BUSINESS IN BRIEF 2/10 Vietnam moves closer to market economy Viet Nam was striving to perfect the market economy and committed to creating the most favourable conditions for foreign investors, Prime Minister Nguyen Tan Dung said at the Viet Nam Global Investment Forum yesterday. With improvements in the business climate, infrastructure and the financial markets, Viet Nam has become a land of opportunities for foreign investors, Dung said. Viet Nam was on track to reach gross domestic product (GDP) growth of above 6.5 per cent this year – the highest rate since 2011 – and during the turbulent 2011-15 period, Viet Nam was among few countries in the world posting positive and high economic growth, averaging 6 per cent per year, the forum heard. The economy was entering a new growth period with macroeconomic stability, faster growth and low inflation towards sustainable development with GDP growth projected between 6.5 per cent to 7 per cent during 2016-20 period. Dung said the Government of Viet Nam encouraged investments from foreign investors. He cited statistics showing that Viet Nam had so far attracted a total US$270 billion in FDI registered capital with more than 19,000 existing projects from 105 countries and territories, $135 billion of which was disbursed. He stressed that the country was making efforts to complete its market economy, improve legal and administrative frameworks, enhance human resources and develop infrastructure systems, aiming to creating an attractive investment environment. "Viet Nam is determined to improve its business climate following international criteria to achieve ASEAN-4's level by 2016," the Prime Minister said. He added the impending signing of new-generation free trade agreements would contribute to improving the country's business environment. Regarding investments in infrastructure, Dung said Viet Nam considered the modern infrastructure system as a breakthrough in the country's development and the Public-Private Partnership (PPP) practice coupled with the restructuring of public investment would create favourable conditions for both domestic and foreign investors. The list of projects calling for investments under PPP practice was being updated and would be published soon. Opportunities for foreign investors also arose from the privatisation of State Owned Enterprises (SOEs), one of the three pillar of Viet Nam's economic restructuring, Dung said. During the past two decades, the number of SOEs has been reduced by 90 per cent. Statistics showed that 350 SOEs were privatised from 2011 to September 2015 and more were expected as the Government was determined to speed up the process. On the financial market, Dung said it remained of modest scale, however, Viet Nam would introduce new policies and products in line with international practices and standards. Increasing foreign ownership limits and abolishing caps on the foreign holdings of Government and corporate bonds together with other open regulations was helping attract foreign investors. During the forum, Tony Shale, Euromoney CEO, Asia, said that Viet Nam had emerged as an attractive market in Asia with an advantageous geological location, impressive economic growth and determination to improve the business climate. The Minister of Planning and Investment Bui Quang Vinh said improving the business environment and national competitiveness were critical. If Viet Nam did not renovate itself, the country might lose out to Laos, Cambodia and Myanmar, Vinh said. Experts at the forum said that they saw advantages of Viet Nam in compared with neighbouring countries in the region, however only long-term vision would promise a successful business climate. The Viet Nam Global Investment Forum was organised by Euromoney and the Viet Nam's Ministry of Planning and Investment. The forum gathered hundreds of delegates from around the world to discuss economic growth, FDI outlook, financial sector development, SOE privatisation, the real estate sector, investment in agriculture, financing infrastructure and power development in Viet Nam.  Supply-demand connection in central, Central Highlands discussed A conference was held in the central city of Da Nang on September 30 to discuss ways to boost links among localities to form goods production-consumption chains in the central and Central Highlands regions.  The event brought together representatives from departments of industry and trade, businesses and business associations of 24 provinces and cities nationwide. Participants said to promote supply-demand connection, regional localities should focus on organising annual conferences which will serve as venues for regional enterprises to seek potential partners and markets.  Emphasis should also be placed on outlining appropriate policies to encourage and support businesses to apply advanced technologies in production, thus improving the quality of products, they stressed.  Representatives from the Ho Chi Minh City Department of Industry and Trade said through connection activities, small-scale production units will have a chance to sell their products in modern distribution systems.  Attendees also underlined the need to build trademarks and geographic indicators and renovate product packaging to create competitive goods and satisfying demanding markets.  According to Deputy Director of Da Nang’s Department of Industry and Trade Lu Bang, the regional industrial production value in the first nine months of this year retained stable growth, hitting 279 trillion VND (12.41 billion USD), representing a year-on-year rise of 11.3 percent.  The region’s total retail sales and service revenue has exceeded 402 trillion VND (17.9 billion USD) so far this year, equal to 75.3 percent of the target set for 2015. Export turnover in the period was valued at 6.16 billion USD, tantamount to 75 percent of the year’s target. The positive results are attributed to regional authorities’ efforts to enhance cooperation programmes, spurring the region’s socio-economic development. On the occasion, a number of cooperation agreements were signed between enterprises and trade promotion centres in the central and Central Highlands regions. Innovation creates sustainable agriculture value chain The agricultural sector should develop a sustainable value chain towards modernisation to improve its competitiveness during the international integration process, as heard at an innovation forum in Ho Chi Minh City on September 30.  Speaking at the event, held by the Ministry of Planning and Investment (MPI) and the Netherlands Development Organisation (SNV), MPI Deputy Minister Nguyen The Phuong said that besides achievements over the past years, agricultural growth remains unsustainable as it relies on natural resources exploitation and abundant labour force, which are coming to their limits and have weaker competitiveness in the era of scientific and technological development.  As such, it is time to find new orientations for the sector to develop sustainably, Phuong stated.  According to Deputy Minister of Agriculture and Rural Development Tran Thanh Nam, intensifying innovation and technological application in agricultural production will help create competitiveness for agricultural products and meet the increasingly high requirements of both domestic and foreign consumers.  Many Vietnamese enterprises are investing in agriculture, particularly hi-tech agriculture, he said, affirming that the positive results are evidence of the role of science and technology in bringing about economic efficiency and sustainably developing agriculture.  At the forum, participants discussed creative business solutions and technological innovation while sharing successful experience in creative business and investment connectivity in the field. Seminar seeks to support Vietnamese businesses in Cambodia Representatives from Vietnamese enterprises in Cambodia have called on the Vietnamese Government to create more favourable conditions for them to conduct business in the host country, contributing to boosting bilateral economic, trade and investment ties.  Speaking at a seminar in Phnom Penh on September 29, co-organised by the Vietnamese Embassy, the Vietnamese Business Association in Cambodia (VBAC) and the Association of Vietnamese Investors in Cambodia (AVIC), the businesspeople stressed their demands for connectivity and experience sharing in the neighbouring country.  They also proposed overhauling the VBAC to promote solidarity and create a strong business community that contributes markedly to socio-economic development in both Cambodia and their homeland.  Vietnamese Ambassador Thach Du highlighted the great potential for economic cooperation between the two countries, describing Vietnamese businesses as a key channel to step up economic links in a rapid and sustainable manner, including firms operating abroad.  He asked the VBAC to update its members on the two countries’ new policies and regulations regarding nationality, finance, accounting, and tax and loan access, among others.  The association should team up with the AVIC, business associations at home and commercial offices to give local businesses advice on investment opportunities and organise visits for them to survey the Cambodian market.  Vietnamese Commercial Counsellor Nguyen Bao told the Vietnam News Agency that Vietnam has been listed among Cambodia’s top five largest investors with 171 projects worth 3.2 billion USD by April 2015.  Vietnam is also Cambodia’s third largest trade partner with bilateral trade value reaching 3.3 billion USD in 2014, he said, noting the two countries are striving to bring the figure to 5 billion USD as soon as possible.  Vietnam has taken the lead in terms of the number of tourists to Cambodia in recent years and is seen as a top destination for Cambodian travellers, Bao said. EVN says power prices to be unchanged The new power tariffs will not raise prices for households while increasing revenue for the sector, an official of the Electricity of Vietnam (EVN) said.  Hoang Van Tuy, Deputy Head of the Finance and Marketing Department under the EVN, told an online discussion on power retail prices held in Hanoi on September 29 that the three ways to calculate power consumption released by the EVN last week were aimed at reducing shortcomings in electricity payment, thus ensuring the rights and benefits to consumers. "The calculations are being studied which should provide feasible plans while evaluating advantages and disadvantages to choose the best option," he said. He added that the Minister of Industry and Trade asked the EVN, in co-operation with the Electricity Regulatory Authority of Vietnam (ERAV), to evaluate the tariffs to ensure that poor and low-income households enjoy support from the government. Tran Dinh Long, Vice Chairman of the Vietnam Electricity Association said the number of tariff levels was not important. However, the ministry should suitably recalculate the difference among the levels. Long proposed calculations for power consumption to be divided into two levels of less than 100kWh and more than 700kWh. Nguyen Anh Tuan, ERAV's director said electricity prices have a significant effect on all socio-economic activities as well as people's lives. This was why asking for ideas on the proposed tariffs would make a big difference. "The new tariffs would ensure that retail electricity prices were higher than production costs while encouraging power saving as well as increasing transparency," Tuan said. Answering a question related to State-owned groups of the EVN and the Vietnam Oil and Gas Group (Petrovietnam) reporting losses due to changes in the exchange rate, he said this was one of the four factors, which included a power mobilisation structure, fuel prices and power purchase spending to adjust power tariffs. "If all of these factors have changes of more than seven percent, the ministry would review the price adjustment. The time for the review is six months," he said. The director also affirmed that money spent by the EVN in non-core businesses of tennis courses and swimming pools would not be calculated into the power price. The group would be organising conferences on power tariffs in three regions this month. The EVN would complete the plan, and submit it to the ERAV and the ministry for consideration before submitting it to the prime minister for approval. FDA, EDF IN sign pact in Hanoi The French Development Agency (AFD) and the Electricity de France International Networks (EDF IN) signed two financial agreements valued at 752,223 USD, in Hanoi on September 29. The agreement is expected to optimise investment planning of two major electricity distribution companies - Hanoi Power Corporation and the Northern Power Corporation, both subsidiaries of Electricity of Vietnam (EVN). EDF IN would support the two companies in drawing up a master plan for two pilot areas jointly identified at a later date. Vietnam's aggregate energy demand, which has significantly increased over the last two decades, is projected to have a growth rate of 5 percent to 10 percent in the coming years.  Vietnam is forecast to face several major challenges in the future, with reliable power supply requiring expansion of the country's investment capacity. In 2014, EVN invested nearly 6 billion USD for the construction of power lines, which represents a major effort compared to previous years. Vnprintpack gets underway in HCM City The 15th edition of the Vietnam International Printing & Packaging Industry Exhibition, September 30-October 3, has kicked off at the Saigon Exhibition and Convention Centre in Ho Chi Minh City. Opening day saw some 230 exhibitors from 12 countries around the globe displaying their wares in more than 400 pavilions showcasing the latest in equipment, materials and supplies for the industry. “The exhibition provides an excellent opportunity for businesses to locate cooperation partners, get updated on the latest technology and trends in the industry and scope out the competition,” said an organizing board member at the opening. Printing, packaging to grow The printing and packaging industries are expected to grow by 15-20 per cent in output this year, according to the Viet Nam Printing Association (VPA). The local printing market has steadily grown, with industrial packaging and label printing accounting for 80 per cent of the total output of the industry, said VPA Chairman Nguyen Van Dong. Industrial production expansion had contributed to the growth of industrial packaging and label printing, Dong said. Dong spoke at the 15th Vietnam International Printing & Packaging and Food Processing Industry Exhibition that opened yesterday in HCM City. Nearly 1,500 industrial packaging printing enterprises are operating nationwide with total revenue of more than US$2 billion, he said. Most large local printing firms are equipped with modern technologies and machinery imported from Italy, Japan, Germany and the US. Small firms with limited financial capacity had bought used machinery and equipment that could not ensure good quality and meet environmental regulations, he said. At the exhibition, hundreds of companies are displaying the latest technologies, machinery and equipment. More than 230 exhibitors from 12 countries and territories, including Singapore, Japan, South Korea, Germany, Thailand, India, Indonesia, Malaysia, Hong Kong, Taiwan and mainland China, are displaying cutting-edge technologies and equipment at the three-in-one exhibition on packaging, printing and food processing industries. The four-day event at the Sai Gon Exhibition and Convention Centre in HCM City's District 7 aimed to create a trade forum for enterprises and manufacturers to access markets, find partners and establish business relationships, said Phan Thi Thanh Minh, director general of the Ministry of Industry and Trade's South Agency. It also aims to enhance international cooperation between local and foreign enterprises in order to exchange technology and apply advanced science and technology. —  VN a top investor in Cambodia Viet Nam was among Cambodia's top five investors as of last April with US$3.2 billion in 171 projects. It is also Cambodia's third largest trade partner with bilateral trade topping $3.3 billion as of 2015, Vietnamese Commercial Counselor Nguyen Bao said, noting the two countries are striving to raise the figure to $5 billion. The information was released at a seminar held in Phnom Penh on Tuesday by the Vietnamese embassy, the Vietnamese Business Association in Cambodia (VBAC), and the Association of Vietnamese Investors in Cambodia (AVIC). Executives from Vietnamese firms in Cambodia called on the Vietnamese Government to create more favourable conditions for them to do business to help boost bilateral economic, trade and investment ties. They also called for overhauling the VBAC to promote solidarity and create a strong business community that could contribute much to socio-economic development in both countries. Vietnamese ambassador to Cambodia Thach Du highlighted the great potential for economic co-operation between the two countries, describing Vietnamese businesses as a key conduit to step up economic links in a rapid and sustainable manner. He asked the VBAC to update its members on the two countries' new policies and regulations on nationality, finance, accounting, and tax, and loan access, among others. It should team up with the AVIC, local business associations and Vietnamese Embassy's commercial office to advise Vietnamese businesses on investment opportunities in Cambodia and organise visits for them to survey the market. More than 50 Vietnamese projects are operational in Cambodia – including rubber plantations by the Hoang Anh Gia Lai Group and the Viet Nam Rubber Group, Cambodia Five-star Fertiliser Production Plant, Cho Ray-Phnom Penh Hospital, sugar-ethnol-thermopower compound production plant and several financial, aviation and telecom projects. Du said there is still room for growth in economic co-operation between the two countries.  Asset firms suggest rules on debt resolution Viet Nam's bad debt managers will propose legislation to overcome a regulatory vacuum hampering sale of billions of dollars in soured loans at banks and State companies, Bloomberg reported. Since the start of 2014, the Viet Nam Asset Management Company has recouped less than 7 per cent of the VND211 trillion (US$9.4 billion) in bad debt it bought since it began operating in 2013, according to Chairman Nguyen Quoc Hung. Without a debt market or legal framework to sell to foreigners, the company known as VAMC, can only sell properties originally pledged as collateral for the non-performing loans or prod the borrowers to pay, Bloomberg reported last week. "We need some sort of special mechanism, or separate regulations which can help us overcome all legal entanglements in the investment law, the land law and other related laws to be able to sell debt," Hung told Bloomberg in an interview in Ha Noi, adding, "Without such special rules, we cannot sell any debt." The VAMC will sign a co-operation agreement with the finance ministry's Debt and Asset Trading Corporation, or DATC, by the end of 2015 "to lay the foundations for a debt market," Hung said. The two agencies expect the government to soon have regulations on debt trading. At stake is Viet Nam's ability to get past an overhang of bad debt that has hindered access to bank credit, posing an ever present risk to the economy's recovery. The State Bank of Viet Nam (SBV) aims to bring down bad loans at the country's lenders to below 3 per cent of total lending by the end of September, compared to about 17 per cent in 2012. "By selling debt to the VAMC, banks will meet the central bank's end-September deadline, but the question is how fast the VAMC can resolve the debt they bought," Bui Kien Thanh, an independent economist in Ha Noi, told Bloomberg. "It will be tremendous progress if VAMC could get needed regulatory changes because under current laws, VAMC cannot do much. However I would not expect that to happen anytime soon," he said. The VAMC would join DATC in proposing needed regulatory changes to the government to quicken the bad debt resolution process at banks and companies, Hung said. SBV Governor Nguyen Van Binh said the process should not be sped up too hastily because some measures, such as reducing the prices of debt to attract more investors, might cause the assets of thousands of enterprises to be undersold. This would push the firms into even more difficulties with more employees losing their jobs. He added that as bad debt was a key issue for the economy, its settlement required comprehensive solutions on the national scale from business support, consumption and investment acceleration, to property market assistance. Hung told Bloomberg that the VAMC had recouped VND8.3 trillion ($368.88 million) out of VND77.2 trillion ($3.43 billion) in bad loans that it had bought so far this year. He expects to recoup another VND4 trillion ($177.78 million) by end-2015, bringing the total to around VND12 trillion ($533.33 million), more than double the VND4.9 trillion ($217.78 million) last year. Vietnam expects accelerating economic growth Vietnam expects a GDP growth of 6.53 percent this year and 6.7 percent in 2016 as efforts to cope with recent drastic fluctuations have created a solid foundation for its economy, Minister of Planning and Investment Bui Quang Vinh has said.  At the Vietnam Global Investment Forum in Hanoi on September 30, Vinh noted that Vietnam will keep to the path of a market economy while speeding up integration into the global economies in order to fuel its economic expansion. As a result, it must align the economic institutions and law system with the world’s norm while domestic businesses must gear up for fierce competition.  Thorough preparations must be made by both the Government and enterprises, otherwise the local market will be dominated by foreign firms, he stressed.  Jonathan Choi, Chairman of the Sunwah and VinaCapital Groups, underlined massive opportunities for foreign investors in Vietnam in the time ahead while asking the country to continue to better its market economy mechanism and ensure consistent policies, which are prerequisites to attract long-term foreign investments.  The Southeast Asian nation faces both opportunities and challenges on the path to international integration, and domestic businesses should be well aware of and get ready to handle those challenges, Asian Development Bank Country Director for Vietnam Eric Sidgwick said.  Jonathan Choi suggested that the Government assist small- and medium-sized enterprises in accessing cutting-edge technologies to improve their product value.  Meanwhile, Saigon Securities Incorporation (SSI) Chairman and CEO Nguyen Duy Hung thought Vietnamese companies should partner with foreign firms to offer products best suit the market demand.  Macro policies need to ensure equality among companies and help local firms to develop, which will help achieve sustainable economic growth, he added.  Indochina Capital Corporation CEO Peter Ryder said Vietnam has made solid step forwards over the past two decades but needs a long-term vision and should not expect quick success.-VNA Remittances to HCM City hit 3.25 billion Overseas Vietnamese remittances to Ho Chi Minh City in the first nine months of the year hit 3.25 billion USD, according to the HCM City branch of the State Bank of Vietnam (SBV).  The city has continuously been one of the top localities nationwide receiving the biggest volumes of remittances, accounting for 40-45 percent of the total in previous years. This year’s rate is expected to exceed 50 percent. According to the central bank, the recent favourable adjustment of exchange rate, the recovery of local businesses and the warming real estate market are among reasons for this year’s high rate. The central bank also attributed the increasing trend to a number of the Government’s policies as well as programmes offered by commercial banks.  The amount of inward remittances to the city in 2015 is expected to hit 5.5 billion USD.  Vietnamese living abroad remitted over 5 billion USD to Ho Chi Minh City last year, 4.2 percent higher than in 2013, according to city's Committee for Overseas Vietnamese.  Between 1993 and 2014, Vietnam received total remittances of about 96.66 billion USD, with an average remittance of 4.4 billion USD per year, accounting for 6.8 percent of the country's gross domestic product (GDP) over the period.  Remittances into Vietnam have increased about 22.4 percent annually in the past two decades, with an exception in 1997 and 2009 when economies in the world faced financial crisis. Japanese developers enter Vietnam’s property market Japan’s two leading property companies, the Daiwa House Group and Nomura Group, have revealed their intention to join hands with Sumitomo Forestry Co., Ltd to invest in Vietnam’s market.  The three companies plan to pour 27 billion JPY (224.6 million USD) in a 1,000- luxury- apartment complex in Vietnam. The decision was prompted by increasing demands for luxurious condominiums in the Vietnamese property market spurred by loosened ownership regulations and stellar economic growth. The complex will be built on an area of 28,000 square metres in Phu My Hung urban area in Ho Chi Minh City, which is billed as one of the most modern urban centres in Vietnam and favoured by most of the high-income earners and foreigners.  The complex, including gymnastic area and swimming pools, have apartments ranging in size from 85 square metres to 120 square metres. They are expected to be sold at high prices, at least doubling the average values of current apartments in Ho Chi Minh City.  The investors can invest in more apartments, depending on sale results. The new Housing Law and the Real Estate Business Law have come into effect since July, which loosens requirements for foreigners to buy and own homes in Vietnam. The move is expected to serve as a catalyst to lure more foreign investment to the real estate sector. The three Japanese property enterprises is now discussing with Phu My Hung Development Corporation possibilities for similar projects in other areas. In addition, Mitsubishi Estate Co., Ltd also has plans to cooperate with a Singaporean group on property investment in Vietnam. Coffee sector aims to increase added value The coffee sector aims to develop the coffee processing system in a bid to increase the added value of domestic coffee products, an official has said.  The focus will be on investment in advanced technologies to enhance productivity and product quality in the period from now to 2020 instead of building new processing facilities, according to Vo Thanh Do, Deputy Director of the Agro-Forestry, Seafood Processing and Salt Industry Department under the Ministry of Agriculture and Rural Development.  By 2020, finished processed coffee products such as roasted and ground coffee and instant mixed coffee are expected to account for 25 percent of the total coffee beans output, of which the total yearly productivity of roasted and ground coffee will reach 50,000 tonnes and that of instant coffee will be 255,000 tonnes.  According to the Central Highlands Steering Committee, the coffee and pepper sector currently exports mostly unprocessed products, which have limited added value.  In the 2013-2014 crop, nearly 1.4 million tonnes of coffee were shipped abroad, generating only 3.55 billion USD.  Chairman of the Vietnam Coffee and Cocoa Association Luong Van Tu said a kg of coffee beans earns nearly 2 USD, equivalent to the price of just one coffee cup in coffee importing countries, while one kg of coffee beans can make 50 cups.  There are currently 265 coffee processing firms across the country with a combined annual capacity of nearly 100,000 tonnes of coffee products. However, the majority are not running at full capacity.  Coffee trees are currently grown on more than 641,700 hectares, producing nearly 1.4 million tonnes of coffee beans each year. The Central Highlands accounts for 573,000 hectares and more than 1.3 million tonnes.  The ministry has set its sights on yearly revenues of 3.8-4.2 billion USD from coffee exports by 2020 and 4.5 billion USD by 2030. Supply-demand connection in central, Central Highlands discussed A conference was held in the central city of Da Nang on September 30 to discuss ways to boost links among localities to form goods production-consumption chains in the central and Central Highlands regions.  The event brought together representatives from departments of industry and trade, businesses and business associations of 24 provinces and cities nationwide. Participants said to promote supply-demand connection, regional localities should focus on organising annual conferences which will serve as venues for regional enterprises to seek potential partners and markets.  Emphasis should also be placed on outlining appropriate policies to encourage and support businesses to apply advanced technologies in production, thus improving the quality of products, they stressed.  Representatives from the Ho Chi Minh City Department of Industry and Trade said through connection activities, small-scale production units will have a chance to sell their products in modern distribution systems.  Attendees also underlined the need to build trademarks and geographic indicators and renovate product packaging to create competitive goods and satisfying demanding markets.  According to Deputy Director of Da Nang’s Department of Industry and Trade Lu Bang, the regional industrial production value in the first nine months of this year retained stable growth, hitting 279 trillion VND (12.41 billion USD), representing a year-on-year rise of 11.3 percent.  The region’s total retail sales and service revenue has exceeded 402 trillion VND (17.9 billion USD) so far this year, equal to 75.3 percent of the target set for 2015. Export turnover in the period was valued at 6.16 billion USD, tantamount to 75 percent of the year’s target. The positive results are attributed to regional authorities’ efforts to enhance cooperation programmes, spurring the region’s socio-economic development. On the occasion, a number of cooperation agreements were signed between enterprises and trade promotion centres in the central and Central Highlands regions. Aquatic product exports shrink Vietnam’s aquatic exports hit around US$514 million in September, bringing the total export revenue in nine months to nearly US$4.7 billion, down 17.8% against the corresponding period last year. The Ministry of Agriculture and Rural Development reported on September 28 that major export markets all saw a decline, for example the US (down 30%) and Japan (11%). As a result, domestic seafood processing businesses and shrimp and tra fish breeders have confronted numerous difficulties. Le Van Tu, a farmer in Binh Thoi village, Ben Tre province has lost almost half a billion Vietnamese Dong due to the fall in prices of different types of shrimp and shrimp epidemics. Currently, 80% of shrimp breeders suffer losses. Tra fish raising areas in Dong Thap, Vinh Long, An Giang and Can Tho provinces have also shrunk. According to seafood businesses, exports from now to the end of this year are likely to improve but see no sudden rise. It is very difficult for the fisheries sector to achieve this year’s export target of US$8 billion, experts said. Dong Nai retail sector maintains strong growth The retail sector of the southeast province of Dong Nai has grown at an increasingly rapid pace in the past five years, fuelled by the availability and convenience of shopping facilities.  According to Dong Nai’s Department of Industry and Trade, the province’s retail sector increased by an average 17 percent per year from 2011-2015, during which 166 markets were newly built or upgraded and many modern shopping malls were opened.  Dong Nai’s retail sales in September alone are estimated to reach 10.4 trillion VND (473 million USD), up 0.75 percent from August and bringing the retail sales for the first nine months of this year to 91 trillion VND (4.14 billion USD), up 11.38 percent.  The total retail sales for 2015 are estimated to reach 122 trillion VND (5.55 billion USD), up 12.05 percent from last year.  The network of current shopping facilities – which includes big names such as Big C, Co.op Mart, Lotte Mart, Vincom and Metro – investors from the US, Japan, Singapore, Thailand and Italy have plans to open business in Dong Nai. Sugar cane varieties to be exported to Australia Vietnam and Australia have signed a Memorandum of Understanding (MoU) on exchange of sugarcane varieties and cooperation in sugarcane disease and pest research. Initially, researchers in each country have provided the other with a list of ten cane varieties to be exchanged. Sugar Research Australia (SRA) executive manager of development Peter Allsopp said the biggest benefit from the MoU would be the chance to build a greater range of cane varieties available to Australian growers. According to the Vietnam Trade Office in Australia, the 10-year MoU between SRA and the Vietnam Sugarcane Research Institute (SRI) is designed to bring the same benefits to Vietnam, which has a much smaller sugar industry. The two agencies will cooperate in the research of sugarcane diseases and pests and other ventures such as trait development, molecular biology, and crop management.  SRI Vietnam Director General, Nguyen Duc Quang, said the agreement will benefit both countries. Currently, Vietnam's cane industry has to cope with some diseases and pests which were of bio-security concern to Australia, even if they had not appeared in Australia, "Working together, we can help lessen their impact on the Vietnamese industry, as well as ensuring that the Australian industry is well prepared for any incursion," he added. Efforts needed to boost exports, reduce trade deficit Vietnam’s Ministry of Industry and Trade (MoIT) has been actively implementing various measures to boost exports and reduce imports, helping decrease the trade deficit.  The MoIT’s 2015 export and import goals, which were set by the National Assembly, are to increase the export value to 10 percent and keep the trade deficit at no more than five percent of the total import-export value.  As of September, Vietnam’s trade deficit had reached 3.9 billion USD or 3.2 percent of the export value, which was nearly 120 billion USD.  Decreased exports of major agricultural commodities such as coffee and rice were cited as reasons behind the trade deficit.  In the first nine months of 2015, Vietnam exported 961,000 tonnes of coffee worth 1.96 billion USD, reducing by 31.2 percent in volume and 32.2 percent in value from a year earlier.  Rice exports reduced 10.1 percent in volume and 15.7 percent in value.  A plunge in oil prices also contributed to the reduction of export revenue and the increase of the trade deficit.  With a strong increase in many commodities such as apparel, footwear, wooden products, phones and accessories and computers and their spare parts, Vietnam’s exports still increased by nearly 10 percent.  With huge demand for investment and development and especially input materials in the first nine months, Vietnam imported 113.5 billion USD of materials for production, accounting for 91.1 percent of the total import value.  According to experts, to promote export growth and reduce imports, functional agencies need to address problems that are disrupting the exports of agro-products.  It is necessary to tighten supervision on import commodities, intensify efforts to combat fake or counterfeit products and boost domestic production, they said.  In the long term, the country needs to build supporting industries and ensure supply for the garment and textile, footwear and machinery sectors as well as boost imports from different countries. Vinh Phuc draws new FDI projects Many businesses, mainly from the Republic of Korea and Japan, have invested into northern Vinh Phuc province over the past few months.  Highly attractive fields include electronics spare parts, automobile and motorcycle support industry, mechanics and manufacturing.  The outcome was attributed to local efforts to persuade foreign businesses to invest in the province to develop industry and generate jobs for rural workers.  According to the provincial Department of Investment Support and Promotion, Vinh Phuc granted new investment licences to 22 foreign direct investment (FDI) projects with a total registered capital of 172.58 million USD.  So far, the province has 199 valid FDI projects worth nearly 3.2 billion USD and 598 domestic initiatives worth over 43.3 trillion VND (1.9 billion USD).  In 2015, the locality has promoted investment attraction from promising and hi-tech countries and territories while focusing on handling land clearance issues, improving infrastructure at industrial parks and developing human resources.  It also concentrated on simplifying administrative formalities by applying the one-stop-shop model and helping businesses weather difficulties.  Many industrial parks and craft villages have generated jobs for local workers with average monthly incomes of 4-5 million VND (177.8 USD-222.3 USD) per person. Produce exports expected to top US$2 bln in 2015 Fruit and vegetable exports are expected to reach US$2 billion this year as more and more countries have opened their door to Vietnamese fruits and vegetables. Earnings from fruit and vegetable exports have increased strongly in recent years, from US$460 million in 2010 to US$1.47 billion last year, according to the Vietnam Fruit and Vegetable Association. The figure topped nearly US$1.3 billion in the first nine months of the year. Vietnam exports 40 kinds of fruits and vegetables to 40 countries and territories, according to Dr Nguyen Huu Dat, director of the Post-Import Plant Quarantine Centre II under the Ministry of Agriculture and Rural Development. Last year, more than 1.6 million tonnes of fruits and vegetables were exported, of which dragon fruit accounted for more than 997,000 tonnes, watermelon nearly 300,000 tonnes, longan more than 100,000 tonnes, litchi over 70,000 tonnes and rambutan 600 tonnes. Dat said export of fresh fruit to choosy markets last year went up by 1.5 times over 2013, with more than 3,000 tonnes of fresh fruits exported. In the first seven months of this year, a similar amount was exported to the US, Japan, the Republic of Korea, New Zealand, Australia and Chile, he said at a seminar held in HCM City last week. Vietnam started to export dragon fruit to the US market in 2008, with only 100 tonnes in that year. The export volume has steadily increased, reaching 1,500 tonnes last year and 1,152 tonnes in the first seven months of this year. Rambutan exports to the market have also increased strongly since late 2011, he said. Last year, the US market began to accept Vietnamese longan and litchi, he said, adding that starfruit and mango are both expected to be shipped to the US by the end of this year. New Zealand and Australia this year also allowed the import of Vietnamese rambutan and litchi, respectively, and Japan has just opened its market for Vietnamese fresh mango. Huynh Quang Dau, general director of An Giang Fruit-Vegetables and Foodstuff Joint Stock Company, said its fruit and vegetable exports had enjoyed a growth rate of 15-20% this year compared to the same period last year, with exports to Japan, the Republic of Korea and the EU increasing significantly. Dat said the country's fresh fruit exports still had more room to grow. However, to develop a sustainable export market, the Government should develop a new export managerial strategy and support farmers and enterprises with post-harvest preservation technology, he said. Local firms would need to be more active in seeking new long-term export contracts, he added. Professor Nguyen Quoc Vong of Australia's RMIT University said the establishment of the ASEAN Economic Community by the end of this year as well as existing and future Free Trade Agreements, including the Trans Pacific Partnership (TPP), would open opportunities to boost exports of Vietnamese farm produce. But to capitalise on these opportunities, the products must meet safety and quality standards and have reasonable prices, he said. Produce exports expected to top $2b in 2015 Fruit and vegetable exports are expected to reach US$2 billion this year as more and more countries have opened their door to Vietnamese fruits and vegetables. Earnings from fruit and vegetable exports have increased strongly in recent years, from $460 million in 2010 to $1.47 billion last year, according to the Viet Nam Fruit and Vegetable Association. The figure topped nearly $1.3 billion in the first nine months of the year. Viet Nam exports 40 kinds of fruits and vegetables to 40 countries and territories, according to Dr Nguyen Huu Dat, director of the Post-Import Plant Quarantine Centre II under the Ministry of Agriculture and Rural Development. Last year, more than 1.6 million tonnes of fruits and vegetables were exported, of which dragon fruit accounted for more than 997,000 tonnes, watermelon nearly 300,000 tonnes, longan more than 100,000 tonnes, litchi over 70,000 tonnes and rambutan 600 tonnes. Dat said export of fresh fruit to choosy markets last year went up by 1.5 times over 2013, with more than 3,000 tonnes of fresh fruits exported. In the first seven months of this year, a similar amount was exported to the US, Japan, South Korea, New Zealand, Australia and Chile, he said at a seminar held in HCM City last week. Viet Nam started to export dragon fruit to the US market in 2008, with only 100 tonnes in that year. The export volume has steadily increased, reaching 1,500 tonnes last year and 1,152 tonnes in the first seven months of this year. Rambutan exports to the market have also increased strongly since late 2011, he said. Last year, the US market began to accept Vietnamese longan and litchi, he said, adding that starfruit and mango are both expected to be shipped to the US by the end of this year. New Zealand and Australia this year also allowed the import of Vietnamese rambutan and litchi, respectively, and Japan has just opened its market for Vietnamese fresh mango. Huynh Quang Dau, general director of An Giang Fruit-Vegetables and Foodstuff Joint Stock Company, said its fruit and vegetable exports had enjoyed a growth rate of 15-20 per cent this year compared to the same period last year, with exports to Japan, South Korea and the EU increasing significantly. Dat said the country's fresh fruit exports still had more room to grow. However, to develop a sustainable export market, the Government should develop a new export managerial strategy and support farmers and enterprises with post-harvest preservation technology, he said. Local firms would need to be more active in seeking new long-term export contracts, he added. Professor Nguyen Quoc Vong of Australia's RMIT University said the establishment of the ASEAN Economic Community by the end of this year as well as existing and future Free Trade Agreements, including the Trans Pacific Partnership (TPP), would open opportunities to boost exports of Vietnamese farm produce. But to capitalise on these opportunities, the products must meet safety and quality standards and have reasonable prices, he said. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR