving as a contribution to projects funded with official development assistance (ODA). It will also be used to pay off debts for capital construction and pre-paid sums. Such capital will also be invested in state-funded projects due for completion before December 31, 2014, but suffering from capital shortages, and unfinished projects from 2011-2015, which will be shifted to the 2016-2020 period. Also, such capital will be used for new projects meeting all investment procedures and counter funding. “Currently, while depending on the government’s budget, many localities have approved too many projects, and have increased capital for their existing projects without taking into account their financial contribution. This has caused delays for projects,” said Deputy Minister of Planning and Investment Nguyen Chi Dung. According to rough statistics from the MPI’s Department of National Economic Issue, total demand for capital from ministries, sectors, provinces and cities for 2016-2020 was about US$167.7 billion, with 74% to be sourced from the state budget, and the rest from ODA. However, after re-checking these figures, the MPI found that they were grossly exaggerated by as much as 30%. Accordingly, the total demand for capital was reduced to US$107.34 billion, with 73% set to come from the state budget, and the rest from ODA. Also according to initial statistics, the total demand for government bound-funded capital from ministries, sectors, provinces and cities for 2016-2020 was estimated to be US$70.4 billion, with 89% for new projects, and the remainder for projects that have already been provided with capital. However, the MPI’s scrutiny of these figures revealed that the real demand was only US$65.96 billion, with 93.3% for new projects. Meanwhile, the government can issue only about US$9.34 billion in the 2016-2020 period, with nearly 50% to be allocated to the transport sector and a quarter to be injected in the irrigation sector. According to the MPI, this year’s first seven months saw a budget deficit of about US$ 5.37 billion cause by a reduction in state revenue and a rise in expenditure. The state budget woes have forced the government to issue US$5.37 billion in bonds. RoK investment in Vietnam rises 82% Investments in Vietnam by businesses from the Republic of Korea (RoK) in the first six months of this year rose 82.2% year on year, said a report on the Sai Gon Giai phong newspaper. Vietnam together with the United States and Singapore reported the highest growth rates of RoK investments during the review period compared to other destinations. RoK investments in Singapore surged 161.6% on a yearly basis, while the rate recorded in the US was 20.5%. The newspaper added that the high growths were attributable to stable economic recovery in the US as well as several Asian countries in the context of expanding overall global investments. Overseas investments by businesses in the East Asia economic power totalled US$17.5 billion during the first six months of this year. Seminar highlights sustainable lobster farming Sustainable lobster farming across the central region was the focus of a seminar held in Nha Trang city, the central coastal province of Khanh Hoa on August 16. Fifty participating scientists shared their research studies on state management, markets, diseases and breeding sources, among others. According to the Directorate of Fisheries under the Ministry of Agriculture and Rural Development (MARD), caged lobster farming has thrived along the south central coast since 2000 with a total of more than 53,000 cages and an annual yield of nearly 1,600 tonnes. Leading the region, Khanh Hoa is home to about 28,500 cages and its production exceeds 880 tonnes each year. However, issues such as the small-scale, spontaneous animal breeding and uncontrolled diseases in some localities are creating difficulties for the sector and negatively affecting the surrounding environment. Lobster prices are declining as the products are primarily consumed domestically or exported to China. Pham Khanh Ly, Deputy Head of the MARD’s Aquaculture Department, said advanced technology is essential to boost yield and reduce environmental damage. Concerning lobster overexploitation, Head of the Institute of Oceanography Vo Si Tuan proposed establishing marine sanctuaries to help the species reproduce. A representative from the Phu Yen Centre for Breeding and Aquaculture Techniques said it is necessary to set up an organisation to protect the rights of lobster producers. Travel in HCM City to be stable ahead of National Day Travel in Ho Chi Minh City in the run up to the 70th National Day (September 2) should only increase slightly from normal days, local bus terminals forecast. They ascribed the almost unchanged passenger volume to the fact that this year’s National Day will fall on a Wednesday and people will have only one day off. The Mien Tay (Western) Bus Terminal predicts the amount of passengers it will serve to be equal or down 3-5 percent the holiday in 2014, peaking at 43,000 – 45,000 a day on September 1 and 2. Routes that can expect traveller increases include those from the southern hub to the nearby provinces of Tien Giang, Ben Tre, Tra Vinh and Dong Thap, it said, adding that the terminal still plans to put additional 40-seat buses into use to ensure smooth travel on peak days. The Mien Dong (Eastern) Bus Terminal also foresees a comparable or slightly reduced clientele ahead of the National Day. The busiest time will be the afternoon and evening of September 1 while most of the passengers will choose short and medium routes to famous tourist destinations like Vung Tau, Da Lat, Phan Thiet and Nha Trang cities, the facility said. Export-import inspection exposes flaws Simplifying specialised inspections of exports and imports was a dominant discussion topic during a seminar in Hanoi on August 17, which aimed to simplify administrative procedures in customs. The move was intended to realise the government’s resolution on improving the business climate and national competitiveness. According to the General Department of Vietnam Customs (GDVC), legal regulations involving specialised inspections are insufficient and fall short of international standards. Currently, there are 259 legal documents specifying quality management, including 19 laws and decrees, 54 decisions and directions issued by the Government and Prime Minister and 186 circulars and decisions by ministries and agencies. Many opinions raised concern that overlapping regulations are resulting in customs clearance delay and business cost increase. Pham Thanh Binh, an expert from the US Agency for International Development (USAID)’s Governance for Inclusive Growth project, said ministries have different interpretations of several laws, leading to varying applications. He suggested adopting risk management and digitalisation while making changes to building goods portfolios. Representatives from the ministries of industry & trade, public health and agriculture & rural development also took note of troubles arising from specialised inspection process and pledged to address them. Ngo Minh Hai, Deputy Director of the GDVC’s Department of Supervision and Control, said rallying public resources for specialised inspections is also a key solution to saving State resources. The event was co-hosted by the GDVC and USAID. Vietnam Airlines announces promotional programme Vietnam Airlines announced its ‘Daily Promotion’ programme on August 17, which applies to a number of domestic flight routes on the occasion of the 70th anniversary of the National Day. Under the programme, lasting from August 20 through December, customers will have a chance to purchase one-way tickets on routes between HCM City and Buon Me Thuot for 555,000 VND (25 USD); Hanoi - Chu Lai for 599,000 VND; HCM City – Da Lat for 666,000 VND; and HCM City – Nha Trang/Quy Nhon/Pleiku/Hue for 699,000 VND. Other promotional deals include HCM City – Da Nang/Phu Quoc, Hanoi – Da Nang and Da Nang – Hai Phong for 799,000 VND; HCM City – Thanh Hoa/Vinh/Dong Hoi and Hanoi – Quy Nhon/Tuy Hoa for 999,000 VND; Hanoi – Nha Trang/Can Tho/Pleiku/Buon Me Thuot and HCM City – Hai Phong for 1,099,000 VND; and Hanoi – Phu Quoc/HCM City for 1,199,000 VND. The prices above do not include taxes and fees, are based on terms and conditions and are not applicable during peak periods.- Vegetable oil imports expected to exceed 800,000 tonnes Vietnam’s total vegetable oil imports from the 2014-2015 marketing year are forecast to stand at 820,000-830,000 tonnes, as revealed in a study by the Vietnamese office of the US Department of Agriculture, reported the Sai Gon Giai Phong newspaper. There are currently 37 domestic enterprises producing cooking oil, salad oil, nutritional oil and solid oil to meet the increasing demands of consumers and food processing industry. Palm oil has the largest market share with 70 percent while soybean makes up 23 percent and other vegetable oil 7 percent. Last year, the country produced a recorded amount of refined oil with nearly 738,400 tonnes, up 0.6 percent from 2013. Refined oil productivity is expected to increase 10 percent to 812,000 tonnes in 2015 and 893,000 tonnes in 2016, spurred by the surge in soybean production. In addition, local oil producers continue to be protected by the Government’s safeguard import tariff against Malaysia and Indonesia: 4 percent from May 2014-May 2015 and falling to 3 percent from May 2015-June 2016. According to the master plan for vegetable oil development by 2020, refinery capacity should soar to 1.59 million tonnes by 2020 and 1.93 million tonnes by 2025. Vegetable oil consumption per capita is forecasted to shoot up over 67.5 percent in the next five years. Earlier, the Ministry of Industry and Trade (MIT) said that Vietnam will continue its safeguarding measures over vegetable oils from foreign countries as growing imports have damaged domestic production. Accordingly, refined soya oil and refined palm oil with trade codes of 1507.90.90, 1511.90.91, 1511.90.92, 1511.90.99 imported to Vietnam will be taxed at 3 percent from May 8, 2015 to May 7, 2016, at 2 percent from May 8, 2016 to May 7, 2017 and 0 percent after May 8, 2017. Safeguard procedures will be implemented in line with current regulations on protective measures for imports.- Petrolimex reports huge profits despite lower revenue Despite a loss in revenue, the Viet Nam National Petroleum Group (Petrolimex) reported after-tax profits of VND1.125 trillion (US$50.8 million) in the second quarter, an increase of 172 per cent over the same period last year. The group released its consolidated financial statement on August 15, saying that it had reached VND43.565 trillion ($1.97 billion) in net revenue, down 22 per cent compared to the same period last year. However, it said the cost reduction had helped it gain better after-tax profits for the second quarter. Similarly, though sales in the first half of the year were VND81 trillion ($3.66 billion), falling 20 per cent over the same period, the after-tax profits reached VND1.586 trillion ($71.7 million), as much as 137 per cent higher than in the same period last year. The group recorded VND124 billion ($5.6 million) in after-tax profits, and its joint ventures and affiliates, as much as an increase of 33 per cent over the same period last year. The report said the group's financial costs had risen by 54 per cent, and the cost of sales and administration expenses had slightly increased by 1 and 8 per cent, respectively. The group has charter capital of VND10.7 trillion ($484 billion) and 1.07 billion shares traded in the over-the-counter market. Established in 1996, Petrolimex is one of 19 wholesale fuel traders in the country. With 27 joint ventures and affiliates, it now holds nearly 50 per cent of the retail market. Petrol prices this year have risen four times and fallen five times. The price of one litre of the most popular fuel, petrol RON 92, is VND1,420 ($0.06) higher than the price at the end of 2014. Deal signed to build safe pork value-chain in Viet Nam The Vietnam Meat Industries Limited Company (Vissan), De Heus LLC and Fresh Studio Innovations Asia (DHFS-Safe Pork) on August 15 signed a memorandum of understanding to establish a safe and sustainable pork value chain in Viet Nam. The parties will establish a safe supply chain from farming, slaughterhouse to finished products and distribution to the market, in accordance with TRACEPIG standards. Under the agreement, products will be labelled with credible origins and will not contain antibiotic residues exceeding the restriction. They will also not be infected with pathogenic microorganisms. All TRACEPIG products must comply animal welfare during the process of breeding and slaughtering. TRACEPIG's set of standards were developed to guide all parties involved in the production chain to follow procedures to ensure the safety and traceability of all TRACEPIG products. The ultimate aim of the project is to offer safe and traceable pork meat to Vietnamese consumers produced in a sustainable way. VISSAN is one of the leading enterprises in the food industry with specialisation and business focus on production of chilled and frozen meat products, as well as processed foods from meat. DHFS - Safe Pork is a joint venture between De Heus LLC and Fresh Studio Innovations Asia Company to co-operate in creating a safe value chain for pork products in Viet Nam. Double-deal to draw in Japanese SMEs The Vietnamese-Japanese joint venture, Japanese SMEs Development Joint Stock Company has hit Japan International Co-operation Agency’s capital to develop its infrastructure project in the southern province of Dong Nai. Last week saw the Bank for Investment and Development of Vietnam (BIDV), the Japan International Co-operation Agency (JICA) and the $36.2 million joint-venture company ink two deals on providing a loan to implement an infrastructure and workshop construction project at the Nhon Trach 3 Industrial Park. Under the first deal between BIDV and JICA, the latter would provide a concessional loan worth $24 million for the former within 15 years. Under the second deal conducted between BIDV and the company, this loan will be lent to the latter to develop this project. Under JICA regulations, in case the agency wants to provide a loan for a company, it must provide it indirectly via a bank. The 183,000-sqm project is aimed to build workshops on 101,500sqm, which are to be leased to Japanese small- and medium-sized enterprises operating in a variety of sectors, such as the supporting industry, mechanics and electronics. The area can house about 100 projects and meet all their strict requirements regarding electricity and wastewater treatment. Some 15 projects have already been cultivated at the area. “This project will help Dong Nai attract more Japanese investors and develop its electronics and supporting industries,” said Nguyen Thanh Binh, member of the joint venture’s board of directors. It is expected that following the construction of the facilities, many Japanese enterprises from Japan will come to lease workshops at the industrial park. This is also due to the project’s proximity to big infrastructural works such as the Ho Chi Minh City-Long Thanh-Dau Giay expressway, the Ben Luc-Long Thanh expressway and the Cai Mep-Thi Vai sea port, said Yasushi Tanaka, director general of JICA’s Private Sector Partnership and Finance Department. Japanese SMEs Development Joint Stock Company was established in late June 2015 by locally-owned Tin Nghia Corporation (55 per cent), Dong Nai Container Port Joint Stock Company (10 per cent) and Japan’s Forval JSC (35 per cent). FLC to build a golf course complex Property developer FLC Group has committed to invest in a complex comprising 10 golf courses in the central Quang Binh Province during an investment promotion conference held in the province last week. Speaking at the event, Dang Tat Thang, FLC's deputy general director, said it was an important project for the group as would help them make a breakthrough in their investments in golf courses. Thang affirmed that if the government approved, ground breaking would happen for the first project by the fourth quarter of this year. Ten golf courses and a 500-room hotel would be built within one year, and other components were expected to be completed in three years, he said. The FLC Group previously proposed to build a complex that was considered a new model in the world. In Asia, such a model complex has been built only in China. It said tourists could stay for several weeks to play golf under this model. Also, golf awards can be organised in the region or at the global level here. He added that each golf course would have five to six resorts and tourism infrastructure, thus creating hundreds of labour jobs. "We commit to employ 90 per cent of the local people for the project," he added. The provincial People's Committee has strongly supported the project and studied the plans for the complex. "We expect to attract a number of high-class international tourists to Quang Binh and expect the project will provide employment for thousands of local workers," said Truong An Ninh, the spokesman on the People's Committee. The courses are expected to be built along the coast from Dong Hoi City to Quang Ninh and Le Thuy districts in the province, with a total area of 1,000 ha of sand dunes. Each golf course would have 18 holes worth at least VND3 trillion (US$137.6 million) of investment. FLC Group has been one of the leading real estate developers in Viet Nam with total investment of $2 billion. It has developed housing and office projects, industrial zones, golf course and tourism infrastructure. Emirates offers special fares for autumn adventures Dubai-based Emirates, a global connector of people, places and economies, will offer passengers from Ho Chi Minh City exceptional discounts of up to 28 per cent on Business and Economy fares to a wide range of cities in Europe, America, Africa and the Middle East. Emirates operates a modern fleet of wide-body aircraft Bookings have to be made from August 17-24, 2015, for departure between September 1 and December 18, 2015. “Emirates offers our passengers an expanding network of global destinations, excellent flying experience, and now for limited time with great special fares. Whether it is to explore a new city, to try out new experiences, or just to make that long-promised visit to friends and family, there is never a better time to make those travel plans a reality with Emirates,” said Mohammad Sarhan, Emirates’ country manager in Vietnam. “We look forward to welcoming more customers, whether avid fans and first time flyers, on board our modern fleet,” Sarhan added. Emirates currently flies to 147 cities in 81 countries. It is not only the destinations that are increasing, Emirates also continues to add the latest aircraft to its fleet which now stands at 235 with 65 A380s in service. Its young, all wide-body aircraft fleet offers the latest on-board comforts including food prepared by gourmet chefs, and over 2,000 channels on its award-winning ice entertainment system. OCB and M Service team up The Orient Commercial Joint Stock Bank (OCB) and the M Service Company signed a partnership agreement on August 15, with customers of OCB being able to use M Service’s MoMo app to conduct financial transactions and pay bills. When connecting to their OCB bank account via the MoMo app, customers can transfer money from their MoMo “wallet” into an OCB bank account and vice-versa. As MoMo has a total of 3,000 transaction points in 38 cities and provinces in Vietnam, the partnership will provide OCB customers with more convenience in using OCB services where the bank has no transaction points. The partnership will also help customers use MoMo when paying electricity, water, internet, and cable TV bills, and well as when buying cinema tickets and topping up their mobile phone accounts, among others. MoMo currently has about 500,000 users. Mr. Truong Dinh Long, Deputy Director of OCB, said that the partnership will provide more value to customers as MoMo is a modern method that helps customers access bank and other services. Bao Viet Holdings releases first half results Bao Viet Holdings (BVH) earned revenue of VND9.7 trillion ($422.4 million) in the first half of year, a 7 per cent increase year-on-year, with after-tax profit of VND731 billion ($33.07 million), a 13 per cent rise compared with the same period last year. It has targeted revenue of VND18.9 trillion ($855.67 million) for the year as a whole and after-tax profit of VND1.14 trillion ($51.58 million). Its first half results therefore represent 52 and 64 per cent of the targets. Among its subsidiaries, BaoViet Life Corporation earned the most revenue, increasing 25 per cent year-on-year. BaoViet Insurance Corporation’s revenue and profit increased 5 and 31 per cent, respectively. Business seeing stable growth included fire insurance, special risk insurance, healthcare insurance, and motor car insurance. The BaoViet Securities Joint Stock Company (BVSC) earned revenue of VND146 billion ($6.6 billion), a 5 per cent increase year-on-year. The BaoViet Fund Management Company, meanwhile, recorded profit of VND9 billion ($407,250), or 60 per cent of the annual target. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR