BUSINESS IN BRIEF 8/1 Tax rates proposed for two fats for milk   A customer buys milk products at a shop in Ha Noi. The Ministry of Finance has proposed same import tariff for two different materials in diary production.  The Ministry of Finance has proposed a standard tax rate for anhydrous butter fat (ABF) and anhydrous milk fat (AMF), two different kinds of materials for processing milk products. According to the ministry's official letter, 87/BTC-TCHQ, sent to Prime Minister Nguyen Tan Dung, the import tax rate of 15 per cent on AMF imposed by the General Department of Customs was not reasonable, the Viet Nam News Agency's bnews.vn reported on Wednesday. The import tax rate at 15 per cent for AMF would ensure different products have the same composition, the same utility and are used interchangeably but have different import tariffs. The finance ministry said the import tax rate at 15 per cent for materials used in production is too high and unreasonable against finished milk products with import tax rates of between 5 per cent and 7 per cent and imported yogurt with import tariffs of 10 per cent. The ministry confirmed that it adjusted preferential import tariff at 5 per cent for both ABF and AMF under the list of preferential import tariff for 2016, an appendix of the Circular 182/2015.TT-BTC issued on November 16, 2015. In December, eight dairy firms on the domestic market, including Vinamilk and Dutch-owned FrieslandCampina, sent a letter to the prime minister and the Ministry of Finance to complain that customs had ordered its local offices to collect back taxes from the businesses for AMF, totalling VND1 trillion (US$44.4 million) dating back to 2010 because the customs department insisted that ABF and AMF are two different products. According to the existing regulations, import tax rate at 15 per cent is imposed on any oil and fat products from milk other than anhydrous butter fat, butter oil and ghee. Meanwhile, the businesses argued that despite different names, anhydrous butter fat and anhydrous milk fat are the same product with similar contents, citing different scientific documents released by local and international organisations. For many years, the companies declared the two products at the same tax code of 0405.90.10 with an import tax rate at 5 per cent. Sai Gon Hi-Tech Park grants licenses to three enterprises The management board of Sai Gon Hi-Tech Park yesterday granted investment licenses to three enterprises with total investment of US$100 million. Two of the three enterprises will participate in the supply chain for Samsung factory. The Phuoc Thanh Hi-tech Research – Application and Production Project has investment of $73 million from Minh Nguyen Support Industry Company. The factory to be built on four hectares of land is expected to be put into use in the second quarter this year with the capacity of 20 million products per year. The factory's main products are high quality technology products made from plastic, metal parts for electronic components, and moulds for plastic industry, among others. The company will also work with universities, domestic and foreign research institutes to develop vocational training programmes, management and operational skills for future high-quality human resources. The project of Aureumaex Precision Plastics Viet Nam invested in by United More SDN.BHD has total investment of $20 million. It will begin in March. The factory will produce plastic screen frames and plastic cases for LCD and LED televisions. The factory will have capacity of 12 million products per year. The third project to receive an investment certificate from the management board of Sai Gon Hi-tech park was the ISD Hitech general service centre project invested by the Hi-tech Development and Service Company. The project has investment of $6.6 million. Upon completion of construction, the project will be a complex of leasing offices, showrooms, meeting rooms, luxury restaurants, and a healthcare centre, all of which are in high demand in the hi-tech park. Confectioners ready for Tet Confectionary makers are ready to supply plentiful, quality products at reasonable prices during Tet (Lunar New Year) that falls in early February this time. According to the HCM City Department of Industry and Trade, the city is expected to consume around 18,000 tonnes of confectionary, 10 -20 per cent higher than the previous year. Leading confectioner Kinh Do company will launch three major products for Tet: special gift, traditional gift, and gift hamper. For its popular products like cookie can, the company has invested in high-quality materials and packaging to take on imported products. It also plans a slew of communications and marketing programmes like sending mobile shops to other provinces and organising folk games in malls in HCM City and Ha Noi. Bibica Corporation will produce around 1,600 tonnes of confectionary, almost three times last year's volume, with the prices of 30 per cent of them remaining unchanged from the pre-Tet period and those of the rest increasing by 5-10 per cent. There will be 20 products made especially for Tet, including soft, fruity and gold-shaped candies. Its two major biscuit brands, Goody and Lac Viet, are popular in the premium segment with their superb packaging, outstanding quality and prices that are 20-30 per cent lower than imports. At the lower end, other local manufacturers like Hai Ha, Hai Chau, Bao Hien Rong Vang, and Minh Ngoc in the north and Quang Ngai in the central region are expecting a 5-10 per cent increase in sales. At wholesale markets in HCM City like Binh Tay and An Dong, most confectionary products are local, and Chinese products are not popular like in the past. It appears local confectionary makers will account for 80 per cent of the products bought during Tet. In foreign-invested super markets like Lotte Mart, Aeon, and Metro, though imported confectionary products are displayed in separate areas, sales of local products match theirs. At French-owned Big C and Co-op Mart supermarkets, local confectionary accounts for 70 - 90 per cent of sales. The imports come mostly from South Korea, the US, France, Thailand, Singapore, Malaysia, and Indonesia. "Customers more and more prefer local products rather than imported ones because of good quality and attractive packaging," Ho Quoc Nguyen, Big C's public relations director, was quoted as saying by Sai Gon Giai Phong (Liberated Sai Gon) newspaper. At many shops, local products account for 90 per cent of the display thanks to their low prices and good taste. "I do not intend to sell imported products any more because clients now prefer local ones," Tong, who has a shop in D2 street, Binh Thanh District, said. According to the customs department, imports of confectionary fell 4.46 per cent in the first 11 months of 2015. Indonesian products accounted for a full third of the imports at US$62.6 million, a followed by Thailand at $32.2 million, a drop of 12 per cent. A recent study found that by 2018 the local confectionary industry will reach VND40 trillion ($1.8 billion) in sales. The potential for development is huge because a Vietnamese only consumes 2kg per year against the world average of 2.8kg. Realising this, many foreign confectionary companies are expected to make a beeline for the country. IT important to improve worker competitiveness Vietnamese firms should apply information and technology (IT) to improve labour productivity and competitiveness, Nguyen Truong Thang, director of Institute of Information Technology, Vietnamese Academy of Science and Technology, said. The country's IT infrastructure was cheap and competitive, which facilitated enterprises, Thang said at a meeting in Ha Noi yesterday. The national IT infrastructure also had stable transmission lines and prices, he added. Meanwhile, Le Van Loi, director of the Viet Nam Chamber of Commerce and Industry (VCCI) 's Institute of Information Technology for Business, recommended that firms boost IT applications as it would help them work faster and have better services in the context of integration. Secondly, he said that if firms did not apply IT, their work would be less effective. Thirdly, IT would help firms satisfy customers if they created fan pages on Facebook or Twitter. "Customer satisfaction is very important in business," he emphasised. "For enterprises which have hundreds of thousand customers, only technology can help them stay in contact with their customers." An attendee at the meeting also shared a story about IT applications in customer care services. She said her friend in the United States bought medicine and then received messages about the medicine's usage and notification on her mobile phone and Twitter to remind her to take the medicines regularly. "When she had completed the dosage, she received an offer to buy a new one with preferential pricing, and now she has become a friendly customer of the pharmaceutical company," she said. Technology can help businesses manage and take care of millions of customers automatically, while a customer care staffer can only take care of about 50 customers per day, she said. Over ten years, information technology has become a key economic sector with a high growth rate and efficiency, Doan Duy Khuong, VCCI vice chairman said. The sector has contributed nearly seven per cent of gross domestic product (GDP) of the country, as well as boosting development of the socio-economy sector, Khuong added. The vice chairman said that many Vietnamese enterprises had actively invested and applied IT in their administration, production and trading activities. However, most of Vietnamese enterprises were still not fully aware of the role of IT, and therefore, were still struggling to find IT models suitable for their financial capacity and business purposes, Khuong added. "VCCI will co-operate with agencies, research institutes, and technology groups in the future as well as increase international co-operation and social resources for the purpose of developing businesses," Khuong said. VCCI would also support the business community in Viet Nam, especially small – and medium-sized enterprises by consulting with businesses in advanced technology applications to improve competitiveness and increase labour productivity, he stated. VN households may soon pay tax online Online tax payment will likely be availabe to individuals and business households in Viet Nam soon with the pilot implementation underway in three major cities. According to the finance ministry, the pilot online tax payment system will be launched in some districts of Ha Noi, Da Nang and HCM City by the year end, in an effort to promote administrative reform and create conveniences for business households – a large taxpayer group estimated to number 1.5 million in Viet Nam. Nguyen Thi Cuc, President of the Viet Nam Tax Consultancy Association, said that online tax declaration and payments were largely applied to enterprises today while it remained an alien concept to millions of households and private individuals. Online payment would also help improve tax management, Cuc said. According to Nguyen Dai Tri, deputy director of the General Department of Taxation, online services would help reduce time for conducting tax procedures, ensure flexibility in paying tax and limit direct contacts with tax officials. Initially, tax departments would pilot online services for automobile and motorbike registration, property transfer, personal property leasing businesses and land-related fees of individuals. Under the pilot scheme, individuals would have their online tax declarations and payment conducted by entrusted organisations through internet banking transactions, for example. From the beginning of 2017, online tax payments for vehicle registration, property leasing and land fees were expected to be applied on a nationwide scale. This service was expected to help cut 23 administrative procedures. Online tax payment was a part of the efforts of tax administrative reform to improve the country's business environment. According to the finance ministry, as of the end of October, 98 per cent of enterprises registered to declare tax online and 90 per cent registered to pay tax online through their connection with commercial banks. As of September 2015, the ministry's statistics showed that tax payment time was cut by 420 hours to 117 hours, exceeding the goal of 121.5 hours set for 2015 in the Government's Resolution 19/2015 about improving business environment. Province pushes joint ventures The northern coastal province of Quang Ninh has been promoting the public-private partnership (PPP) investment and management model aiming to become a service-industry oriented locality by 2020. Chairman of the provincial People's Committee Nguyen Duc Long said 2015 was a successful year for the PPP model, especially in infrastructure development, transport and tourism projects. Local authorities have granted an investment license to the joint venture between Cong Thanh Investment and Construction JSC and Phuong Thanh Investment and Construction JSC to build the Ha Long- Van Don expressway and upgrade the Ha Long – Mong Duong section of National Highway 18 under the build-operate-transfer (BOT) model with a total investment of nearly VND14 trillion (US$616 million). Once completed by the end of 2017, the project will help reduce traffic on National Highway 18 and shorten the distance from Ha Noi to Ha Long City and the Van Don Special Economic Zone, and from Ha Long to the Mong Cai Border Economic Zone. The chairman said the projects will help complete the infrastructure network in the province and attract more investment, promoting socio-economic development in Quang Ninh and the key northern economic region. A series of projects have been implemented under the PPP model since late 2014. The provincial People's Committee said that 25 PPP projects have been conducted on schedule so far. Vu Van Khanh, Director of the provincial Department of Transport said the transport sector will co-ordinate with relevant sectors to complete the Ha Long-Hai Phong by late 2016. Quang Ninh has also applied the PPP model to social and working infrastructure, medical and educational establishments and information technology. Local authorities have also asked for approval from the Government to build the Quang Ninh Airport and Van Don-Tien Yen-Mong Cai expressway under the model. In 2015, the province attracted total investment of VND51 trillion ($2.24 billion), a year-on-year increase of 12.5 per cent. During the year, it welcomed a number of major projects worth trillions of dong from both domestic and foreign businesses such as the Vincom Centre Ha Long and Vinpearl Ha Long invested by Vingroup, Ha Long Ocean Park invested by Sun Group, and Ha Long Star Tourism Urban and Entertainment Complex Casino invested by real estate developer Nakheel from the United Arab Emirates. HCM City proposes new 520 million USD power plant The HCM City Department of Planning and Investment has asked for approval from the city's People's Committee to build a waste-to-power plant using thermal plasma technology from Trisun Green Energy Company, according to Tuoi Tre (Youth) newspaper. The 520 million USD project, covering an area of 13ha and equipped with plasma torches to achieve temperatures of 3,000 degrees Celsius to incinerate waste, is expected to treat 2,000 tonnes of domestic waste daily. The investor estimates that waste treatment by thermal plasma technology will cost 32 USD per tonne. The facility would charge 31.88 USD a tonne if it treats 1,000 tonnes a day and 29.88 USD a tonne if it treats 2,000 tonnes a day. Steady macro economy bodes well for property market Economists said the domestic real estate market is benefiting from stable macroeconomics. The average consumer price index gained 0.63 percent in 2015, the lowest recorded since 2001. Likewise, home loan interest rates stayed low, encouraging the realty market to thrive. According to the State Bank of Vietnam, credit growth stood at 18 percent last year, compared to between 12 and 14 percent recorded for 2012-2014. Despite a slight rise after the US Federal Reserve (FED) deciding to raise interest rates by 0.25 percentage points in early December 2015, Vietnam’s interest rates are projected to be stable throughout 2016. These factors have brought realty investors a higher profit than the return made by their peers who invested in foreign currencies, gold or bonds. Experts from the CBRE Vietnam believe the country will continue this growth based on its international connections. The trend has been reflected in increasing overseas capital being channelled into Vietnam, and with the growing number of free trade agreements between Vietnam and foreign partners. Meanwhile, the newly formed ASEAN Economic Community will contribute to boosting Vietnam’s competitiveness regionally and internationally. These positive market occurrences will help local property market gain ground, particularly in the housing segment, noted Tran Ngoc Quang, General Secretary of the Vietnam Real Estate Association. In 2015, Vietnam recorded 22.7 billion USD worth of foreign direct investment (FDI), 10.5 percent of which was poured into real estate. As such, the realty sector was ranked third in terms of FDI with the funds coming to 34 new and 12 existing projects. Entertainment, tourism complex to be built in Quang Nam The Tuan Chau Group will build an entertainment, tourism and real estate complex with total investment capital of 3 trillion VND (133 million USD) in Dien Ban town in the central province of Quang Nam later this year. The project would boost investment flow among domestic and foreign investors in the east region of the province, Doan Ngoc Minh, head of investment and co-operation office under the provincial department of planning and investment, confirmed to Vietnam News newspaper. He said Tuan Chau Group completed its land clearance to begin the first stage of the project this year on 35 hectares. He said the project will be crucial in boosting the socio-economic development of the province. Central bank reduces VND/ USD reference exchange rate The State Bank of Vietnam announced on January 8 its reference rate for the exchange trading band at 21,909 VND for a US dollar, down 10 VND from the day earlier. This is the first time the central bank has adjusted down its reference rate since it started a daily reference price for the VND/USD exchange trading band on January 4. With the current +/- 3 percent VND/USD trading band, the ceiling exchange rate is 22,566 VND per US dollar and the floor rate is 21,252 VND per US dollar. At 9 am, the Commercial Bank for Foreign Trade of Vietnam (Vietcombank) and the Bank for Investment and Development of Vietnam (BIDV) posted the buying and selling rates at 22,470- 22,540 VND per US dollar, the same from the previous day. The Vietnam Technological and Commercial Joint Stock Bank (Techcombank) kept its rates intact at 22,430 VND buying and 22,545 VND selling to a US dollar. The rates applied by the Import Commercial Joint Stock Bank (Emximbank) were 22,440 VND-22,520 VND per US dollar. Confectioners ready for Lunar New Year festival Confectionary makers are ready to supply plentiful, quality products at reasonable prices during Tet (Lunar New Year) that falls in early February this time. According to the HCM City Department of Industry and Trade, the city is expected to consume around 18,000 tonnes of confectionary, 10 -20 percent higher than the previous year. Leading confectioner Kinh Do company will launch three major products for Tet: special gift, traditional gift, and gift hamper. For its popular products like cookie can, the company has invested in high-quality materials and packaging to take on imported products. It also plans a slew of communications and marketing programmes like sending mobile shops to other provinces and organising folk games in malls in HCM City and Hanoi. Bibica Corporation will produce around 1,600 tonnes of confectionary, almost three times last year's volume, with the prices of 30 percent of them remaining unchanged from the pre-Tet period and those of the rest increasing by 5-10 percent. There will be 20 products made especially for Tet, including soft, fruity and gold-shaped candies. Its two major biscuit brands, Goody and Lac Viet, are popular in the premium segment with their superb packaging, outstanding quality and prices that are 20-30 percent lower than imports. At the lower end, other local manufacturers like Hai Ha, Hai Chau, Bao Hien Rong Vang, and Minh Ngoc in the north and Quang Ngai in the central region are expecting a 5-10 percent increase in sales. At wholesale markets in HCM City like Binh Tay and An Dong, most confectionary products are local, and Chinese products are not popular like in the past. It appears local confectionary makers will account for 80 percent of the products bought during Tet. In foreign-invested super markets like Lotte Mart, Aeon, and Metro, though imported confectionary products are displayed in separate areas, sales of local products match theirs. At French-owned Big C and Co-op Mart supermarkets, local confectionary accounts for 70 - 90 percent of sales. The imports come mostly from the Republic of Korea, the US, France, Thailand, Singapore, Malaysia, and Indonesia. At many shops, local products account for 90 percent of the display thanks to their low prices and good taste. "I do not intend to sell imported products any more because clients now prefer local ones," said Tong, who has a shop in D2 street, Binh Thanh district. According to the Customs Department, imports of confectionary fell 4.46 percent in the first 11 months of 2015. Indonesian products accounted for a full third of the imports at 62.6 million USD, a followed by Thailand at 32.2 million USD, a drop of 12 percent. A recent study found that by 2018 the local confectionary industry will reach 40 trillion VND (1.8 billion USD) in sales. The potential for development is huge because a Vietnamese only consumes 2kg per year against the world average of 2.8kg. Realising this, many foreign confectionary companies are expected to make a beeline for the country. Cao Bang authorities meet investors to boost cross-border trade The People’s Committee of northern border Cao Bang province organised a meeting with Vietnamese and Chinese investors on January 7 to seek to accelerate farm produce export to the neighbouring country. The meeting was held prior to an international workshop that was designed for the same purpose. Local authorities took the occasion to promote the province’s favourable conditions and extensive cooperation opportunities. Cao Bang shares a long borderline with China’s Guangxi province from which it could reach other Chinese localities and even ASEAN member countries. The two enjoy good trade relations, with revenue following an upward trend in recent years. The Vietnamese province has 61 percent of its land covered by forests and is rich in farm products as well as minerals such as iron and bauxite. It is striving to develop green tourism and boost visits to historical sites, like national Pac Bo relic site and Ban Gioc waterfall. Cao Bang has assisted investors through preferential policies related to taxes, land lease and technology transfer. It is accelerating the building of infrastructure in the Tra Linh border gate, thus facilitate trading activities through the Tra Linh – Long Bang border gates. At the function, the committee also collected proposals from participating enterprises. New small hydropower plant serves remote areas in Hoa Binh A 9MW hydropower plant was inaugurated in Da Bac district in the northern province of Hoa Binh on January 7, bringing electricity to far-flung areas in the mountainous district. Built with a total investment of 300 billion VND (13.4 million USD), the Dong Chum 2 Hydropower Plant has four turbines, generating around 30 million KWh of electricity a year to the national grid. Construction of the plant began in November, 2011. It joined the national grid in October 2015. The operation of the plant is expected to facilitate local industrial and agricultural development. This is the second hydropower plant in the district, following the Suoi Nhap A Hydropower Plant. Both plants are invested by the Hoang Son joint stock company. Vietjet to add 800 flights during Lunar New Year 2016 The private carrier Vietjet Air is set to add over 800 flights, starting from January 20 to February 20 to meet travel demand during Lunar New Year 2016. An additional of more than 150,000 air tickets with abundant choices on routes and travel period with flexible and saving costs will also be offered to customers. Major flight routes to be increased include Ho Chi Minh City- Hanoi (30 return routes a day); Ho Chi Minh City- Da Nang (13 return routes a day); Ho Chi Minh City- Hai Phong (7 return routes a day), Ho Chi Minh City- Vinh (6 return routes a day). On the occasion, the carrier has announced to open new routes such as Pleiku- Hai Phong, Pleiku – Vinh, and Ho Chi Minh- Tuy Hoa. The new routes will start services from mid January 2016. Tickets are open for sales on all Vietjet Air’s selling channels including www.vietjetair.com, Smartphone and Facebook. Currently, Vietjet Air has 41 domestic and international flight routes, with 190 flights each day carrying nearly 20 million passengers annually. Vietnam pilots self-certification of goods within ASEAN Vietnam is joining Thailand, Laos, Indonesia and the Philippines in a pilot project for self-certification of goods origin, which is seen as an important step for Vietnamese businesses to make deeper inroads into countries participating in free trade agreements (FTAs). 2015 marked a milestone in Vietnam’s international economic integration process as the country signed four FTAs with its partners. Vietnam’s participation in FTAs greatly benefits domestic exporters as import tax is reduced or cut to zero among FTA member nations. However, businesses need to meet the criteria for rules of goods origin if they wish to enjoy tax incentives. The Ministry of Industry and Trade (MoIT) issued Circular No. 28/2015/TT-BCT on a pilot project for self-certification of goods origin under the ASEAN trade in Goods Agreement (ATIGA), introducing businesses to relevant regulations. Self-certification of goods origin means traders must make their own declaration of origins of goods for export goods on commercial invoices, instead of the usual certificate of origin (C/O) Form D (which is issued together with Circular No. 21/2010/TT-BCT and Circular No. 42/2014/TT-BCT). Accordingly, the selected traders shall be issued the authorisation, which will be valid for one year from the date of issuance, by the Export and Import Administration under the MoIT. Goods imported from the countries participating in the pilot project, shall be entitled to tariff incentives upon satisfying the following conditions: that the commercial invoice has the contents of origin declaration issued by the exporter, and the goods are among the accepted products listed by the Ministry of Industry and Trade. The project is expected to help enterprises reduce the time of application for a C/O in the traditional way, and proactively release commercial invoices with contents of origin already declared, to facilitate their business and export. It will also help businesses gain better understanding about the ‘rules of origin’ within FTAs, thus allowing businesses to take full advantage of the benefits of tariff reduction brought about from these deals. PV Power aims to produce over 21 billion kWh The PetroVietnam Power Corporation (PV Power) aims to produce over 21 billion kWh and earn 29.45 trillion VND (1.31 billion USD) in 2016. General Director of PetroVietnam Nguyen Quoc Khanh urged the Corporation to accelerate its restructuring and divestment from low efficient businesses. According to PV Power General Director Nguyen Xuan Hoa, it reached the yearly target of 19.3 billion kWh set for 2015 in late November, 33 days ahead, which marked the sixth consecutive year it overperformed its assigned tasks. As of the end of 2015, the Corporation’s output reached 21.1 billion kWh, exceeding the target by 6 percent, up 32 percent from 2014. In the past year, it earned 25.3 trillion VND (1.13 billion USD) and contributed more than 1.8 trillion VND (81 million USD) to the state budget. The company’s plants have continuously ensured security and safety in their operation, while meeting the requirements on environmental protection. Hanoi shifts to animal husbandry, agricultural services Hanoi’s agricultural sector has been on the move to develop animal husbandry, processing and agricultural services instead of enlarging cultivation, Vice Chairman of the municipal People’s Committee Tran Xuan Viet said at a conference held in Hanoi on January 7. The agricultural sector will have ample opportunities in 2016 thanks to the country’s deeper integration into the global economy and more specifically the ASEAN bloc, he highlighted, suggesting that it should enhance linkages and mutual supports while building trademarks to increase competitive capacity. The municipal official underscored the need to provide training for agricultural experts and farmers, saying that relevant organisations should coordinate to implement comprehensive projects and training schemes. In 2015, the local agricultural sector paid attention to such key national programmes as food safety and sanitation management in agro-fishery-forestry production, supplying fresh water for rural areas, producing high-quality rice and upgrading agricultural mechanisms. During the year, the city had over 294,000 hectares of cultivation land. Regarding cattle breeding, it was home to 1.52 million heads of pigs, 25,000 buffalos and nearly 143,000 cows, increasing 4 percent, 2 percent and 4.2 percent from the previous year, respectively. Despite difficulties, the sector still recorded stellar growth in 2015, with a surge in cereal grain productivity and assured food security. Especially, hi-tech application in production and management has improved agricultural yield and enhanced farmers’ livelihoods. Crop production needs restructuring Minister of Agriculture and Rural Development Cao Duc Phat has asked for the restructuring of crop production in order to further develop the agricultural sector. Speaking at a ceremony in Hanoi on January 7 to mark the 10th founding anniversary of the ministry’s Department of Crop Production, Phat affirmed that the crop production holds an extremely important position in agricultural production. However, the sector is vulnerable to disasters, climate change, and changes in the world market, he said. According to head of the department Ma Quang Trung, crop production now accounts for 73 percent of the agricultural sector’s gross domestic production (GDP). The export revenue of farm produce makes up more than half of the total agricultural export value. The crop production sector contributes seven of the ten major agricultural products, earning over 1 billion USD from export annually. Vietnam is now the world’s largest exporter of pepper and cashew nut, and the world’s second biggest exporter of coffee and rice. In addition, the quality of several agricultural products has been improving in recent years. Vietnamese rice, litchi, dragon fruit, longan, and tea have found their way to choosy markets like the US, Japan, the Republic of Korea, and the EU. The crop production sector enjoys an average annual growth of 3 percent, and has contributed to ensuring food security and alleviating poverty and hunger, he added. UPCoM Index calculated with new method The Hanoi Stock Exchange (HNX) has started to use new methods of calculation for the UpCoM Index. Under these new methods, the UpCoM Index is calculated using a free-float ratio, as defined in the Ground rules of HNX Indices. The UPCoM Index is a price index that is calculated based upon the free float adjusted market capitalisation of all stocks registered for trading on HNX, with the free-float ratio equal to 5 per cent or more. The review of constituents' stocks is conducted quarterly, according to the periodic adjustment of the free-float factor, as stipulated in the ground rules of the HNX Indices. Further, the Hanoi Stock Exchange also stopped calculating the UPCoM FF Index from January 4. Since June 25, 2015, HNX has carried out the pilot implementation of the UPCOMFF Index for all companies registered on UPCoM on the Hanoi Stock Exchange. Bank for Social Policies sees increased lending in 2015 The Vietnam Bank for Social Policies (VBSP) has reported its total outstanding debt in 2015 at nearly 143 trillion VND (6.4 billion USD), up more than 10 percent compared to 2014. Strong growth was seen in preferential loans for near-poor households, credit for rural water supply and sanitation, and lending to household production and business activities in difficult areas. In 2015, the VBSP carried out a line-up of comprehensive measures to improve credit quality. Of the total outstanding debt, overdue debt and frozen debt accounted for just 0.78 percent and decreased 32 billion VND (1.4 million USD) compared to 2014. During the year, nearly 2.4 million poor and near poor households, families just escaping from poverty and other welfare policy beneficiaries got access to VBSP’s preferential loans. The loans helped over 400,000 families overcome poverty, created jobs for 180,000 labourers and supported 102,000 disadvantaged students. Credit programmes run by the bank also built some 1.36 million clean water and sanitation facilities, over 5,300 storm and flood shelters in central region and 2,500 other houses in Mekong Delta region. Israeli firm supports advanced agriculture in Vinh Long The Mekong Delta province of Vinh Long launched a cooperation project with Dagan group from Israel on January 6. The Israeli group will transfer hi-tech farming techniques to the province and help with the research on aquacultural potential in local areas. The cooperation also involves the breeding of Koi carps for export. Besides, Dagan group will assist Vinh Long in establishing farming models and a high-tech agricultural park. Vinh Long is striving to raise annual agro-fishery production value to 290 million VND (12,907 USD) per hectare by 2020, based on the expansion of advanced farms. Nam Dinh fosters agriculture cooperation with Japanese locality A delegation from the Japanese prefecture of Miyazaki discussed with authorities of the northern province of Nam Dinh the implementation of their agreement on agricultural cooperation during a visit to the province on January 6. The Japanese side offered assistance for Nam Dinh in human resource training and pledged to support Miyazaki enterprises in investing in the province’s agricultural sector. It suggested the province zone off areas for developing specific crops, while providing help to build a number of economic models in Yen Cuong commune, Y Yen district. Deputy Governor of Miyazaki prefecture Uchida said Nam Dinh is the first locality in Vietnam that his prefecture signs an agreement on agricultural cooperation with. The agreement was signed between the two localities in November, 2015. During the visit, the two sides surveyed areas which Nam Dinh plans to lease out to Miyazaki enterprises for the farming of vegetable and taro. The establishment of a branch of the Minami Kyushu University in Nam Dinh was also tabled for discussion. Enterprise numbers on rise as new laws kick in The number of new enterprises being established reached a record high in 2015, reaching 94,700, according to the Agency of Business Registration (ABR) under the Ministry of Planning and Investment (MPI). “Businesses have been opening in ever-increasing numbers for the last decade,” said Mr. Bui Anh Tuan, Deputy Director of ABR. Since the Law on Enterprises 2014 and the Law on Investment 2014 took effect on July 1 the number of new enterprises stood at 6,900 in July, 9,300 in August, 7,000 in September, 9,200 in October, 9,300 in November, and 7,900 in December. More importantly, VND601.52 trillion ($26.74 billion) in investment came into the economy in 2015 from these new enterprises, while VND851.02 trillion ($37.84 billion) came in additional capital at existing enterprises, for a total of VND1,452.5 trillion ($64.59 billion). Mr. Nguyen Dinh Cung, Director of the Central Institute for Economic Management (CIEM), said the Law on Enterprises and the Law on Investment have given more independence to enterprises and cut administrative procedures, making it more straightforward to open a business. The number of enterprises closing or temporarily ceasing operations, meanwhile, remains high, with ABR figures showing that 9,500 enterprises completed documents for closure in 2015, a decline of just 0.4 per against 2015. The number of enterprises temporarily ceasing operations stood at 71,400, an increase of 22.4 per cent against 2014. Mr. Nguyen Bich Lam, Director of the General Statistic Office, said that new enterprises being established and others closing their doors is a common occurrence in a market economy. Economist Pham Chi Lan said that Vietnamese enterprises, especially small and medium-sized enterprises, continue to face a host of difficulties and this raises questions over the effectiveness of support policies. Given the ASEAN Economic Community is on its way, she added, Vietnamese enterprises will find it harder to compete with regional counterparts. Foreign enterprises in Vietnam only look at the advantages the country provides in cheap labor and market demand but not do pay any attention to the development of local enterprises. She therefore suggested a rethink on support policies so that they strengthen the local business community. Trading codes for foreign investors up nearly 25% Vietnam Securities Depository (VSD) announced it issued 1,037 security trading codes to foreign investors in 2015, an increase of 23.6 per cent compared with 2014. Trading codes were granted to 745 individual investors, up 42.72 per cent against 2014, and 292 institutional investors, down 7.89 per cent. In December alone 99 foreign investors, including 84 individual and 15 institutional investors, were granted security trading codes. VSD also agreed to change the information regarding 21 foreign investors (18 individual and three institutional) and cancelled the security trading codes for three institutional investors. The total number of investors with trading codes in 2015 therefore increased slightly compared with 2014. As at December 31 VSD had granted a total of 18,607 security trading codes to foreign investors, including 15,728 individual and 2,879 institutional investors. Foreign investors have a significant impact on market sentiment, continuing to be net buyers in 2015. According to figures from VSD, last year foreign investors bought 266.51 million shares with a total value of nearly VND3 trillion ($132 million), down 11 per cent in volume and 22.36 per cent in value compared to 2014. Commercial segment flourishing in Da Nang The commercial segment in Da Nang’s real estate sector saw a prosperous third quarter of 2015, especially retail, with rents and occupancy rates all increasing quarter-on-quarter, according to the latest report from Savills on the central city’s real estate market, released on January 1. The report also put total retail sales in the first nine months of 2015 at approximately VND55 trillion ($2.42 billion), up 16.8 per cent year-on-year. Total retail stock was 167,000 sq m; stable quarter-on-quarter. Average rents increased 7 per cent quarter-on-quarter due to higher rents being achieved at Vincom Ngo Quyen and Indochina Riverside Tower. Occupancy in Hoang Anh Gia Lai Lake View and Nguyen Kim Da Nang Supermarket both increased. Average occupancy increased by 1 ppt quarter-on-quarter. Supply in the office segment, meanwhile, reached 85,000 sq m, a decline of 2 per cent quarter-on-quarter, as Trung Ky Plaza closed for renovations. Average rents were up 2 per cent quarter-on-quarter. Grade A average rents increased 7 per cent quarter-on-quarter and Grade B was up 4 per cent, while Grade C saw a 2 per cent decline. Average occupancy reached 87 per cent, up 5 ppts quarter-on-quarter. The number of newly-established enterprises is considered to be one of the factors behind the increasing office supply. According to the Da Nang City People’s Committee, in the first nine months of 2015 there were 2,393 newly-registered enterprises, up 38 per cent year-on-year, with registered capital of over VND8.6 trillion ($378.4 million). Regarding the hotel segment, stock increased 7 per cent quarter-on-quarter due to the official ranking of four hotels: three four-star hotels and one three-star hotel. Average occupancy was up 3 ppts quarter-on-quarter, to 77 per cent. The average room rate (ARR) increased 8 per cent year-on-year. Meanwhile, RevPAR grew 13 per cent year-on-year. ARR and RevPAR increased across all grades quarter-on-quarter and year-on-year. According to the Vietnam National Administration of Tourism, there were 1.5 million arrivals to Da Nang in the third quarter, up 24 per cent year-on-year. Vingroup launches Vinhomes Gardenia in Hanoi The Vinhome 2 Real Estate Business Co. under Vingroup officially introduced Vinhomes Gardenia in Hanoi’s Nam Tu Liem district on January 4. On an area of 17.6 ha in the My Dinh New Urban Area, Vinhomes Gardenia is the first complex developed by Vingroup in the west of Hanoi. Green and balanced living has become a trend around the world and in Vietnam. “With Vinhomes Gardenia we hope to become the pioneer in giving residents a new lifestyle with health and balance from the design, planning, aesthetics, residential community, and harmonized facilities,” said Ms. Luu Thi Anh Xuan, General Director of Vinhomes 2. Vinhomes Gardenia is divided into two subdivisions - The Arcadia and The Botanica. The Arcadia comprises three high-rise residential buildings with apartments ranging from 54 sq m to 146.8 sq m with one, two or three bedrooms. It also includes other facilities such as tennis courts, a children’s playground, and a BBQ garden, arranged around a 50-meter swimming pool. The Botanica, meanwhile, comprises adjacent villas, shophouses, and duplex villas that lie along the main landscape, between facilities such as a flower hill, a children’s playground, bike lanes, tennis courts, and a jogging track. Villas range from 277 to 382 sq m and are separated by fences and green landscapes. Vinhomes Gardenia is designed based on the principles of green, health and balance, with a unique garden concept designed by Singapore’s CPG and Canada’s West Green Design. The project is expected to link with upcoming modern infrastructure, an administrative center, and a commercial area in the area. Cong Thanh expands Nghi Son cement production The Cong Thanh Group officially opened the second production line at its cement plant in Thanh Hoa province’s Nghi Son Economic Zone on December 27. With total investment of $510 million the new line has a capacity of 12,500 tonnes of clinker a day or 3.6 million tonnes of cement a year. The new line boasts the most modern technologies from Germany. The plant can now produce 15,000 tonnes of clinker a day or 6 million tonnes of cement a year, making it the biggest cement plant in Vietnam, according to Group Chairman Nguyen Cong Ly. It also provides high quality products to the market that are suitable for different environmental conditions. The new production line is among projects approved by Prime Minister Nguyen Tan Dung in the country’s cement development planning by 2010 and orientation towards 2020. Under the planning, Cong Thanh’s cement plant will contribute 95 million tonnes to the country’s cement capacity by 2019, guaranteeing supplies to both the domestic and export markets. Under the group’s business plans in 2016 it will sign agreements with distributors for 70 per cent of its cement products to go to the domestic market and 30 per cent to be exported to markets in ASEAN. Established in 2006 the Cong Thanh Group now includes nine member companies in a range of sectors, including cement, thermal power, fertilizer, transport, and hotels and resorts. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR