BUSINESS IN BRIEF 3/10 Vissan stops buying Aussie cows from HAGL Major local meat processor Vissan, a unit of Saigon Trading Group (Satra), said it has suspended purchases of Australian cows farmed by Hoang Anh Gia Lai (HAGL) Group. Speaking to the Daily on September 30, Vissan deputy general director Dang Thi Phuong Ninh said Vissan bought 300 Australian cows from HAGL in early February but later decided to halt purchases as the HAGL-bred cows were not big enough to ensure profitability. Ninh said at a meeting in June this year that Vissan and HAGL had agreed on terminating a cooperation contract they struck earlier with neither party required to compensate. At the meeting, HAGL proposed supplying cows back to Vissan but the two parties have not clinched any new deal. Ninh said Australian beef sold at Vissan’s stores was from cows imported by a number of companies including Thuy Ha. HAGL chairman Doan Nguyen Duc declined to comment when he was reached at an event held in HCMC on Tuesday for Nutifood to launch a new dairy product and sign an agreement with HAGL and the Institute of Agricultural Science for Southern Vietnam (IAS) on production of soybeans for supply to the nutrition firm. Duc said HAGL supplies 300 cows a day for slaughterhouses in HCMC and Hanoi markets. Fiber firm debuts on HOSE Century Synthetic Fiber Corporation (STK) on September 30 became the first fiber firm to list on the local stock market as it offered over 42.3 million shares on the Hochiminh Stock Exchange (HOSE).    STK had the reference price of VND29,000 per share and the fluctuation range of 20% on either side on its first trading day. Closing the session on September 30, STK added 6.55% to VND30,900 per share.  Dang Trieu Hoa, chairman and general director of STK, said the corporation mainly sells quality filament polyester DTY/FDY yarn to local and foreign textile-dying businesses which supply fabrics to producers of clothes of famous brands. Over 70% of STK’s revenue is from exports to European and Asian markets. He said the enterprise would focus more on the textile-garment supply chain to strengthen its competitiveness and cash in on the opportunities from more investments of China and Taiwan in Vietnam. To make the most of opportunities from Vietnam’s signing of free trade agreements with partners, the company has commissioned Trang Bang 3 yarn plant in the district of the same name in Tay Ninh Province. The facility has an annual capacity of 15,000 tons of partially oriented yarn (POY) and 15,000 tons of draw textured yarn (DTY). The factory worth VND735 billion (US$32.6 million) will increase the firm’s total capacity to 52,000 tons of yarn per year. STK plans to invest VND275 billion in Trang Bang 4 plant with a designed capacity of 3,000 tons of DTY, 6,000 tons of POY and 4,000 tons of fully drawn yarn (FDY). The new facility will be up and running in the third quarter of 2016 and help increase the enterprise’s annual capacity to 60,000 tons. STK posted revenue of some VND1.46 trillion and after-tax profit of VND106 billion last year, up 42% year-on-year and 14% higher than the year’s profit target. In the first six months of this year, its after-tax profit amounted to VND54.5 billion, 16% higher than the first-half target. Malaysian firm to build power station in Vietnam Malaysia-based firm Toyo Ink is finalizing preparations to carry out Song Hau 2 thermal power plant project in the Mekong Delta province of Hau Giang, the Vietnam News Agency reports. According to Toyo Ink managing director Song Kok Cheong, the group started exploring the power sector about eight years ago and has since then spent big on feasibility studies for projects here in the nation. In 2012, Toyo Ink got the Government’s nod to invest in the coal-fueled power plant with a capacity of 2,000 megawatts under build-transfer-operate (BOT) format. The firm is now finalizing deals for land lease and coal supply, among others. Toyo Ink expects to get an investment certificate in the next two or three months so that the enterprise will commence construction of the project soon. The project requires a total investment of US$3.5 billion and is expected to generate annual revenue of around US$970 million when it becomes operational in 2021. Cheong said 20% of the investment cost would be financed by Toyo Ink and the remainder by bank loans. The company is seeking partners to form a joint venture to implement the power project.  More luxury condo projects launched Property enterprises have this month unveiled a slew of new apartment and land lot projects in HCMC, mainly for high-income earners, stoking concerns over an oversupply. Novaland Group has recently introduced its seven luxury apartment projects in the city, including Sunrise Cityview in District 7, Sunrise Riverside in Nha Be District, Golden Mansion, Orchard Parkview and Newton Residence in Phu Nhuan District, The Park Avenue in District 11 and Duxton Residence in Tan Binh District. The property developer did not reveal the total number of apartment units at the new projects but said they would offer apartments with prices ranging from more than VND2 billion (around US$89,000). Over the weekend, Phuc Khang Corporation introduced its luxury apartment project Diamond Lotus with total capital of more than VND1.2 trillion (about US$53.4 million) and covering 1.68 hectares in District 8. Him Lam Land has heated up the race by preparing to offer for sale 400 high-end apartments and 207 townhouse land lots at its Him Lam Phu Dong project in the outlying district of Thu Duc. With the real estate market showing signs of recovering, Kusto Home is preparing to kick off phase two of the Diamond Island project with 1,000 apartment units in District 2 after it signed a cooperation deal with Cotec Construction Joint Stock Company (Coteccons) last week. The first phase of Diamond Island comprising 200 high-end apartments priced at billions of dong per unit has been finished. Murat Utemisov, general director of Kusto Home in Vietnam, said that as it has been active in the property sector in Vietnam for nearly 10 years, the company is well aware of the market. The firm will adjust down apartment sizes in the coming time to make its products more affordable than in phase one of the project. In September alone, property enterprises have announced dozens of high-end projects with a total of around 5,000 apartments in HCMC, where numerous luxury apartment projects are under construction. The housing projects in HCMC introduced to high-income earners earlier include Vingroup’s Vinhomes Central Park in Binh Thanh District and Dai Quang Minh’s Sala in District 2. Though investors of those luxury projects claimed they had sold out apartments or sold them in bulk, large numbers of units at these projects are still on offer on property exchanges in the city. A property expert in HCMC told the Daily that around 30% of high-end apartment buyers have bought the product in anticipation for higher prices in the coming time. At a meeting with potential customers of a luxury project in HCMC early this month, the Daily found that most of them wanted to buy two to three apartments with prices of between VND3 billion and VND5 billion per unit for rent or resale.  While new high-end apartment projects abound in HCMC, the numbers of projects for low- and medium-income buyers are still limited though demand is huge. Doan Chi Thanh, general director of Hoang Anh Saigon, which specializes in distributing land and homes, said the company had sold nearly 2,000 mid-end apartments in the year to date and expects to sell an additional 1,000 units in the following three months. As explained by the leader of a HCMC-based property company, land prices for mid-end and high-end projects are almost equivalent but construction costs are different. However, it is more difficult for investors to increase apartment prices in mid-end projects than luxury ones, and this is one of the reasons why property developers have shifted their investments to the upper-class apartment segment. Brokerages yet to raise FOL Securities enterprises have been allowed to submit their foreign ownership limit (FOL) increase applications since early this month, but only three firms have increased the cap to over 49% so far, said a leader of the State Securities Commission (SSC). Government Decree 60, issued in June, allows foreigners to own up to 100% of a securities enterprise or establish a 100% foreign-owned securities firm in the country. It replaces Decree 58, which allows foreigners to either own a maximum 49% stake at a Vietnamese brokerage or set up a 100% foreign-owned company. The old decree prevents foreigners from holding a stake of over 49% at local securities enterprises. However, Saigon Securities Inc. (SSI) is the only firm to obtain approval from the SSC to raise its FOL to 100%. According to latest data, the company is 48% owned by foreigners. Besides, Maybank Kim Eng Securities Co. is a 100% Malaysian-owned firm and KIS Vietnam Securities Co. is 92% owned by Korea Investment Securities Co. (KIS). According to the SSC leader, shareholders of Nam An Securities Co. have agreed to transfer its 100% stake to South Korea’s Shinhan Investment Corp. However, the brokerage has yet to complete procedures to turn 100% foreign-owned. Meanwhile, IB Securities Co. (IBSC) at its annual general meeting early this week decided to revise its charter, allowing foreigners to hold up to 100%. However, the SSC has yet to receive its application. Regarding investment in securities enterprises, the director of a foreign investment fund said that all brokerages can benefit from the new decree. However, foreign investors will eye on leading firms with a wide range of services. In addition, foreign investors at enterprises where FOL has reached almost 49% may seek a higher cap to secure a majority stake.  The nation has seen around 90 active securities firms, including 40 companies with foreign ownership. Three of them have increased foreign room to over 49% and eight others have 49% foreign ownership. The expert also said that small firms will find it difficult to raise FOL as it is simple to establish a 100% foreign-invested company now. At present, some securities firms have announced to raise FOL but investors are cautious. In fact, it is difficult to seek foreign investors. Enterprises may change their FOL rules but it is uncertain that they can find foreign investors, the director said. Tran Anh, Nojima to open first electronics store in Hanoi in Oct. Tran Anh Digital World Co. will join forces with Japanese electronics retailer Nojima to open their first electronics store in the first shopping mall of Japanese retail giant Aeon in Hanoi City in October this year. The first Aeon Mall in the capital is scheduled for inauguration on October 28. Tran Xuan Kien, chairman of Tran Anh Digital World Co., told the Daily that the 1,800-square-meter store will feature both Tran Anh and Nojima brands. Kien said unlike other Tran Anh stores, the new facility will be operated in accordance with the service quality standards of Nojima Japan. The local company plans to apply this business model to its stores later. According to Nikkei newspaper, the first Tran Anh-Nojima store in Hanoi will sell Japanese-brand refrigerators, televisions, and other products targeting medium- and high-income customers in Vietnam. Products with Nojima’s own Elsonic brand will also be available at the facility. Tran Anh Digital World is now operating 15 electronics stores, mostly in northern Vietnam, and plans to open six new stores bearing the Tran Anh brand only in the region towards the end of this year. The company had its shares listed on the stock market in early 2010.  Headquartered in Yokohama, Nojima is a major electronics retailer in Japan. The company entered the Vietnamese electronics market by spending over VND64 billion acquiring a 10% stake at Tran Anh in mid-2013 before raising its holding at the domestic company to 31% in June. This year, Tran Anh targets revenue of more than VND3.32 trillion and after tax-profit VND7.8 billion. VCCI: Tough times ahead for big employers With a wage rise next year and higher social insurance obligations in 2018, enterprises in labor-intensive sectors would find it hard to survive, the chairman of the Vietnam Chamber of Commerce and Industry (VCCI) has warned. Vu Tien Loc told a conference in HCMC on Wednesday on institutional reform and corporate competitiveness improvement in the integration process that the National Wage Council early this month agreed on a region-based minimum wage increase of 12.4% for 2016. Higher wages will lead health and social insurance premiums to surge.  Loc said the Prime Minister has not approved the minimum wage hike proposed by the council, so businesses can still ask for a lower rise as 12.4% is too much. If the Government leader approves the wage spike, the Government should delay collections of social insurance based on actual incomes rather than base salaries. Loc explained if the new calculation method for social insurance takes effect in 2018, many enterprises would face higher costs, especially those in such labor-intensive sectors like apparel and footwear.  Le Quang Hung, chairman of Garmex Saigon Company, said the firm spends VND36 billion (US$1.6 million) covering health and social insurance premiums and labor union fees for its workers a year. The amount would go up by nearly VND5 billion if the minimum wage in HCMC rises by 12.4%.   Meanwhile, Garmex Saigon cannot hike prices of products shipped to the European Union and Japan as demand in these markets remains weak. The company has had to export more products to the U.S. to adopt with this situation. Hung said if an electricity tariff hike plan is translated into reality, it would make life even harder for the enterprise. Apart from the wage hike, business executives at the conference said complicated administrative procedures are also impeding their operations.     Huynh Van Minh, chairman of the HCMC Union of Business Associations (HUBA), said streamlining administrative procedures would not be effective if enterprises continue to be harassed by officials.  A representative at the Hepza Business Association (HBA) said local enterprises are not afraid of the possible difficulties resulting from the country’s international integration but the hurdles created by State agencies. One of the troublesome issues is a lack of guiding documents for new laws. Loc of VCCI described mindset change as important as institutional reform. State agencies should consider themselves as supporters of enterprises. Nok Air to launch flights to Ha Noi Low-cost Thai airline Nok Air plans to start flights to Ha Noi on December 1, after launching a new route from Bangkok to HCM City this month. The airline will initially launch four weekly flights from Bangkok's Don Mueang Airport to Ha Noi's Noi Bai International Airport. Meanwhile, the airline has started four weekly flights to HCM City, and will increase the service to seven weekly flights from October 25. The launch of Nok Air flights to Ha Noi will strengthen the carrier's return to Viet Nam after seven years. The move is also expected to help open up more opportunities for commercial exchanges between the two countries, particularly when the ASEAN Economic Community is scheduled to be established by the end of the year. However, it also means that Nok Air will face growing competition on the routes as other airlines seek to increase their presence in Viet Nam. HCM City is Nok Air's third active international destination, after Yangon in Myanmar and Hefei in China's Anhui Province, launched early this year. Previously, Nok Air used to operate international flights to Ha Noi and Bangalore, launched in 2008. However, it suspended these loss-making international flights to focus on expanding the domestic market. New enterprises fall in September The latest report from the Agency for Business Registration under the Ministry of Planning and Investment (MPI) revealed that in September there were 7,042 newly-established enterprises with total capital of VND44.5 trillion ($1.95 billion), down 24.3 per cent and 19.3 per cent, respectively, against September last year. The number of enterprises dissolved around the country was 672 during the month, down 19.4 per cent compared to August. The number of enterprises that temporarily suspended operations stood at 9,439, an increase of 24.3 per cent against August. There were also 1,515 enterprises that restarted business after temporarily suspending operations during the month, an 11.5 per cent increase against August. In the first nine months there were a total of 68,347 newly-established enterprises with capital of $421 trillion ($18.5 billion), increases of 28.5 per cent and 31.4 per cent, respectively, year-on-year. The number of new enterprises in the first nine months increased in all sectors compared with the same period last year. Certain sectors saw high growth in the number, such as arts and entertainment, with 95.3 per cent, real estate 78.7 per cent, agriculture, forestry and fishery 55.3 per cent, transportation 52.3 per cent, and construction 36.6 per cent. Meanwhile, 12,848 enterprises that had temporarily suspended operations restarted business in the first nine months, an 8.2 per cent increase against the same period last year. Rural areas prefer domestic made Vietnamese goods account for 75 per cent of market share and are favoured in the rural areas, the Ministry of Industry and Trade has said. Statistics from the ministry revealed at a conference on connecting supply and demand between industrial units in rural areas and distribution system in the northern region held in Ha Noi yesterday that market share was expected to increase in the upcoming years. Consumers in the areas have shown increasing interest in domestically produced goods. Deputy Minister Ho Thi Kim Thoa said the ministry in co-operation with localities has been actively organising trade promotion among businesses especially those in the retail and distribution sectors. More than 40 co-operation agreements were signed for supply of goods in the central Da Nang City, while another 40 agreements in HCM City and several others were signed in the northern region. For example, Big C supermarkets in the north signed agreements with Tam Hoa Co-operative in Cao Bang Province, Thien Phuc Tea Co-operative in Bac Kan Province, and Tan Cuong Hoang Binh Tea in Thai Nguyen Province. However, Thoa said several local businesses have faced problems when bringing industrial products made in rural areas to traditional markets or supermarkets. Some signed contracts were not implemented as producers did not meet with the requirements of the supermarkets. "This is the reason that the conference aims to connect producers and goods in cities and provinces to the distribution system," she said. A representative from Big C in the northern region hailed the strengths of Vietnamese goods, saying that 95 per cent of goods at their supermarkets are domestically produced. Big C exports 1,100 containers of local agricultural and seafood products to 20 countries in Asia and the Americas totally valued at more than US$30 million. Ishikawa Tadahiko, Aeon's representative in Viet Nam also said 90 per cent of goods at their supermarkets had been bought from Vietnamese producers. In the upcoming time, Aeon would buy organic vegetables, seafood, frozen foods, plastics and clothing from the country's producers. "Aeon expects to contribute to Viet Nam's retail sector with help from systems in Japan such as a transport system and human resource training. It would increase the number of local suppliers if it opens new supermarkets, thus creating more jobs," he added. Local producers and distributors have opportunities to seek partners. However, several businesses said it was hard to find partners in the local market. Pham Hung Vu, director of Thu Nguyet Crafts and Trade Company said most of their products were only exported to Japan and South Korea. The products have not done much business in the domestic market. "The purchasing power in the country is low as the promotion of craft products is limited. We hope that distributors will pay attention to our products to increase consumption in Viet Nam." he said.  VN, India push agricultural trade India is a potential market for Vietnamese export farming products and cooperation in agricultural development, deputy minister of agriculture and rural development Vu Van Tam said at the Viet Nam-India business meeting. During the event in New Delhi on Tuesday, the representatives of Vietnamese enterprises briefed the hosts on the production and export of coffee, tea and dragon fruit in Viet Nam. Tam underlined the potential for the two nations' cooperation in agriculture, saying that the sector had been buoyed by traditional cooperative ties. Over recent years, India had provided support for Viet Nam in training human resources and technology transfers in animal farming and other fields, Tam noted. The 1.27-billion-people market of India offered huge potentials for Vietnamese agricultural products, such as tea, coffee, dragon fruit and aquatic products, he said. Vietnamese aquatic products, which have been so far shipped to Japan, the EU, the US and the Republic of Korea, are expected to enter the Indian market and contribute to fostering economic and trade cooperation between Viet Nam and India. Also at the event, the Federation of Indian Export Organisations (FIEO)'s President S C Ralhan said that Viet Nam was an important partner of India in the Southeast Asian region, adding that bilateral trade between the two nations had increased year-on-year. Viet Nam had actively participated in a number of regional and global organisations and forums, such as the Association of Southeast Asian Nations (ASEAN), the East Asian Summit (EAS), the Asian European Meeting (ASEM) and the World Trade Organisation (WTO), he said. The FIEO President also pledged to support Vietnamese enterprises entering Indian markets. Meanwhile, Tam highly appreciated India's role in the trade, and the growth of Viet Nam's economy, in general, and the agricultural sector, in particular. The Vietnamese government has continuously offered incentives for domestic trade promotion activities to boost bilateral and multilateral cooperation with international partners, including Indian firms, Tam said. He expressed his hope that Indian state offices would assist agricultural exports in both countries, especially exports of Vietnamese coffee, tea and dragon fruits to India. During the meeting, Ambassador of Viet Nam in India Ton Sinh Thanh highlighted the trade and investment potentials between the two nations. He suggested the two governments develop a comprehensive agricultural cooperation programme, as well as boost business exchanges. The meeting, jointly organised by Viet Nam's Ministry of Agriculture and Rural Development (MARD), the Embassy of Viet Nam in India and the FIEO, forms part of the activities of MARD's 2015 trade promotion programme. Agriculture sees nearly 6% surge The agriculture sector saw a growth rate of 5.9 per cent over the first nine months of the year, with increased production value helped by higher-quality seeds and seedlings, according to the director of HCM City's Department of Agriculture and Rural Development. Nguyen Phuoc Trung said the sector had maintained an annual growth rate of 5.8 per cent between 2011 and 2014 although the farming area has reduced in size. Trung spoke at the Vietnam Farm Expo 2015, which opened yesterday in HCM City. Last year, the average production value of one hectare was about VND325 million (US$14,440) per year, the country's highest value. It is expected to reach VND375 million ($16,660) per hectare this year. Over the first nine months, the city exported more than 1,600 tonnes of fruit and vegetables to many countries in North America, Europe and Asia. Last year, it exported about 1,000 tonnes of fruit and vegetables. Th expo has attracted nearly 100 enterprises with 200 booths showcasing farm machinery and high-quality agricultural produce that meet Vietnamese Good Agriculture Practices (VietGAP) and Global Good Agricultural Practices (GLOBALGAP). The five-day event at Tan Binh Exhibition and Convention Centre in Tan Binh District was co-organised by the HCM City Business Association and Dong Nam Advertising and Commercial Promotion Joint-Stock Company.  Deputy PM seeks steel report Deputy Prime Minister Hoang Trung Hai has asked the Ministry of Industry and Trade (MoIT) to issue a report on domestic steel producers that are facing stiff competition from cheap imported steel. Vietnam News Agency reported last week that cheap imported steel is a concern to domestic producers. According to local producers, they must compete against a surplus of cheap steel imported by Chinese steel producers. According to Wong Chao-Tung, President and Chief Executive Officer of the China Steel Sumikin Joint Stock Company, the US' anti-dumping investigation into China's steel trade has led China to ship its surplus of steel to Southeast Asian countries, including Viet Nam. Wong said his company is collecting information to file complaints to the Viet Nam Competition Authority. Viet Nam Steel Association (VSA) Vice Chairman Nguyen Van Sua said the amount of imported steel in July exceeded 1.72 million tonnes, a 4.8 per cent increase from the previous month and a 62.1 percent rise year-on-year. With a value of $792 million, it is up 10.5 per cent from the same period last year. In the first seven months of 2015, Viet Nam imported 8.43 million tonnes of steel worth $4.47 billion, up 38.6 per cent in volume and 9.3 per cent in value year-on-year. Of that amount, imports from China amounted for more than five million tonnes, or nearly 60 per cent of the supply - up 76 per cent from last year. Meanwhile, Viet Nam exported 1.42 million tonnes worth more than $1 billion, down 5.2 per cent in volume and 11.4 per cent in value over the same period last year. Sua said the VSA has implemented measures to create a technical barrier in order to prevent cheap steel from entering Viet Nam. He also called for local enterprises to improve the quality of their products and reduce costs to keep prices low. According to the VSA, its member enterprises produced 8.9 million tonnes of steel in the first eight months of this year, up 17.9 per cent from last year, and steel consumption reached 7.4 million tonnes, a rise of 17.7 per cent.  Vietsovpetro taps 33.6 million tonnes of oil in five years The Vietnam-Russia Oil and Gas Joint Venture (Vietsovpetro) extracted 33.6 million tonnes of oil in the period from 2010 to 2015, surpassing the five-year target by 3%.  The venture collected over 10 billion cubic metres of gas in the period, pumping onshore 2,494 cubic metres.  A number of new oil rigs have been commissioned to ensure smooth extraction and transport of crude oil.  Vietsovpetro has also built and upgraded a dozen of marine works to improve production efficiency while increasing the collection of gas to pump onshore and improving the monitoring system.  It plans to exploit 5.1 billion tonnes of crude oil and gross a total revenue of US$3.9 billion this year.  In 2014, the venture pumped 5.36 million tonnes of crude oil, exceeding its annual target by 260,000 tonnes and generating US$4.34 billion in revenue.     Cashew – spotlight in agricultural export Vietnam raked in 1.78 billion USD from shipping 245,000 tonnes of cashew nuts abroad in the first nine months of this year, up 7.8 percent in volume and 20.6 percent in value year-on-year.  In September alone, the country exported about 30,000 tonnes of cashew nuts, pocketing 218 million USD.  The figures make a stark contrast to other agro-forestry-fisheries products whose total export turnover stood at only 10.29 billion USD from January-September, representing a year-on-year decrease of 7.2 percent.  The US, the Netherlands and China are Vietnam’s largest cashew importers, making up 61.17 percent of the country’s total export revenue.  The average price of each tonne of cashew nuts in the first eight months stood at 7,271 USD, up 12.48 percent against the same period last year.  The Vietnam Cashew Association (VINACAS) said the country targets 320,000 tonnes of cashew nut exports and 2.5 billion USD in revenue in 2015.  The target is feasible as cashew demand is expected to rise in most markets in the remaining months of this year, the association affirmed.  According to the Ministry of Agriculture and Rural Development (MARD), Vietnam has to import about 60 percent of its raw cashew nuts from African nations, Indonesia and Cambodia in service of processing and export.  To ease the dependence on imports, the ministry has coordinated with VINACAS in planning, cultivating and improving cashew varieties over the past two years.  The country now has over 300,000 hectares of cashews in the southern provinces of Binh Phuoc, Ba Ria – Vung Tau and Dong Nai; Phu Yen and Binh Dinh provinces in the central region; and the Central Highlands province of Dak Lak.  The MARD and VINACAS have also implemented a project to upgrade 60,000 hectares of cashews.  VINACAS has suggested farmers cultivate good quality cashew varieties in order to increase mechanisation and cut labour force needs in processing.  MARD Deputy Minister Le Quoc Doanh said thanks to new cultivation methods, cashew productivity has increased significantly with many models yielding up to 6 tonnes per hectare. Lotte E&C keen to invest in Yen Vien – Lao Cai Railway The Lotte Engineering and Construction ( Lotte E&C) of the Republic of Korea wants to invest in the phase II of the Yen Vien – Lao Cai Railway project under the build-lease-transfer (BLT) model , according to the Ministry of Transport.  Under the phase II, the Yen Vien – Lao Cai Railway is expected to be able to handle 5 million passengers and 7.5 million tonnes of cargoes a year while the travel time should be cut by 90 minutes, the Ministry said.  Lotte E&C was one of the main contractors in the recently-completed first phase, in which the Yen Vien – Lao Cai Railway was upgraded at an investment of 166 million USD.  Upon the approval of the ministry, Lotte looks to complete the second phase within three years and then lease the infrastructure to the Vietnam Railway Corporation.  The ministry is still waiting for a detailed proposal for the project from Lotte E&C as well as response from ODA donors before deciding on the investment plan. Hanoi: e-tax payment surpasses expectations Some 96,208 enterprises in the capital city have successfully registered for and completed e-tax payments, accounting for 91.5 percent of total local enterprises, said the Hanoi Taxation Department on October 1. According to Head of the desk on disseminating and supporting tax payer Nguyen Thi Hai Yen, e-tax payments have helped enterprises save time and costs compared to traditional payment methods, encouraging enterprises to actively participate in the new mode. In order to create favourable conditions for enterprises to make e-tax payments, the department has advised sector and administration authorities to coordinate with tax offices to implement e-tax declarations and payments as well as developing training programmes for local organisations, enterprises and tax payers. The department is also working with commercial banks to open seminars for local enterprises regarding e-tax payments with a view to evaluating the implementation process and introducing solutions to difficulties that could be encountered during the process. To date, Hanoi is one of 25 localities nationwide that have achieved 90 percent of their enterprises implementing e-tax payments as per Government Resolution 19/2015, which requires the time to complete tax payments not to exceed 121.5 hours a year and the proportion of e-tax declarations among enterprises to be over 95 percent. Can Tho speeds up trade relations with Germany Can Tho is eager to speed up its trade relationship with Germany through cooperative promotion programmes with mutual benefits. The announcement was heard at a working session between Vice Chairman of the Mekong Deltacity’s People’s Committee Truong Quang Hoang Nam with a delegation from the Ministry of Foreign Affairs, and representatives from the Delegate of German Industry and Commerce (DGIC) in Vietnam in the city on October 1.  Nam said the city’s total export turnover in the first eight months of this year accounted for 4.3 million USD with major products including rice, frozen shrimp, ‘tra’ fish filet and canned farm products. Besides traditional products, the city yearns to introduce new products such as fresh fruit and high-quality apparel to the European country, he added. Head of the DGIC Marko Walde highlighted that Germany shipped 1.5 million USD worth of goods to the southern city in the first eight months of the year. German enterprises are eyeing more information regarding the Can Tho market to develop factories in rice production, processing, trading and export, sewage treatment and engineering construction. For his part, Deputy Foreign Minister Bui Thanh Son pledged to act as a bridge to link enterprises from the two sides through trade promotion programmes and international fairs. He also vowed to provide news on markets and taxation of the host country for enterprises of both sides to prevent unnecessary economic losses caused by a lack of information. Tien Giang: Export turnover hits record high Export turnover in the Mekong Delta province of Tien Giang hit 1.32 billion USD in the first nine months of this year, up 23 percent compared to the same period last year - the highest growth recorded thus far. According to the provincial Department of Industry and Trade, the figure reached nearly 83 percent of the yearly target. Key export products included garment-textiles, handbags and leather footwear which together accounted for 60 percent of the turnover in the period, up nearly 50 percent year-on-year. Handbag exports posted double growth while garment-textiles increased about 143 percent in terms of volume and 30 percent in value. Notably, foreign direct investment enterprises accounted for as much as 60 percent of the export turnover.  The good performance was attributable to businesses’ attempts to improve production lines, worker skills and product quality.  Tien Giang is continuing efforts to boost exports in the remaining months towards surpassing the goal of shipping goods worth 1.5 billion USD this year.- SHB garners Best SMEs Bank of the year The Saigon-Hanoi Commercial Joint Stock Bank (SHB) was presented with the “Best Small and Medium Enterprises (SMEs) Bank in Vietnam 2015” award at a recent ceremony held by the Alpha Southeast Asia magazine to honour the best financial institutions in Southeast Asia. It was one of the ten prizes lavished on Vietnamese financial organisations by the magazine this year. Criteria for the award included the bank’s financial capacity, business results and quality of products and services – especially policies, preferences and solutions supporting small and medium enterprises. Earlier, the bank was awarded “Best SME Bank” and “Best Customer Service Bank” in Vietnam in 2015 by the Global Banking Finance Review, a prestigious online magazine in the UK. By the end of the fiscal year 2014, the SHB had a charter capital of 9 trillion VND (400 million USD), total assets of 169 trillion VND (7.52 billion USD), pre-tax income of over 1 trillion VND (44.5 million USD) and more than 400 branches and transaction points in 50 cities and provinces nationwide and five branches overseas in Laos and Cambodia. Work begins on thermal power plant in Nghe An province Construction of a thermal power plant commenced on October 1 in Quynh Lap commune, Quynh Mai town, the central province of Nghe An.  The Quynh Lap 1 thermal power plant, invested by the Vietnam National Coal-Mineral Industries Group (VINACOMIN) has an estimated investment of the total cost of 2.2 billion USD. It consists of two turbines with a combined capacity of 1,200 megawatts. Upon completion in 2020, the plant will add 6.6 billion kilowatt hours to the national grid every year, contributing to ensuring national energy security, developing the northern central region’s socio-economy and creating jobs for local labourers.  The Quynh Lap 1 thermal plant is part of the Quynh Lap Thermal Power Centre project, which covers 283 hectares. The project, which includes two thermal power plants, has a total capacity of 2,400 megawatts with four 600-megawatt turbines.- Dong Nai’s nine-month FDI exceeds yearly target The southern province of Dong Nai attracted an estimated 1.83 billion USD in foreign direct investment (FDI) in the first nine months of 2015, up 54 percent against the same period last year and surpassing the yearly target by 83 percent.  According to the provincial Department of Planning and Investment, there were 78 new projects with a total registered capital of 1.35 billion USD while 483 million USD was added to 77 existing projects in the period. The projects were mainly being carried out at industrial zones by Asian firms.  The locality has so far attracted a combined 1,535 projects worth approximately 28 billion USD.  Many enterprises from the US, India, Taiwan (China), the Republic of Korea, Japan, Thailand and Singapore have visited Dong Nai to study its infrastructure, policies and mechanisms serving their investment plans.  Vice Chair of the Chamber of Commerce and Industry of Japan’s Nagoya prefecture Hiroyasu Naito said that Dong Nai is one of the provinces attracting Japanese investments thanks to its convenient transport and simple administrative procedures.  Mai Van Nhon, Deputy Head of the province’s industrial zone management board, said most FDI projects in the province have produced positive results.  From January-September, foreign-invested businesses in the locality earned 12.9 billion USD in total revenues, a year-on-year rise of 7.5 percent, and contributed around 445 million USD in taxes to the State budget, up 3.5 percent. Motor car excise tax to rise The Ministry of Industry and Trade has proposed new tax policies to legal amendments, significantly increasing excise taxes on automobiles with engines of over 2,000 cubic centimeters (cu cm). The ministry will apply exceptionally high tax rates on these automobiles under previous guidance from the government in July, which will take effect on July 1, 2016.  In July the government requested the ministry adjust taxes on automobiles by dividing them into smaller categories, of nine seats and with a cylinder capacity of 3,000 cu cm and over. The ministry also proposed cuts to personal income tax (PIT) for expert trainers and experts specializing in technology transfer working in the field of developing support industries. PIT will be cut by 50 per cent for professionals involved in human resources training and technology transfer that serve the development of support industries in Vietnam, for a maximum period of one year. BIDV to provide cheap loans to textiles and garments The Bank for Investment and Development of Vietnam (BIDV), the Vietnam National Textile and Garment Group (Vinatex), and the Vietnam Textile and Apparel Association (VITAS) held a roundtable discussion on September 30 in Hanoi regarding the opportunities and challenges for garments and textiles during integration. BIDV believes textiles and garments require support policies to operate effectively and so has introduced a loan program for importers and exporters for this year and next year totaling VND15 trillion ($666 million). Textile and garment enterprises have been classified as VIP customers of the bank and can access loans at preferential interest rates and conduct transactions for 20 per cent less. “In the last five years, due to wasted land resources, enterprises have not had raw material areas and are unable to prove the origin of their exported goods, so their products may be returned despite the tax benefits available from free trade agreements,” said Chairman of BIDV, Mr. Tran Bac Ha. “If enterprises can find suitable land for developing raw materials BIDV commits to being flexible on credit access, with lower interest rates.” He also suggested enterprises invest in fiber and dye to create a complete production line. BIDV will also spend $2 billion over the next five years on supporting textile enterprises to invest in finished products and semi-finished materials and provide VND10 billion ($444,444) for trade promotion activities. Outstanding loans to the bank in the sector stood at VND391 billion ($17.4 million) as at June 30, 2015.  Standard Chartered Vietnam increases charter capital The State Bank of Vietnam (SBV) signed Document No. 7364/NHNN-TTGSNH on September 28 approving an increase to the charter capital of Standard Chartered Vietnam from VND3 trillion ($133.47 million) to VND3.08 trillion ($137.02 million), under a plan proposed by its parent bank and its board of management. Standard Chartered Vietnam is responsible for preparing plans and supervising credit growth so it is suitable with targets approved by the SBV, implementing the increase to charter capital in accordance with the law, and after increasing charter capital submitting documents on adjustments to its license. The SBV document expires 12 months from the day of signing. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR