BUSINESS IN BRIEF 11/11 HCM City to hold international cashew conference The 7th Vietnam International Cashew Conference is set to take place in the southern metropolis of Ho Chi Minh City from November 22-24, according to the Sai Gon Giai Phong newspaper.  The event is expected to host representatives of over 300 enterprises and associations, including those from 30 countries and territories like the Global Cashew Council (GCC), the US’s Association of Food Industries (AFI), and the African Cashew Alliance (ACA).  The conference is co-organised by the Vietnam Cashew Association (VINACAS) and the Vietnam Trade Promotion Agency (Vietrade).  In the first 10 months of 2015, Vietnam exported 272,000 tonnes of cashew nuts for a turnover of 1.9 billion USD, up 6 percent in volume and over 18 percent in value compared to the same period last year.  The cashew sector is expected to bring home 2.5 billion USD in 2015, of which 2.3 billion USD are from cashew nuts. Vietnam continued accounting for over 50 percent of the globe’s cashew nut trade value of about 5 billion USD and maintained its title as the world’s leading cashew nut exporter for the 10 th consecutive year. Vietnam expedites drastic banking system’s shake-up The State Bank of Vietnam (SBV) and relevant financial organisations need to take drastic measures to push the banking sector’s restructuring process in its final year. During the process, self-restructuring, and merger and acquisition (M&A) are encouraged among Vietnamese commercial banks, said SBV Deputy Governor Nguyen Thi Hong. She said SBV will keep track of the progress to tackle arising difficulties and foster comprehensive restructuring while enhancing the credit institutions’ governance capacity through new mechanisms on information transparency, stock market listings, sound internal business policies and the development of risk management systems. According to economic expert Vu Dinh Anh, the banking system’s competitiveness capacity needs to be ensured not only in the domestic market, but also in foreign markets amid regional and global integration, with various bilateral and multilateral commitments to be implemented after 2015. He suggested reviewing all restructuring projects since 2011 to assure adjustments are timely while controlling the compliance of legal regulations on rates of personal and organisational ownership in commercial banks. Meanwhile, former National Financial Supervisory Commission Chairman Le Xuan Nghia said successful bank restructuring relies on integrating deep legal reforms with major renovation in state-owned enterprises, public investment, agriculture and administrative procedures. The SBV affirmed it will streamline legal frameworks for monetary and banking activities in accordance with Vietnamese practices and international standards. Achievements from 2011 to 2015 will create a base for developing a modern, sustainable credit institute system that is diverse in ownership and scale to meet the economy’s increasing demands on financial and banking services. Largest DAP fertilizer plant in northwest commenced A high-quality diammonium phosphate (DAP) fertilizer plant, the second of its kind and the largest in the northwestern region, was inaugurated in Bao Thang district, the northern province of Lao Cai on November 7. The plant, covering an area of 72 hectares in Tang Loong industrial park, was built at total cost of over 5.1 trillion VND (228.5 million USD). With a designed capacity of 330,000 tonnes of DAP fertilizer a year, the plant will help reduce the country’s dependence on foreign fertilizers with unstable prices and quality while meeting part of the export demand. In his remarks at the inaugural ceremony, Deputy Prime Minister Hoang Trung Hai underscored that the plant’s operation will raise the total DAP production to 660,000 tonnes a year that meets two thirds of DAP domestic demands for agricultural production. The plant needs to pay heed to management and production to mitigate emission and environmental pollution, he said, adding that measures to address chemical incidents must be mapped out in addition to the evaluation of the plant’s impact on the environment. The plant has created jobs for over 300 labourers in the locality, according to Nguyen Van Vinh Secretary of the provincial Party Committee. The DAP plant No.1 is located in Dinh Vu industrial park, northern Hai Phong city. Thai expo in HCM City to offer huge discounts Shoppers will have plenty of opportunities to buy Thai products at specially discounted prices November 12-16 at the Robins Thai Expo at the Crescent Mall in District 7 of Ho Chi Minh City. The Thoi Bao Tai Chinh Vietnam Online reports sellers at the venue will offer BOGO (buy one get one free) deals on a select group of items. The expo is set to have another year with a record 50 number of booths and exhibitors eager to display their products and services. In addition, the newspaper reports many cultural events are planned related to traditional Thai costume, cuisine, art performances and much much more.  A similar expo is slated for December 4-20 at the Vincom Mega Mall Royal City at 72A Nguyen Trai street in Hanoi.  Beverage sector needs to strategise Local beverage enterprises should have reasonable strategies on production and consumption to gain growth in the situation of high inventory at present, said experts. According to the Ministry of Industry and Trade's report in October, the inventory index of the beverage industry in the first 10 months of this year increased by 97.4 per cent compared with the same period last year. It was always among the top industries with the highest inventory index in the last two years. Meanwhile, the beverage industry also had a high production index, even higher than the average production index for the processing industry. The General Statistics Office reported that in the first 10 months of this year, the production index of the local beverage industry gained a year-on-year increase of 7.1 per cent, including milk powder, which went up 17.9 per cent, fresh milk, which rose 15.3 per cent, and beer that rose 6.8 per cent, in addition to commercial water, which increased 6.6 per cent. However, the consumption index of the beverage industry had a year-on-year surge of only 5 per cent in this period. The local beverage firms have faced difficulties in production and business as well as competition from rival foreign rival firms. In addition, slow growth of the local economy has been a reason for slow consumption of beverage products in the past. Nguyen Van Viet, chairman of Viet Nam Beer, Alcohol and Beverage Association, said early this year that Vietnamese beverage firms must be ready to face strong competition from foreign rival because foreign enterprises have had strong investments in Viet Nam. The association said the growth rate of the beer industry has seen a downtrend since 2011. It is expected to reduce to 4.7 per cent for this year from 8.5 per cent in 2011. The HCM City Food and Foodstuff Association said the beverage industry has faced those difficulties due to the instability in purchasing material, high transport costs and property rents, and lower purchasing power in the local market. However, experts said the local beverage industry will gain recovery in growth if it overcomes the existing difficulties. Bui Truong Thang, deputy head of the Light Industry Department under the Ministry of Industry and Trade, said that in the future, those enterprises should focus on expanding the market and synchronising production equipment to improve capacity and quality and reduce production cost. These will lead to increased competitive ability of beverage products of local firms. The SSI Research under the Saigon Securities Inc (SSI) said the consumption of beverage products has seen a saturation in cities in recent times, but the rural regions have become potential markets that the enterprises have not focussed on developing, Thoi bao Kinh doanh newspaper reported. New tax to be levied on auto imports The Government will levy a special consumption tax on cars with 24 seats and below from January 1, 2016, according to the prime minister's new decree. According to details in a number of new articles of the revised law, under the decree 108/2015/ND-CP, the new special consumption tax, which will be set equal to the importers' price, will replace the current one. It has been calculated keeping in mind their cost, insurance, and freight (CIF) value plus current import tariff. The new calculation is expected to ensure fairness between automobile importers and domestic assemblers and producers, preventing tax fraud and tax losses to the State's budget. The tax for imported cars with 24 seats and below will be equal to the importer's price but not lower than 105 per cent of the cost price, which includes the car's import price plus import tax and special consumption tax. If it is lower than this level, the tax will be fixed by a tax agency following regulations on tax management. As for the 24-seater cars assembled and manufactured in Viet Nam, the tax will be equal to the carmakers' wholesale price but this price will not be lower than 7 per cent compared with the average prices of automobile businesses. According to the General Statistics Office, Viet Nam imported an estimated 95,000 cars in the first 10 months of this year at a cost of US$2.31 billion – making year-on-year increases of 82.8 per cent and 100.2 per cent, respectively. As is normal, people's demand of cars will increase in the last few months of the year. Therefore, the businesses are expecting to import reach more than 100,000 cars by the end of this year with the total price exceeding $2.5 billion. Meanwhile, the total import turnover of auto spare parts reached $4.8 billion in the 10 months, 64.4 per cent higher than the same period last year. Imported automobiles is expected to add to the boom in the domestic market in the near future as Viet Nam will reduce its car-import tax to zero per cent by 2018, under the ASEAN Trade in Goods Agreement.  Firms urged to take up trade defence measures Vietnamese firms have been urged to learn more about trade defence instruments allowed under the WTO and cooperate in the use of trade defence  instruments to protect domestic production, a seminar heard yesterday in HCM City. Nguyen Phuong Nam, deputy head of the Viet Nam Competition Authority under the Ministry of Industry and Trade, said a series of free trade agreements would  offer huge opportunities for Vietnamese firms to boost exports. On the other hand, under these FTAs', the country will have to open its markets to imports, which can create challenges. Many countries have applied trade defence instruments, including anti-dumping, anti-subsidy and safeguards against Viet Nam's exports. Statistics from the VCA show that export products faced 98 lawsuits related to trade defence between 1994 and October this year in foreign markets. Trade defence lawsuits affect export companies' competitiveness and exports, often causing them to lose markets, according to Pham Huong Giang, deputy  head of the VCA's Trade Remedies Board. In addition, companies have to spend huge amounts of money on lawsuits, and can be hit with high import tariffs for five years or more. Domestic enterprises in many sectors like steel, spinning, paper and plastic face difficulties due to the inflow of imported products, especially from China. But domestic firms have not paid enough attention to trade defence instruments to protect their sector. As of October this year, Viet Nam has launched only one anti-dumping and three safeguard investigations into imported products. "The knowledge of Vietnamese firms about trade defence remains limited, making it very difficult to apply or initiate lawsuits against imported products," Giang  said. Giang said limited financial and human resources and a foreign language barrier were among other factors hindering firms from initiating lawsuits related to  trade defence. Vu Van Thanh, Hoa Sen Group's deputy general director of finance, said according to regulations, to file a lawsuit, plaintiffs must account for at least 25 per cent  of the market share of an industry. Companies in the same sector should join in a group as the plaintiff, he said. However, firms were reluctant to provide figures for the investigation involving trade defence, he said. In addition, there were few domestic lawyers specialising in this field. At the seminar, the VCA also spoke about necessary steps in preparing files to submit to the VCA on use of trade defence measures. Giang said exporters should learn more about issues related to trade defence and use the VCA's Early Warning System on anti-dumping cases, to avoid facing  trade defence lawsuits against their exports. The seminar on effective use of trade defence remedies to protect domestic production was organised by the VCA, the Domestic Market Department and the  Viet Nam Association of Women Entrepreneurs. Shrimp exports to fall by $1 billion Viet Nam's shrimp exports in the first nine months were worth US$2.13 billion, a year-on-year decrease of nearly 27.4 per cent, according to the Viet Nam  Association of Seafood Exporters and Producers. In major importing markets like Japan, the EU, and South Korea, the economic downturn contributed to dropping demand while sharp currency devaluations  meant Vietnamese exporters got less for their products. Besides, the currencies of large shrimp exporters such as India, Indonesia, Ecuador and China too depreciated while shrimp supply rose in Southeast Asian  countries, both of which hit Viet Nam's exports. The country's exports to the US saw a year-on-year fall of 45 per cent, and to Japan and the EU declines of 19.7 per cent and 18.7 per cent. Viet Nam's 10 largest markets are the US, Japan, the EU, mainland China, South Korea, Canada, Australia, Taiwan, ASEAN and Switzerland, which together  accounted for 94.5 per cent of its shrimp exports. VASEP has lowered this year's shrimp export target to $2.9 billion, a reduction of more than $ 1 billion from last year's $4 billion. At the beginning of this year   VASEP had set a target of $3.2 billion. In the third quarter exports were worth $840.8 million, a 26.6 per cent fall from the same period last year, but higher than in the first quarter ($573.9 million) and  second ($716.2 million). From $263.5 million in July it rose to nearly $305 million in September. In the fourth quarter exports are expected to reach $800 million, a year-on-year decrease of 2025 per cent, according to VASEP. Vietnamese shrimp is exported to 92 markets around the world, an increase of six markets compared to last year.  Phu Quoc brings in US$8b of investments Phu Quoc Island, in the southern province of Kien Giang, attracted more than 200 projects with a combined investment capital of VND168 trillion (approximately  US$8 billion) till September this year. According to analysts from the Phu Quoc Investment and Development Management Board, the presence of large investors such as Vingroup or Sun Group  has enhanced the island's attraction. To date, Vingroup has taken the lead with VND9trillion ($400 million) in investments. Sun Group came next with more than VND8.62 trillion ($383.4 million). They  are followed by Milton with VND5 trillion ($222 million), BIM Group with VND1.26 trillion ($56.3 million) and CEO Group with VND1.25 trillion ($55.91 million). A global property consultancy said Phu Quoc Island held great potential for tourism development thanks to its abundant land resource, beautiful untouched  beaches as well as year-round warm weather. Meanwhile, the island was also named by many prestigious foreign newspapers and TV channels as one of the  tourism destinations in the world with the most potential. Since becoming an exclusive economic zone, the island has been offering investors incentives on corporate tax and personal income tax, among others. It has  also exempted value-added tax for tourists at the Phu Quoc International Airport while providing them a 30-day visa exemption. In a master development plan approved by the Prime Minister, the island will be designated as a special economic zone, a centre for high-quality eco-tourism, a  trade and luxury services area, and a high-tech area. The Viet Nam Administration of Tourism's statistics showed out that the number of international tourists visiting the island had increased significantly over the   past three years from around 400,000 in 2013 to 600,000 in 2014, and 1.2 million in nine months of this year. Some experts predicted that the island would see a stronger increase in the number of arrivals in the time to come especially as high profile tourism projects  begin operations. Among them are the $133.3 million Safari Zoo project, being developed by Vingroup in a total area of 500ha and the world's longest cable  car and an entertainment centre project, by the Sun Group valued at $217.7 million.  New cement plants to boost production Three cement plants under construction will add an estimated 8.3 million tonnes to the industry's total output by 2018, intensifying pressure on prices amidst  stagnant demand. While investors in new cement projects said they could find markets for most of their output, a representative from the Viet Nam Cement Association worried  that competition in selling cement products would grow more intense due to soaring supply throughout the industry, which is already struggling with large  inventories. The three new cement plants are Tan Thang Plant, with an annual capacity of 2 million tonnes of cement and Song Lam Plant in central Nghe An Province, with a   4-million-tonne expected capacity for the 2015-17 period; and Thanh Thang Plant, with a 2.3-million-tonne cement capacity in northern Ha Nam Province. The new plants were expected to be operational in 2017 or at the beginning of 2018, at the latest. Director of Tan Thang Cement Joint Stock Company Nguyen Cao Dien was quoted by Dau Tu (Investment) newspaper as saying that the cement industry had  seen new investments after years of struggling with supply exceeding demand, with many plants incurring losses. He also said thorough market research had been conducted before making investment decisions to ensure sales would be adequate, adding that there should  be little concern about consumption. Still, the association is worried that the industry will continue struggling to sell cement due to the rising supply and fierce competition with giant cement  exporters, such as China, Thailand and Indonesia. There are some 100 cement plants in the country, with a total capacity of 60 million tonnes per year. In August last year, Viet Nam removed five cement plant projects from the industry plan for the 2011-20 period and delayed construction of nine others. In the first nine months of this year, cement sales totalled more than 52 million tonnes, roughly equal to the same period last year, and 73 per cent of the full  year's target, according to the Ministry of Construction's Department of Building Materials. Viet Nam exported 11.85 million tonnes of cement in the nine-month period, only equivalent to 88 per cent of the same period last year. — VNS Although export was considered a solution for the struggling cement industry, it was not easy to expand cement exports due to competition from China – the  world leading cement producer, accounting for 60 per cent of the world's total output. A report on Viet Nam's cement industry by Stoxplus pointed out that the industry lacked a long-term export strategy. 400 firms at Vietbuild 2015 in Ha Noi More than 400 local and foreign companies will showcase their products at the international exhibition Vietbuild 2015 in Ha Noi from November 11 to 15. There will be nearly 1,300 booths at Giang Vo Exhibition and Fair Centre displaying products of real estate, interior and exterior decoration, construction and  building materials, and others. The exhibition attracts companies from fifteen countries and territories including Viet Nam, South Korea, Japan, mainland China, Germany, Australia,  Switzerland, Spain, Singapore, Thailand, Sweden, and Hong Kong, France, Taiwan andMalaysia. The five-day event will also include seminars introducing new and hi-tech products as well as enterprise forums, which will create opportunities for Vietnamese  enterprises to expand trade co-operation, connect investments, and production and technology transfer. Advanced technology will boost the development of construction work and real estate projects of the country in the integration process, Nguyen Ngoc Quang  from the Ministry of Construction said. This is the second time that Vietbuild takes place in Ha Noi and the sixth time nationwide this year.  BIDHomes project to open in 2018 The Building and Infrastructure Development of Viet Nam Joint Stock Company (BID) and Urban and Housing Development Joint Stock Company have signed  an agreement for BIDHomes Golden South project's development. Under the co-operation contract signed yesterday, the two sides will construct the 9,760sq.m complex in the expanded North Dai Kim Urban Area in the city's  Hoang Mai District. The project was designed to have three 28-storey buildings, five floors of commercial centres and offices, two grounds and 874 apartments measuring 70sq.m  to 88sq.m each. With a favourable location, the complex will be easy accessible, with the capital's centre being just a 10-minute drive away. BIDHomes Golden South will also  be close to the large residential areas of Linh Dam, Dinh Cong, Dai Kim and Gamuda Gardens, as well as large universities and hospitals. The construction is  expected to start in the second quarter of 2016, with the complex becoming operational in the second quarter of 2018. Ineffective IPs to be reviewed Deputy Prime Minister Hoang Trung Hai has instructed some provinces which have occupancy rate of less than 30 per cent at industrial parks (IPs) to review  investment attraction and improving their effectiveness. The localities include Son La, Binh Thuan, Ninh Thuan, and Ca Mau, in addition to Hoa Binh, Thanh Hoa, Ha Tinh and Cao Bang. Some IPs in Ha Noi, Khanh Hoa  and Ba Ria-Vung Tau with low effectiveness should also be reviewed. Statistics from the government showed that in the first nine months of the year, Viet Nam has five newly established IPs bringing the total to 299 with 85,000ha.  Of which, 212 IPs came into operation with occupancy rate of 67 per cent, two per cent higher than the same period last year. The country has three new economic zones in central Quang Tri, Thanh Hoa and Nghe An provinces, making the total number to 16 IZs with area of 815,000ha.  Iceland shares seafood processing experience with Vietnam Icelandic President Olafur Ragnar Grimsson shared his country’s experience in fishing and seafood processing at a workshop held in Ho Chi Minh City on November 6.  According to the President, fishing and aquatic processing are the strengths of Iceland as it brings great profits to the country. At present, many seafood businesses in Iceland are applying high technologies and modern methods to turn the sector into a hi-tech industry with substantial contributions to the local economy, he said.  President Olafur Ragnar Grimsson also emphasised the importance of increasing quality and trade value of fish products.  It’s good time for Vietnam and Iceland to cooperate in the field, he stressed, adding that such cooperation will help Vietnam fully tap its potential and gross high profits.  Vietnam ’s fishing and aquatic processing sector has posted an annual average growth of about 15 percent in recent years, significantly contributing to the national gross domestic product (GDP) and export, said Vice Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vo Tan Thanh. However, the sector’s development failed to match its potential due to low-capacity vessels and out-of-date equipment, he said, stressing that the cooperation between Vietnam and Iceland in the field is expected to benefit both sides.  Deputy Minister of Agriculture and Rural Development Vu Van Tam said Iceland ’s experience is useful for local managers, researchers and businesses to study fishing grounds and preserve aquatic products.  Co-organised by the VCCI and Iceland’s investment and trade promotion agency, the workshop enables Vietnamese firms to get update on cutting-edge technologies and seek partners from the European country, he added. RoK insurer expands business in Vietnam The Republic of Korea’s Hanwha Life Insurance on November 5 said the company aims to become the fifth biggest insurers in Vietnam by 2020. Hanwha Life Vietnam General Director Baek Kong-guk stressed that Vietnam’s economy has grown around 6 percent a year since 2009 when the company entered this promising market. Insurance demand in the country has been on the rise although its annual gross domestic product (GDP) per capita stands at about 2,000 USD, he added. After establishing a sales network across Vietnam in the past seven years, the company is seeking stable growth in both profit and market share in the country (about 8 percent). A company’s spokesman said Hanwha Life has employed locals for most of its positions in Vietnam. Only three of the 238 employees are Korean. The company has also pledged to increase social activities, such as building health care centres, kindergartens and houses for impoverished people in northern areas of Vietnam. Founded in 1946, Hanwha Life Insurance is the oldest life insurance company in RoK. It has grown to be the country’s leading life insurer with total assets of 84 billion USD and an AAA solvency rating from prominent rating agencies. In Vietnam, the company was honoured with Golden Dragon Award in the five consecutive years of 2010, 2011, 2012, 2013 and 2014 for the “Best financial services”. As of May 2015, Hanwha Life Insurance boasted more than 69,000 customers throughout Vietnam. Business community expects stronger tax, customs administrative refor The business community hopes for stronger determination from tax and customs sectors in administrative reform, said Vo Tan Thanh, Vice President of the Vietnam Chamber of Commerce and Industry (VCCI).  Many enterprises agree that despite the sectors’ recent efforts, tax and customs in administrative reform progress has yet to meet expectations or the country’s socio-economic development, Thanh said during a dialogue between the Ministry of Finance and the business community in Ho Chi Minh City on November 5.  According to a recent VCCI report on the tax sector’s operations, 49 percent of 2,500 surveyed enterprises in 63 localities nationwide complained that they find administrative procedures troublesome.  Besides, 92 percent of the firms said they saw positive changes in tax laws in the past five years, especially in value-added tax and corporate income regulations.  The sharpest cuts in the duration of administrative procedures were seen in land use, natural resources and special consumption taxes, the report said.  Meanwhile, most of the questioned businesses recognised impressive outcomes in customs renovation. However, they also pointed to a lack of synchrony between old and new procedures, which poses difficulties to businesses during implementation, Thanh said.   He said enterprises in the southern region wanted the tax and custom sectors to simplify administrative procedures and expand information channels while shortening duration and becoming more transparent.  At the same time, Deputy Minister of Finance Do Hoang Anh Tuan said stagnation during the implementation of laws in some tax and customs departments was among the main reasons some policies were inefficient.  The Government’s Resolution 19 on tasks and solutions to improve the business environment and national competitiveness in 2015 and 2016 has enabled the tax and customs sectors to make positive changes, he said, but the sectors should make more efforts in the field.  Currently, e-taxation systems have been applied in 36 localities, benefiting 506,000 enterprises. As of November this year, total businesses registering for e-tax payment reached 457,504, or 90 percent of operating firms. Trade, dumping laws tightened Vietnam is tightening its trade laws to protect its domestic market in light of the ASEAN Economic Community (AEC) and a number of other free trade agreements in the offing, said Deputy Head Nguyen Thanh Nam of the Vietnam Competition Authority. "We will reform our laws to better cope with irregular competition in the Vietnamese market by foreign manufacturers and exporters,'' Nam said at a seminar on November 6 in Ho Chi Minh City addressing unfair trade practices and how best to cope with them.  Nam said at the seminar that the new regulations on goods imported and exported would provide a more standard and transparent base for the government to administer trade after the AEC and other free trade regions are formed. The regulations will insure domestic businesses operating abroad will be protected in foreign markets as well and will fully cover anti-dumping, anti-subsidy and other trade safeguard measures. He said transparent anti-dumping laws will be the most powerful weapons both at home and abroad to combat unfair trade and domestic businesses need to go the extra mile to make sure they comply with the laws to the letter, to best protect themselves. Phu Quoc welcomes 750, 000 visitors Phu Quoc island has welcomed 750,000 visitors, 30% of them are foreign arrivals in the nine months leading up to October this year.  Huynh Quang Hung, vice chairman of Phu Quoc island district People’s Committee said 6,000 hotel rooms are currently available in Phu Quoc. The district expects to have a total of 15,000 rooms by 2020 to serve 2.5 - to 3 million visitors per year. According to Phu Quoc John's Tours, the number of international visitors to Phu Quoc has increased significantly in recent years. So far, the island district has attracted more than 200 foreign and domestic invested projects totally capitalised at VND168,000 billion in tourism, services and entertainment. Bac Lieu sees record high seafood exports The Mekong Delta province of Bac Lieu earned nearly 351 million USD from seafood exports in the first 10 months of this year, 100 million USD higher than that of the whole 2014.  The money came from the shipments of 42,300 tonnes of seafood products, with 97 percent being frozen shrimp, a 7 percent rise year on year.  Local processors and exporters have been pledged to have adequate power supply and financial bank support to ensure their stable production until the end of this year. They are requiring more input materials for their next year’s orders. So far, Bac Lieu has earned 381 million USD in exports, fulfilling 85 percent of its yearly target, but experiencing a drop of 5.8 percent over the same period last year.  The locality’s rice exports reached only 26 percent of the target for the whole year due to fierce competition from Thailand, India and Pakistan. Bank restructuring on right track with positive results The Government is on track to settle its bad debts and cross-ownership, under a scheme to restructure credit institutions from 2011 to 2015. According to the State Bank of Vietnam (SBV), more than 424.1 trillion VND in non-performing loans, or 91.2 percent of the total as of September 2012, was recouped between 2012 and August 2015, bringing down bad loans at lenders to 3.21 percent of total lending in August 2015. The figure is expected to drop below 3 percent later this year. SBV Deputy Governor Nguyen Kim Anh put the success down to the adoption of new standards on debt classification that unlock capital inflows into efficient economic areas. She also called for the involvement of ministries, departments, localities and businesses in the process, and for authorities to devise proper policies. Economist Vu Dinh Anh pressed for more efficient operation of the State-run Vietnam Asset Management Company, a powerful legal entity established to restructure bad debt. He suggested building and operating a secondary debt market accessible by both domestic and foreign investors, and fine-tuning relevant legal regulations. In his view, a large amount of toxic debt was still owned by State groups and corporations that were being restructured. Le Xuan Nghia, former vice chairman of the National Financial Supervisory Committee, acknowledged initial achievements in addressing cross-ownership and market corner behaviours, thanks to the application of international-standard risk management, accounting, financial statements and safety indicator practices. National Financial Supervisory Committee Vice Chairman Truong Van Phuoc hailed better banking management quality, which was possible thanks to manpower and financial support following mergers and acquisitions. Since 2011, 17 credit institutions and branches of foreign banks have shut down through mergers, acquisition or dissolution, Anh said. Events spotlight trade with Russia Viet Nam will organise a series of events in Russia in response to the signing of the free trade agreement (FTA) between Viet Nam and the Eurasia Economic Union (EEU). The events would be jointly held by the Ministry of Industry and Trade (MoIT), the Vietnamese Embassy in Russia, State Committee of the Overseas Vietnamese Affairs, and the Bank for Investment and Development of Viet Nam (BIDV), in addition to the Ha Noi-Moscow Trade Centre Investment Joint Stock Company (INCENTRA). Accordingly, a world-wide conference of Vietnamese entrepreneurs would be held on November 10. The two-day event is expected to attract participation of 150 Vietnamese entrepreneurs from around the world of which 70 are overseas Vietnamese in Russia. This would be the largest conference of its kind so far. Participants would have the opportunity to visit production units of Vietnamese businesses in Russia. The entrepreneurs would also be honoured for their contribution to Viet Nam as well as having the chance to connect to Vietnamese businessmen worldwide. A Viet Nam-Russia forum on promoting trade co-operation and bilateral payment would also be held on November 12. The forum aims to connect importers and exporters of the two countries, creating opportunities for businesses to seek co-operation. It would introduce opportunities and benefits of imports and exports after the FTA comes into effect. The bilateral payment channels, their advantages and preferences, as well as issues relating to the payment would be released at the forum. The forum has drawn special attention of exporters from the two countries. The organising board said that around 300 to 350 firms, which include 200 Vietnamese companies and the rest from Russia, would take part in the event. Specifically, the Viet Nam-Russia Bank and BIDV and VTB would speak about the two-way payment channels which have been a bottleneck for trade between the two countries over the past year. A one-month long exhibition on high quality Vietnamese goods would begin on the same day. Around 170 Vietnamese enterprises with hundreds of tonnes of goods would be transported to Russia by sea and air. Food, garment and textiles, handicrafts, and seafood, apart from tea, coffee and confectionery, would be showcased at the event. The goods are required to meet with Vietnamese standards and should be suitable for the Russian market. About 4,000 to 5,000 Russian firms will be attending the exhibition. Special conferences on connecting agricultural and foods businesses, wooden furniture and interiors, with experiences on access to Russian markets would be organised under the aegis of the exhibition.  Lam Dong seeks market for tea Lam Dong Province, the country's largest tea cultivation area, has an oversupply of tea as exports have declined. As of mid-October, tea companies in Lam Dong had stored nearly 5,000 tonnes of unsold tea, including 2,590 tonnes of black tea, 1,660 tonnes of green tea and 688 tonnes of OoLong tea, according to the province. Black and green tea is mostly exported to Pakistan and Afghanistan, according to Nguyen Van Son, deputy director of the province's Department of Agriculture and Rural Development. Son spoke at a meeting held on Tuesday in Lam Dong. Foreign importers are still buying tea from Lam Dong, but payments have been slow. OoLong, a kind of high-quality tea, is mostly exported to Taiwan. However, Taiwan has recently set up technical barriers, including reducing the maximum ermissible levels for fipronil, a pesticide, in tea to 0.002ppm (parts per millions). This was done to limit tea exports from Viet Nam to protect Taiwan's tea production, according to Son. Export decline was due to tea growers and processors, he said. Tea companies cannot manage the quality of tea materials, especially the residue of pesticides in tea, he said, adding that many tea growers used pesticides improperly. Since Taiwan reduced the maximum permissible levels for fipronil in tea to 0.002ppm in July, the province's nine tea companies have temporarily stopped operating and many tea companies have cut back their production because of export decline. Tea companies now buy fresh tea at a price of 5-10 per cent lower than the same period last year. OoLong tea, for instance, is purchased at VND20,000 (90 US cents) a kilo, down VND400 (2 cents). Pham Duc Nguyen, director of Phuong Nam Enterprise, said the management of pesticide use still had limitations. Tea companies did not have facilities to do quick tests of tea quality when they bought tea from farmers, he said. Doan Trong Phuong, deputy chairman of the Viet Nam Tea Association, said: "Tea companies should cooperate with farmers to set up tea material areas and systems to trace tea origin. If tea from a farmer is found having pesticide residue exceeding safety standards, the farmer will not be allowed to participate." Pham S, vice chairman of the provincial People's Committee, said to solve current problems agencies should develop measures to raise awareness of farmers in applying high technology and safe standards in tea production. Farmers should not use any chemicals that contain fipronil, he said. Agencies should find markets in Europe as well as the America for OoLong tea, he said. The province would organise two trade promotion delegations to Europe by the end of this year to promote tea exports, he said. The Tay Nguyen (Central Highlands) has nearly 24,000ha of tea with annual output of 230,000 tonnes, accounting for about 30 per cent of the country's tea cultivation area. Lending rates likely steady as deposit rates higher Lending interest rates will remain steady despite a recent upward trend in deposit rates, experts have forecast. In October, some commercial banks increased interest rates on dong deposits by between 0.2 per cent and 0.5 per cent per year, making it the fifth hike since August this year. DongA Bank in late October announced a 0.5 per cent increase in the rate for numerous term deposits, raising 6 month, 7 month and 8 month deposits to 6 per cent per year. The rates for shorter terms of 3 month, 4 month and 5 month deposits have also been adjusted upwards by 0.2 per cent to 5.2 per cent. This marked the second time the bank had raised its rate since mid-August this year. After making a 0.2 per cent deposit interest rate hike on October 21, Viet Capital Bank on October 28 also announced a second adjustment for the month, with another increase of 0.2 per cent for numerous term deposits. Previously, Ocean Bank, Viet Capital Bank, Sacombank, Eximbank and Lien Viet Post Bank had also inched up their deposit rates by roughly 0.2 per cent. With the fifth hike, the dong deposit interest rate offered by commercial banks has increased by a total of some 1 per cent since August this year. Commercial banks expected the rate increase to help them attract more deposits, especially medium- and long-term deposits, to balance their source of capital and meet medium- and long-term lending demands. After the deposit rate increase, businesses feared a possible lending rate hike would occur in the following months. However, experts said strong liquidity at large banks would make it difficult to increase the lending rate in the coming months. According to Can Van Luc from BIDV, the deposit interest rate hike is not popular and is seen only in small- and medium-sized banks which are capitalising on the rising deposit sources at the end of the year to enhance their capital mobilisation and to boost their credit growth. The rates at large banks such as Vietcombank, VietinBank, Agribank and BIDV had remained stable thanks to their strong liquidity, Luc said. The latest statistics from the State Bank of Viet Nam also showed that the dong mobilisation rates continued to be stable. The rates were commonly at 0.8-1 per cent per year for demand and for terms below 1 month, 4.5-5.4 per cent for terms of 1 to less than 6 months, 5.5-6.5 per cent for terms of 6 months to less than a year, and 6.6-7.2 per cent for terms of longer than a year. Director of Vietcombank's Thang Long branch Ho Van Tuan also told Tien Phong (Vanguard) newspaper that interest rates for the rest of the year would remain unchanged due to good liquidity. According to Tuan, his branch, to date, has mobilised more than VND10 trillion (US$446.42 million), while its total outstanding loans amounted to some VND5.3 trillion ($236.6 million). Vietcombank's lending interest rates are over 10 per cent per year for long-term loans and about 8.5 per cent for short-term loans, according to Tuan. Tuan said his bank expected to boost credit growth, but it was not easy to find good borrowers at the moment. The director of an Agribank branch in the capital, who declined to be named, confirmed that banks were trying to boost lending to exporters and importers whose capital demands were rising at the year-end. However, the director admitted that lending was not easy, as this group of customers did not pay much attention to interest rates but to lending procedures and mechanisms. He was concerned that his branch would have difficulty meeting the annual lending target as it had so far met only 60 per cent of the target. According to the central bank, the dong lending rates have remained stable. Besides the average rates of 6-7 per cent for short-term and 9-10 per cent per year for medium- and long-term loans for priority fields, State-owned joint-stock commercial banks have also continued offering the rates of 6.8-9 per cent per year for short-term and 9.3-11 per cent for medium- and long-term ordinary loans. As inflation this year is forecast to rise by only about 2 per cent, the lowest level for the past decade, deputy head of the National Assembly's deputies delegation of HCM City Tran Du Lich affirmed that he would recommend the relevant ministries and bodies cut the lending rate by some 2 per cent per year starting in 2016 to support production and business. If medium- and long-term lending interest rates remain high at 9-10 per cent per year, local businesses cannot restructure their firms to increase their competitiveness, Lich said.  VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR