BUSINESS IN BRIEF 18/4 VN aiming for sustainable exports   Local businesses, managers and economists sat together to discuss how to improve Việt Nam’s position as a trustworthy, reliable and sustainable exporting country at a trade promotion forum in Hà Nội yesterday. This year, the Vietnam Trade Promotion Forum 2016 was designed to exchange and discuss measures on export promotion, production development and market development, aiming to boost the production and exporting capacity of Vietnamese enterprises. Speaking at the Vietnam Investment Promotion Forum, Deputy Minister of Industry and Trade, Đỗ Thắng Hải, described trade liberalisation as the main momentum of global trade over the past decades, especially in Asian countries, including Việt Nam. Since joining the World Trade Organisation in 2007, the country’s total trade turnover has increased threefold, from US$111.3 billion to $327.8 billion in 2015. Import revenue expanded 2.6 times and export value climbed 3.3 times to $165.7 billion and $162.4 billion, respectively, he said. These numbers demonstrate that Vietnamese businesses have made the best use of opportunities afforded by integration and trade liberalisation to deliver their products abroad, the official noted. However, the integration process has exerted diverse impacts on economic sectors, Hải said, explaining that home décor products, handbags, leather and footwear, garment-textiles and a number of agricultural products have received more benefits than others. Also, he added, the enterprises which turn out high-quality products and have strong export promotion measures are likely to have better success. Võ Trí Thành, former Deputy Director of the Central Institute for Economic Management, said small-scale businesses with outdated technologies and weak management will find it hard to compete with their foreign rivals. Besides this, the domestic market is expected to witness fierce competition as a flurry of foreign products with competitive prices and quality will flood Việt Nam, thanks to the present average import tax reduction of above 10 per cent. Strict requirements regarding product quality, technology and locally-made content set by foreign countries are the main barriers to local exporters, he said. Meanwhile, Thành pointed to many domestic enterprises that have yet to take the initiative in studying foreign markets and export promotion. He suggested that Vietnamese firms improve their production and business capacity while raising their product quality to satisfy standards set by foreign markets. JETRO Chief Representative in Ha Noi, Atsusuke Kawada, said that in 2015 first and foremost, Vietnamese start-up businesses needed to produce locally-made products with high competitiveness. To do this, Vietanmese producers needed to minimize their production costs, raise product quality and the productivity of production activities. They were also urged to generate good human resources to meet every demand of production activities. He said assistance from the Vietnamese government was needed, but that manufacturers themselves first had to make an all out effort. Collecting information about exports in importing countries was also important, he added. Kawada said he hoped that through trade exchanges, trade promotions and trade fairs held in Viet Nam, Vietnamese businesses will have more opportunities to expand their exports. Embassies seek to woo investors Việt Nam would create favourable conditions and offer incentives for Indian firms to invest in Việt Nam, said Vietnamese Ambassador to India Tôn Sinh Thành. Economic ties were also the focus at events between Việt Nam and Belgium, and Việt Nam and Mexico held the same day in Brussels and Mexico, respectively. The Vietnamese Embassy in India and the Federation of Indian Chambers of Commerce and Industry (FICCI) co-organised a conference entitled, “Invest Vietnam 2016” in New Delhi on Tuesday. Speaking at a conference, Thành highlighted the expanding Indian investment in Việt Nam and the great potential for investment links between the two countries’ enterprises. Việt Nam welcomes Indian companies to invest in the oil and gas industry, textiles, parts supply industries, pharmaceuticals, food processing, IT, mechanics, infrastructure development and renewable energy, he stated. Việt Nam has participated in 12 free trade agreements (FTAs) and has become a major gateway for exports into many large markets such as the US, Japan and the European Union, he said, adding that Việt Nam is now an attractive destination for foreign investors. Việt Nam commends the Indian Government for setting up its US$100 million special fund, which supports Indian companies to build production and supply chains in Cambodia, Laos, Việt Nam and Myanmar, Thành said. The Việt Nam-India Strategic Partnership has been strengthened in recent years, facilitating economic co-operation between the two countries, he added. According to the ambassador, along with enhanced links in trade and tourism, Indian firms are increasing their investments in Việt Nam. Indian enterprises poured over $230 million into Việt Nam last year, bringing their country’s total progressive foreign direct investment in Việt Nam to more than $530 million. Vice Director of the Export Import Bank of India, Nirmit Ved, said there were many reasons for foreign partners to invest in Việt Nam, citing its rapid economic growth, strategic position in Southeast Asia and strengthened international economic relations. Vietnamese representatives from the Foreign Investment Agency also introduced the country’s fields of strength and the Vietnamese Government’s preferential policies on tax and land leases. On the same day at a conference in Brussels, Nabil Jijakli, an expert from the Credendo Group emphasised that Belgium should look to trade ties with Việt Nam, where stable politics stimulate economic growth. Jijakli said Việt Nam’s average growth rate above 6 per cent is a dream for many western countries. According to him, the key to Việt Nam’s success lies in its geographical location in Southeast Asia and literate young population. These factors help boost industrial development, particularly in the manufacturing sector. However, Jijakli also noted challenges facing Việt Nam, including a slowdown in the global economy and neighbouring China – an economic powerhouse in Asia. Participating businessmen praised the Vietnamese market, saying it has the potential for European investment in technology, the environment and manufacturing. A seminar analysing achievements in Việt Nam’s foreign policy, Đổi Mới (Renewal), and international integration was also held in Mexico on Tuesday. At the seminar, Ambassador Lê Linh Lan briefed participants on major milestones in Việt Nam’s regional and international integration, especially the country’s role in the formation of the Association of Southeast Asian Nations (ASEAN). The ambassador also expressed her joy at the strengthened co-operation between the two countries, especially in economics. Two-way trade reached a record in 2015, hitting $2.23 billion, up 55.7 per cent year-on-year. In the first two months of this year, the figure was $320.46 million, up 32.17 per cent over the same period last year. Participants of the seminar lauded Việt Nam’s foreign policy, socio-economic achievements and its efforts to build a peaceful and prosperous nation. Tax incentive caution urged in VN Viet Nam should be more cautious while providing tax incentives to attract foreign direct investment (FDI), as these would affect the Government's coffers and consequently affect public services, experts said. Experts at a conference held by ActionAid Viet Nam on Wednesday said the country, at the same time, needed to improve its tax legal system and management to prevent tax evasion and avoidance, especially from FDI firms. This was critical for the Government to ensure tax collection to improve public services, while tax cuts and tariff liberations following free trade agreements were anticipated to cause a drop in the national coffers, according to ActionAid, which initiated the tax justice campaign in July 2013. A report by ActionAid Viet Nam and the Viet Nam Tax Consultants Association launched at the conference said that generous tax incentives for foreign direct investment (FDI) companies, including tax exemptions and reductions, as well as rampant avoidance of taxes, has caused losses of millions of dollars to the State budget, which could better be spent on public services, social security and fairness. The report cited statistics from the General Department of Taxation that the loss to the State budget caused by FDI firms which avoided paying taxes - mostly through transfer pricing - amounted to US$20 million in 2012, the most recent year the figure was available. The sum was five times higher than the budget for education and three times higher than the budget for healthcare services in the same year. Further, it was stated that tax incentives could not create competitiveness for the national economy. Instead the report urged the Government to focus on improving the investment environment through building the legal framework, developing infrastructure, investing in quality human resources and the industry for parts suppliers, rather than using tax incentive policies to attract investments. Tax incentives must be provided with care to prevent "side-effects" such as a loss to the budget revenue, the report said. Nguyen Van Phung, Director of the Large Taxpayers Office, did not offer comments about the figures in ActionAid's report, except to say that this could be an opportunity cost. "There is no discrimination in policy incentives between domestic and FDI firms," Phung stressed. It was now time Viet Nam became more selective in attracting FDI, Phung said, adding that incentives should aim to direct investments in industries and sectors where the country aimed to promote development. He added that it was critical to improve the legal tax framework, enhance the management capacity of tax authorities, strengthen enforcement, including inspections against transfer pricing, and apply advance pricing agreement (APA) mechanisms to prevent tax evasion and avoidance. Regarding the massive and shocking leak of the Panama Papers which revealed an intricate web of money laundering and tax evasion from the world's political elite, Phung said this had rung alarm bells for the Government of Viet Nam to be more cautious with investors coming from tax havens as they might take advantage of incentives in Viet Nam and then transfer profits to tax havens where the rates were very low or even at zero. Additionally, Vu Dinh Anh, economic expert from the Academy of Finance, said Viet Nam's tax authorities should improve their management capacity towards financial situations of foreign investors in Viet Nam. This would essentially require international co-ordination to prevent tax evasion and avoidance, he said. Int'l tourists in Ha Noi rise by 25% in Q1 More than one million international visitors arrived in Ha Noi in the first quarter of this year, a year-on-year increase of 25 per cent. The number of domestic visitors to the capital city also increased sharply to 4.6 million, seven per cent higher than the same period last year, reported the Ha Noi Department of Culture, Sport and Tourism. The city's tourist revenue, as of March 31, was more than VND16 trillion (US$716.5 million), 13 per cent higher than the same period in 2015. The department said the city's tourism industry had been gradually improving the service quality, creating tourism products and attracting more funds for the sector. In addition, Ha Noi has also offered promotional programmes that have enabled the city's image in the international market to rise steadily, the department said. From now until the end of the year, the department is calling for strategic investors to participate in the development of tourism around West Lake and the Hong (Red) River. Ha Noi officials said the city would continue to co-operate, promote and link the city with foreign markets, such as France, the United Kingdom, Germany and the United States, as well as China, Japan and South Korea. VIB shareholders may enjoy 25% dividend rate Shareholders of Vietnam International Bank (VIB) will vote for a dividend payment rate of 8.5 per cent in cash in 2015 and a plan to increase its charter capital. The proposal suggests the charter capital will increase from VND4.85 trillion (US$216 million) to VND5.64 trillion ($251 million) by distributing bonus shares, equivalent to 16.5 per cent, at the upcoming shareholders meeting here. If approved, the shareholders would enjoy total 25 per cent, including divident in cash and bonus shares, which is rather impressive when compared with the rates of other banks in this context, the bank said in its statement. Last year, VIB shareholders also enjoyed a dividend rate of 23 per cent, including 9 per cent in cash and 14 per cent in bonus shares. During the reviewed period, the bank posted a profit before tax of VND655 billion and fulfilled the plan set by the general meeting of shareholders. The banks credit growth rate reached 24.9 per cent, while its total assets increased by 5 per cent compared to 2014. Its non-performing loan rate, meanwhile, decreased to only 2.07 per cent. The bank targets achieving a pre-tax profit of VND675 billion and a credit growth rate of 25 per cent. VIB has joined the ranks of banks with high-quality shareholder equity, reflected in its capital adequacy ratio (CAR) ranging from 17 per cent to 18 per cent. Besides this, of the 10 banks selected for the pilot Basel II programme, VIB had the highest readiness score thanks to its technology platform being securely in place and its CAR of nearly 13 per cent, based on Basel II standards, compared to the required CAR of 8 per cent. Specialised communes fuel animal husbandry in Hanoi Dozens of communes across Hanoi designated to develop livestock farming over the last five years have proved to be a stepping stone to the growth of the capital city’s animal husbandry. The designation is under a programme on expanding large-scale livestock farming since 2011. Hanoi is now home to 19 communes specialising in raising beef cattle with nearly 27,000 head, accounting for 21 percent of the total beef cattle in the city. More than 2,000 of the cattle are kept at 105 large-scale farms. Local farmers’ income has increased by over 60 billion VND (2.69 million USD) a year thanks to the sale of beef and breeding cattle. About 12,500 head of dairy cattle, or 82 percent of the total, are being raised in 15 designated communes. They produce about 98 tonnes of milk each day, accounting for 88 percent of the milk output in Hanoi. The number of dairy cows has risen by some 4,000 and their milk productivity was up 29 tonnes per day from 2011. Farmers have benefited from an additional 150 billion VND each year as a result of dairy cattle farming. Large pig farms have also developed in a more environmentally friendly manner. About 890 such farms are raising 1.4 million pigs. Meanwhile, the encouraged use of organic feed has been welcomed by the market. One kilogramme of organic pork costs 3,000 – 5,000 VND higher than that of ordinary pork. Hence, the income from each pig is augmented by 300,000 – 500,000 VND (13.4 – 22.4 USD). Regarding poultry, more than 21 million animals are being farmed city-wide, including over 7 million chickens raised in 29 designated communes. Hanoi is accommodating 2,380 large-sized fowl farms, 1,410 of them specialise in raising chickens. The expansion of poultry farming has also helped revive local specialised species known for their meat quality, such as the chicken species in Soc Son and Ba Vi districts or the duck species in Van Dinh township. TPP handbook introduced to southern enterprises The handbook “Summary of TPP” was introduced to enterprises and trade associations at a conference entitled “Trans-Pacific Partnership Agreement – What enterprises need to know” in Ho Chi Minh City on April 14. The conference was organised by the World Trade Organisation Centre and the Vietnam Chamber of Commerce and Industry (VCCI). Speaking at the event, Deputy Director of the VCCI in Ho Chi Minh City Tran Ngoc Liem said it is the first TPP handbook in Vietnam which summarises the main contents of the TPP with clear guidance for businesses. It was developed by the VCCI in close consultation with the TPP Negotiation Delegation of Vietnam. The next two years are important for the government and enterprises to prepare for TPP which may take effect in 2018, he noted, adding that the VCCI will help domestic businesses understand the trade deal and utilise its benefits through various activities. Consul General of Australia Karen Lanyon highlighted the positive impacts of TPP, saying it will give a boost to the economy and create more employment opportunities. According to Lanyon, the Australian government has been assisting the development of small and medium-sized enterprises (SMEs) in ASEAN, including Vietnam. It pledged to provide the best support for the country’s businesses in stimulating economic growth as well as in global integration. State bank works to keep bad debt below 3 pct The State Bank of Vietnam (SBV) has requested that credit institutions and foreign bank branches intensify their credit quality and bad debt management and submit their bad debt handling plans for 2016 before April 28. The move aims to ensure the bad debt ratio is at a safe level of below 3 percent of loans, the central bank said in freshly-issued Document No 2588/NHNN-TTGSNH sent to credit institutions and foreign bank branches across the country. The document instructs credit organisations to implement bad debt treatments in accordance with Directive No 02/CT-NHNN dated February 23, 2016, on strengthening security assurance and the restructuring of credit organisations’ systems, bad debt management, and monitoring and maintaining bad debt at a safe level. The Directive also cited that credit institutions should focus on speeding up bad debt treatment through several measures such as risk contingency, selling bad debt to the Vietnam Asset Management Company (VAMC), supervising debt collection, settling collateral, and monitoring credit, bad debt and overdue debt management. Lotte Mart in search of Vietnamese suppliers at VIETNAM EXPO 2016 Lotte Group’s retail business Lotte Mart has joined the 26th Vietnam International Trade Fair – VIETNAM EXPO 2016 to look for Vietnamese products to export to foreign markets. Ten sales managers from Lotte Mart Korea and seven sales managers from Lotte Mart Vietnam are directly searching for competitive products and suppliers. The products will be exported to Korea this August to sell to Korean consumers through the series of events called “Vietnamese Production Exhibition” which will be held in 117 Lotte Mart supermarkets in Korea. “VIETNAM EXPO 2016 is a great chance for Lotte Mart to get closer to Vietnamese businesses since it is believed that direct procurement helps Vietnamese producers earn higher profits,” said Hong Eun Bee, Lotte Mart’s chief manager. In 2015, Lotte Mart imported a wide range of products from Vietnam to Korea including fresh foods, processed foods, clothing, and earned about $4 million in revenue. This year, Lotte Mart estimates to earn more than $5 million from the Vietnamese products. Besides concentrating on the Korean market, Lotte Mart also promotes exports of Vietnamese products to China and Indonesia via the Lotte Mart distribution channel. Lotte Mart opened the first hypermarket in Vietnam in South Saigon, Ho Chi Minh City in 2008. As of now there are 12 Lotte Marts throughout Vietnam. VIETNAM EXPO 2016, organised in Hanoi from April 13-16, has attracted more than 500 businesses from 23 nations and regions. This year, there are 71 businesses from Korea participating the exhibition and introducing products including cosmetics, food - beverages, textiles, consumer goods, pharmaceuticals - medical equipment, electrical equipment - electronics, machinery supplies in industrial sector. This is the 18th times Korean participants took part in VIETNAM EXPO. During the past years, Vietnam has always been considered as a potential market for Korean companies, especially those in the retail sector. TPBank releases 2016 targets TPBank has released documents for its annual general meeting containing details of objectives set for 2016. Total assets are to increase by 20 per cent to VND91.56 trillion ($4.1 billion), while charter capital will rise to VND5.84 trillion ($261.63 million), an increase of 5.26 per cent against 2015. Total mobilized capital has been set at VND84.59 trillion ($3.78 billion); 23 per cent higher than last year. Customer deposits are to reach VND63.87 trillion ($2.68 billion), an increase of 62 per cent, while credit will stand at VND41.6 trillion ($1.86 billion), or 47 per cent higher. Non-performing loans will be managed at less than 2 per cent, against 0.66 per cent in 2015. Pre-tax profit is targeted at VND695 billion ($31.13 million), or 11 per cent higher. Its capital adequacy ratio (CAR) will be higher than 9.5 per cent with a return on equity (ROE) ratio of 13.3 per cent. Commercial banks to access huge resources Commercial banks may gain access to temporarily unused State funds as a result of the recently-issued Decree No. 24/2016/ND-CP on the management of State funds. The Decree stipulates that “temporarily unused State funds may be deposited at commercial banks ranked by the State Bank of Vietnam (SBV) as having a high level of safety, with priority given to commercial banks with a higher level of safety, better liquidity, and higher interest rates.” While interest rates are a source of competition among joint stock banks, the higher level of safety and better liquidity are set by criterion under State regulations. Circular No. 36 from the SBV stipulates that safety limits and ratios at credit institutions are the basis of determining whether the criteria are met, such as the bad debt ratio and the loan-to-deposit ratio (LDR). Under this criteria some private commercial banks are in better shape than some State commercial banks in gaining access to State funds in terms of their bad debt ratio and LDR. As soon as provisions on the management of State funds become effective, the rule that unused funds are automatically deposited in State commercial banks may be abolished. Such deposits have been in large amounts because only State commercial banks have had the “privilege” of access. This “privilege” was described by experts at a seminar on banking sector as unfair for private commercial banks in approaching unused State funds, which amount to trillions of VND, according to the SBV’s financial reports. Private commercial banks have time before the Decree becomes effective at the beginning of 2017 to improve their performance. UK firms keen on Metro Line No. 5 UK firms have shown keen interest in the second phase of Metro Line No. 5 in HCMC, British Secretary of State for Foreign and Commonwealth Affairs Philip Hammond said at a meeting on April 13 with the city’s chairman. Hammond  said UK businesses proposed using the 500 million euros of the UK Export Finance (UKEF) for the metro line running from Bay Hien Intersection in Tan Binh District to Can Giuoc Coach Station in Binh Chanh District. However, HCMC chairman Nguyen Thanh Phong said it is not appropriate to use the financing of the UKEF for the second phase given lending conditions and the city’s financial ability. Phong said Britain should reconsider the lending conditions and interest rate proposed for the project. A source from the HCMC Management Authority for Urban Railways (MAUR) told the Daily that the city could not use this source of funding since the lending conditions applied for export credit are stricter than those for official development assistance (ODA) loans. Interest rates of export credit are higher as well. Besides, the borrower has to observe a couple of strict requirements for choosing equipment suppliers. In addition to railway projects, Hammond and Phong discussed trade and education before he made a field trip to the construction site of a station of Metro Line No.1 in front of the Opera House in downtown HCMC. MAUR briefed Hammond on the eight metro lines approved in HCMC. Hammond said Vietnam and the UK can cooperate in implementing the second phase of the Metro Line No. 5 under the public-private partnership (PPP) format as the European nation has a wealth of experience in the field. Le Khac Huynh, deputy head of MAUR, said the city is finding solutions to raise finances for the second phase of the Metro Line No. 5 and also considering the PPP format for the project. Huynh said the UK can provide HCMC with technical assistance in developing metro lines as Britain has experience and modern technology in the urban railway sector. Punitive interest for late tax payers down Enterprises will have to pay an interest rate of 0.03% per day or 0.9% per month for their unpaid taxes from July 1, instead of the current 0.05% per day, according to the revised law on amendments and supplements to some articles of the laws on VAT, special consumption tax and tax management. Article 3 of the revised law, approved by the National Assembly (NA) last week, requires enterprises to pay the original taxes plus an interest rate of 0.03% per day for their arrears when the law comes into force from July. The new punitive interest rate is below 0.05% per day or 1.5% per month as stipulated by Article 5 of Law No. 71/2014/QH03 on amendments and supplements to some articles of the laws on taxes. Earlier, the Ministry of Finance proposed that the punitive interest rate should not be regulated by the laws and that the Government should be allowed to decide it depending on operations of enterprises and business situations. According to the ministry, the rate has been adjusted many times but still mismatched the reality. The rate of 0.05% per day, or 18% per year, applied since early last year is much higher than the current average bank interest rate of 9.5-10.5% a year. When the tax management law was passed in 2006, the penalty was 0.05% per day. According to Law No.21/2012/QH13 introduced in 2012, the punitive rate for late tax payments in a period of 90 days was 0.05% per day but 0.07% per day for longer periods. But Law No. 71/2014/QH13 issued in 2014 stipulates the fine at 0.05% per day. Article 60 of the current law on tax management, if tax authorities are late in tax refunds for enterprises due to their mistakes, the latter could demand interest payment for late tax refunds. The interest rate equal to that applied by banks at the time of payment, according to the Government’s Decree No. 83/2013/ND-CP. However, the NA Standing Committee said tax authorities that are late for tax refunds to enterprises have not paid the interest to taxpayers. Therefore, the committee proposed the Government revise the decree in a way that forces tax agencies to pay interest for taxpayers. More goods, services to be exempt from VAT Value added tax (VAT) exemptions will apply to more groups of goods and services from July 1 as specified in the revised law on amendments and supplements to some articles of the laws on VAT, special consumption tax and tax management. The 13th NA passed the revised tax before the legislature wrapped up its final session in Hanoi on Tuesday. Under Article 1 of the revised law, VAT breaks will be valid for care services for elderly and disabled persons and export products made from mineral resources with a total value of resources plus energy cost accounting for at least 51% of production cost. Article 1 also states that from July 1, products of the cultivation and livestock sectors, and unprocessed and semi-processed seafood will be free from VAT declarations but still enjoy a deduction of this tax. At its eighth session, the 13th NA adopted Law No. 71/2014 /QH13 on amendments and supplements to some articles of the laws on taxes. This law regulates that from early 2015, fertilizer products, specialized machinery and equipment for agricultural production, offshore fishing vessels, and animal feed are not subject to VAT. Enterprises which trade VAT-free products are not allowed to get the deduction and refund of input VAT. Binh Dinh okays tunnel at tourism complex Binh Dinh Province has given the nod to FLC Group’s plan to build a tunnel linking its hotel-office-apartment complex and a beach in Quy Nhon City. The tunnel, 3 by 3 meters, will stretch 65 meters through the central coast city’s existing park to a nearby beach. A 500-square-meter bar will be built under the park as part of the project worth more than VND2 trillion (around US$90 million) on An Duong Vuong Street in Nguyen Van Cu Ward. FLC is allowed to construct the tunnel and the bar before commencing work on other components of the complex, according to a document signed by Binh Dinh Province’s chairman Ho Quoc Dung. However, construction of the tunnel and the bar should not impact daily activities of local citizens. The province earlier approved Faros Construction, a member company of FLC Group, to draw up an investment plan for the hotel-office-apartment complex in an area of over 1.7 hectares in Quy Nhon City. The complex comprises 25-storey twin towers for hotel, office, apartment and trade services. The investor will hire an international hotel company to manage the 5-star hotel when it is opened to guests. In addition, FLC Group has invested in other major tourism projects in the province, including a VND3.5-trillion golf villa resort that is scheduled for completion at the end of this June. The 350-hectare project got off the ground in May last year and features more than 800 hotel and resort rooms, an 18-hole golf course, a convention center able to accommodate over 1,500 guests at a time, a zoo and entertainment facilities. Visitor arrivals to Binh Dinh have surged over the last two years, leading to an undersupply of hotel rooms. That is why a number of domestic businesses including FLC and Vingroup have invested in tourism projects in the province. Binh Dinh targets 5.5 million visitors and VND10 trillion in tourism revenue by 2020, with annual growth of 25%. Local firms advised to attend to CSR Vietnamese enterprises should regard corporate social responsibility (CSR) as a core part of their business development strategies given the country’s increased international integration. Experts, speaking at a workshop in HCMC on Tuesday, called for Vietnamese enterprises to pay attention to CSR. The workshop on how to improve competitiveness through better industrial relations aimed at raising awareness of CSR compliance under Vietnam’s commitments to the free trade agreement with the European Union (EU). When the agreement comes into force in 2018 as expected, Vietnam’s gross domestic product (GDP) would grow stronger and exports to the EU may jump 35%. There will be a lot of opportunities for exporters but they can miss them if they fail to observe the strict quality and production method rules of European partners. “We should ensure that trade does not happen at the cost of the environment or people’s rights,” said Swedish Ambassador to Vietnam Camilla Mellander. According to Mellander, consumers have been more aware of how products they buy are produced in terms of their impact on the environment and working conditions, and this will pile pressure on enterprises. According to experts at the workshop, the apparel sector should take the lead to comply with CSR standards as it is a key export industry. In addition, there are still many labor issues relating to high rates of job quitting and worker strikes in the sector as data of Better Work Vietnam showed. Better Work is a partnership program between the International Labor Organization (ILO) and the International Finance Corporation (IFC) run in eight countries, including Vietnam. The program offers consultations, training and assessments of local and international labor standards to 373 apparel plants in Vietnam. Nguyen Hong Ha, manager of Better Work in Vietnam, said the program not only helps improve workers’ lives but also contributes to growth of enterprises. Up to 62% of businesses joining the program said their productivity has picked up and 65% have posted higher revenues. Besides, three-fourths of participating enterprises have got more orders from major customers. HIPC wants land use right certificate issuance shortened Hiep Phuoc Industrial Park Joint Stock Company (HIPC) has requested the HCMC government to shorten the process of issuing land use right certificates for its tenants to help it draw more investors to Hiep Phuoc Industrial Park. At a meeting with HCMC leaders on Tuesday, the company said many investors are hesitant to set up shop in its industrial park (IP) in Nha Be District due to the slow issuance of land use right certificates, which may last up to two years. The company bemoaned that the slow issuance of land use right certificates has made life tough for investors because they cannot use their assets as collateral to take out bank loans. Therefore, it proposed shortening the process to nine months. The process of issuing land use right certificates for tenants at IPs with complete site clearance and compensation takes two years because they have to finish the procedures for converting rice growing land into industrial one, registering annual land use plans, valuing land rent, and deducting site clearance compensation for the land use fee in line with the 2013 Land Law. At the meeting, HIPC proposed HCMC leaders in general and the authority of Nha Be District in particular quicken the procedures for issuing the land use right certificate for the second phase of Hiep Phuoc IP to enable the company to put infrastructure development on fast track. Phase one of Hiep Phuoc IP covering 310 hectares has attracted 97 projects with total registered capital of VND12 trillion (US$539 million) and created jobs for nearly 9,000 workers. HIPC is developing the second phase on nearly 600 hectares, including 200 hectares for firms in supporting industries. The 200 hectares consist of a Vietnam-Japan technology park covering 13 hectares for Japanese small and medium enterprises to lease, and the two other areas of about 190 hectares for companies in need of 1,500-2,700 square meters each to build factories. HIPC said it has completed the construction of Rach Rop 1 Bridge and plans to open to traffic Muong Lon 1 Bridge in late June. These bridges are part of a road leading to Hiep Phuoc IP. The company sought the city’s assistance for building more bridges worth a total of about VND350 billion (US$15.7 million) to facilitate traffic to and from the IP and Hiep Phuoc Port. Hanoi IP approved to turn into urban area The Prime Ministerhas approved conversion of the 40-hectare Hanoi-Dai Tu Industrial Park (IP) in Long Bien District into an urban area. The IP was established under Investment Certificate No 1358/GP issued by the State Committee for Cooperation and Investment in August 1995 and Hanoi-Dai Tu Construction and Business Industrial Infrastructure Co was picked as the investor of the projectthen. The IP was located in the suburban area of Hanoi when it came onlinein 1997. However, with rapid urbanization, it now lies in the center of the capital city. According to the Hanoi Industrial and Export Processing Zone Authority, the IP has drawn 21 investment projects and had its power, water supply, drainage and waste water treatment systems completed. After years of operation, the current occupancy rate at the IPstands at only 36.1% as ithas not been able to attract environmentally-friendly and hi-tech firms as earlier expected. Therefore, it is essential to relocate polluting factories in the IP and turn it intoan urban area. Hanoi is toldto draw up a detailed conversion plan for the IP and submit it to the Government for consideration and approval. The city will have to work with relevant agencies to adjustrelevant zoning plans and report issues beyond their authority to the Prime Minister. EVN says 10 power plants ready this year Vietnam Electricity Group (EVN) said at least 10 major hydro and thermal power plants will be put into operation this year to meet increasing electricity demand. The projects comprise hydropower stations Lai Chau, Huoi Quang, Trung Son and Song Bung 2, extension power plants Da Nhim and Thac Mo, and thermal power plants Duyen Hai 3 and Duyen Hai 3 extension, Vinh Tan 4 and Thai Binh 1. The projects have a combined capacity of 3,893MW, including 2,081MW from the hydropower plants. The second 400-MW generator of Lai Chau Hydropower Plant is scheduled to come on stream by end-June, Khuong The Anh, deputy director of Son La Hydropower Company, told the Daily. The company looks set to commission the remaining 400-MW generator of the third largest hydropower station in Vietnam by the year-end. In December last year, the first generator of Lai Chau Hydropower Plant in the northern province of the same name went online after five years of construction. The 1,200-MW station will generate 4.7 billion kWh a year for the national grid when the two remaining generators are commissioned. Protracted drought has dealt a blow to a number of hydropower plants in the central, southern and Central Highlands regions. EVN said water levels at their reservoirs are far below the average of previous years. The drought-hit reservoirs are Ban Ve, Hua Na, Cua Dat, Quang Tri, Binh Dien, A Vuong, Dak Rinh, Ka Nak, Krong H’nang, Pleikrong, Ialy, Ham Thuan, Dai Ninh, Dong Nai 3, Tri An and Thac Mo. To deal with the severe impact of the drought on hydropower stations, EVN has asked thermal power stations to run at full tilt to meet strong demand in the ongoing dry season. SHB to dissolve or merge its securities firm Sai Gon-Ha Noi Commercial Bank (SHB) will decide on whether to dissolve or merge its securities firm SHBS on April 21 at the general shareholders meeting. According to a document to be presented at the meeting, with a relatively low charter capital of VND150 billion (US$6.8 million), SHBS was finding it difficult to match the competition. The bank's board, which holds a 98.5 per cent stake in the securities firm, had said it would not put anymore money into SHBS. The board said it would, instead, either merge or dissolve the securities firm to ensure there was adequate capital in the bank. Divestment was also an option. An SHB representative said they would focus on improving the financial capabilities of the bank and its core business activities. Sai Gon-Ha Noi Securities (SHS), also a subsidairy of the bank, announced the merging plan with a securities firm between 2016 and 2017. This caused most local investors to think about the merger between SHBS and SHS. According to the financial reports, SHBS, which only offers a brokerage service, earned revenue of VND61 billion, down 50 per cent from the previous year and reported a drop of VND2.3 billion in its profit. If the company is dissolved, it will be the second securities firm to exit the market, after Kim Long Securities Company, once Viet Nam's fourth-largest firm in terms of market value. According to a local expert, some more securities firms were expected make an exit in 2016 due to the market's small scale. Before 2015, there were more than 100 securities firms. The number of firms that are operational has now reduced to 81. To boost the competitiveness of the local market, the State Securities Commission will launch a derivative market this year end and complete its plan to merge the two bourses in the country. VFA forecasts decline of rice exports in second quarter The Vietnam Food Association (VFA) has planned to export 1.6 million tons of rice for the second quarter of this year, 200,000 tons lower than the initial plan. This is attributable to the implementation of the signed contracts and the impact of drought and saline intrusion which make rice yields to fall. Rice exports in the first quarter saw positive results. The country shipped 1.59 million tons of rice to get US$692 million in the period, up 41.6% in volume and 40.8% in value against the same period last year. The VFA attributed the sharp increase in the first three months to the implementation of G-to-G contracts signed with Indonesia and the Philippines last year and newly signed contracts with China. According to VFA, the export prices of Vietnamese rice also stood higher than those offered by other suppliers in Asia and Vietnam’s rice exporters are likely to lose competitive edge and market shares in the coming time. Rice exports in the first half of this year are expected to hit over 3 million (excluding the volume exported through illegal channels), up 12% against the corresponding period last year. Autodesk subscription transition towards cloud computing development New commercial licences of Autodesk’s software will be available by subscription only from July 31 this year, instead of the perpetual licenses as current. Under the new subscription model, customers will pay for Autodesk products and cloud services with multi-year, annual, quarterly or monthly subscription terms. Thus, customers can instantly access to latest versions and product enhancements whenever they are available without paying any additional or update fees. Phan Trung Hieu, country manager of Autodesk in Vietnam and Cambodia emphasised that the subscription transition was the most important move of the company in 2016. According to Hieu, this company's decision will aim at the development of cloud computing, as well as deliver continuously evolving software to customers. When this takes effect, the company will provide new, simplified subscription options so customers can access multiple products and share licences as they do today - while gaining the simplicity, accessibility, and flexibility of subscription. The key benefit for customers when choosing subscription is lower upfront cost and the ability to pay-as-you-go on multi-year, annual, quarterly or monthly subscription terms. Therefore, customers can account the cost for software as an item in operation cost. As a result, companies can adjust more nimbly and with less cost to shifting business environments. “For example in Vietnam, our customers are mainly in architecture, engineering and construction industry. The architecture firms can choose to pay for software as their projects go, such as purchase an annual and two quarter subscription terms for an 1.5 year project. When the project is completed, they record the software cost in operational cost and stop buying software until getting new projects,” Hieu said. "This transition to subscription shows the commitment of our strategy to bring better and more diverse opportunities to users in emerging markets such as Vietnam in order to use the most advanced technology in the global industry. With the initial investment reduction, flexibility in the transition from the previous model, it will help to accelerate the innovation of businesses and individuals in Vietnam, encouraging them to make more and better products," said Hieu. To pave the way for a smooth transition, Autodesk will offer a choice of simplified subscription plans tailored to the needs of individuals, teams or enterprises. Customers will be able to purchase individual or shared subscriptions to gain access to individual products or a portfolio of products with the option of single user licensing or shared network licensing. These flexible options protect and optimise customers’ existing investments in Autodesk technologies and deliver a seamless path forward as Autodesk discontinues the sales of perpetual licences. Those who purchase a perpetual licence of Autodesk Design & Creation Suites and affected products prior to July 31, 2016, will continue to own and have full usage rights for those licences, and customers on maintenance for those perpetual licenses will continue to receive corresponding benefits for as long as they continue to renew their maintenance. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR