BUSINESS IN BRIEF 9/11 $50 million road for HCM City Construction of a 2.7-km long road costing VND1.134 trillion ($50.8 million) connecting Pham Van Dong Boulevard and the Go Dua intersection on National Highway No. 1 in Ho Chi Minh City has been approved by the City’s Department of Transport, with construction to be in the build-transfer (BT) form and conducted from 2015 to 2017. The road will complete Ring Road 2, connecting main traffic routes in the city and reducing traffic density along arterial roads. In the first phase two roads running parallel to each side of the main road (to be built in the second phase) will be built with three lanes each. Three bridges will also be constructed (Rach Lung Bridge, Rach Ong Viet Bridge, and Rach Go Cat Gridge), with each being approximately 80 meters long. Additional works will also be built, such as drainage systems and lighting. The main road, built in the second phase, will have eight lanes. The Ho Chi Minh City People’s Committee approved the project’s feasibility study on October 20. Vinamilk submits proposal on divestment plans Vinamilk has submitted four requests to the government on State divestment from the corporation. The first is that the detailed schedule be revealed by the State Capital Investment Corporation (SCIC), as there are sound macro-economic conditions in place and the stock market has gained the attention of investors from the TPP being signed. To attract large investors Vinamilk has proposed the government’s 45 per cent stake be sold in large batches. The sale should be conducted no more than three times, with a minimum of 10 per cent on sale each time. The second request is to increase the maximum threshold for foreign investors to 100 per cent instead of the current 49 per cent, as milk is not a sensitive product. The corporation believes foreign investors would help it take Vietnamese milk to global markets. The third request is regarding the divestment method, with Vinamilk believing it should be done by auction to ensure publicity and transparency and not have any adverse impact on the stock market. It also pointed out that the State has already made three divestments from Vinamilk by auction and the sale price was much higher than the starting price. Regarding the criteria for investors purchasing shares, Vinamilk asked that the consulting unit work out the details with the corporation. It believes the criteria should be in accordance with its business philosophy and be to the benefit of shareholders and employees. The proposal was submitted after there were indications that Fraser & Neave Limited (F&N) from Singapore wanted to buy Vinamilk at a price of $4 billion. F&N Dairy, one of its smaller companies, currently holds more than 11 per cent of Vinamilk. On November 3, however, F&N said it had not made any proposal to Vinamilk. Vinamilk’s accumulated revenue in the first three quarters of the year was nearly VND29 trillion ($1.3 billion), with profit after tax of VND5.869 trillion ($262.99 million); 35.3 per cent higher than in 2014. Vietjet receives its 29th aircraft Vietjet’s brand-new aircraft, an A321, landed at Ho Chi Minh City’s Tan Son Nhat International Airport, after flying from Hamburg in Germany.  The aircraft – an A321ceo with Sharklet wingtips – is the tenth of the milestone agreement between Vietjet and Airbus for acquisition and leasing 100 aircraft. The230-seat aircraft is the latest version of single-aisle aircraft family manufactured by Airbus. The aircraft whose advanced designhelps reduce fuel costs, CO2 emissions is expected to boost the carrier’s efficiency and protect environment.  “With this addition to its fleet, Vietjet is now operating 29 brand-new and modern A320s and A321s, helping the new-age airline to further develop its network in Vietnam and across the Asia-Pacific region”, said Mr. Luu Duc Khanh – Vietjet’s Managing Director.  “Flying with us, passengers will experience the full suite of Vietjet’s high-quality services includingcomfortable seats on modern aircraft, a refreshing drink and delicious meals served by our friendly flight attendants, and plenty of special surprises onboard,” Khanh said. Nippon Koei keen on Quang Ngai bridge The Quang Ngai Provincial People’s Committee met with Nippon Koei Vietnam and Project Management Board No. 7 on October 4 to discuss the Cua Dai Bridge project. Acting Chief Representative of Nippon Koei Vietnam told the meeting that the company is eager to cooperate with the central province in building transport infrastructure, in particular Cua Dai Bridge. The bridge is designed to the 22TCN 272-05 standard and is 3.7 km length with four lanes and estimated investment of VND3.4 trillion ($152.5 million). The project is associated with the planning for coastal roads to maximize the use of marine resources, promote socio-economic development in poor coastal regions, and strengthen national defense and security.   A representative from Nippon Koei told VET that the company is interested in the project but is still in the research stage. Chairman of the Provincial People’s Committee, Mr. Tran Ngoc Cang, expressed his appreciation of the interest being shown by Nippon Koei. The province is committed to creating the conditions necessary for the company to continue its research and develop the project shortly. Nippon Koei began providing consultancy services in Vietnam in 1955 and has successfully implemented many projects in the country in various fields, such as energy, transport, urban development, agriculture and rural development, and water resources, which have contributed significantly to development. Established in 2012 with support from the Japanese parent company in finance and experience, Nippon Koei Vietnam has won the trust of customers and successfully conducted projects in fields including transport, urban planning, energy, and environmental engineering. Caravelle Saigon given EarthCheck Gold Certificate Caravelle Saigon recently became the first property in Vietnam to receive an EarthCheck Gold Certificate 2015 and is also the only one to have the opportunity to maintain the prestigious achievement for the next five years. EarthCheck is the world’s leading certifier of sustainable travel and tourism businesses with an internationally-recognized standards, benchmarking, and certification program. Since 1987 it has helped businesses, communities, and governments deliver clean, safe, prosperous and healthy destinations for travelers to visit, live, work, and play. The “EarthCheck Gold” designation is only conferred after five years of continual assessment by independent auditing parties adhering to EarthCheck Company Standards.  The certification makes Caravelle Saigon a leader in the unique worldwide group of sustainable tourism operators. It is also another noteworthy milestone for the hotel after many years of outstanding effort, such as saving and recycling resources as well as CSR projects calling public attention to keeping a clean and green living space. Caravelle Saigon has been at the center of Ho Chi Minh City society since it was opened in 1959. It has 335 superbly-appointed rooms, suites, exclusive Signature Floors, a Signature Lounge, non-smoking floors, and specially-equipped rooms for the disabled. Amenities include an IDD telephone, satellite TV, a DVD player, a fax machine, a mini-bar, tea and coffee facilities, an espresso machine, and an in-room safe. The hotel has received a range of awards, such as TripAdvisor 2013-2014 Traveller’s Choice Award and the TripAdvisor 2012-2013-2014 Certificate of Excellence Award, to name just a few. HCM City officials get earful from business leaders On November 11, Ho Chi Minh City officials held a question and answer session with Japanese business leaders to discuss taxes, visas, air pollution, making improvements to roadways and installing traffic lights for pedestrians. “This is the third such meeting of recent city officials have held to discuss needed improvements,” said Vice Director Cao Thi Phi Van of the HCM City Investment and Trade Promotion Centre (ITPC). Van said the city has taken the problems and concerns to heart and has made substantial progress addressing them. “They have satisfactorily resolved nearly 90% and will continue to work diligently on ironing out those thorny issues that remain,” said Van. Representatives of the Japan Business Association of HCM City (JBAH) in turn said last year they had 25 issues related to the environment.  Currently the city has resolved or made substantial headway on 17 of them, leaving seven yet to be addressed. However, the JBAH representative stressed the improvement of the business climate is not solely the responsibility of city officials and that Japanese businesses must shoulder some of it as well. “They can do this by keeping updated on changes in laws and regulations to avoid misunderstanding and keep the chains of communication with officials open to timely voice consequential matters and get the city’s feedback,” said the representative. Work starts on Yen Vien railway logistics centre The state-owned Vietnam Railway Corporation (VNR) and the Indo Trans Logistics Corporation (ITL) held a ceremony on November 6 to commence the construction of a railway logistics centre in Yen Vien station in Hanoi. The first phase of the project has a total investment of 90 billion VND (about 4 million USD). Once operational, the new logistics centre will boost the container-handling capacity of Yen Vien railway station by 3-5 times and its goods-handling capacity by 2-3 times while reducing handling times, according to VNR Chairman Tran Ngoc Thanh. Additional 5-6 twinsets (a set of two railroad cars) will be put into operation in routes linking Yen Vien with Hai Phong Port in Hai Phong city, Cai Lan International Container Terminal (CICT) in Quang Ninh northern province and Song Than Industrial Park in Binh Duong southern province. Bui Quang Lien, a representative from the ITL, said that the corporation will strive to speed up the construction so that the centre will be operational before June 2016. According to an agreement signed earlier, the ITL is allowed to operate the Yen Vien Railway Logistics Centre in 23 years. Vietnam promotes tourism in Europe Vietnam is introducing its tourism products at the 36th World Travel Market (WTM), an annual event for the global travel industry, in London, the UK, through a string of activities.  The Vietnam National Administration of Tourism (VNAT) and the national flag carrier Vietnam Airlines organised a press briefing on the country’s new products tailored to the demand of European customers, including tours to explore the world’s largest cave of Son Doong, Dong Van karst plateau and the new “tropical paradise” on the southern island of Phu Quoc.  Vietnam Airlines Chief Representative in the UK Le Thanh Dung informed the participants about the carrier’s recent putting into use of the new Boeing 787-9 aircraft on the services between London and Hanoi and Ho Chi Minh, as well as the plan to increase flights on the routes.  Ha Van Sieu, VNAT deputy head, said Vietnam has taken a host of synchronous measures to attract more European holiday-makers, one of which was the 15-day visa exemption for tourists from the UK, France, Germany, Italy and Spain since July this year.  Along with increasing connectivity between the European market and local destinations via direct flights to the UK, France and Germany, Vietnam has improved service quality and design more up-scale products, he said.  Gordon Bell from FocusAsia travel agency said Vietnam’s tourism sector has made marked progresses since more and more local residents can speak English and service quality has been improved significantly.  He suggested Vietnam open tourism representative offices in European countries to support vacationers and businesses from the region while allowing longer visa exemption duration and visa-free re-entry.  Foreign arrivals to Vietnam reached more than 6.33 million in the first ten months of this year, a decrease of 4.1 percent year-on-year, according to the VNAT.  In October, the number of foreign visitors to the country increased 3.6 percent against the previous month and 16.1 percent compared to the same month last year.  Tourist growth was seen in markets with visa exemptions, high spending and long stays such as the Republic of Korea, up 30.7 percent; Hong Kong, 28 percent; Singapore, 16.9 percent; Spain, 9.8 percent; Finland, 9.1 percent; and the US, 7.9 percent.-VNA Casino Ho Tram project takes shape in Ba Ria-Vung Tau US Harbinger Capital Partners on November 6 announced that it expended US$50 million to date on its US$1 billion share of the US$4.2 billion Ho Tram Strip real estate project in Ba Ria-Vung Tau province. “Progress on the luxury villa, office and entertainment complex is progressing as planned and things are really starting to come together as planned,” said a representative of Harbinger. On the same day, the majority stakeholder in the project, Asian Coast Development (Canada) Ltd, unveiled the appointment of Michael E Kelly as its senior president, who will take the helm of the Ho Tram Strip project. Food, forestry exports reach almost $25b through October Viet Nam's farming, fishery and forestry product export value in the first 10 months of this year was estimated at US$24.6 billion, a year-on-year reduction of 3.8 per cent. According to the Ministry of Agriculture and Rural Development, most of the key agricultural products saw a tumble in both volume and value. Since January, the country has raked in $2.26 billion from exporting 5.32 million tonnes of rice, dwindling 4.6 per cent in quantity and 11.7 per cent in value compared to the same period last year. The same situation affected coffee and rubber exports, which saw two-digit decreases. About 1.05 million tonnes of coffee were sold for $2.13 billion in the ten-month period, tapering off 29.6 per cent in volume and 31.4 per cent in value. Meanwhile, rubber exports witnessed a slight surge of 3.5 per cent in the amount shipped abroad to 870,000 tonnes but a 15.8-per cent fall in value to $1.22 billion. During the first 10 months, tea shipments of 99,000 tonnes were worth $170 million, down 9.1 per cent in volume and 8.4 per cent in value. By stark contrast, pepper and cashew exports saw stellar results. About 272,000 tonnes of cashew consumed in foreign countries brought back $1.97 billion, escalating 6.3 per cent in quantity and 18 per cent in value. Pepper exports in 10 months slid 19.6 per cent but value went up 0.5 per cent. Pepper shipments stood at 117,000 tonnes for an export value of $1.11 billion. Viet Nam earned $5.47 billion from wood and wood-based product exports, picking up 7.9 per cent over the same period last year. China, Japan and the United States (US) are three biggest importers of the commodity. The seafood sector also contributed $5.37 billion to the total export revenue, dropping 17.7 per cent compared to the same period in 2014. The US continued to be the leading market with 19.43 per cent of total seafood export value.  VN firms must adapt to FTAs The upcoming Trans-Pacific Partnership (TPP) and ASEAN Economic Community would present Vietnamese business with opportunities as well as challenges as they would have to compete with highly qualified foreign companies, business executives said at a seminar held yesterday in HCM City. "Today, intelligence, creativity and technology are the factors that make success, not intensive labour of a low capacity," Ly Truong Chien, chairman of the Tri Tri Group, said during the opening speech of the seminar. He said the world was "now flat" with information available to many people. "But Viet Nam is still passive and waiting, so the country lags behind far even neighbouring countries," he added. Chien suggested that the business community should encourage start-ups and the embrace the philosophy of "welcoming mistakes and failures". "Change is the essence of life, especially at this time where change is faster than in the past. Viet Nam must change to catch up with the international community," Chien said. In 2016, Vietnamese companies will have to export with a low taxation level, and join global supply chains. More markets will not depend on only one partner, and the business environment will be more fair and transparent. Chien said that Viet Nam did not have a competitive advantage over other ASEAN members. "Cheaper commodities from ASEAN will flood into Viet Nam along with high-level human resources who will come to work in Viet Nam," Chien said. In addition, prices would increase, such as electricity, which rose 7.5 per cent early last year. Chien said that environmental fees would rise by 300 per cent. To cope with the situation, Chien said that the local business community must increase their resilience, promote creativity and innovation, and receive protection for their ideas and products. "The HCM City Intellectual Property Association (HIPA) is ready to support the local business community in protecting their products and inventions," Nguyen Van Vien, chairman of the HIPA, said. "Viet Nam has signed many international intellectual property agreements in order to support local enterprises so they can compete in the international market. However, intellectual property protection does not receive enough attention, only when Vietnamese brand names are lost," Vien said. The situation has improved, but not enough to protect local businesses in the international arena. "The local business community must protect their brand names, products and creations with intellectual property rights," he said.  Exchange rate volatility drives down third quarter earnings Viet Nam's foreign exchange rates fluctuated greatly in the third quarter, influenced by global currency volatility resulting in a negative impact on earnings of many listed companies. According to data available on the financial website ndh.vn, the US dollar increased 3.1 per cent against the Vietnamese dong in the third quarter while prices of the Japanese yen and euro went up 5.1 per cent and 3.9 per cent, respectively, during the period. Around 385 companies have published the third-quarter earnings reports on the two stock exchanges as of October 28, accounting for 56 per cent of total listed companies. Many posted lower profits due to forex losses. "Foreign exchange rates were very volatile in the third quarter which adversely affected business results of many companies, particularly the ones which borrowed heavily in foreign currencies, or their businesses rely on imports," Thanh Thuy, a stock analyst was quoted on the ndh.vn. With a majority of loans in the greenback, Century Synthetic Fiber Corporation (STK) saw their July-September financial expense rise almost ten times against the same quarter of last year to VND21 billion (US$937,500), thus trimming its profit to just VND7 billion ($312,500), down 76 per cent year-on-year. Its nine-month profit reached nearly VND62 billion ($2.8 million), equivalent to just 41.4 per cent of the company's yearly target. Petroleum, transportation and rubber companies were also among the biggest losers. Vietnam Tanker Co (VTO) incurred a forex loss of VND24 billion ($1.1 million) in the third quarter, pushing its financial expense up 400 per cent compared year-on-year to VND38.6 billion ($1.7 million) while driving its profit down 82.3 per cent to VND3.3 billion ($147,300). As of September 30, VTO incurred a US dollar-denominated debt of VND856 billion ($38.2 million) while its loans in Singaporean dollars was VND40.5 billion (S$2.5 million). Viet Nam Petroleum Transport Co (VIP) and Vinaship (VNA) were doubly hit by both forex fluctuations and poor business performance. VIP earned VND1.4 billion ($6300) in net profit in the last three months, significantly down from a VND16.5 billion ($737,000) profit in the third quarter of last year. Meanwhile, VNA incurred a loss of VND20 billion ($893,000) during the period and adjusted its plan from a profit of VND2 billion ($89,300) to a loss of VND60 billion ($2.7 million) by year-end. VNA posted a cumulative losses of VND38 billion ($1.7 million) in the previous two quarters. Financial expense of the Southern Rubber Industry Co (CSM), one of the biggest listed rubber companies with a market cap of over VND2 trillion ($89.3 million), also increased by 62 per cent against the same period of last year due to forex volatility. Its net profit thus was down 32.6 per cent year-on-year to VND53 billion ($2.4 million). Apart from borrowing heavily in foreign currency, the tire manufacturer's business depends on imported raw material which accounts for 65 per cent of its total material input. Also seeing rises in financial expenses due to forex fluctuations were Dry Cell and Storage Battery Co (PAC) and Ha Tien 1 Cement Co (HT1), which posted impressive earnings with net profits rising 16 per cent and 77 per cent year-on-year, respectively. However, Vicem But Son Cement Co (BTS) incurred a loss of VND24.5 billion ($1.1 million) in the period. Almost 300 companies have yet to report their financial statements, including large ones which attributed their delays in preparing lengthy consolidated financial reports. The number of companies which will likely suffer from forex fluctuations is expected to rise as many are borrowing in foreign currencies, particularly in the US dollar and euro.  Ministry talks taxes with businessmen Finance leaders and more than 500 business representatives sat together yesterday in Ha Noi to discuss and answer questions raised by businesses relating to tax and customs policy and administrative procedures. Speaking at the dialogue, chairman of the Viet Nam Chamber of Commerce and Industry (VCCI) Vu Tien Loc said this was a frank dialogue to make an active contribution to the tax sector. In recent years, the tax sector was one of the pioneer forces in the administrative reform of taxation, especially the implementation of the Government's Resolution 19/NQ-CP/2015 on key duties and solutions to improve the business environment and national competitiveness. Loc said tax and customs were two key areas that the Prime Minister has directed to reform in recent years. Therefore, the Ministry of Finance has drastically made positive changes recently. He added the business community has highly appreciated the efforts made by the authorities to adjust tax policy in recent years. It focused on adjusting tax rates, especially the corporate tax and import tax thus helping contribute to increasing export revenues and assisting businesses in the current economic situation. He mentioned that the tax authorities have helped to improve Viet Nam's business climate over the years. The World Bank has ranked Viet Nam 90 out of 189 countries in its latest report on the ease of doing business globally. In recent times, the business community has spoken highly of certain changes in the administrative reform of the financial sector, however, there remains many obstacles and difficulties. Do Hoang Anh Tuan deputy minister of finance affirmed that the Government's resolution 19/ND-CP stipulating a regulation to cut the time for customs clearance and tax payments has brought many benefits for businesses. According to the Ministry of Finance's data, the ministry has deployed the online tax filing system in the nation's 63 cities and provinces. As a result, the number of enterprises filing for tax payment on the Internet has amounted to 98.95 per cent of the total number of operational firms in the country. Over 458,000 businesses have used the online tax filing system by the end of October this year. To improve administrative procedures on tax, Cao Anh Tuan deputy general director of General Department of Taxation said the Ministry of Finance has continued to review and issue legal documents to minimize administrative procedures and time for tax payment. The time reduction from 420 hours last year to the current 117 hours beats the target set in the Government's Resolution 19/2015/NQ-CP. Prime Minister Nguyen Tan Dung required the tax payment time to be lowered to less than 121.5 hours within this year. To this, the Finance Ministry has required tax authorities to further enhance online tax payment. A representative of An Do Limited Company involved in exporting and importing garments and pesticides said the administrative procedures was a big hurdle thus making a negative impact on his business. Over the last nine months of this year, his business had to pay VND620 million (US$28,000) for cumbersome procedures. He noted this should be changed to avoid losses to businesses (more expense and more time). If not, many small-scale businesses will dodge taxes. US accuses Vietnam of dumping steel US businesses have presented an antidumping and counterveiling duty petition to the US Department of Commerce (DOC) and the US International Trade Commission (ITC) against circular welded carbon steel pipes (CWP) imported from five countries, including Vietnam. Vietnamese defendants included Sujia Steel Pipe Ltd Company, Vietnam Steel Pipe Company Limited and SeAH Steel Vina Corporation. The plaintiff also noted that many other Vietnamese steel exporters have not been listed in the complaint yet. The dumping margins on Vietnamese businesses are very high of 103.83%. Earlier in 2011, the US initiated anti-dumping and countervailing duty investigations on imports of CWP from India, Oman, UAE and Vietnam. However, it ended as the DOC identified that Vietnamese businesses received no subsidy and the ITC concluded that there was no damage on the US CWP industry. Thus, this is the second US anti-dumping investigation against Vietnamese CWP and the sixth one on Vietnamese steel this year. The DOC will carry out investigations within 20 days since the official complaint is lodged. The Vietnam Competition Authority warned that domestic CWP producers and exporters prepare all necessary things to cope with the lawsuit to protect their legitimate rights. Vietnam ranks 55th in global prosperity index Vietnam has moved up 1 notch to 55th from last year’s 56th – in the latest global prosperity index released by British think tank - Legatum Institute. The survey conducted in 142 countries across eight categories: the Economy, Entrepreneurship & Opportunity, Governance, Education, Health, Safety & Security, Personal Freedom, and Social Capital. Accordingly, Vietnam is placed 32th for its healthy economy, 64rd for business opportunity, 59th for Governance, 57th for Education, 90th for health, 68th for safety and security, 77th for Personal Freedom, and 70th for Social Capital. Norway came out on top, followed by Switzerland and Denmark. Central African Republic ranked bottom of the list. The Legatum Prosperity Index is a unique and robust assessment of national prosperity based on wealth and wellbeing globally. 16 Vietnamese former bankers charged for causing over US$448mn loss The Ministry of Public Security has commenced legal proceedings against 16 ex-officials at a Vietnamese bank for activity that allegedly caused a total loss of over U$S448 million to the state budget last year. As part of the expansion of a criminal case at the Vietnam Construction Joint Stock Commercial Bank (VNCB), in which Pham Cong Danh, former chairman of the management board, was arrested in July 2014, the ministry’s investigation agency on Sunday said it had issued a decision to take legal action against these ex-officials, who worked for the same bank. The decision was approved by the Supreme People’s Procuracy, the agency added. All the 16 former bankers are banned from leaving their residence, according to the decision.  Of these, Pham The Tuan, an ex-member of the VNCB management board and ex-deputy head of the supervisory board of the lender, has been charged with “negligence of responsibility, causing serious consequences,” under Article 285 of the Penal Code. Tuan is accused of being negligent in not reporting in a ‘timely fashion’ Danh’s and his staff’s activity to the bank’s management board, and of not taking effective measures to cope with their offenses, leading to the fact that they moved money out of the VNCB, causing a loss of VND2.5 trillion (over US$112 million) to the bank.      Another of these offenders is Le Cong Thao, ex-director of the bank’s information technology center, who has been alleged to “deliberately act against the state’s regulations on economic management, causing serious consequences.” Meanwhile, the 14 remaining former bankers have all been indicted for “breaching regulations on loan provision in the operations of credit institutions.” With their alleged activity, all the defendants in this case have caused a total loss of more than VND10 trillion (over US$448.16 million), investigators said. TPP catalyses growth in real estate market Vietnam’s industrial parks, offices, residential areas, and resorts are expected to benefit the most in the real estate sector when the Trans-Pacific Partnership (TPP) agreement comes into force. Lately, all sectors are warming up again, with increasing transactions throughout the country. VinaCapital has recently launched the second phase of Dai Phuoc Lotus in the southern province of Dong Nai and Nine South Estates in Ho Chi Minh City. Meanwhile, Jen Capital, a Chiaphua Group subsidiary based in Hong Kong, also introduced its Caye Sereno villas to the market. Pham Vu Hai Anh, deputy director of Hong Hac Dai Lai, the developer of the Flamingo Dai Lai resort in the northern province of Vinh Phuc, said the TPP was considered one of the most effective motivators pushing foreigners to buy houses in Vietnam. “This is why the foreign demand for our villas will be increased,” Anh said. Meanwhile, a recent report by CBRE Vietnam clearly pointed out that industrial park developers and construction companies would benefit the most when a great number of foreign textile and fisheries companies migrate to Vietnam. The report said that the TPP would spur more investment capital to Vietnam, especially from countries that are big importers of Vietnamese products, like the US and Japan. “US investment projects in Vietnam remain modest compared to the Republic of Korea (RoK) and Japan. American companies will increase manufacturing activities in Vietnam and reimport made-in-Vietnam products, thanks to the country’s tax exemption on major products such as garments and textiles. They will likely target industrial land in the southern provinces of Vietnam, where a number of existing garment and textile factories are located,” the CBRE report said. “Similarly, manufacturers from other countries will certainly consider switching from non-TPP countries like China, Thailand, Cambodia, Indonesia, and India to Vietnam to enjoy extra-low tariffs. This will lead to more demand for industrial land, warehouses, and factories, not necessarily from TPP countries, but also from non-TPP members like China, Hong Kong, or Taiwan (China), who want to front-run the TPP.” Regarding the logistics sector, the report also said that increasing trade flow would result in higher demand for services. There will be greater need for infrastructure, including roads, railways, seaports, and airports to facilitate this sector. In office and accommodation, increasing foreign investment and growing demand for foreign companies to set up in Vietnam will drive up the demand for international standard office space. “The anticipated growth of foreign companies coming to Vietnam also means the higher demand for serviced apartments, apartments for lease, and even apartments for sale,” according to CBRE report. Although it might be too early to conclude the possibility of land price increases, CBRE cited growing demand for industrial land and a limited supply of quality land as two factors that will drive up prices, especially in areas most sought after by textile and garment manufacturers like the southern provinces of Binh Duong, Dong Nai and Long An. Japanese corporation to introduce farming machinery to Can Tho Japan’s Satake Corporation aims to invest in the Mekong Delta city of Can Tho’s agricultural equipment, General Director Nguyen Trong Hieu told municipal authorities on November 2. Satake works on high-tech machinery for agriculture, from sowing to post-harvest preservation. It plans to introduce Can Tho to seed-split and drying equipment with a designed capacity of 30-120 tonnes per batch. Municipal People’s Committee Vice Chairman Dao Anh Dung suggested Satake hold seminars to introduce products, support policies and technology transfers. Can Tho will work closely with Satake to launch product displays, he said, adding that Satake should offer affordable prices to compete with Chinese and Thai rivals. French Auchan Holding moves into Vietnam Auchan Holding has started developing its first supermarket chain in Vietnam as part of its planned expansion into the country, said company officials at a November 2 press conference in Ho Chi Minh City. The company plans to open 20 retail establishments throughout northern Vietnam by 2020 under the S-Mart banner pursuant to a joint venture agreement with Vietnam’s CT Group said Gilbert Infantes of Auchan. “We will sign the agreement for the first store to be located at the Long Bien MIPEC Trade Centre,” said Infantes and we plan to have the 3,700 square metre facility open for business in early 2016.  Auchan Holding, formerly Groupe Auchan SA, operates as a food retailer. The company operates supercentres (hypermarkets) and supermarkets that offer a range of food and non-food products. As of December 31, 2014, it operated 862 fully-consolidated supermarkets in France, Italy, Spain, Poland, Russia, and Senegal in addition to its many other branches including supercentres, shopping malls and retail parks. The supermarket business will be headed by Jordi Fernandez, who was previously the company’s sales director in Spain and Tunisia. Lotte introduces Made-in-Vietnam brand in RoK Lotte is getting ready to add a new line of Vietnamese products at six of its supercentres in the Republic of Korea (RoK), the Thoi bao kinh te Saigon online newspaper recently reported. The newspaper said for the week October 29-November 3 the retail giant will hold a promotion touting more than 200 Vietnamese products in a wide variety of departments from clothing to food and housewares at the supercentres. For those that spark sufficient customer interest, Lotte will add them to their store shelves on a permanent basis. This is the second time the Lotte brand has launched such a sales event in its attempt to kick up its Vietnamese product line offering for its customers to choose from, the newspaper said.  Vietnam voted as region’s most favored housing market Vietnam is expected to be the best performing real estate market in Southeast Asia in 2016 due to an easing of foreign ownership rules, experts have said. “Currently Vietnam is offering the most exciting opportunity in the region, while at the same time the regional real estate markets are suffering,” Rudolf Hever, executive director of the Ho Chi Minh City-based Alternaty Real Estate Service Company, said.  Singapore is feeling the effects of the heavy-handed cooling measures, Indonesia and Malaysia have seen rapid currency depreciation, Thailand continues to grapple with internal issues and Myanmar is seeing significant supply coming on to the market putting downward pressure on rentals and pricing, he said. “Meanwhile Vietnam has come through an extended period of consolidation, and looks poised to lead the regional real estate markets over the next two to three years”. At the 2015 Property Report Congress held last week in Singapore attendees acknowledged renewed interest in Vietnam due to the positive fundamentals. Drivers of Vietnam’s latest emergence include a stable and recovering economy, rising confidence among buyers and developers, and the positive effects of the AEC (ASEAN Economic Community) and TPP (Trans-Pacific Partnership), of which Vietnam will be a key beneficiary. Recent positive moves by the Vietnamese Government like relaxing foreign ownership rules ate and cut in visa fees for foreign tourists are also factors. Vietnam will cut single-entry visa fee for visitors from US$45 to US$25 with effect from November 23. A three-month multi-entry visa will almost be halved to US$50. Anyone with a valid visa or other entry documents can buy housing in Vietnam. The congress heard insights from top industry leaders on the success of real estate companies in Southeast Asia and the likely challenges and opportunities following ASEAN integration. Country-focused opportunity sessions were also held with in-depth discussions on the Vietnam, Singapore, Philippines, Thailand, Myanmar, Malaysia, and Indonesia housing markets. During the Congress, panelists were asked to vote on which markets will perform best in 2016, and the clear favorite was Vietnam. Participants expected Vietnam to be the best performing real estate market in 2016, ahead of Thailand, Indonesia, and Philippines. They were also asked to choose one market (excluding their home market) which currently offers the best opportunity in the real estate market, and once again Vietnam was their prime choice. According to Alternaty, developers in markets such as Thailand (Bangkok, Phuket), Singapore and Indonesia (Bali, Lombok) had a lot of success in attracting foreign buyers over the past few years, while Vietnam missed out on this trend. However, the results from the Congress indicate that foreign buyers may finally give Vietnam serious consideration, according to the company. Foreign imports erode sales of Vietnam automakers Vietnam consumers are on track to spend more on auto imports this year than they do purchasing domestic vehicles, according to the latest figures of the General Statistics Office (GSO). In the 10 months leading up to November, the GSO reported foreign imports jumped 83% in volume year-on-year to 94,600 units and doubled in value to US$2.3 billion— an all-time record high. The turnabout follows news of the reduction of duties on vehicles imported from ASEAN+6 and other WTO member states as well as changing consumer purchasing trends. In the January-October period, China replaced the Republic of Korea (RoK) as the largest supplier of autos with more than 20,000 units valued at US$776 million. Vehicle imports from Thailand, the second largest supplier, jumped to 16,900 units followed by India at 12,500 vehicles, the GSO reported. Australia, Vietnam develop new sugarcane technology Sugar Research Australia and the Vietnam Sugarcane Research Institute recently signed a 10-year agreement to participate in a project seeking new sugarcane production technology for the benefit of both countries. The project will evaluate varieties of sugarcane that are better adapted to the soil and climate of  the two nations, taking into consideration the issues of productivity, pest resistance and tolerance to cold and drought. “The greatest benefit of the project is the opportunity for both countries to develop a greater range of cane varieties,” said Sugar Research Australia Executive Manager of Development Peter Allsopp. Additionally, Allsopp said the project aims to develop and recommend a production system model based on studies of fertilization and planting periods, among other regional factors. “However our primary focus is on developing a broader diversity of plants for propagation that can withstand a wider array of pest and disease organisms”, said Allsopp. That's what this agreement with Vietnam is all about Allsopp underscored— it's about increasing the diversity of materials we can use as parents. "We can make crosses and then we can select the best of those seedlings that we get in our trials and hopefully develop better varieties of cane for the Vietnam and Australian sugar industry." Mr Allsopp said in the past, foreign cane varieties rarely succeeded in the harsh Australian conditions, adding that currently only about half the sugar varieties in Australia have one parent from a foreign exchange. Initially, researchers in each country provided the other with a list of ten cane varieties to be exchanged. The agencies will also work cooperatively on research into sugarcane diseases and pests ‘of mutual interest’ and other ventures such as trait development, molecular biology, and crop management. Sugar Research Institute Australia currently has variety exchange agreements with 15 countries. Director General Nguyen Duc Quang of the Sugar Research Institute of Vietnam is hopeful the agreement will benefit both countries. Quang said Vietnam's sugarcane industry had some diseases and pests which were of bio-security concern to Australia, even some that had not yet appeared in Australia. "Working together, we can help lessen their impact on the Vietnamese industry, as well as ensure that the Australian industry is well prepared for any incursion." Australia is the globe’s third largest exporter of sugarcane, while Vietnam is less competitive lagging far behind countries such as Thailand, Indonesia and the Philippines in production. The agreement is widely accepted as being a tremendous boon to Vietnam, especially in light of the noodle bowl of free trade agreements the nation is engaged in and the need to boost the competitiveness of its agriculture industry. UK investors keen on urban railway projects in HCM City The United Kingdom wishes to further cooperate in specific projects with Vietnam in general and Ho Chi Minh City in particular, said Lord David Puttnam, the UK Prime Ministerial Trade Envoy to Vietnam, Cambodia, Laos, and Myanmar.  At the meeting with Nguyen Thi Hong, vice chairwoman of HCM City People’s Committee on October 29, Lord Puttnam said the UK is keen to cooperate with HCM City in building its urban railways and expanding Tan Son Nhat international airport. He added that the construction of urban railways will be a solution for HCM City’s long-term development. The UK is willing to share knowledge and skills with Vietnam and particular, HCM City in urban railway construction and help train high-quality human resources. For her part, Ms Hong said HCM City is seeking for support and cooperation from all nations including the UK in different areas. The city has started building urban railway line 1 from Ben Thanh to Suoi Tien. It is conducting negotiations and calling for investment for the remaining lines. The city appreciates UK businesses who come for investment survey and research. Ms Hong said HCM City also wishes that UK businesses will learn about investment opportunities in the fields of infrastructure development, finance, banking, and public-private partnership. Especially, she hoped that there will be more cooperative programs in human resource education and training between the city and the UK in the coming time.  Dong Nai posts record-high footwear export The southern province of Dong Nai exported over 2.1 billion USD worth of footwear in January-October, posting the highest year-on-year increase of 17 percent.  Dong Nai is one of the three biggest footwear exporters of Vietnam with Europe and the US as key markets, according to Deputy Head of the provincial statistics department Tran Xuan Ha.  He noted that a number of big orders from overseas are flowing into the province, which is hoped to help the footwear sector surpass its target of 2.5 billion USD set for this year.  In addition to footwear, wood-timber products and garment-textiles also grossed over 1 billion USD in export turnover, which is forecast to surge in the remaining months.  Key importers of the three staples are the US, Europe and the Republic of Korea.  According to the provincial Department of Industry and Trade, in the first 10 months of this year, Dong Nai’s export turnover is estimated at over 12 billion USD, up 10.6 percent over the same period last year.  The province imported 11.06 billion USD worth of goods, a year-on-year rise of 6.3 percent. It mainly purchased machines, equipment and spare parts together with apparel and footwear materials.  Local export revenue is expected to reach over 14.4 billion USD in 2015, up 15 percent against the previous year and nearly doubling that of 2010. To realise the target, the department will continue to improve administrative formalities and increase business competitiveness.  The province will actively engage in cooperation and connectivity programmes with cities and provinces in different regions to create abundant opportunities for export while endorsing trade and investment promotion activities. MoF releases State budget figures The Ministry of Finance has announced that balanced State budget revenue in October has been estimated at VND95.6 trillion ($4.28 billion) and VND777 trillion ($34.83 million) for the first ten months of the year, equal to 85.3 per cent of the annual plan and a 6.3 per cent increase compared to the same period last year. Domestic revenue saw the most positive results. The figure in October was estimated at VND75 trillion ($3.36 billion), some $1.48 billion (78.6 per cent) higher than in September, primarily due to October being the deadline for enterprises to declare and pay taxes on revenues generated in the third quarter. Accumulated domestic revenue for the first ten months was VND578.2 trillion ($25.9 billion); 90.5 per cent of the annual plan and a 16.2 per cent increase year-on-year. Many revenue sources reached the annual plan. Environmental protection tax stood at 158.3 per cent of the annual plan due to tax increases on petrol and oil products applicable since May 1. Agricultural land use tax was 133.3 per cent, house and land use fees 128.9 per cent, and registration fees 115.6 per cent of the annual plan. Balanced revenue from imports and exports in October reached only VND16 trillion ($716.8 million), with total revenue at VND22 trillion ($985.6 million) and VAT refunds at VND6 trillion ($268.8 million). Accumulated total revenue for the ten months was VND209.3 trillion ($9.38 billion), equal to 80.5 per cent of the annual plan and roughly the same year-on-year. After VAT refunds of VND70 trillion ($3.14 billion), balanced revenue was at VND139.3 trillion ($6.24 billion), equal to 79.6 per cent of the annual plan. Revenue from crude oil continued to decline. In October it was estimated at VND4.2 trillion ($188.16 million) and VND55.5 trillion ($2.49 billion) for the first ten months, representing 59.7 per cent of the annual plan and a 37.7 per cent fall compared to the same period of 2014. Full payments were made on an estimated 13.9 tonnes during the ten months; 94.3 per cent of the annual plan and an 11.4 per cent increase year-on-year. The average crude oil price was $58.4 per barrel; $41.6 lower than expected. October expenditure has been estimated at VND97.9 trillion ($4.39 billion) and at VND918.4 trillion ($41.14 billion) for the first ten months, equal to 80.1 per cent of the annual plan and 7.4 per cent higher than in 2014. Investment and development spending in October stood at VND13.1 trillion ($586.88 million), with accumulated spending for the first ten months at VND137.9 trillion ($6.18 billion), representing 70.7 per cent of the annual plan and 8.1 per cent higher year-on-year. As at the end of October disbursement of basic construction investment was at VND133.5 trillion ($5.98 billion), or 70.1 per cent of the annual plan and 70.6 per cent of last year’s figure. The spending of capital from government bonds during the ten months was estimated at 54 per cent of the annual plan and below the 64.9 per cent recorded last year. Debt and aid repayments in October totaled VND13.5 trillion ($604.8 million), for a ten-month figure of VND127.3 trillion ($5.7 billion); 84.9 per cent of the annual plan and a 10.3 per cent increase year-on-year. The Ministry of Finance said that this payment was only on matured debts. Socio-economic, defense and security, and administration expenses during October were at VND70.2 trillion ($3.14 billion), bringing the total for the first ten months to VND645.1 trillion ($28.9 billion), or 84.1 per cent of the annual plan and 5.4 per cent higher against the same period in 2014. Expenditure was met when needed for defense and security and overcoming natural disasters. The Ministry of Finance also provided 80,000 tonnes of national rice reserves to support the poor and hungry in many regions. The State budget deficit for the first ten months was therefore VND141.4 trillion ($6.33 billion), representing 62.6 per cent the yearly estimate. Funds mobilized for the State Budget reached VND30.452 trillion ($1.36 billion) as at October 25. Bonds issued by bidding were at VND8.162 trillion ($365.66 million); 3.3 times higher than in September and equal to 64.2 per cent of the figure in the same period of last year. As at October 26 accumulated mobilized capital for the State budget and investment and development was VND157.9 trillion ($7.07 billion), or 63 per cent of the annual plan. PM approves $4 million dam upgrade project The Prime Minister has approved a loan from the World Bank to implement the Dam Rehabilitation and Safety Improvement Project. The project has total investment of $443 million, of which ODA capital totals $415 million and reciprocal funding is $28 million, with the goal of supporting a program to repair and upgrade dams and strengthen their management and operations to protect people and socioeconomic infrastructure in downstream areas. It includes three phases. The first phase is dam safety rehabilitation and the repair and upgrade of irrigation dams, the second phase is dam safety management, supervision and operation, and the third phase is supporting the management of the project. Upon completion it is expected that 450 dams that are at risk will be repaired and upgraded, 718 irrigation reservoirs will open with flood warning systems, and the national database on dam safety management will be improved. The project will be implemented in 2016-2022 in provinces such as Ha Giang, Yen Bai, Tuyen Quang, Bac Kan, Lao Cai, Thai Nguyen, Lang Son, Son La, Hoa Binh, Vinh Phuc, Phu Tho, Bac Giang, Quang Ninh, Hai Duong, Ninh Binh, Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri, Thua Thien Hue, Quang Nam, Quang Ngai, Binh Dinh, Khanh Hoa, Phu Yen, Kon Tum, Dak Lak, Dak Nong, Lam Dong, Gia Lai, Binh Thuan, Ninh Thuan, and Tay Ninh. The PM has assigned the Ministry of Agriculture and Rural Development to prepare plans and negotiate with the World Bank over the agreement. Developing logistics key to new FDI flows At a seminar on the impacts of the TPP on investment attraction and trade in Vietnamese localities and on enterprises held in the central city of Da Nang on October 30, Mr. Nestor Scherbey, Head of the Customs & Trade Facilitation Working Group of the American Chamber of Commerce (AmCham) in Vietnam suggested developing logistics infrastructure to attract new foreign direct investment (FDI) flows and contribute to sustainable growth and greater competitiveness. In Da Nang and many other localities in Vietnam, international services by wide-bodied aircraft are infrequent or non-existent and warehousing at airports is limited, while logistic costs are too high compared to other countries in the region. Mr. Scherbey told local media that local authorities in Da Nang should propose the government pilot a free trade zone under the supervision of customs agencies. A free trade zone would promote production investment by tax exemptions on imported equipment components and machinery and reductions in administrative procedures and specialized monitoring requirements. Analyzing the impact of the TPP on trade and FDI in Vietnam, Executive Director of AmCham in Vietnam, Mr. Herb Cochran, emphasized the key benefits of the agreement for the country, which include stronger connections with international supply chains and encouragement for administrative reform, promoting growth and creating opportunities. This is also a challenge for Vietnam, with FDI enterprises accounting for 70 per cent of the country’s exports. According to, Mr. Cochran, Vietnam needs to improve to become a supplier meeting standards in the US market and the world to increase its export share in the international supply chain. In particular, Vietnam should look to increase the exchange of electronic data with D-U-N-S code (a unique international ID number with nine digits recognizing global companies in all transactions) for commercial activities as well as promote the development of transport and trade logistics to boost productivity and strengthen competitiveness. In addition to improving trade infrastructure, innovation and improvements in business processes are also essential, in particular changes to import and export procedures to reduce the cost of trade after joining the TPP. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR