BUSINESS IN BRIEF 19/12 Agribank rolls out EMV chip cards State-owned Agribank, one of the largest banks in Vietnam, rolled out a set of debit and credit cards for high security transactions using EMV chip technology in Hanoi on December 17. Highlight was MasterCard Credit Card Platinum (Agribank Platinum) which is believed to offer holders extra convenience and outstanding experiences. EMV, created by three world largest card associations – Europay, MasterCard, and Visa, is a technical standard for smart payment cards and for payment terminals and automated teller machines that can accept them. Each EMV card contains a microprocessor chip that creates a unique code for every transaction so that security against fraud is improved compared to magnetic stripe card that rely on the holder’s signature. Agribank is a pioneer in implementing the non-cash payment project in Vietnam and providing card services to clients in rural and remote areas. Petrol prices drop to 16,405 VND per litre The prices of RON 92 petrol and E5 bio-fuel were reduced by 391 VND per litre as of 3 pm on December 18, the 5th consecutive cut and the 22nd adjustment so far this year. The petrol and oil price control joint team of the Ministry of Industry and Trade and the Ministry of Finance said with the reduction, the price of RON 92 petrol will not be higher than 16,405 VND (0.72 USD) per litre and that of E5 bio-petrol not more than 15,910 VND (0.7 USD) per litre. The price of diesel oil also dropped by 1,246 VND per litre, while that of kerosene and fuel oil decreased by 1,136 VND and 942 VND per litre, respectively. This reduction made the current petrol price 1,400 VND lower than the level at the beginning of this year while the diesel price fell by 6 ,500 VND. Over 110 mln USD support industry projects land in HCM City   Two support industry projects from the Republic of Korea, worth 112 million USD in total, were authorised to land in the Saigon Hi-Tech Park (SHTP) in Ho Chi Minh City on December 17. The 80-million-USD facility for electronic component manufacturing and assembly, Platel Vina, will be built at the park by Intops Co., Ltd., covering an area of 40,000 square meters. The factory, scheduled to be operational in December, 2016, is designed to produce about 6.5 million items per year for Samsung Electronics. Another is the 32-million-USD project of Dihan Climate Control Co., Ltd. The 20,700-sq.m facility will be operational by the second half of 2016, capable of manufacturing 2 millions of heat exchangers annually, also for Samsung Electronics. The Daihan Climate Control said it will need about 400 workers for the project. Samsung Electronics started construction on the 1.4-billion-USD Samsung CE Ho Chi Minh City Complex (SEHC) in May this year to produce electronic goods, such as Smart, LCD and LED TVs. According to Le Hoai Quoc, head of the SHTP management board, these projects will be part of Samsung’s supply chain and will foster domestic supply chains and increase value for Vietnamese products. Thailand's PTT suspends US$3bln project in Vietnam amid oil slump As oil prices continue to fall, oil and gas giant PTT Plc has said it will delay three oil refinery and facility projects worth an estimated US$3 billion each in Vietnam, Myanmar and Indonesia, Thai media reported on December 17. Chansin Treenuchagron, senior executive vice president for the state-run company's petrochemicals and refineries, told The Bangkok Post that PTT will decide whether to proceed with the projects in 2017. The company has worked on the feasibility studies of the projects since early last year, he said. It was approached by state-owned oil and gas companies in the countries, but they have yet to reach any agreement, he added. With oil prices continuing to drop significantly since last year and likely to bottom out next year, PTT has been focusing on higher operating efficiency and reviewing capital expenditures, even though the countries' oil production sector still has potential, Chansin was quoted as saying. A file photo of a security guard keeping watch during the open ceremony of Thai energy firm PTT's sixth Gas Separation Plant near the town of Map Ta Phut in Rayong province, east of Bangkok in 2011 file photo. Photo: Reuters The company originally planned to build an oil refinery complex with a hydrocarbon cracker production facility in Myanmar, while two refineries in Indonesia and Vietnam were slated to be run through its subsidiaries, Thai Oil Plc and PTT Global Chemical Plc, according to the news report. In Vietnam, PTT is best known for leading a US$22-billion refinery, which it has been working on since 2013. Located in the central province of Binh Dinh, the facility is slated to be one of Southeast Asia’s largest with the capacity of 400,000 barrels per day. Speaking to local media in July, PTT representative Jittayapa Wongsaroj said dropping oil prices forced it to reassess the profitability of the project, and the reassessment was expected to be completed by the end of this year. PTT, which already secured the participation of Saudi Arabia's national oil and gas company, Aramco, in the mega project, has been reportedly seeking local partners, especially state-run companies such as Petrolimex. Annual interest rate on dollar deposits cut to zero percent The maximum interest rate paid to individuals depositing USD in local banks will be zero percent per year from December 18, the central bank announced. Organisations, excluding credit institutions or branches of foreign banks, will also not receive interest for dollar accounts. This notice was confirmed in Decision No.2589/QD-NHNN released on late December 17. Prior to the change, the maximum interest rate for individuals was 0.25 percent per annum. The central bank said the decision was made to continue implementing concerted measures to increase the value of Vietnam dong and curb the dollarisation of the economy. Earlier on December 17, the US Federal Reserve (FED) decided to raise interest rates by 0.25 percentage points, which, however, has not prompted the State Bank of Vietnam to change its policy on stabilising foreign exchange rates. Vietnam’s forex market saw almost no fluctuations after the FED decision and the prices of US dollar at commercial banks remained at the ceiling, experts said. As of 8:20 am, Vietcombank quoted selling price of USD at 22,547 VND and buying price at 22,517 VND, the same rates as BIDV. Meanwhile, Eximbank kept its buying and selling rates steady at 22,497-22,547 VND per one USD. The green notes have rebounded quickly and hit the ceiling since earlier this week. The commercials banks also raised the buying price after pegging the selling one to the ceiling in anticipation of the US central bank’s adjustment. Monetary policy helps stabilise macro-economy The picture of Vietnam’s monetary policy in 2015 is brighter than that in 2011, affirmed Deputy Governor of the State Bank of Vietnam Nguyen Thi Hong at a seminar on the management of the policy in the period and its impact on the economy in Hanoi on December 17. According to Hong, in 2011, the country’s gross domestic product (GDP) grew 6.2 percent and inflation rose by 18.13 percent, while its 2015 GDP is estimated at over 6.5 percent and inflation is kept at a low level despite increases in domestic consumption and investment demands. Five years ago, interest rates stood at 20-25 percent per year, compared to the current 6-9 percent for short-term rates and 9-11 percent for medium- and long-term ones, which help address difficulties for enterprises. Credit growth is well controlled in accordance with economic development requirements, while banks’ liquidity is improved, Hong said. Director of the Business Development Institute Le Xuan Nghia stated that the monetary policy in the 2011-2015 period was a success, winning praises from both domestic and foreign experts. The State Bank has carried out numerous drastic measures to restructure the banking system, which creates an important premise for the system’s modernisation. Deputy head of the Banking Strategy Institute Pham Xuan Hoe affirmed that the monetary policy and banks’ operations during the period have contributed significantly to curbing inflation and stabilising the macro-economy and the gold and foreign currency markets. Agricultural sector seeks stronger international cooperation A conference on boosting international cooperation in the agricultural sector in the new phase of global integration was held in Hanoi on December 17. The conference brought up a range of subjects, including agricultural trade with Japan and Germany and measures to increase domestic agricultural products’ position on the international market. According to Deputy Foreign Minister Bui Thanh Son, Vietnam is among world leading exporters of rice, rubber, coffee, cashew and fisheries products, and a series of free trade agreements (FTA) the country has signed or is going to sign are expected to open up more opportunities to domestic products. However, deeper integration will also bring challenges and greater competition both at home and abroad. Tran Cong Thang from the Institute of Policy and Strategy for Agriculture and Rural Development said the Trans-Pacific Partnership (TPP) would benefit some produce such as fruit, vegetables and sugarcane, as most of them are exported as raw material or unprocessed products, thus enjoying lower tariffs. However, these products would face stiff competition from foreign counterparts, which are superior in terms of farming technologies and prices. He suggested forming production chains to reduce costs and ensure clear origin, while relevant agencies should build standards for domestic products in line with TPP members. Participants also urged facilitating joint ventures and other investment cooperation forms and promoting technology transfer in the agricultural sector, thus creating more opportunities for local farmers to access advanced techniques in the field. Dong Nai exceeds FDI target Foreign direct investment (FDI) registered in southern Dong Nai Province has hit US$2.4 billion as of November 20, exceeding expectations and this year's target of $1.5 billion. According to the province's Department of Planning and Investment, of the sum, $1.75 billion was for 100 newly-licensed projects while the remainder from 86 operational ones to raise their capitals. Most of the new projects were financed by Japanese and South Korean investors and were involved in the support industry in a bid to increase the support of locally-made components for the domestic manufacturers. General Director of Osaka Fuji Viet Nam Yoshiharu Kondo told Voice of Vietnam (VOV) that after surveying many localities, the company decided to invest in Dong Nai thanks to its infrastructure advantages and streamlined administrative procedures. The company's operational plant, built at a total cost of US$3 million in Nhon Trach 3 Industrial Zone, specialises in manufacturing machinery infrastructure and spare parts for the steel plating industry. It will also provide maintenance, repair and manufacture of industrial machinery for enterprises in Viet Nam. The director said that his company would continue to expand production and increase the capacity of the plant in 2016. The province is now home to approximately 1,190 valid foreign-invested projects worth a combined $24 billion. Most of them (1,039) are located in industrial zones (IZs). Deputy head of the province's IZs Management Board Mai Van Nhon said that the province would continue to upgrade the infrastructure of its IZs, speeding up administrative reforms and improve quality of the personnel resource as move attract more FDI. Dong Nai's trade surplus to hit $1.5bn in 2015 The southern province is likely to record a trade surplus of $1.5 billion this year, according to its Department of Industry and Trade. The province's export turnover is estimated to cross $14 billion this year. In the first 11 months of this year, trade surplus reached $1.3 billion, the highest level so far and up three times higher than that of the same period last year. In November alone, the province earned $1.27 billion from exports and recorded $220 million in trade surplus. Key export products seeing trade surplus were footwear, wooden products, and garments, in addition to electronics and spare parts. According to the provincial Statistics Department, exports of agro-fishery products reached over $1 billion in the January to November period, accounting for 8 per cent of the total export turnover. People trust banking system thanks to improved policies Improved monetary policies in the past five years have helped increase the trust of people in the banking system, a conference heard yesterday. At the conference on the management and regulation of monetary policies from 2011 to 2015, and its effects on the economy, held in Ha Noi yesterday, participants said that for the past five years, the monetary, fiscal and other economic policies have contributed in controlling inflation, stabilising the macro-economy, supporting economic growth and ensuring the safety of the banking system. Deputy Director of the Banking Strategy Institute Pham Xuan Hoe noted that the most visible achievement in the past five years is that the monetary policy has played an important role in curbing inflation and stabilising the macro-economy. Hoe said that the banking industry has also gained with the stability achieved in the ... foreign exchange and gold markets as well as successfully fighting against the use of gold and the US dollar in daily transactions in the local economy. Rector of the National Economics University Tran Tho Dat said that Viet Nam's economy has faced many difficulties and challenges, which have caused volatility in the macro-economy, high inflation, low economic growth, and a decreasing stock market, apart from a frozen real estate market. During those years, the banking system was unsafe with many credit institutions suffering poor liquidity, weak governance and accelerating non-performing loans (NPLs). The foreign exchange market was also very volatile while the government's foreign exchange reserves remained low. To remove these shortcomings, the banking system has undergone strong restructuring for the past five years which has helped it register major achievements. According to Deputy Chairman of the National Financial Supervisory Commission Truong Van Phuoc, from 2012 till now, the entire banking system has handled roughly more than VND458 trillion (US$20.35 billion) of NPLs, 45 per cent of which were handled via the Vietnam Asset Management Company (VAMC). It has helped reduce the bad debt ratio of the entire banking system from 17 per cent in late 2011 to 2.91 per cent in October 2015. However, Phuoc said, the central bank would have to continuously issue new policies to help the VAMC handle the bad debts that it had bought from credit institutions. Phuoc also expected the debt would be handled soon thanks to the warming real estate market as most of the VAMC's bad debts are mortgaged by real estate assets. For the past five years, the central bank has also succeeded in restructuring ailing banks through mergers and acquisitions, which has helped the banking system avoid a domino-like collapse. Thanks to the restructuring of the banking system, the lending interest rate has also been cut by half from 20 per cent per year in late 2011 to between 9 per cent and 11 per cent this year for ordinary loans and 6.5 per cent for prioritised loans. The interest rate reduction, which is equal to that in 2005 and 2006 when the economic growth was stable, has contributed significantly to cut input costs for businesses. Despite the achievements, the banking industry is still faced with major challenges, Hoe said. He said that as the credit growth is roughly between 15 per cent and 17 per cent yearly, the central bank will have to closely supervise the quality of loans to avoid rising bad debts. Besides, he said, the regulation of domestic monetary policies would also face major challenges as policies announced by central banks of major countries worldwide would impact Viet Nam's financial system. It is also difficult for the central bank to implement regulations as the country is deeply integrating into the world's economy while the financial status as well as asset quality and governance of local banks remain restricted, Hoe said. Banking economist Can Van Luc suggested that the central bank should regulate monetary policies actively and flexibly, and reduce administrative measures to make it more effective. Imports threaten local output Joining free trade agreements should have boosted Viet Nam's exports but the anticipated inflow of imports is posing a challenge to local production, urging the use of trade defence instruments. However, a majority of Vietnamese businesses are still in the dark on trade defence instruments, a conference heard on Wednesday by the Viet Nam Competition Authority. Nguyen Phuong Nam, the competition authority's deputy director, said during the rapid international integration process, applying trade defence instruments was a must to protect local production. Although faced with numerous trade defence lawsuits, Vietnamese firms remained passive in using trade defence instruments even in the home market due to the lack of knowledge and limited capacity and resources, according to Nam. He added that the lack of co-operation among firms in an industry made competitive pressure fiercer to a single firm. Nam said Viet Nam was among the countries which applied trade defence instruments modestly, damaging domestic production. "Not only enterprises, but government management agencies should also be blamed," Nam said at the conference. Since the promulgation of the ordinance on trade defence instruments in 2004, Viet Nam carried out only three safeguards and one anti-dumping case against imported products. "Each time, while preparing for a trade defence lawsuit, we feel the intense pressure," Nam said. To Thai Ninh from the Viet Nam Competition Authority cited statistics showing that only 1.8 per cent of surveyed firms said they had studied quite carefully about trade defence while 64 per cent said they were unaware of it, and 16 per cent said they had never heard of it. Those figures sent alarm bells ringing within domestic firms amid the rapid integration with the anticipated rise in the use of trade defence instruments following liberalisation, in line with free trade agreement commitments, Ninh said. Ninh urged firms to enhance their awareness of trade defence as well as be more active in using instruments to protect market shares. Experts at the conference urged firms to join hands to deal with trade defence issues. Anti-dumping, anti-subsidy and safeguards were trade defence instruments allowed by the World Trade Organisation to protect local production. Restructuring decisive to economic growth Restructuring is decisive to the quality of economic growth and the level of economic development amid new challenges posed by international integration, economists said at a seminar in Ha Noi yesterday. The function was held by the Central Institute for Economic Management (CIEM) to review outcomes of economic restructuring between 2011 and 2015 and prepare for the design of a blueprint for the work in the next five years. Since 2011, the Government has focused economic restructuring on ensuring the safety of the financial-banking system, and improving the effectiveness of capital mobilisation and allocation through measures to stabilise the macro-economy, monetary and fiscal policies, and interest rates. As a result, inflation has been strictly controlled and kept at low levels, facilitating business growth and people's livelihoods. The Government has also conducted public investment restructuring to renovate mechanisms for and methods of mobilising, managing and using the State capital. It has issued Resolution No.11 and related directions and increased bidding in order to ease the burden on the State budget. The divestment of the State capital at State-owned enterprises (SOEs) and SOEs equitisation have been widely implemented with the aim to improve the firms' transparency and competitiveness. SOEs have divested more than 25 per cent of the State capital from non-core business so far. Economists highlighted significant outcomes over the last five years, including a stabilised macro-economy, a continuously improved business climate, low inflation, and accelerating GDP growth. However, they also pointed out certain shortcomings such as the modest progress in public investment restructuring, the prolonged settlement of bad debt, and the lingered preference for SOEs. After years of being managed under the old-fashioned mindset, Viet Nam's economy is facing the risk of lagging behind, especially in comparison with neighbouring countries, said Director of the CIEM's Research Department on Macro-economic Policies Nguyen Tu Anh. If Viet Nam's average growth rate is at 5 per cent annually, its per capita GDP will be only 75 per cent of China's and 83 per cent of Thailand's by 2035, he added, forecasting that the conundrum will get tougher as the State's resources are increasingly limited, causing a more severe budget deficit and public debt. Many other experts voiced concerns over the acceleration of debt expansion and backward infrastructure which has failed to meet social demand. SOEs' ineffective operations, outdated management models and low labour productivity are also negatively impacting modernisation efforts. Phu Tho to get $98m investment The Prime Minister Nguyen Tan Dung signed off on a VND2.2 trillion (US$97.6 million) investment package for infrastructure development of the Cam Khe Industrial Park in Phu Tho Province, the baochinhphu.vn (Government news website) reported. Viglacera Corporation, the investor in the industrial park project, will help the park increase efficiency and facilitate its management and operation. The hope is that the project will stimulate the surrounding areas' socio-economy and further development of industrial parks in the province. The project will occur in three phases, the first of which will complete developing 137ha by the fourth quarter of 2017. The second phase will add another 138.5ha by the first half of 2020. The third will quickly follow at the end of 2020. The Prime Minister permitted the provincial people's committee to grant the licence to Viglacera and co-ordinate relevant agencies to assist in land clearance. The Prime Minister asked the province and investor to attach special importance to devising job solutions for locals whose will be forced to move and for industrial workers in the area. The Cam Khe industrial park is a multi-industry park utilising advanced technology and producing goods that qualify internationally. The park will involve several industries: construction materials; electronics and high-end consumer goods; textile equipment; automotive; and agro-forestry machinery and processing. The park is expected to create 25,000 to 28,000 jobs when it goes into operation. There are currently seven industrial parks in the province, the biggest being Phu Ha and Cam Khe with 450 ha. Hi-Tech Park companies to invest $110m The Saigon Hi-Tech Park (SHTP) in HCM City yesterday granted investment licences to new projects of two South Korean enterprises operating in supporting industry worth a total more than US$110 million. Platel Vina, a project of Intops Viet Nam Limited Company, will build a factory to manufacture electronic components, with an investment capital of $80 million on a 40,000 sq.m land plot. The project is expected to go into operation at the end of 2016, with a capacity of 6.5 million products per year. The plant will first focus on producing household appliance parts and components for South Korean firm Samsung Electronics Viet Nam Company Ltd. Then it will expand business into other sectors, including the development and manufacture of internet of things (IoT) devices. The other project, a heat exchanger manufacturing plant of Daihan Climate Control Co., Ltd, has an investment capital of $32 million, covering an area of 20,700 square meters. The plant is scheduled to be operational in the second half of 2016, with a capacity of two million products a year. It will focus on producing heat exchangers, components for refrigerators and air conditioners. According to Daihan Climate Control company, the plant will have to recruit about 400 Vietnamese workers, and enhance the quality of personnel resources. The two above projects both engage in the supply chain of support products for Samsung. On May 2015, Samsung Electronics Company started construction on the Samsung Consumer Electronics Complex (SEHC) at the SHTP with a total investment of US$1.4 billion. It is a base for Samsung's research and development (R&D) activities and manufacturing hi-tech electronic products. Investor interest high in Kim Lien Tourism Many big companies are bidding for shares of Kim Lien Tourism Joint Stock Company, the owner of historic Kim Lien Hotel, currently owned by the State Capital Investment Corporation (SCIC). This is in stark contrast to the depressing results of the recent auctions when very few institutional investors showed their interest. The State investment arm, SCIC will sell its entire stake of nearly 3.65 million shares in Kim Lien Tourism JSC, equivalent to 52.4 per cent of the company's charter capital. All of the shares will be offered in a whole lot sale, scheduled on December 22 on the Ha Noi Stock Exchange. With the starting price of VND30,600 (US$1.37) a share, an investor must pay at least VND112 billion ($5 million) to own these shares. "This is a relatively high price for a share of a small-sized business," Hoang Thanh Tung, a securities analyst at the Royal Securities Company, said. Even the price of the Airports Corporation of Viet Nam's initial public offering (IPO), the sole manager of all 22 airports in Viet Nam early this month, was set at only VND11,800 (53 cents) a share. State-owned Kim Lien Tourism Company primarily operates in the field of restaurant and catering services. It has a charter capital of nearly VND69.6 billion ($3.1 million). Its possession of the 55-year historic Kim Lien hotel at the prime location in Ha Noi centre was attributed to the attractiveness of this auction to many companies, Tung said. The 3.5ha hotel, opened in 1961, has two fronts onto the two crowded streets, Dao Duy Anh and Pham Ngoc Thach. It has nine buildings with 437 rooms and five restaurants. This piece of land has been leased to the company from 1993 for a period of 50 years. "As the shares are being sold as one lot it will allow investors to hold the controlling stakes in the company," Tung said. As many as 10 companies have registered to chip in the auction, including big companies. State-owned Ha Noi Tourist Corporation is the largest bidder with a charter capital of over VND2.8 trillion ($125 million), followed by Refrigeration Electrical Engineering Corporation with a charter capital of VND2.7 trillion ($120.5 million); ThaiGroup, VND2.5 trillion ($111.6 million), and Mien Trung Construction Corporation, with nearly VND2.1 trillion ($93.8 million). Affordable housing key to Vietnam’s goals of increased productivity As Vietnam continues to urbanize rapidly, adequate supply of affordable housing will be integral to achieving national development targets and enabling the country to maintain a high rate of growth, with cities contributing a growing share of jobs and GDP. According to a new World Bank report - “Vietnam Affordable Housing - A Way Forward”, the structural shift out of rural areas and toward a higher-productivity manufacturing and service-based economy will drive population growth and new demand for housing in cities. The share of the urban population is expected to reach 50% by 2040, with an estimated 374,000 additional units needed in cities each year to cope with demand. “Urbanization has been used as a tool to accelerate economic growth and poverty reduction in many countries around the world, and affordable housing will be instrumental to helping Vietnam achieve its goals for increasing productivity and inclusive urban growth,” the report states. According to the report, despite economic growth, Vietnam still has a substantial deficit of quality housing. Almost 20% or approximately 4.8 million households in Vietnam are still living in poor conditions. Meanwhile, the majority of new demand for housing will be concentrated in only a few major cities and industrial zones. Together, the Red River Delta Region, surrounding Hanoi, and the South East Region around Ho Chi Minh City, will account for around two-thirds of the new housing demand. Vietnam has experienced several phases of housing policy in the past. Following liberalization of the sector, growth in the real estate sector spurred by foreign direct investment and speculation led to significant home price increases and supply in the luxury market that eventually resulted in a real estate bubble from 2009-2012. The recent VND 30 trillion stimulus package, launched in 2012, has helped to reorient developers and lenders toward the affordable middle income market where there are real home ownership needs. A revised Housing Law, passed by government in 2015, provides a strong legal framework for reforms with a new focus on supporting self-built housing, an active role for private sector in housing provision and addressing the shortage of affordable rental housing, especially for workers in industrial zones and students. Toward that end, this report, which includes a comprehensive sector assessment and roadmap for affordable housing in Vietnam recommends the following key messages: -        Increase and reorient government spending in the housing sector. In particular, focusing on programs that support and target the lowest two income quintiles and high growth cities, where the need for housing is most urgent. -        Develop a National Affordable Housing Program that acts as a vehicle to implement the 2015 Housing Law and structure the government’s interventions in the housing sector. This Program would include initiatives to improve access to housing finance, stimulate supply of affordable rental housing and enable delivery of core housing to support the self-built housing sector.   -        Prioritize structural reforms to improve governance of the housing sector and urban land management. Specific priorities are to strengthen an over-arching coordinating body that convenes all stakeholders and orchestrates implementation of selected housing initiatives, and to introduce reforms in the land taxation framework. -        Support market development by investing in the building blocks of a functioning housing sector, including regulatory reforms to incentivize greater private sector participation, improved real estate information systems, as well as monitoring and evaluation standards. These key messages are further elaborated into a concrete set of policy and program options, organized into six priority areas of action, to help to inform and shape the government of Vietnam’s interventions in the housing sector moving forward. Tourism revenue soars thanks to Son Doong Cave: officials Tourism revenue of Quang Binh Province in north-central Vietnam has reached VND179 billion (US$7.95 million) in 2015 thanks to the attraction of Son Doong Cave, local authorities have said. The number of visitors to Quang Binh has topped 2.86 million this year, of which foreign arrivals are 46,900, an increase of 8.9%, officials from the People’s Committee announced on December 9. Turnover from hotels and restaurants surged 19% to more than VND1.930 trillion (US$85.77 billion). The strongest growth was recorded in tourism, which increased up to 89.4% and hit VND179 billion. Local authorities said such success was the result of the Son Doong Cave promotional campaign, especially after the American Broadcasting Company (ABC) aired a signature program featuring the grotto earlier this year. In May, ABC broadcast live the show accentuating the astounding magnificence of Son Doong and En (Swallow) Caves on “Good Morning America,” a much-loved program watched by an average of six million subscribers every day. The caves are secluded in the core area of the UNESCO-recognized Phong Nha-Ke Bang National Park, located in the north-central province of Quang Binh. En Cave is around two kilometers from Son Doong. The expedition to Son Doong Cave has become a choice of many tourists from around the world. To reach Son Doong Cave, trekkers have to hike through two densely forested expanses which span from Truong Son Tay Road to En Cave, and from En Cave to Son Doong Cave. The adventure tours are considered highly difficult, during which visitors will have to walk nearly 60km, not to mention other activities such as climbing, crossing the forest, and wading through the streams. In 2014, there were 243 tourists visiting the cave. At the end of August this year, this number rose to 482, including 47 Vietnamese. There are currently nearly 500 awaiting visitors who wish to explore Son Doong Cave, filling the 2016 tour schedule. Other visitors will have to wait for their turn in 2017. The “pearl” of Phong Nha-Ke Bang, Son Doong Cave, which has a large, fast-flowing underground river inside, was found by a local resident named Ho Khanh in 1991. It became public after a group of British scientists from the British Cave Research Association, led by Howard and Deb Limbert, conducted a survey in Phong Nha-Ke Bang, a UNESCO World Heritage Site, in April 2009. According to the Limberts, Son Doong Cave is five times larger than Phong Nha Cave, previously considered the biggest cave in Vietnam. The biggest chamber of Son Doong is more than five kilometers long, 200 meters high and 150 meters wide. With such large dimensions, Son Doong overtook Deer Cave in Malaysia to become the world's largest grotto. Hundreds of thrill seekers, mostly foreigners, are currently in line for an adventure expedition, which costs between US$3,000 and US$6,000 each person, to the awe-inspiring cave. Barriers freeze foreign buying frenzy Despite the recent revision to the Law on Housing, which has created a more favourable legal system for foreigners to buy and own houses in Vietnam, there are still some barriers which should be removed to encourage foreign buyers. According to Cosimo Jencks, chief representative of Hongkong Land, the government’s allowance of foreigners to purchase housing in Vietnam is a step in the right direction. The revised law however should review the stipulation that only 30 per cent of an apartment building in a commune and 10 per cent of housing development can be owned by foreigners. “This should certainly be scrapped for second home developments. The process of documentation should be made quick and easy, and the financing options available should be improved,” Jencks told VIR. Oliver Massmann, partner and general director of Duane Morris Vietnam LLC law firm agrees, adding that the restriction on the number of houses foreigners are allowed to buy in an area or in a building could ruin their expectations. “In this regard, I would like to note that foreigners in Vietnam like living together in one community. Thus, such a restriction should be revisited in the implementing decrees of the Housing Law to reflect the positive purposes of the law,” he added. Massmann added that a lack of legal framework for foreigners to mortgage assets, borrow money, register ownership, along with rising prices and complicated transfer procedures are the main hurdles for foreigners wishing to buy houses in Vietnam. Meanwhile, Kenneth M Atkinson, executive chairman of Grant Thornton Vietnam, said that the current regulations on the repatriation of profits and uncertainty about whether owning a property entitles foreigners to a visa and the right to live in the property were concerns. Other concerns were the continued devaluation of the Vietnamese dong which will reduce the opportunity to make capital gains in foreign currency. The relaxation of foreign housing ownership regulations combined with promotional sales programmes offered by developers is reaping results after three months of implementation. According to CBRE Vietnam, since the new law took effect, anecdotal evidence shows that some selected high-end projects with good locations, adequate facilities and were developed by prestigious investors have sold up to 15 per cent of their properties to foreigners and overseas Vietnamese. From July to October this year, Vingroup reportedly received deposits for 400 units from foreign buyers. Singaporean developer CapitaLand confirmed that about 15 per cent of the total transactions at Vista Verde have been bought by foreigners. Keppel Land, another investor from Singapore also reported that foreign enquiries for their high-end condominium project Estella Heights have increased by 30 per cent. Dong Nai to open seven VietGAHP standard stores The southern Dong Nai Province will open seven stores to sell pork and chicken, which meet the VietGAHP standard. A men is slaughtering chickens. The southern Dong Nai Province will open seven stores to sell pork and chicken, which meet the VietGAHP standard. -VNA Photo Dinh Hue VietGAHP standard, or the Vietnamese Good Animal Husbandry Practices standard, is a range of principles that aims to improve products' quality and safety, to enhance the health of consumers and producers, protect the environment and support product traceability. These stores, partnered by the Dong Nai Livestock Association and the Dong Hiep Livestock Service Co-operative, will be opened in Bien Hoa City, Trang Bom District and Thong Nhat District. The stores are expected to open before Tet 2016. According to Nguyen Tri Cong, chairman of the Dong Nai Livestock Association, this was the first step in a programme to build a safe food chain of the association. In the coming years, the association would build a wholesale market for the distribution of VietGAHP pork and chicken, he said. Mobile World to push its food business Mobile World (MWG), the owner of the thegioidicong.com and dienmayxanh.com electronics supermarkets, will further promote its food business next year. According to a representative from MWG, the retail food and consumer goods markets have huge potential because of growing demand among consumers. The company now owns four food stores, focusing on fresh food and essential food. “The four stores are still in the trial stage, giving customers the chance to experience the quality they provide,” the representative said. Last week MWG released nearly 7 million shares, worth VND527 billion ($23.1 million), to 886 employees of the company and subsidiaries. The employees must also meet the special conditions of the company, with no share transfers permitted in the first year and only 50 per cent in the following year. By the end of 2017 all employees are free to transfer their shares. After the issuance the total number of MWG shares increased to 146.8 million, for charter capital of VND1.4 trillion ($61.6 million). As at October MWG had recorded revenues of VND19.8 trillion ($871.2 million) this year, up 61 per cent year-on-year. The company now has 560 electronic retail stores nationwide and opens two new outlets every three days on average. South Dinh Vu IZ II breaks ground A breaking ground ceremony was held on December 14 for the South Dinh Vu Industrial Zone II - Deep C II and the Gateway Commercial and Logistics Business Centre - CDC Hai Phong, in northern Hai Phong city. The ceremony was attended by H.E. Jehanne Roccass, Ambassador of Belgium to Vietnam, and representatives from the Ministry of Planning and Investment, the Hai Phong People’s Committee, local authorities, and investment promotion agencies. The Dinh Vu Industrial Zone has more than 55 multinational projects, attracting almost 30 per cent of the total foreign direct investment (FDI) in the city. Deep C II covers a total area of nearly 650 ha and infrastructure is to be quickly completed and land of more than 40 ha handed over to tenants in 2017. The remaining two components of the Deep C cluster are the Gateway Industrial Zone (Deep C III) of nearly 500 ha on Cat Hai Island and the Tien Phong Industrial Zone (Deep C IV) in Dam Nha Mac, Quang Ninh province. Together these industrial zones make up a cluster of over 2,000 ha, nearby Lach Huyen Deep Sea Port, Dinh Vu Port, and Cat Bi International Airport, and directly connected to the new Hanoi - Hai Phong Expressway and the Tan Vu - Lach Huyen Bridge. The same utilities at the Dinh Vu Industrial Zone will be executed in the Deep C cluster, with underground power networks connected to the national grid, certified waste water treatment services, and reliable water supplies and drainage systems. With the success of the Dinh Vu Industrial Zone the Belgian investor, Rent-A-Port, decided to expand in the city by developing the South Dinh Vu Industrial Zone II - Deep C II, creating the Deep C industrial cluster in the area. Deep C II is proud that though still in its early development stages it has welcomed the CDC International Corporation, one of the leading companies in Qatar in coastal industrial and urban area development, as its first FDI tenant. The Gateway Commercial and Logistics Business Center in Deep C II, with total investment of approximately $2.2 million, will develop office buildings and open storage space for lease. After receiving an investment license in June this year the project is now scheduled to begin commercial operations in January 2017. As highlighted by a representative of the Hai Phong People’s Committee, the ceremony marks an important milestone and affirms the commitment of the Belgian investor to Hai Phong. City authorities have committed to providing the most favorable conditions possible for the development of the Deep C industrial cluster and its investors. Mr. Marc Stordiau, Chairman of South Dinh Vu II/Deep C II, said that the corporation will continue to deliver the same quality and reliability in infrastructure development, utilities, and services provision as those enjoyed by existing tenants at the Dinh Vu Industrial Zone. Putting all these elements together, tenants at the Deep C industrial zones will be in one of the best locations in Vietnam, just a short distance away from infrastructure and utilities of international standard. BIDV & Becamex together in Binh Duong The Bank for Investment and Development of Vietnam (BIDV) and Becamex IDC Corp. signed a comprehensive cooperation agreement on December 11 with the target of contributing to socioeconomic development in southern Binh Duong province. The provincial government appreciates the effectiveness of the cooperation between BIDV and Becamex to date, Deputy Chairman of the Provincial People’s Committee Tran Thanh Liem told the signing ceremony. Provincial leaders will create all favorable conditions possible for the cooperation to achieve great success. This is the third time the two have renewed the agreement for a five-year period. They will promote their advantages to exploit their potential and diversify their business activities. The agreement is also expected to improve their competitiveness and contribute to growth in Binh Duong in the 2015-2020 period. BIDV will arrange capital or directly finance Becamex IDC and its subsidiaries to develop feasible projects, with a maximum credit of VND15 trillion ($666.6 million). The credit will focus on projects in developing urban areas and infrastructure at Binh Duong New City, developing infrastructure at the Bau Bang Industrial Zone and the Becamex Binh Phuoc Industrial Zone, projects in the development of the education and healthcare sectors, and projects in developing industrial parks and commercial and service areas developed by VSIP (Vietnam Singapore Industrial Park) in Binh Duong, Quang Ngai, Nghe An, and Hai Phong. The bank is also committed to providing Becamex IDC and its affiliates with a diverse range of banking and financial products and services, such as payment services and centralized capital management, deposits, guarantees, trade finance, foreign exchange trade, securities services, and bond issuance, among others. According to Mr. Tran Bac Ha, Chairman of BIDV, the bank will continue to accompany Binh Duong in completing its targets in socioeconomic development in the 2015-2020 period. Based on its relationship with foreign partners, BIDV will coordinate with the provincial government in attracting foreign investors, focusing on those from Japan, Taiwan, South Korea and Singapore, Mr. Ha said. BIDV was the first bank to be present in Binh Duong when the province was re-established in 1997 and have worked with Becamex IDC since then. Great sales at Sun Group's Phu Quoc properties Sun Group introduced two projects developed on Phu Quoc Island - Premier Village Phu Quoc Resort and Premier Residences Phu Quoc Emerald Bay - in Hanoi on December 13. On the first day of sales at Premier Village Phu Quoc Resort, attended by nearly 500 potential customers, 50 villas were sold. Premier Residences Phu Quoc Emerald Bay, meanwhile, also saw a high number of transactions, with 150 apartments sold, according to Sun Group. Sun Group has committed to owners and investors of Premier Village Phu Quoc Resort a minimum profit of 9 per cent per year in the first ten years and the same profit for the first nine years to owners and investors at Premier Residences Phu Quoc Emerald Bay. Located on Ong Doi Cape, in the south of Phu Quoc Island, Premier Village Phu Quoc Resort has a total of 118 villas and is unique in having sea views on two sides. Its prime location will provide a special experience for owners and visitors, as they can watch both the sunrise and the sunset. Located on Khem Beach, also in the south of Phu Quoc Island, Premier Residences Phu Quoc Emerald Bay comprises more than 200 resort apartments of five-star standard with sea views. Apartments range from 30-288 sq m and are smartly designed with skylight systems to ensure the full use of natural light. Facilities at the project include a gym, a spa, a dedicated area for children, recreation space at the pool-bar, and private space in the business center and library. AccorHotels will provide initial consultancy on services and then operational management. Sun Group is one of the largest real estate groups in Vietnam and the largest investor in central Da Nang city, with dozens of notable projects in hotels, resorts, amusement parks, and urban areas, such as the InterContinental Danang Sun Peninsula Resort, Harnn Heritage Spa, Ba Na Hills Mountain Resort, and Asia Park, among others. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR