BUSINESS IN BRIEF 29/4 Transimex-Saigon opens logistics center at SHTP Logistics service provider Transimex-Saigon Joint Stock Company on April 21 inaugurated a 10-hectare logistics center at the Saigon Hi-Tech Park (SHTP) in District 9, HCMC. The first logistics center at SHTP operates as an inland container depot with bonded and tax suspension warehouses, a container-freight station, a three-hectare distribution facility, a 9,000-square-meter cold storage facility, and a three-hectare container yard with a capacity of 5,000 TEUs. Transimex-Saigon has invested nearly VND600 billion (US$26.91 million) in the facility, which is equipped with a goods storage system of 7-level shelves and surveillance cameras. It also has software that allows customers to keep track of their goods and find relevant statistics, and a fire prevention system to protect goods of customers, especially hi-tech products. The center is close to Belt Road No. 2 linking HCMC and Dong Nai, Binh Duong, and Ba Ria-Vung Tau provinces, and near major ports like Cat Lai and HCMC-Long Thanh-Dau Giay Expressway. Machine tool exhibition attracts high-tech firms The fourth international precision engineering, machine tools and metalworking exhibition (MTA HANOI 2016) opened in Ha Noi yesterday. The exhibition was co-organised by the Singapore Exhibition Services and local organiser VCCI Exhibition Service Co., Ltd. This year's exhibition attracted 175 enterprises from 19 countries and territories, including four international pavilions from South Korea, Singapore and Taiwan. Enterprises exhibited products by many international brands with modern and advanced technologies such as metal cutting and forming machines, metrology, and other supporting systems and tools. Speaking at the opening ceremony, Deputy Minister of Industry and Trade Do Thang Hai said that MTA HANOI 2016 was an opportunity for local businesses to access the advanced technology of the world to improve production efficiency as well as increasing product value. At the same time, it was also a chance for local businesses to update information and experience in science and advanced technological solutions from international companies, as well as seeking more co-operation opportunities and business investment, the deputy minister added. The deputy minister also urged Vietnamese mechanical enterprises to put more effort into researching and manufacturing in order to further develop the sector in the times to come. The event had secured its position in northern Vietnamese industry after many successful exhibitions, connecting enterprises with trending new achievements and technologies in the world, said BT Tee, a representative from Singapore Exhibition Services. After the MTA HANOI 2016, the organisation board has decided to hold the MTA HANOI event annually instead of biannually. There will be also a series of sideline seminars accompanying the exhibition. The exhibition will continue until tomorrow. Masan Consumer wants to grow in the ASEAN market   Masan Consumer CEO Seokhee Won told the board of directors on April 26 he is determined to grow the company’s footprint in the ASEAN market. At the annual general meeting of the board in Ho Chi Minh City, Mr Won said he envisions making significant inroads into the ASEAN market and achieving double digit growth in short order. He said he was setting his initial sights on market entry into Thailand as the market is red hot and later, the company would seek entry into the Laos, Cambodia and Myanmar markets. Masan Consumer is one of the largest local diversified companies in the fast moving consumer goods sector in Vietnam. It manufactures a wide range of food and beverage products including sauces, bottled beverages along with instant noodles, coffee and cereals. Jetstar takes off ahead of ASEAN’s Open Sky As low-cost airlines are forecast to dominate the regional aviation market under the ASEAN Open Sky policy, national flag carrier Vietnam Airlines and its partner, Australia’s Qantas, have injected an additional $139 million into low-cost carrier Jetstar Pacific Airlines to develop its aircraft fleet and take advantage of the market’s potential. Le Hong Ha, general director of Jetstar Pacific Airlines (JPA), confirmed at a meeting last week that Qantas, which owns a 30 per cent stake in JPA, would invest $100 million, while Vietnam Airlines (VNA), which holds a majority 70 per cent share in the airline, would contribute the rest. The extra investment would help JPA develop its aircraft fleet to 30 units by 2020, thus helping the carrier continue its development in the low-cost segment over the next five years. “By investing in low-cost air services, VNA and other airlines aim to cash in on a significant increase in the number of Vietnamese people travelling abroad using low-cost carriers, and especially to benefit from the ASEAN Open Sky Agreement,” Vo Huy Cuong, deputy head of the Civil Aviation Administration of Vietnam (CAAV), told VIR. The agreement, also known as the ASEAN Single Aviation Market, will allow air services to freely operate routes within the ASEAN region without facing any government restrictions. The same advantages apply to Vietnamese airlines. The ASEAN region, which is home to more than 600 million people, has seen a boom in low-cost carriers in recent years, heightening competition in the air transportation segment. Singapore, China, India, and Thailand have seen the most rapid development of such services. To prepare for the liberalisation of regional aviation, aside from its additional investment in JPA, VNA has thus far upgraded the overall quality of its services on the ground and in the air from three to four stars, in accordance with international standards. It has also invested in a modern fleet, as the carrier is expected to replace its entire wide-body fleet with 33 planes, including 19 Boeing 787 Dreamliner aircraft and 14 Airbus A350-900XWB aircraft (both purchase and lease) over the next three years. In a similar move, VietJetAir, the country’s only privately run air carrier, has taken steps to prepare its personnel, air fleet management, and financial capacity to cash in on the benefits of the ASEAN Open Sky agreement. Aside from a contract with Airbus to lease and purchase 100 aircraft, VietJetAir has ordered six new Airbus A321 planes, bringing the number of its fleet to over 107. It has also implemented a series of co-operation activities with leading global manufacturers and suppliers of aviation materials and services. VietJetAir is considered as a major success in aviation. Its effective development has catapulted it onto the list of the sector’s key players, and it is expected to soon become a regional leader. $100 million Smart City kicks off in April National Housing Organization (N.H.O JSC.) and its partner Thien But Real Estate Company will start a VND2,200 billion ($100 million) project called Smart City An Giang on April 27. Located in Long Xuyen city, Smart City will supply accommodation for around 12,000 people when finished in 2018. Smart City An Giang occupies an ideal venue since it is located at the backbone transport system of the Mekong River Delta, neighboured by the major roads of Thoai Ngoc Hau, Trieu Quang Phuc, and Dien Bien Phu. The project consists of different types of residential estates, such as semi-detached houses, high-rise building apartments, and villas, offering close-at-hand facilities, such as schools, hospitals, parks, shop houses, and a trading centre. More than 40 per cent of the total land area was reserved for green and public space, as well as a convenient infrastructure system. According to Tran Thi Diu Hoa, general director of N.H.O, Smart City An Giang is one of the company’s major projects in 2016. “This project will not only create more accommodation, but increase the living standard of local residents of the Mekong River Delta, as well as attract more investors to develop other projects the area,” Hoa said. N.H.O is a joint venture between TAG Investment Joint Stock Company and NIBC Investment Limited. With a range of brands, like First Home, First Home Premium, First Residence, Nobilis, and Smart City, N.H.O expects to build around 25,000 units of accommodation in Vietnam. Park Hyatt Saigon has new general manager The Park Hyatt Saigon has announced Frederic Boulin as its new general manager with effect from February 2016. Boulin, a French native, brings the newly renovated Park Hyatt Saigon more than 20 years of hotel management experience in the luxury segment across five continents in flagship properties. The graduate of hotel and business administration from the Switzerland - Glion Institute of Higher Education worked for Hyatt Regency Acapulco and held food and beverage positions in Venezuela, Argentina, Cambodia, Guatemala and Greece. In 2002, Boulin held the Executive Assistant Manager at Grand Hyatt Seoul and the Resident Manager position at Grand Hyatt Sao Paulo before holding his first position as General Manager at Hyatt Regency La Manga in Spain, followed by Grand Hyatt Cairo in Egypt. Prior to joining Park Hyatt Saigon, he was general manager of Park Hyatt Seoul. Under his leadership, Park Hyatt Seoul won a number of prestigious recognitions, including Condé Nast Travelers Gold List in 2012, Top 10 Hotels in Japan and South Korea by Condé Nast Travelers’ Readers Choice Awards in 2013 and Top 500 World’s Best List by Travel + Leisure in 2013. Vietjet to launch three new domestic routes Vietjet will launch its three newest domestic routes to better connect Hai Phong with Phu Quoc, Da Lat and Buon Ma Thuot. Celebrating the new routes will coincide with the opening of a new terminal at Cat Bi International Airport. The airline will also offer 15,000 discounted tickets with prices beginning at zero dollars. These airfares will be available for booking from April 26-28 from noon to 2pm. The travel period for the special fares will be from May 12 to October 29 for Hai Phong – Phu Quoc, from May 20 to October 29 for Hai Phong – Da Lat and from June 2 to October 29 for Hai Phong – Buon Ma Thuot. All special tickets do not include traveling on some holidays. The route connecting Hai Phong and Phu Quoc will begin operating on May 12, with four round-trip flights per week on Tuesday, Thursday, Saturday and Sunday. Meanwhile, the Hai Phong – Da Lat route will have three round-trip flights each week on Monday, Wednesday and Friday beginning May 20. The third route, which links Hai Phong with Buon Me Thuot, will begin June 2 with four round-trip flights per week on Tuesday, Thursday, Saturday and Sunday. SGP lowers 2016 target, plans divestment The Bank for Industry and Trade of Viet Nam (VietinBank) and Viet Nam Thinh Vuong Commercial Bank (VPBank), strategic investors of Sai Gon Port JSC, asked to sell their holdings in the port at the shareholders general meeting last week. VietinBank and VPBank bought a 9.07 per cent stake and 7.44 per cent stake, respectively, when the port underwent equitisation last year. Although the regulations applied to the purchase included restrictions on transferring the port's shares for at least five years, the buyers asked the board to permit sales in less than one year. As of 2016, the port expects VND775 billion (US$34.7 million) in turnover and profit of VND50 billion. The target is much lower than last year's recorded revenue of more than VND1 trillion and profit of VND85.5 billion. This year, according to the port, it must relocate Nha Rong - Khanh Hoi Port under the city's infrastructure plan by the end of December and must hand over part of the port by the middle of this month. Thus, all services at the parent ports as well as their five subsidiaries will be affected, resulting in reduced output, revenue and profits. The port also said the Tan Thuan 1 and Tan Thuan 2 ports were restructured within the year, while construction work on Sai Gon-Hiep Phuoc Port was incomplete. The port has been adjusted retroactively for after-tax profit calculations, with accumulated losses of more than VND1 trillion for 2015, as it failed to report losses of this amount from its associated companies, deepsea container terminal SP-PSA and SP-SSA International Terminal (SSIT), last year. As a result, the port owners' equity fell by almost half. So, due to these difficulties, the board must lower the current annual target and will not pay a dividend, in accordance with last year's equitisation plan. Also at the meeting, the port said it would sell its shares in Ngoc Vien Dong JSC, a subsidiary of real estate company Vingroup, which is developing the Vinhomes Khanh Hoi project. Previously, the port was asked to contribute more capital to keep its current stake of 26 per cent in the company when it raises the charter capital to VND5 trillion in the future. Based in HCM City since 1860, the port has been a key transport hub for the country, connecting the city to the southern region, the Mekong Delta and the neighbouring country of Cambodia. Sai Gon Port operates important ports in the southern part of Viet Nam, including the Nha Rong Khanh Hoi, Tan Thuan 1, Tan Thuan 2 and Phu My Steel ports. The port accounts for 10.5 per cent of the overall throughput in the South. Currently, the port has five subsidiaries offering logistics, commerce, transport and investment services in the city. The board said it would concentrate this year on upgrading Tan Thuan 2 Port, establishing the Hiep Phuoc Service Zone in Nha Be District and co-operating with Khahomex Company to build an office building on Nguyen Tat Thanh Street in the inner city. On April 25, more than 21.6 million shares for the port (SGP) were listed on the unofficial market of UPCoM. To date, with registered capital of more than VND2.1 trillion, it is the fifth-largest firm in UPCoM. Little Vietnam to be opened soon Syrena Việt Nam Development Investment Jsc., will organise a two-day event this weekend prior to the official opening of the Little Vietnam shop-houses which is expected to become a tourist attraction in northern Quảng Ninh Province’s Halong Marina Urban Area. Little Vietnam was designed to replicate original architectural features, lifestyles and traditional businesses of Hà Nội and Hội An – two famous tourist cities of Việt Nam. The project was developed with the idea of it becoming a developed trade community and an attractive destination for tourists to enjoy the original features of Hà Nội and Hội An in Hạ Long City, and had become a phenomenon in the property market two years ago when all its units on offer were sold. According to Syrena Việt Nam, Little Vietnam was one among the most attractive projects in Halong Marina Urban Area, which a large number of people coming from Hà Nội bought into as they saw promising profits coupled with a quality living environment. “Little Vietnam will become a new destination for tourists coming to Hạ Long,” the developer said. Syrena Việt Nam said that all projects in Halong Marina Urban Area were being developed with priorities placed on quality living environment integrated with investment opportunities. The two-day event at Halong Marina Urban Area will include art and music performances, traditional games, a cooking show and a night festival decorated with coloured lanterns. Syrena Việt Nam, was founded in 2008 as a member of the BIM group to focus on property development, was credited with a line-up of high-profile projects in the 248-hectare Halong Marina Urban Area, such as the Lotus Residences resort townhouse, for which the developer guaranteed a profit of 24 per cent of the townhouse value in the first three years. Syrena Việt Nam has also developed property projects in Laos and Phú Quốc. Vietnam, US step up agro-forestry-fisheries cooperation On April 25, Minister of Agriculture and Rural Development Cao Duc Phat and US Secretary of Agriculture Thomas J.Vilsack held talks in Hanoi to boost collaboration in agriculture, forestry and seafood between the two countries. According to MARD, the country’s agro-forestry-fisheries exports to the US still face a number of difficulties and unfair treatment. The procedures to grant an export licence for Vietnamese fruit to the market are complicated, costly and time-consuming. So far, only four kinds of Vietnamese fruit, namely dragon fruit, rambutan, longan, and lychee are licensed to enter the US, but with high export costs. Vietnam has sent a draft report on the probable risk assessment (PRA) of mango and star apple to the US Department of Agriculture (USDA)’s Animal and Plant Health Inspection Service (APHIS) and proposed APHIS hand over the inspection of fruit irradiation to the Vietnamese ministry’s Plant Protection Department. Vietnam has effectively coordinated with the US in this field since 2008. The US Environmental Protection Agency (EPA) and the US Food and Drug Administration (FDA) are imposing the zero maximum residue limits (MRL) on some unregistered drugs in the US but are allowed to be used in other countries. This has caused difficulties for Vietnamese exporters. On the other hand, Vietnamese farm produce has to follow regulations on food safety from separate US states. Concerning seafood, Vietnamese shrimp and tra fish exported to the US last year suffered unfair treatment and anti-dumping and anti-subsidy lawsuits, which greatly affected the two countries’ trade ties as well as the jobs and incomes of millions of Vietnamese farmers and businesses. The USDA has ruled the establishment of an inspection programme for Siluriformes fish, including Vietnamese tra and basa fish, which came into effect from March 1, 2016. Accordingly, the export countries have a transitional period of 18 months (until August 31, 2017) to adjust their production systems in line with the new US regulations. The implementation of the programme within 18 months is difficult for Vietnam due to the country’s significant difference in production conditions and development level from the US. This might interrupt trade activities and affect millions of Vietnamese farmers and exporters. Therefore, Vietnam proposed the US extend the time limit for the country to meet the programme’s regulations. The Vietnam Ministry of Agriculture and Rural Development (MARD) hopes to strengthen cooperation with the US in smart agriculture to cope with climate change, Minister Phat said, adding that the US is expected to help the Southeast Asian country enhance capacity in the fields of biological and hi-tech agriculture, food hygiene and safety, and flora and fauna inspection. He asked the US to support Vietnam in evaluating aquatic resources and realising commitments in the environment programme under the Trans-Pacific Partnership (TPP) Agreement – to which both nations are members. Currently, the US is the second most important farm produce market of Vietnam after China, with an export turnover of US$5.69 billion and imports of US$1.4 billion in 2015. Thaco expands automotive engineering complex Truong Hai Auto Joint Stock Co., better known as Thaco, on April 24 broke ground for a project to expand its automotive engineering complex in Quang Nam Province. The area to be expanded in the Chu Lai-Truong Hai complex covers 210 hectares and will be put into operation in 2018, Thaco said at the ground-breaking ceremony, which was attended by Prime Minister Nguyen Xuan Phuc. The project got off the ground two days after Thaco got approval from shareholders for a major business strategy at an annual meeting last Friday. The strategy consists of new auto factories and other major investments at Chu Lai-Truong Hai complex in Chu Lai Open Economic Zone. Thaco is making new investments at a time when many passenger car assemblers in Vietnam are importing vehicles due to mounting competition from completely-build-up (CBU) autos imported from Thailand and Indonesia. Autos of under 10 seats imported into Vietnam from other ASEAN markets come with competitive prices, especially in 2018 when the import tariff is cut to 0% under the ASEAN Trade in Goods Agreement (ATIGA). The new passenger car factory invested by Thaco will have an annual capacity of up to 100,000 units, including products of the Mazda brand. Sales of this car brand have grown rapidly since it was launched in Vietnam five years ago. Thaco said more than 20,300 Mazda autos were sold last year, much higher than sales of other brands that were introduced to the Vietnamese market before Mazda. In the first three months of this year, nearly 6,830 Mazda autos were delivered to customers, up a staggering 63% year-on-year. Thaco said the other factories would have annual capacities of over 100,000 trucks, 10,000 minivans of 12-16 seats, and 5,000 bigger buses. Thaco will invest heavily in advanced technology and improve designs to turn out international-standard buses for export. The company also plans more investments in auto parts production for supply to its auto assembly factories. The enterprises will produce machines for the agricultural sector under the three-year strategy. Thaco targets to become a business group active in multiple sectors and a major enterprise in ASEAN, with automotive engineering identified as its core business. Thaco aims for sales of 150,000 vehicles and revenue of VND95 trillion (US$4.3 billion) in 2018. This year, the local auto market is forecast to grow 10-15 % so Thaco targets total sales of over 112,000 units in the 2016 business plan, up 40% against last year, with revenue of VND71.7 trillion. Of which, passenger cars are projected to rise by 47% to over 62,000 units and commercial cars by 32% to more than 50,200 units compared to last year. Last year, Thaco sold more than 80,400 vehicles and obtained total revenue of VND45.8 trillion (US$2.05 billion) including after-tax profit of VND7.03 trillion (US$315.6 million). As part of the business strategy, Thaco will expand Chu Lai-Truong Hai Port and establish shipping routes connecting to ports in Japan, South Korea and China. It will invest in Tam Hiep urban area covering 265 hectares. The firm on April 24 commenced work on two roads linking the complex and an expressway that is near Chu Lai Open Economic Zone in Quang Nam. Thaco plans a total investment of VND30.4 trillion (US$1.36 billion) in its projects between now and 2018, including almost VND20.4 trillion (US$916 million) to be spent directly by the enterprises and VND10 trillion contributed by partners. Thaco chairman Tran Ba Duong said the company poured nearly VND28 trillion into the automotive engineering complex since 2003. The 400-hectare complex is home to 24 auto assembly and parts manufacturing factories using technologies of Europe, Japan and South Korea. SSI to expand business to derivative securities Shareholders of the Saigon Securities Inc. (SSI) approved yesterday on the company's expanding its operation into the derivative securities business. Last May the Government issued Decree 42/2015/ND-CP on derivative securities and derivative securities market and under the Circular released by the Ministry of Finance in January regulates that a securities company must obtain an approval from its general shareholder meting to carry out derivative securities trading operations. SSI's new business will cover derivative securities brokerage, proprietary trading, consultancy as well as clearing and settlement service. The company will also issue covered warrant once legal regulations take effect. The meeting also agreed on this year's target of VND1,430 billion (US$64 million) in revenue, which is expected to yield VND950 billion in pre-tax profits. Last year's revenue was VND1,333 billion and pre-tax profit, VND1,064 billion. The company ranked the first in market share in both exchanges in HCM City and Hà Nội, with a combined share of 12.13 per cent, up 10.4 per cent over 2014. Chairman Nguyen Duy Hưng stressed the success of his company's investment bank service, including the consultancy for property developer Novaland to mobilise VND1,000 billion, Digiworld to raise VND250 billion and for the deal of Quang Ngai Sugar Company to sell almost VNĐ300 billion to foreign investors. This investment bank service brought in a revenue of VND57 billion, up 125 per cent from 2014's figure. Its SSI Assets Management Company was the first domestic one having raised funds from European institutional investors for establishing the Andbank Investment SIF – Vietnam Value and Income Portfolio. It also raised US$32 million in the first phase in cooperation with its Japanese partner Daiwa for the DAIWA-SSIAM Vietnam Growth Fund II LP, which focueses its investments in private companies operating in areas of agriculturre, aquaculture and consumer goods. Halong charms resort property developers Giant property developers keep flocking to Halong city in the north-eastern province of Quang Ninh to cash in on the breakthrough in infrastructure development as well as its immense tourism potential. Property expert Dang Hung Vo said that there was immense potential for the development of resort properties in Vietnam, with attractive returns which could amount to 9 per cent per year. Nguyen Nam Son, chairman of Singapore-based Tanzanite International, said the best location for the development of resort properties were places only some hours away by car from the major cities such as Hanoi or Ho Chi Minh City, with a stunning natural landscape, such as the sea shore. All these factors were met in Halong, making it an ideal destination for investment in resort properties in the northern region, which explains why many giant developers like Vingroup, FLC, Sun Group and BIM Group have all made their presence felt in the city. Private multi-industry BIM Group, ran by businessman Doan Quoc Viet, was the pioneer in property development in Halong city with a string of large-scale projects. Its first project here was the 4-star Halong Plaza Hotel, the first 4-star hotel in the city. The idea for the hotel arose after Viet's trip to Halong Bay in the early 1990s. After nearly two decades, BIM Group is now credited with a number of high-profile projects of which the US$2 billion Halong Marina Urban Area covering 248 hectares along  Halong beach was its flagship project, designed as a mini replica on the lines of Australia's Sydney Port. The urban area consisted of a line-up of projects that provided not only quality living with all the amenities, but also investment opportunities. One of projects was Van Lien (Lotus Residences), a luxury resort townhouse project at the prime Halong Marina area, consisted of 159 environment-friendly townhouses and amenities such as an all-season swimming pool, a park and a children's playground. Especially, on April 23 Syrena Vietnam- a member of BIM Group in charge of property development, will join hands with G5 Property Trading Floor Alliance to begin sale for the next phase of Lotus Residences in Hanoi. The developer has guaranteed a return of 8 per cent per year in the first three years of operation, if buyers join the rental pool, which is a management model in which developers and buyers share the expenses and the profits of Lotus Residences and 65 per cent of the rent profits from the following years. Any deposits for purchases made in April and May will be given a 5 per cent discount from the before-tax price of the townhouses and a membership card of BIM Group's luxury sports club Elite Passport worth VND35 million (US$1,600). Early payment worth 95 per cent of the contract value will also get 5 per cent discount. The previous sales saw a large number of buyers, with some 80 per cent of units on offer being sold, according to Syrena Vietnam. In the past two decades, Halong has retained its position as a tourism hot-spot in northern Vietnam, with Halong Bay recognised as a world natural heritage site. Last year, Quang Ninh attracted nearly eight million visitors, including three million foreigners. The growth in tourism revenue averaged 20 per cent annually. Notably, a series of city-based major infrastructure projects were nearing completion, which would make travel from neighbouring provinces to Halong easier than ever before. The projects include the VND13 trillion (US$580 million) Halong-Haiphong expressway which is expected to be open to traffic in 2017and reduce travel time to less than two hours from the capital city. Other projects involve upgrading the highways connecting Halong city with Van Don and Mong Duong, worth a total of VND14 trillion (US$642 million), the VND10 trillion (US$458 million) Tuan Chau international tourism port, or the VND6.7 trillion (US$307 million) Van Don airport which was slated to begin operation in late 2017. Hoa Phat to build steel plant in Hung Yen Hoa Phat Group has decided to develop a plated steel sheet plant, worth about VND4 trillion (US$180 million) in the northern Hung Yen Province's Pho Noi A Industrial Zone, vietnamplus.vn reports. The project aims to diversify the products of the firm and meet increasing demand for plated steel sheets in the market, as well as provide materials for its steel pipe factories in the locality. Work on the plant is expected to kick off next month. The plant will provide 400,000 tonnes of product annually once operational in early 2018. Last year, the group earned VND27.86 trillion (US$1.24 billion) in revenue and VND3.5 trillion in after-tax profit, 24 per cent and 8 per cent higher, respectively, than their target. It strives to earn VND28 trillion in revenue and VND3.2 trillion in after-tax profit in 2016. Viet Nam's rice exports surge in Q1 Viet Nam exported 1.42 million tonnes of rice for a total free-on-board value of US$577.28 million in the first quarter, a year-on-year increase of 57.7 per cent in volume and 51.16 per cent in value, according to the Viet Nam Food Association. Many of last year's contracts were executed this year, especially Government-to-Government contracts with Indonesia and the Philippines, and commercial contracts with China pushed up the exports, the VFA said. Asian countries were the main buyers, buying 76.12 per cent of the exports, followed by the Americas with 10.94 per cent and Africa with 9.76 per cent. Common white rice accounted for 29.31 per cent, up 135.44 per cent from the same period last year due to high demand from Indonesia and the Philippines. Exports of high-value white rice and fragrant rice accounted for 21.96 per cent and 21.89 per cent respectively thanks to high demand from Cuba, Indonesia, Africa, and China. Shipments of glutinous rice surged by 200.16 per cent due to an increase in demand from China. But broken rice exports were down by 64.76 per cent. The association said the number of contracts to be executed in the next few months, excluding new contracts, remains high, with around 1.4 million tonnes to be shipped. Export prices have increased significantly in recent months, especially since March. Meanwhile, high demand from exporters and falling output in the Cuu Long (Mekong) Delta because of drought and saltwater intrusion have pushed up domestic prices of the grain. As a result, Viet Nam's export prices are higher than those of other Asian suppliers, causing the country to lose its advantage in the competitive global market. The association quoted the US Department of Agriculture as saying world output in 2015-16 declined by 1.6 per cent to 471 million tonnes, a second straight year of decline. El Nino was a major factor, causing smaller crops in many rice producing countries. Global consumption will meanwhile rise by 0.3 per cent to 484.2 million tonnes, making it the third consecutive year when consumption will exceed production, leading to a depletion of stockpiles. The USDA expects China's rice imports this year to equal that of last year at around five million tonnes. In the first quarter China was the biggest buyer of Vietnamese rice. The association is concerned that China may shift to buying rice from other regional countries due to rising prices in Viet Nam. The VFA expects exports to reach 3.01 million tonnes in the first half, a year-on-year increase of 12 per cent. Treasury offloads bonds for $336.3m The State Treasury sold G-bonds worth nearly VND7.5 trillion (US$336.3 million), or 73.2 per cent of the bonds offered on the primary market, between April 11 and 15. In the previous week, the winning rate of bonds offered on the primary market was 86.3 per cent, the bond auction's organiser, the Ha Noi Stock Exchange (HNX), said. The deals included three-year bonds worth VND3.9 trillion, five-year bonds amounting to VND2 trillion, VND303 billion-worth ten-year bonds and 15-year bonds-worth VNĐ1.237 trillion. The three-year bonds, the most attractive item at the auction, were all offloaded. Ninety five per cent of the 15-year bonds were also sold out, while the quantity of the five-year bonds and ten-year bonds sold was 50 per cent and 30 per cent, respectively. The annual coupon rate for ten-year bonds fell slightly by one basis point to 6.94 per cent, while yields for bonds of three years, five years and 15 years were unchanged at 5.55 per cent, 6.40 per cent and 7.65 per cent, respectively. In the primary market, as of April 15, the Government issued VND100.8 trillion-worth G-bonds and Government guaranteed bonds, including bonds worth more than VND87 trillion issued by the State Treasury, VND13 trillion-worth bonds issued by the Việt Nam Development Bank and bonds worth VND600 billion issued by the Bank for Social Policies. Meanwhile, the transaction liquidity on the secondary market improved, with an increase in transaction value of 27.5 per cent compared to last week's figure, to reach VND22.4 trillion. Each day, average trading reached VND4.5 trillion. Outright transactions accounted for 56 per cent, mainly on the three-year bonds, while the repo transactions accounted for 44 per cent. Foreign investors sold bonds worth VND31.4 billion in the week. On April 20, the treasury offloaded another VND9.8 trillion-worth of bonds, including three-year bonds-worth VND3.9 trillion, VND5.2 trillion-worth five-year bonds, VND691 billion-worth 15-year bonds and VND7 billion-worth 20-year bonds. Vinafor earns $11.03 million from IPO  The Viet Nam Forest Corporate (Vinafor) earned VND246.2 billion (US$11.03 million) from sales of more than 24.3 million shares at an initial public offering on April 21. The auction attracted 27 individuals and two institutions. Bid volume reached 12,250,000 shares, and the highest bid price was 17,200 VND per share, the auction organiser Ha Noi Stock Exchange said. The average sale price was 10,114 VND per share, 114 dong higher than the opening price. According to the company's equitisation plan, Vinafor will have charter capital of VND3.5 trillion, corresponding to 350 million shares. The State still holds a 51 per cent stake, strategic investors hold 140 million shares, or 40 per cent of charter capital, while other investors and staff employees hold the rest. Vinafor chose multi-industry investment firm T&T Group as its strategic shareholder. Established in 1995, Vinafor operates in planting, forest protection and forest product processing in Viet Nam. It is also involved in office leasing services. In 2015, the company reported revenues of VND1.2 trillion, an increase of 15 per cent over 2014. It also reported after-tax profits of VND159 billion. It operates in 12 cities and provinces with land 43,450ha, including in Ha Noi, HCM City, Hai Phong City and Binh Dinh Province. Vinafor has been constructing high-rise apartment blocks in the capital city's Ha Dong District and an office building in Quy Nhon City in Binh Dinh Province. The two projects will be completed in 2016 and 2017. FPT opens IT service centre in Da Nang FPT, a Viet Nam software giant, officially inaugurated the Information Technology (IT) Service Centre, FPT Complex, in Da Nang, providing office space for 3,200 IT employees in the first stage and 10,000 engineers in the second stage. It's the biggest IT service centre in the central region with an aim of contributing US$1 billion to FPT's software export revenue in 2020. The first stage of the 5.9ha complex was built with an investment of VND485 billion (US$23 million). It has been recognised as an environment friendly and energy-saving complex by the Ministry of Construction, with a solar-power heater system and a solar power generator. "It's a green and smart place for 10,000 employees and partners working together. The centre was a crucial step of our strategy in developing Da Nang as a smart city and a world IT centre," said FPT Chairman Truong Gia Binh. "Da Nang is seen as a young dynamic city with 60 per cent of its population of working age, and we have received positive support from the city's leadership in developing the project," Binh said. He said the operation of the FPT Complex would help develop the e-education system in the city in the near future. In the latest report from the city, FPT Da Nang, a company of FPT, contributed 37 per cent of the city's software export revenue in 2015 (US$50 million). According to FPT, the group has been developing offices, apartments, villas, lakes, parks, traffic and public entertainment centres and a FPT University in a ‘green' environment with standard waste water treatment, energy saving and renewal energy for both domestic and foreign IT employees and students. Last year, FPT Software in co-operation with Japanese partners debuted its 10,000-Bridge Software Engineer (BrSE) training programme to boost the Japanese IT market by 2020. FPT operates in 19 countries, has a labour force of 27,000 and a revenue of US$1.8 billion. FPT Software has officially signed a contract to provide Quang Ngai University of Finance and Accounting with Eduprove software. The software was originally named Uniprove, which was developed under the co-operation between FPT Software and Hitachi in 2012. It is a comprehensive university management support system provided by Hitachi to Japanese universities. It provides information management for students from entry to graduation and administrative support for teaching staff. Together, the two companies localised the programme into Viet Nam and changed the specifications in accordance with the Vietnamese university system to develop Eduprove. MobiiStar offers new smartphone with 21 megapixel camera Vietnamese mobilephone brand name MobiiStar officially announced the launching of new Prime X Max after a time delay for adjusting new camera software. This is the first medium-priced mobile phone in the world with a 21 megapixel camera with a Sony sensor on the chipset of Mediatek Helio P10, often used for luxury phones. The smartphone has internal memory of 32GB and 3GB RAM with fingerprint security. The first 300 customers who order Prime X Max from April 19 – 22 through website: http://giovang.mobiistar.vn will get a discount of VND1 million (US$45) for the VNĐ7 million ($315) smartphone. MobiFone launches store in Hai Phong MobiFone Telecommunications Corporation (MobiFone) opened its 10th retail store in the northern city of Hai Phong. The city is a potential market for the company to increase its market shares and customers, according to MobiFone. This was the result of a research process along with the corporation's long-term and strategic investment. Bui Son Nam, MobiFone deputy director general, said that with careful preparation and determination to bring customers diverse and comprehensive technology, MobiFone had been focusing on investing and developing a retail store chain to cover all parts of the country. Moreover, the corporation would also continue developing a retail store chain in the near future to serve and take care of customers more comprehensively, he added. The corporation launched its first equipment retail shop in HCM City in October last year, marking its move from a mobile network provider to a multi-service corporation. PIJICO to offer 20% of shares to investors Petrolimex Insurance Company (PJICO), code PGI, will issue 20 per cent of its shares to investors to raise its charter capital to VNĐ1 trillion (US$44.7 million), it was announced at the annual shareholders’ meeting on Thursday. Without revealing the names of the investors, general director of PJICO Đào Nam Hải said the firm was working with two foreign investors who paid attention to the stake, which would account for 17.7 million shares. After raising the capital, the dominant shares in Petrolimex will be reduced from over 51 per cent to 42.5 per cent. Hà Nội-based PJICO, serving the vehicle and asset insurance industry, reported VNĐ2.2 trillion in revenue last year, an increase of 5 per cent over 2014. It seeks another five per cent increase in revenues this year. On Thursday, each share rose 0.6 per cent to close at VNĐ15,500 on the HCM Stock Exchange. Circular tightens offshore borrowings A circular containing new regulations on offshore borrowing took effect on April 15, expanding the central bank’s control over offshore borrowings to short-term loans. Doan Tu Tich Phuoc, lawyer at Duy Long Legal LLC, provides some insight on the topic. On April 15, the State Bank of Vietnam’s Circular 03/2016/TT-NHNN (Circular 03) regulating offshore borrowing took effect with some last-minute changes. The new law was issued by the central bank on February 26, 2016 and supersedes the earlier circulars governing foreign borrowing without a government guarantee, namely Circular No.09/2004/TT-NHNN and Circular No.25/2014/TT-NHNN. Circular 03 was designed to strengthen the State Bank of Vietnam’s (SBV) control over the foreign exchange rate with a requirement for all offshore borrowings and repayments by corporate entities, including those for short-term loans, to be made through special accounts dedicated for such purposes (Offshore Loan Accounts (OLAs). However, Circular 03 could have significantly increased transaction costs for offshore borrowing and create a heavier burden on credit institutions. Due to these shortfalls, the SBV has just made an unprecedented decision to amend Circular 03 on its first day of implementation by Circular No.05/2016/TT-NHNN (Circular 05). Registration changes for medium- and long-term loans Circular 03, as amended, retains the requirements for registration of medium- and long-term loans at the SBV as set out under its previous incarnations, albeit with certain changes: - An electronic procedure has been introduced under which a borrower may opt to register for an online account at the SBV’s website for offshore loan registration and reporting purposes. Once the account registration is made, the borrower will no longer be able follow the traditional procedure before the SBV’s Department of Foreign Exchange Management. - Importing goods on deferred payment terms does not need to be registered at the SBV. However, this is still subject to the requirement on the opening and use of the foreign loan account as discussed below. The importer must fulfill its reporting obligation to the SBV, similar to any ordinary offshore borrower, and evidence of such reports must be presented for the purpose of loan repayment. - The SBV’s timeline in the processing of registration is shortened from 20 days to 15 for a paper-based application, and 12 days for an electronic one. In the case of an offshore loan made in VND that needs approval from the SBV governor, the procedure has been reduced to 45 days instead of the previous 60. - The procedure for registration of changes in an offshore loan is relaxed in certain situations where the change is deemed to be insignificant. If there is a change of the borrower’s trade name or its address within the province/city where the borrower is headquartered, or a change in details of a non-agent lender in a syndicated loan – in these cases only a written notification is required instead of a formal registration. Extended regulations to short-term borrowings and stricter regulations on use of OLAs Previously, the SBV only targeted long and medium borrowings with a term of more than one year by its registration regime. Following stricter requirements on use and management of OLAs, short-term borrowings have been for the first time brought under regulation. The term OLA was first introduced under Circular 25. However, no specific requirements for these accounts had been set out, except that foreign-invested companies must use their direct investment accounts for this purpose. Circular 03 now expressly requires that any disbursement and repayment of an offshore loan be made through an OLA. This requirement is applicable to all types of borrowings, including short-term ones. Circular 03 further provides that an OLA will be dedicated for the purpose of both disbursement and repayment (including reimbursement to a guarantor) of an offshore loan, as well as payment of transaction fees in relation to such a loan. This means that the borrower will need another account to transfer the disbursement fund for further use or for the repayment amount to be used as remittance to the lender. As a result, the borrower will see a significant increase in transaction costs, especially if it needs a large number of short-term loans during its daily operations. While a local borrower is allowed to open OLAs in more than one credit institution (thus minimising inter-bank transfers), the disadvantage to a foreign-invested company is obvious, since it may only use a single direct investment account for this purpose. Thanks to the last-minute amendment under Circular 05, a foreign-invested company may now use an OLA other than its Foreign Direct Investment (FDI) Account to conduct short-term borrowing activities. However, as long- or medium-term loans must still be disbursed and repaid through a single FDI Account, these companies will continue to suffer from the disadvantages of less flexibility and higher costs associated with the transactions. Credit institutions that provide OLA services may also find the new circular challenging to comply with, since it imposes additional duties on overseeing the offshore borrowing status of their clients other than periodic reports. For instance, Circular 03 provides that, for the purpose of repayment of a guaranteed offshore loan, the guarantor must submit written confirmation from the credit institution that hosts the relevant OLA of the borrower as evidence that the loan has not yet been repaid. Another provision stipulates the general obligation of a credit institution in disclosing details of any OLAs upon request, but not identifying from whom such a request may be made. This type of disclosure of a client’s information may not only be questionable under existing laws, but could also potentially conflict with the current internal rules of the institution. In conclusion, while a certain relaxation of procedures is notable under Circular 03, the general control of the SBV over offshore borrowing has been tightened, with an extension to short-term loans and an additional burden of compliance on credit institutions. This new circular may be necessary for the SBV given the current pressures on the country’s forex reserves. However, from a business standpoint, it may lead to a significant increase in transaction costs for borrowers. The SBV’s unprecedented move to amend Circular 03 with Circular 05 on the first day of the new circular’s implementation suggests that the regulations may need more time to be tested in practice. The issuance of Circular 05 with immediate effect is also questionable under existing procedural laws, which require a public consultation period of 60 days before and a rolling period of another 45 days after issuance. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR