BUSINESS IN BRIEF 8/11 NFSC sees challenges for economy The National Financial Supervisory Commission (NFSC) has released a report on Vietnam’s economic situation for October and the first ten months of the year, together with forecasts for 2016. The NFSC believes economic growth over the remainder of the year will slow down due to fluctuations in the global economy, the lack of progress in Vietnam’s economic restructuring, and policy space (fiscal and monetary policy) being narrower. In 2016 Vietnam will face greater challenges in economic growth, with the NFSC predicting GDP growth of 6.5 to 6.7 per cent.  GDP in the first nine months reached 6.5 per cent, with the NFSC writing that the manufacturing and construction sector was the major contributor, with GDP growth of 9.57 per cent, which is nearly double the 5.75 per cent recorded in the same period last year. Meanwhile, growth in the service sector remained largely unchanged year-on-year, while the agriculture, forestry and fisheries sector saw growth fall from 2.94 per cent to 2.08 per cent. The Index of Industrial Production (IIP) in the first ten months rose 9.7 per cent, significantly higher than in the same period last year, when it was 6.69 per cent. Assembly and mechanical engineering increased 10 per cent; 2.6 per cent higher than the 8.4 per cent in the same period last year. Export orders in the region are low, however, and have fallen for four consecutive months. The banking system in the first ten months saw stable liquidity growth and risk provisions also increased. In October liquidity increased, with the loan-to-deposit ratio (LDR) remaining at 80 per cent, with capital mobilization and foreign credit granting also recording an LDR of 85 per cent.  The credit structure has moved from long and mid-term loans to short-term loans. Though credit growth is solid, the net interest margin (NIM) slightly increased, but because of banks increasing their risk provisions the return on equity (ROE) and return on assets (ROA) fell. Financial markets began to recover in October. The market reacted positively to news the TPP had been signed and to positive third quarter business reports from listed companies. Information that the State Capital Investment Company (SCIC) has been directed to divest from SOEs also triggered an upward trend in the market. Foreign investors, meanwhile, bought about $50 million in the stock market in the early weeks of October. 66,000 businesses using e-customs Vietnam Customs held a preliminary review on October 30 on the implementation of the VNACCS / VCIS (Vietnam Automated Cargo And Port Consolidated System/Vietnam Customs Information System).  The review showed that the system has been successfully implemented, completed its basic objectives, met the requirements of the government on managing customs, and become a useful tool not only for Vietnam Customs but also other authorities. Beginning on April 1, 2014, VNACCS / VCIS is the largest IT project of Vietnam Customs. Processing times are quicker and the system has now been deployed at all local customs departments. According to Vietnam Customs, in October some 66,000 businesses declared goods through VNACCS / VCIS with 11.4 million declarations on exported and imported goods with turnover of $471.7 billion. VNACCS / VCIS is the basis for implementing the national and ASEAN one-door customs mechanism and contributes to improving national competitiveness. Senior Advisor at the Japan International Cooperation Agency (JICA), Mr. Makoto Kato, said the rate of 99 per cent of customs declarations going through VNACCS / VCIS in Vietnam is even higher Japan’s 98 per cent. He also noted that this proves it is important to upgrade systems to meet growing requirements. Deputy Director of Vietnam Customs, Mr. Vu Ngoc Anh, said that the department is continuing to complete system connectivity with the national one-door customs mechanism and expand it to connect to the satellite communications sector. VNACCS / VCIS has completed its first phase and the second phase is still being upgraded. Japan will support the implementation of the second phase. October PMI comes in at 50.1 The Nikkei Vietnam Manufacturing Purchasing Managers’ Index (PMI), a composite single-figure indicator of manufacturing performance, posted 50.1 in October, only fractionally above the 50.0 “no-change” mark and thereby signaling little change in business conditions over the month. The reading was up from the 49.5 recorded in September, according to the latest report from Nikkei and Markit Economics. Vietnam’s manufacturing sector stabilized in October, providing some reassurance that the deterioration seen in September was not the start of a prolonged downwards trend, according to Mr. Andrew Harker from Markit. That said, the strong growth seen earlier in the year now seems a long way off, with external markets looking to be the key headwind at present, the report stated. Firms will hope for an improvement in global economic conditions to help support a return to growth. “Falling raw material costs were again recorded in October, leading both input prices and output charges to decrease further,” Mr. Harker said. “However, the respective rates of decline eased.” Helping the headline index to rise back above the 50.0 mark was a marginal increase in production, according to the report. This followed a fall in the previous month. Those respondents that saw growth in output linked it to higher new orders. However, other panelists saw new business decline, thereby feeding through to lower production. New business decreased marginally overall in October; the second successive month in which a reduction has been recorded. “Panelists linked the fall to declining client demand, which was also a factor behind a fifth consecutive monthly contraction in new export orders,” the report added. Lower new business resulted in spare capacity at Vietnamese manufacturers and a subsequent reduction in backlogs of work. This also led to a third successive monthly slowdown in the rate of job creation. “The latest increase in employment was only slight,” according to the report. Manufacturers in Vietnam continued to report falling raw material prices during October, feeding through to reductions in both input costs and output prices. In both cases the rate of decline was solid but the weakest in three months. Input prices have fallen continuously since July. A second successive monthly reduction in purchasing activity was posted, with panelists indicating that holdings of inputs were sufficient to meet output requirements. Consistent with this was a marginal increase in stocks of purchases, ending a three-month sequence of depletion. Stocks of finished goods also rose, as was the case in September. According to respondents, an increase in production, a fall in new orders, and delays in distributing products to customers all contributed to the increase in post-production inventories. Suppliers’ delivery times, meanwhile, improved for the third month in a row amid reports that reduced workloads had enabled them to cut lead times. Winners of mobile marketing awards announced The Mobile Marketing Association has announced the Vietnam SMARTIES Awards 2015, for brands and products recording great results from mobile marketing. There are 15 categories in total: Brand Awareness, Product / Service Launch, Promotion, Relationship Building & CRM, Lead Generation / Direct Response / Conversion, Cross Media / Mobile Integration, Marketing within Mobile Gaming, Messaging, Mobile Apps, Mobile Websites, Innovation, Location Based, Best Brand Experience in Mobile Rich Media, Most Engaging Mobile Creative, and Industry Awards. Leading brand names with gold medals were Coca-Cola, Samsung, Heineken, Unilever, Lazada, and Adtima, with Adtima receiving gold medals in five fields and a total of 18 medals, including silver and bronze. In the Industry Awards, Momo won first place in Enabling Technology Company of the Year. Zalo was in first place in Publisher / Media Company of the Year. “Share a Coke” from Coca-Cola and “Watch it with the S6” from Samsung won the “Best in Show” award, while Adtima also received the Agency of the Year in Mobile award and Unilever was Marketer of the Year. “In my opinion the best value for MMA Forum delegates is gaining a broad picture of the mobile marketing market, which is being strongly developed, and learning from many countries as well as Vietnam, especially when Vietnam is seen as one of the fastest-growing markets for mobile marketing in the region,” said Mr. Nguyen Anh Tuan, Managing Director of Adtima. The SMARTIES Awards are held by the Mobile Marketing Association to seek new and valuable ideas and innovation that will lead the mobile marketing industry. It also honors achievements in mobile marketing at three levels: nationwide, regional, and global. The Awards have been presented for the last ten years around the world and this is the second year they have been held in Vietnam. Sabeco to sell Eximbank stake Sabeco is in the process of selling all of its 5,728,051 shares in Eximbank (EIB) at an agreed price to investors. According to a report from Sabeco it paid around VND11,137 ($0.5) per share. By June 30 it held 0.46 per cent of the bank’s charter capital. The book value of the investment was approximately VND63.8 billion ($2.86 million), or still $0.5 per share. In the last three months the share price has traded in the range of VND11,400 ($.51) to VND12,000 ($0.54) per share, standing at VND11,800 ($0.53) per share by the end of October. Eximbank currently has two large shareholders: the Sumitomo Mitsui Banking Corporation and Vietcombank, which hold 15 per cent and 8.19 per cent, respectively. Inspection authorities announced on October 22 that there were many problems in the shareholding and share investment in Eximbank. Some loans relating to investment in banking stocks did not follow regulations, and these were requested to be handled within one month from the inspection results being announced. According to local media, in the near future Eximbank will make certain changes in its leadership positions. The State Bank of Vietnam will assign representatives to manage and participate in its restructuring of Eximbank, who will come from Vietcombank. In January this year the Saigon Jewelry Company Limited (SJC) announced the sale of all its 25.62 million shares in Eximbank, equal to 2 per cent of its charter capital. Grant Thornton relocates HCMC office Grant Thornton Vietnam will move from the Saigon Trade Center in Ton Duc Thang in Ho Chi Minh City’s District 1 to the 14th Floor at Pearl Plaza, 561A Dien Bien Phu Street in Binh Thanh district on Monday November 2. “This move reinforces Grant Thornton Vietnam’s continued commitment to the Global Strategy -Growing Together 2020,” said Mr. Kenneth Atkinson, Executive Chairman of Grant Thornton Vietnam. “The strengthening of the Grant Thornton presence in Vietnam is an indicator of our strong momentum in key growth markets.” To accommodate the rapid growth of the firm the new office has been designed with a focus on a modern working environment, incorporating a more efficient layout, access to natural light, increased multi-purpose space, and more effective collaboration and training rooms. “This is an exciting development,” said Mr. Nguyen Chi Trung, Managing Partner of Grant Thornton Vietnam. “Our new space will enhance collaboration and excellence, allowing us to better serve our current and future growth-oriented clients in the area.” Grant Thornton’s phone numbers will not change but the fax number will. Full details are as follows. Future bright for textiles & garments By 2050 Vietnam is expected to be the second-largest textiles and garment exporter, up from its current position of fifth, Chairman of the Vietnam Textile and Garment Association, Mr. Vu Duc Giang, told the "Stock Market by the end of 2015 - Opportunities for Shares in Textile and Garment Sector" workshop at the Hanoi Stock Exchange (HNX) on October 30. Textile and garment exports were previously targeted to reach $30 billion by 2020 but this year stood at $28 billion, recording growth five-times faster than the government’s plan. “The Association predicts that by 2020 the figure will be $50 billion to $55 billion,” Mr. Giang added. The sector has been a bright point in Vietnam’s stock market as the year draws to a close, with well-performing shares including TCM (Thanh Cong Group), TNG (Investment Corporation and Trading TNG), STK (Century Synthetic Fiber Corp) and G20 (G.Home Textile), Deputy Director of the Research and Analysis Department at VietinBank, Mr. Dang Tran Hai Dang, said in the workshop. “The sector is considered to have potential to grow thanks to benefiting from free trade agreements,” he explained. The sector is actually performing better than the VN-Index. Mr. Giang said Decree No. 60, issued recently by the government, urges Vietnamese enterprises to list on the stock market. State-owned enterprises, after completing their IPO, are required to register with the State Securities Commission (SSC) for listing. “A number of famous Vietnamese textile and garment enterprises are to be listed, such as the Viet Tien Garment Joint Stock Cooperation, the Garment 10 Corporation, the Nhabe Corporation, and 28 Corporation,” he said. Textiles and garments has attracted about $3.5 billion in foreign investment and this will grow much higher after a number of textile and garment enterprises list. “The textile and garment sector has seen sustainable development and become a ‘hot’ sector for investment,” said Ms. Nguyen Thi Hoang Lan, Deputy Chairwoman and Deputy CEO of HNX. “Vietnamese textile and garment enterprises rarely appear in the media, instead quietly going about their investment,” Mr. Giang said. The Viet Tien Garment Joint Stock Cooperation, for example, has invested in about ten projects over the last two years or so, while Vinatex has invested in 13 projects in the same timeframe. The “yarn forward” rule in the TPP on input materials for the sector is being gradually addressed by Vietnamese enterprises. Mr. Giang explained that, by 2018, the localization rate in Vietnam’s textile and garment products will reach some 70 per cent. Since the beginning of the year Vietnam has seen foreign investors buy around $209 million worth of shares, Mr. Dang said. Meanwhile, foreign investors has sold around $1 billion and $3 billion worth in Indonesia and Thailand, respectively. CBU automobiles double this year Figures from the General Statistics Office show that the number of imported complete-built-up (CBU) automobiles in the first ten months of the year totaled over 94,600 units, valued at $2.3 billion, an increase of 83 per cent in number and 100 per cent in value year-on-year. The figures also showed a clear change in import markets. In 2013 and 2014 South Korea led the way with an average of 15,000 to 16,000 units imported each year. This year, however, China has taken its place, with more than 20,000 units valued at $776 million. The Vietnam Automobile Manufacturers Association (VAMA) previously forecast that motor vehicle sales this year may reach 200,000 units.  The increasing number of imported automobiles significantly increased the revenue and profits of a number of automobile firms. Accumulated revenue from January to September for the Hoang Huy Group was VND417 billion ($18.69 million), a 230 per cent increase, for Truong Long Auto VND102 billion ($4.57 million), a 345 per cent increase, for TMT Motor VND185 billion ($8.29 million), a 422 per cent increase, and for Savico VND120 billion ($5.38 million), a 115 per cent increase. Southeast Asia and India are the center for small cars with low prices. However, with falling tariffs under recent free trade agreements and policies to come into play by 2018, small cars from India and Thailand will gradually increase in Vietnam. The draft Law on Special Consumption Tax, which cuts rates from 45 per cent to 25 per cent for cars with an engine capacity of under 2 liters, is waiting to be passed. If this happens, the price of CBU units under 2 liters imported from ASEAN countries will fall between $2,500 and $4,000 and $1,500 to $2,500 for those from India. The KIA K3 1.6 AT, for example, which now has a price tag of $30.381, will then sell for $26,149. Max Mara opens first store in Vietnam Following the successful distribution of global luxury brand Christian Louboutin in Vietnam, international fashion distributor Maison JSC has officially announced the opening of the first store of Max Mara, an Italian premium brand, at 25 & 27 Trang Tien, Hanoi, in December. “The forecasted economic situation for Vietnam is among the factors that drove our decision to expand our fashion network,” said Ms. Pham Thi Hong Nhue, Director of Maison Hanoi. The arrival of individuals and foreign enterprises and the emergence of potential domestic customer groups are positive signs for the proliferation of the high-fashion segment. “All of these elements will consolidate our business operations and positively contribute to the retail segment,” Ms. Nhue added. Savills Vietnam assisted Maison in finding a strategic location for Max Mara. On an area of 200 sq m at international standard, the two new stores of Max Mara and Christian Louboutin will create a chain of prominent shopping destinations in the downtown area, continuing to satisfy the luxurious tastes of the city’s shoppers. The Max Mara store is now in the final stages of decoration to welcome customers during the year-end festive season. Founded in 2002, Maison JSC has been an exclusive distributor of world famous brands in Vietnam with more than 60 stores, including Topshop / Topman, Mango, Karen Millen, Coast, Warehouse, Oasis, Charles & Keith, Pedro, Accessorize, Havaianas, Bebe, NYS, Miss Selfridge, Dorothy Perkins, MAX&Co., and now Max Mara. Alibaba to hold Online Export Forums The Online Export Forum 2015 will be held by the Alibaba Group and its representative in Vietnam, OSB Holding, in four cities around the country - Hanoi, Da Nang, Ho Chi Minh City, and Can Tho - on November 11, 18, 19, and 21, respectively. The Forum aims to raise the competitive capacity of Vietnam’s exporters in e-commerce so they can seize the opportunities presented by the EU-Vietnam Free Trade Agreement and the recently signed TPP. The Forum will present information on the EU market to help Vietnamese enterprises establish a strategic direction in their business activities. Participation in global B2B e-commerce platforms is seen as an effective and economic solution. With the opportunities available and as integration continues, being able to get ahead of the trend and apply tools in the IT field effectively will create a competitive advantage in global markets. Dr. Le Dang Doanh, Senior Economist and former Director of the Central Institute for Economic Management, will be in attendance, as will leading managers and experts in the field of exports and e-commerce. Alibaba is one of the leading e-commerce platforms for B2B, with over 48.3 million users from more than 240 countries and regions. OSB Holding has been its official authorized dealer in Vietnam since 2009. Hoa Phat looks at steel plant in Quang Ngai The Quang Ngai Provincial People’s Committee met recently with related departments on an integrated steel plant investment proposed by the Hoa Phat Group in the central province’s Dung Quat Economic Zone.   According to Dung Quat’s Management Board the steel plant would have a capacity of 4 million tons per year and total investment estimated at $2 billion to $2.5 billion if it was to go ahead. It will produce high-quality long steel, form steel, and sheet steel on an area of 300 to 350 ha on the site of the Quang Lien Steel Plant, which has been delayed and may have its investment license revoked. The People’s Committee and related departments will create the necessary conditions for the Hoa Phat Group to conduct further research on the project. However, the province should quickly revoke the investment license for the Quang Lien Steel Plant, given it has been delayed due to the investor lacking capital. At the meeting the Chairman of the Provincial People’s Committee, Mr. Tran Ngoc Cang, said that Hoa Phat Group’s intentions are a positive sign for the province. He therefore asked the Management Board at Dung Quat to quickly coordinate with related departments to complete procedures to revoke the investment license for the Quang Lien Steel Plant and submit them to the Provincial Standing Committee and the Prime Minister for consideration. He also directed the Management Board to introduce investment procedures and investment incentives and land use, for submission to the People’s Committee for consideration. In the first quarter of 2015 the Group’s revenue reached VND6.9 trillion ($309.4 million) with a profit of VND1 trillion ($46.5 million). Steel manufacturing has seen high growth in construction steel and steel tube. In steel construction, Hoa Phat holds a market share of 22 per cent and 23 per cent in steel tube, the largest in both. According to Group Chairman Mr. Tran Dinh Long, Hoa Phat is developing breeding feed factories in northern Hung Yen and southern Dong Nai provinces with a total capacity of 500,000 tons per year and capital of VND500 billion ($22.5 million). The plants are expected to be completed in the first quarter of 2016. Healthy 9M for VPBank VPBank’s accumulated net operating income for the first three quarters of 2015 reached VND8.448 trillion ($378.64 million), a 94 per cent increase year-on-year. Income from services grew strongly, at 51 per cent, as the bank seeks to be less reliant on profit from other activities. Total mobilized capital was nearly VND148 trillion ($6.63 billion), 5 per cent higher than the annual plan and up 22 per cent compared to the end of 2014. VPBank was ranked 21st in the V1000 rankings; the 1,000 organizations that have paid the most corporate income tax in Vietnam in 2015. Profit before tax for the first nine months stood at VND2.329 trillion ($104.39 million), equal to 93 per cent of the annual plan and 73 per cent higher year-on-year. Total assets as at September 30 were VND195.004 billion ($8.74 billion), representing 96 per cent of the annual plan and nearly $1.43 trillion (19 per cent) higher than the figure at the end of 2014. Besides maintaining positive growth in traditional products for individual customers and small and medium-sized enterprises (SMEs) in 2015, VPBank also introduced products and credit policies for household businesses in traditional markets and traditional craft villages. It also supported enterprises in the agricultural sector in securing capital to expand their business. “In 2015 VPBank successfully implemented its end-to-end risk management system for individual customers and SMEs, resulting in quality of debt increasing four-fold and risk provisions falling,” according to its report. As at September 30 VPBank had handled 100 per cent of its bad debts under a commitment to the State Bank of Vietnam, of which VND1.25 trillion ($56.03 million) was in customer debt repayments. “A debt collection system was also set up, which effectively cut the rate of debt conversion compared to last year,” the report stated. Senior banking personnel in state of flux With a policy in place to promote the restructuring of Vietnam’s banking sector, from now to the end of the year there is expected to be some volatility in banking personnel, especially high-level personnel. Over the next month Southern Bank and Sacombank are expected to hold extraordinary shareholders meeting to carry out their merger. According to the State Bank of Vietnam (SBV), Mr. Tram Be, Deputy Chairman of the Board at Sacombank, committed to authorizing indefinitely the SBV or individuals assigned by the SBV to implement the rights of shareholders as prescribed by law and the charter of Southern Bank. Thus, once again senior personnel at Sacombank will change, after changing its Chairman three times. Eximbank, meanwhile, is also in a period of restructuring its senior and high-level personnel. Despite holding the Chairman position, when addressing the annual shareholders meeting in July this year, Mr. Le Hung Dung said he would withdraw from the Board for the next term (2015-2020). The bank plans to conduct extraordinary shareholder meetings this month. The head of Eximbank told local media that the SBV may appoint high-end personnel at the bank. Besides Sacombank and Eximbank, in the past two months three other banks have also seen changes in senior personnel. Saigonbank announced a change of Chairman to its shareholders, with Mr. Nguyen Phuoc Minh retiring on September 1 from the position for the 2013-2017 term. Board Member Mr. Tran Quoc Hai took on the post of Chairman. Nam A Bank also surprisingly conducted an extraordinary shareholders meeting to announce the resignation of Chairman of Mr. Nguyen Quoc Toan and assign Mr. Phan Dinh Tan, Deputy Chairman of the Board, to the post. The new Chairman told the meeting that Nam A Bank would continue to develop into the future. It is implementing plans to increase its charter capital to VND4 trillion ($180 million) but has yet to succeed in doing so. Changes to senior personnel at DongABank at the end of August also attracted a lot attention. After falling under the control of the SBV, Mr. Tran Phuong Binh, former CEO, and Ms. Nguyen Thi Ngoc Van, former Deputy General Director, were both suspended, and with the resignation of Mr. Cao Sy Kiem, former Chairman of the Board, the bank had a new Chairman appointed on August 27. The SBV assigned Mr. Vo Minh Tuan as a Board Member, with other Members subsequently agreeing to Mr. Tuan becoming Chairman. Although the shareholder meeting season has ended it is expected that changes in senior personnel at banks will continue in the future. Singaporean fund invests $300 million in Diamond Lotus Singapore’s Genesis Global Capital and the Phuc Khang Corp. have signed an agreement to develop Diamond Lotus - a green residential building developed by Phuc Khang in Ho Chi Minh City’s District 8. Genesis Global Capital will acquire 30 per cent of the project to sell and lease to foreigners living in Vietnam in a deal worth $300 million over a period of six years, according to Phuc Khang Corp. Chairman Tran Tam. The Singaporean fund has invested in Germany, the US, and Brazil and is now looking to Vietnam, which it sees as a developing country with a high population and considerable demand for housing, according to Mr. Ng Chuan Kai, Director of Genesis Global Capital. Legal changes have also come that grant foreigners home ownership rights. Vietnam is continuing to integrate further into the global economy and is attracting many international investors to conduct business, live, and travel in the country. The TPP will also result in a spike in housing demand among Overseas Vietnamese (Viet Kieu) professionals and businesspeople in the country, Mr. Kai said. Diamond Lotus, which cost nearly VND1.27 trillion ($56.6 million), is located on 1.68 ha on Le Quang Kim Street, with three apartment buildings and a 500 sq m rooftop garden. It was the first project to be designed, built, and operated under green LEED standards - a leading certification for green buildings. Great start for sales at The Nassim The Nassim, a luxury condominium project jointly developed by Hongkong Land and SonKim Land in Ho Chi Minh City’s District 2, sold over 90 per cent of its released stock in a private preview held recently that also marks the opening of initial sales. Two penthouses of over 450 square meters each, with a private swimming pool, sauna, and BBQ area on a large sky deck, were sold at prices of over VND80 million ($3,600) per sq m. “We are very pleased with the sales,” said Mr. Trinh Bao Quoc, CEO of SonKim Land. Luxury segment buyers in Vietnam are more sophisticated and demanding than ever before. They have traveled to cities like New York, London, Hong Kong, and Singapore and have seen luxury features such as a private lift lobby, wet and dry kitchens, and marble flooring. “Combining those features and being conveniently located in the premium neighborhood of Thao Dien, The Nassim offers discerning buyers a truly distinctive and exclusive place to live,” Mr. Bao said. The Nassim comprises four towers with 238 residential units ranging from one to four bedrooms and penthouses. Located in the heart of Thao Dien, The Nassim enjoys magnificent panoramic views of the Saigon River. The development is fringed by an exclusive enclave of low-rise private residences and conveniently accessible from the Hanoi Highway. Nearby amenities include various leading international schools, shopping malls, medical care centers and clinics and some of the highest-rated restaurants in Ho Chi Minh City. The An Phu urban railway station is under construction just a short walk away. Vingroup to develop sports & entertainment complex in HCMC The Ho Chi Minh City’s People Committee has approved Vingroup becoming the developer of the Sport & Entertainment Complex at the 2C functional area in the Thu Thiem New Urban Area. On an area of 39 ha, the 2C functional area is at the center of the urban area and Vingroup is expected to build international-standard stadiums, versatile gymnasiums, and a sports park. Its development will assist efforts in attracting major investments in the other functional areas of the Thu Thiem New Urban Area. The urban area sits to the east of the Saigon River, opposite District 1, on a total area of 657 ha, and will be a new and modern business district, enlarging the existing center of Ho Chi Minh City. It has been divided into eight main functional areas. Each is characterized by a distinct mixed-use program and density range, as well as public spaces and key landmark buildings. The “Core Area” of Thu Thiem includes the 2a, 2b, and 2c functional areas. On an area of 10 ha, the 2a area, known as Eco Smart City, is being developed by South Korea’s Lotte and Japan’s Mitsubishi and Toshiba, with investment of $2 billion. The 2b area, known as Empire City, on an area of 14.5 ha, is being developed by Empire City LLC with investment of $1.2 billion. Ho Tram Strip to host Asian Tour tournament The inaugural Ho Tram Open will be held from December 3 to 6 at Vietnam’s first truly integrated resort, located two hours northeast of Ho Chi Minh City, with the magnificent Greg Norman-designed Bluffs Ho Tram Strip golf course playing host to stars from the region’s premier tour following a landmark three-year agreement. “We are delighted to announce the launch of the Ho Tram Open at The Bluffs Ho Tram Strip in December,” General Director of the Ho Tram Project Company, Mr. Colin Pine, said. “This new and exciting event will showcase the magnificent Ho Tram Strip to the world and complement our vision and ambition to deliver world-class entertainment to our guests and visitors.” Through four days of live television broadcasts that will reach 180 countries and a potential 625 million homes on the Asian Tour’s global TV platform, the Ho Tram Open will propel Ho Tram Strip and The Bluffs onto the international map and showcase the destination as a world-class hub for gaming, entertainment, and recreation. “On behalf of our players, I would like to thank Ho Tram for its commitment to sponsoring the Ho Tram Open on the Asian Tour until 2017,” said Mr. Mike Kerr, Asian Tour Chief Executive Officer. “With a prize purse of $1.5 million, the Ho Tram Open will take its place as one of our prestigious championships on our 2015 Schedule and our members are very excited to return to Vietnam.” England’s Robert Rock, the course’s brand ambassador and a two-time winner on the European Tour, will be among the players competing in the inaugural Ho Tram Open. The event will also see the appearance of other celebrities, such as Brian McFadden, formerly of the band Westlife, who will headline the Week of Entertainment (December 1 to 6), and global golf superstar Sergio Garcia, who has won a staggering 24 tournaments worldwide. The Ho Tram Strip is offering an “Endless Summer Package” with rates starting from VND2.3 million++ ($105) per night until December 31. The package includes accommodation for two in a Dune’s View Room, daily international buffet breakfast for two people at Ginger, resort-wide wi-fi access, a mini-bar with select beverages, access to the resort’s pools, a pool bar, round-trip shuttle bus transfers between Ho Chi Minh City and Vung Tau and the resort, and the fitness center and spa. Ho Tram Strip is an integrated resort and residential developments located on more than 400 acres of land with two kilometers of pristine beach. The first phase of the project had total capital of $4 billion and work on the second phase is underway, with future phases to see an additional three five-star resorts with investment of over $550 million. The first phase of its development, The Grand Ho Tram Strip, opened in July 2013 and includes a 541 room five-star hotel, a world-class entertainment facility, nine food and beverage venues, high-tech meeting spaces, including the 1,500-person capacity Grand Ballroom, an exclusive VIP area, and a variety of beachfront recreation activities.  Three enterprises listed most valuable VN brands in ASEAN The ASEAN Brand Management Project has just released its list of 55 most valuable brands in ASEAN listed on Vietnamese Stock markets through its 2015 survey.   55 companies posted at Vietnam stock market have been evaluated including 50 companies in HOSE and 5 in HNX. On the list, three Vietnamese leading brands include Vinamilk (VNM), Ho Chi Minh City Stock Company (HCM) and PetroVietnam Fertiliser and Chemicals Coporation (DPM).Two brands that were evaluated to have the management improvement in last three years are Hoang Anh Gia Lai (HAG) and the Refrigerator Engineering and Electricity (REE). The award ceremony is scheduled to be taken place on November 14 in Manila of the Phillipines. Long Thanh Airport site clearance concerns experts over huge capital Site clearance and resettlement for Long Thanh International Airport project in the southern province of Dong Nai which is expected to finish within three years and worth at VND11,226 billion (US$503.11 million) concerned experts at a seminar hosted in Hanoi yesterday. At the seminar hosted by the provincial People’s Committee and some agencies on the project, committee chairman Dinh Quoc Thai said that the first phase would take at least three years to clear 2,750 hectares of land and build Loc An-Binh Son resettlement areas. Site clearance and compensation must start now for the project to break ground by the end of 2018 or early 2019 as planned, he added. The Dong Nai People’s Committee has proposed the Prime Minister to separate these works from the big project into a small project and allow it to be implemented independently from this yearend.  Chairman Dinh Quoc Thai said the province has asked the PM for advancing capital in accordance with the project’s progress with the total fund for the first phase approximating VND11,226 billion. Besides, it has also sought the PM’s permission to appoint contractors to build infrastructures for two resettlement areas Binh Son and Loc An-Binh Son to relocate households from the project’s site timely. The province has built a policy framework on compensation, resettlement and employment to residents in cleared areas. Compensation level for building land is proposed to be 1.5 fold agricultural land price in the land price list of the Dong Nai People’s Committee. It will be 0.5 fold to agricultural land. At the seminar, Dr. Tran Du Lich, deputy head of the Ho Chi Minh City National Assembly Delegation, said that besides land of local residents, there is a large area of speculators. Compensation policy should be different for them. Assistances in resettlement, job training and employment must be studied carefully how to benefit relocated residents, he added. Referring to the huge fund for the first phase which concerned many experts at the seminar, Dr. Truong Van Phuoc, deputy head of the National Financial Supervisory Commission, suggested bond issue for compensated households. Deputy head of the Land Management Directorate Dao Trung Chinh said that large projects usually face with complaints about compensation price. Hence, especially large projects such as Long Thanh which affects nearly 4,730 households should call on social attendance to assess land price. Specifically, residents should be permitted to invite independent and qualified consultant units to be part of a land price assessment council, which will solve petitions objectively too. In addition, related agencies should map out a route to use the nearly 5,000 hectares of withdrawn land to prevent them from being abandoned causing waste. Hanoi announces made in Vietnam QRcode The Hanoi Association for Anti-Counterfeiting and Trademark Protection and Dat Viet Enterprises Club has announced made in Vietnam QRcode smart phone app to detect counterfeits. The app will help businesses protect their brand names and consumers set their minds at rest while shopping.  Director of Icheck Joint Stock Company Vu The Tuan said that QRcode is a two dimensional bar code to encode one or many types of information.  The use scope of Vietnam’s QRcode is unlimited detecting counterfeits produced in Vietnam and other nations.  The app comprises two parts, QRcode stuck on product packing and code scanner installed in smart phones. Each QRcode stands for a single product. Lam Dong seeks help to save tea sector   The People's Committee of Lam Dong Province is calling for help from the Vietnam Tea Association as the tea sector is facing great difficulties in export sales.   In an urgent letter sent to the association, the People's Committee of Lam Dong Province said that tea exports had been hit by negative rumours and technical barriers applied by Taiwan to protect its own tea sector. Nguyen Van Son, vice director of the province's Department of Agriculture and Rural Development, said the difficult situation has come since last April when authorities in Taiwan, Vietnam's biggest tea importer, warned that seven batches of black tea imported from Vietnam were contaminated with the highly toxic compound dioxin, and 22 other batches exceeded the allowed pesticide residue limit. "Although this information was later been proved wrong by investigators from both countries, local tea exports continue to face new challenges when Taiwan recently raised the Oolong tea compositional standard to fipronil 0.003 ppm (it is just 0.005ppm in some European market)," Son said. "I think this move, along with the dioxin rumours were to cripple competition, which has been going on between Taiwanese tea companies operating in Vietnam and those in their country." Hundreds of tea exporters in Lam Dong Province, including about 30 Taiwanese firms, along with thousands of local farmers have been facing great difficulties due to slow sales. Lam Dong People's Commitee reported that there was now more than 2,000 tonnes of unsold tea in the province. The committee proposed the association seek more markets to save the local tea sector. Lam Dong is the largest tea producing province, with more than 22,000 hectares, yielding 230 tonnes of tea last year. The Central Highlands province is home to around 6,000 hectares of high-quality tea plantations, concentrated mainly in Bao Loc, Di Linh and Da Lat. That tea is exported to the United States, Japan, South Korea, Taiwan, and Europe. Preferential interest comes to forest planters and farmers Households living in remote and mountainous areas will be eligible for a loan interest rate of 1.2 percent starting November 2. The rate is included in Decree 75/2015/ND-CP, which focuses on forest protection, afforestation and poverty alleviation from 2015-2020. As such, the beneficiaries will be needy forest-planters and farmers. The Vietnam Bank for Social Policies will lend them credit without requiring collateral. Households obtaining preferential loans to plant trees can acquire a maximum sum of VND15 million (US672.30) per hectare, with durations calculated based on production time and lasting less than two decades. Peers who need capital for animal husbandry may borrow up to VND50 million (US2,241) within 10 years. Rice exports earn US$2.26 billion Vietnam exported 5.32 million tonnes of rice worth US$ 2.26 billion in the first 10 months of 2015, dropping 4.6% in volume and 11.7% in value compared to the same period last year, according to the Ministry of Agriculture and Rural Development (MARD). China remained the largest consumer of Vietnam’s rice over the last 10 months, making up around 37.03% of the country’s exports. Vietnam's rice exports to China increased 4.67% in volume but declined 3.07% in value year-on-year. It was followed by Malaysia, Ghana and Ivory Coast. Markets that saw a sharp drop in the first 9 months of 2015 compared to the same period of 2014 include the Philippines (down 41.05 % in volume and 45.27 % in value), Singapore (36.36 % in volume and 33.58 % in value), and Hong Kong (27.65 % in volume and 34.56 % in value). Meanwhile, the domestic market saw positive signs as purchasing activities have been promoted to meet the high demand from the Philippines and Indonesia. The MARD has also predicted the domestic rice market will continue to be active as the Philippines is planning to import 1 million tonnes of rice in early 2016. Retail sales and consumer services up 9.6% in first ten months Revenues from retail sales and consumer services in the first ten months of 2015 reached VND2,661.6 trillion (US$119.8 billion), up 9.6% over the same period last year, according to the General Statistics Office (GSO). The national statistics agency said revenues were up 8.4% when adjusted for price changes. A breakdown shows retail revenues hit VND2,026.2 trillion (US$91.2 billion), up 10.7% year on year with a number of goods posting strong sales growth such as food, home appliances, garments, vehicles, and cultural and educational items. Revenues from accommodation and catering services rose by a decent 5% from a year earlier to VND307.6 trillion (US$13.8 billion) with Ba Ria-Vung Tau, Ho Chi Minh City and Can Tho posting respective growth of 11.2%, 10.7% and 10.5%. Travel service revenues in the January-October period reached VND25.3 trillion (US$1.1 billion), up 3% year on year. Meanwhile, income from other services increased by 8% over the same period last year to VND302.5 trillion (US$13.6 billion), the GSO noted. Export prospect: US$300 billion within reach The goal to lift export value to US$300 billion by 2020 is within reach if opportunities are fully exploited, said Deputy Minister of Trade and Industry Tran Anh Tuan. The export volume increased 20-25% annually between 2001 and 2010 before dipping to 17% annually from 2010 to 2014, he added. In the first nine months this year, the index rose 9.6% compared to the target of 10% set by the National Assembly. Favorable geographic conditions and political and macroeconomic stability still remain advantages for Viet Nam to lure foreign investment. The country is now transforming its economy into socialist-oriented market one to improve competitiveness and added value to products. In addition, a network of free trade agreements signed or under negotiation process offers Viet Nam a good opportunity to increase exports, particularly processing, aquatic products, to the European Union, Japan, the Republic of Korea, Chile among others.  Mr. Tuan said Viet Nam needs to further raise the quality of exports while maintaining firm niches in traditional markets like the U.S. where Viet Nam is the second biggest garment exporter after China. Noticeably, Vietnamese exports to the U.S. surged 17-20% per year, the Deputy Minister of Industry and Trade said. SOEs pay higher wages than other sectors The average wage of employees at State-owned enterprises (SOEs) was higher than that offered by companies in other sectors in the second quarter of this year, according to data of the Ministry of Labor, Invalids and Social Affairs. The ministry’s quarter-two labor market report released last Friday showed the average monthly income of laborers stood at VND4.46 million (US$200) in quarter two. Male employees got VND4.7 million per month while each female laborer earned VND4.13 million a month. The monthly income of laborers averaged VND5.25 million in urban areas and VND3.84 million in rural areas. Every month, leaders of SOEs earned the highest income of VND7.3 million each on average, followed by technical experts with VND6.5 million and normal laborers with VND3 million a month.  Employees of SOEs received an average monthly income of VND6.15 million each, well above VND5.09 million of their peers in the FDI sector. Meanwhile, laborers of the non-State sector got VND4.99 million per month and employees of cooperatives earned just VND2.84 million per month. Asked by the Daily why wages of SOEs were ranked the highest, Nguyen Thi Lan Huong, head of the Institute of Labor Science and Social Affairs, said the average salary of the SOEs sector has been the highest over the years as it is a large-scale sector. “In Vietnam, 97% of enterprises are small and medium and the remaining 3% are mainly SOEs. Therefore, SOE wages stay high though it is said that many SOEs are not running at a profit,” Huong said. Moreover, SOEs have a large number of skilled laborers so wages of this sector are certainly high. Many employees of companies in other sectors do not declare wages accurately while SOEs strictly follow regulations governing this area. However, Huong said such high wages resulted from many SOEs operating in monopolistic industries and salary increases are made regardless of employees’ productivity, leaving negative impact on the labor market. According to the report, 1.4 million people of working age were jobless in the second quarter, down 15,200 people against the January-March period. Among them, 607,800 people (53.1%) did not have skills, 50,800 persons higher than quarter one and 199,400 people (17.4%) were graduates, up 22,000. The unemployment rate stood at 2.42% in the second quarter, down slightly against the first quarter. Except for college graduates, the jobless rates of other groups with vocational qualifications edged up. Notably, the jobless rate of youngsters was 6.68% in quarter two, 2.8 times higher than the average rate and up 0.08 percentage point compared to the first quarter. Meanwhile, the jobless rate of young people in urban areas was at 11.84%. Vietnam urged to prepare for FTA with EU To make the most of opportunities from a free trade agreement (FTA) with the European Union (EU), Vietnam needs to be well-prepared in terms of infrastructure and food hygiene and safety, said the new ambassador and head of the EU Delegation to Vietnam. Bruno Angelet told a meeting with reporters in HCMC last Friday that the FTA between Vietnam and EU will bring in huge trade and investment flows if Vietnam has adequate preparations for fulfilling its commitments.  Europe is currently the biggest investor in ASEAN, according to Angelet. Many European companies have invested in Vietnam via their affiliates in Singapore and Hong Kong, as European businesses regard Singapore and Hong Kong as the gateways to enter Asia.  Vietnam is among the markets European companies target if they change their investment destinations though many other countries in the region have better infrastructure than Vietnam. Therefore, Vietnam should improve infrastructure to attract those companies.  A young labor force is among Vietnam’s competitive advantages. But a large number of rural laborers have moved to cities but do not have proper training, and Vietnam will have to ensure they will be trained in the coming years. The Government also needs to support local small and medium enterprises (SMEs) to grow and get access to financial sources in a fair way. Angelet said the agricultural sector would face more challenges than other sectors when the Vietnam-EU FTA or the Trans-Pacific Partnership (TPP) trade pact takes effect. Around 20% of Vietnam’s GDP is contributed by the Mekong Delta region whose strength is farm produce exports. However, Vietnam’s farm produce exports to the EU remain limited due to the low quality and problems concerning food safety. Angelet said farmers should be supported by the Government and trained to turn out farm products meeting hygiene and safety requirements. Angelet said farmers and small businesses do not have strong financial capacities, so they always try to recover their investments quickly and thus do not care about food safety and quality. Therefore, they should be provided with more and faster access to credit sources. In August, Vietnam and the EU announced they had virtually concluded FTA talks after two and a half years of intense negotiations and the agreement is expected to be signed this year. But the ratification of the FTA will take some time. Angelet hoped before the agreement is ratified and comes into force, leaders of Vietnam should build good policies to better preparations for and capitalize on the opportunities when the agreement becomes effective. He added the EU is willing to provide technical assistance for Vietnam to make such preparations if Vietnam’s Ministry of Industry and Trade clarifies what the country needs from the EU. Vietjet provides 20,000 cheap tickets  To meet the travel demand of passengers and welcome its newest routes including Ha Noi – Chu Lai, Hai Phong – Cam Ranh and Vinh – Buon Ma Thuot, Vietjet is giving away 20,000 promotional tickets just from VND 199,000 for a grab. Tickets can be booked at www.vietjetair.com (also compatible with smartphones athttps://m.vietjetair.com) or at www.facebook.com/vietjetvietnam (just click the “Booking” tab) or at Vietjet ticketing offices and agencies nationwide. Customers can also call Vietjet’s hotline at 1900 1886.   Payment can be easily made with Visa, MasterCard, JCB, American Express, and ATM cards issued by 24 Vietnam banks that have been registered with internet banking.  “These new routes are expected to offer passengers more travel options as well as to boost the economy and culture exchange among cities in Vietnam. With our non-stop developing fleet of modern aircraft, passengers will experience the full suite of Vietjet’s high-quality services as well as opportunities to win economical fares andspecial surprises from our promotional campaigns,” said Desmond Lin – Vietjet’s Director of Business Development. Gov’t proposes lower special consumption tax on autos The Government has proposed the National Assembly (NA) approve a special consumption tax reduction by five percentage points on autos with no more than nine seats and engine capacity below 2,000 cubic centimeters from July next year. The Government made the proposal as the special consumption tax on such autos in Vietnam is higher than in other ASEAN countries. As committed, Vietnam will have to cut the tariff on cars imported from other ASEAN countries to 0% in 2018 under the ASEAN Trade in Goods Agreement. The duty on auto imports under other free trade agreements (FTA) between Vietnam and other economies will also gradually go down to 0%. Despite significant budget losses from import tax reductions, the Government suggested the legislature amend the laws on value-added tax, special consumption tax and tax management to make them compatible with Vietnam’s commitments to international integration. Currently, the domestic special consumption tax on cars of nine seats or smaller with engine capacity under 2,000 cubic centimeters is 45%, higher than the average of regional countries. The Ministry of Finance proposed a special consumption tax of 40% for autos with engine capacity of 1,000 cubic centimeters or smaller from July 1 next year, five percentage points lower than the current rate. The tax would go down to 30% in early 2018 and 20% in early 2019. Similar reductions would also apply to cars with engine capacity of 1,000-1,500 cubic centimeters and from 1,500 cubic centimeters to 2,000 cubic centimeters. In 2019, the tax for these cars will drop to 25% and 30% respectively. The special consumption tax on autos with engine capacity of 2,000 cubic centimeters or bigger would remain unchanged at 50% as suggested by the ministry. However, autos with engine capacity of 2,500-3,000 cubic centimeters would be subject to special consumption tax rises to 55% from early 2018 and 60% from 2019. Cars with engine capacity of over 6,000 cubic centimeters would be subject to a 150% tax from next July, up 90 percentage points compared to the current rate. The NA Financial and Budgetary Committee backed the finance ministry’s proposal for the special consumption tax on autos and changing the calculation methods of special consumption tax for imported and domestic products in line with Vietnam’s international integration commitments. The proposed special consumption tax rates would go before the NA at its ongoing meeting in Hanoi. Shrimp exports forecast to fall sharply this year The Vietnam Association of Seafood Exporters and Producers (VASEP) has revised down its shrimp export forecast to US$2.9 billion for this year, over US$1 billion lower than last year. The revised projection is US$300 million lower than the full-year estimate announced in July this year by VASEP. The association made the revision based on the outbound sales of shrimp in the past months. VASEP estimated the shrimp export revenue in the final quarter of this year at only US$800 million, down 20-25% compared to a year ago. If this is true, Vietnam can earn shrimp exports of only US$2.9 billion including US$573.9 billion in the first quarter, US$716.2 million in the second quarter and US$840.8 million in the third quarter. Truong Dinh Hoe, general secretary of VASEP, told the Daily earlier that the association expected shrimp exports would go down by only US$700 million this year against last year. However, the situation has turned sour. VASEP attributed the fall to declining demand in Vietnam’s key export markets and less competitiveness of Vietnamese shrimp than that of rivals. The currencies of India, Indonesia and Ecuador have weakened stronger than the Vietnam dong against the U.S dollar this year. In addition, shrimp supplies in other ASEAN countries have improved this year as they have put shrimp diseases under control. Therefore, importers have had more choices and this was the reason behind a drop of 27.4% in shrimp exports in the first nine months of this year. In the period, shrimp shipments to the U.S., Japan, and the European Union plunged 45%, 19.7%, and 18.7% year-on-year respectively. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR