BUSINESS IN BRIEF 5/4 Vietnam Airlines' rebranded offshoot set for first flight this summer A new joint-venture between national carrier Vietnam Airlines and partly-private lender Techcombank is expected to acquire a license in the second quarter to provide passenger and goods transport services. In a recent report to the government, the Ministry of Transport said it is considering a business plan put forward by SkyViet Aviation JSC. According to the plan, SkyViet, which was restructured from Vietnam Airlines' short-haul carrier Vietnam Air Services Company, or VASCO, will continue to operate a small fleet of ATR72 aircraft. Founded in 1987, VASCO now has a share of around 8 percent in Vietnam's domestic passenger air market. SkyViet will operate on short routes such as those linking Ho Chi Minh City and Con Dao Island off the southern province of Ba Ria-Vung Tau, and the southernmost province of Ca Mau. Vietnam Airlines owns a stake of 51% in SkyViet, while two Techcombank's subsidiaries Techcom Capital and Techcomdeveloper own the rest. With a registered capital of around VND300 billion (US$13.26 million), SkyViet is expected to generate revenue of VND2 trillion over the next three years. Besides SkyViet, Vietnam Airlines is also running low-cost carrier Jetstar Pacific, which controlled 14.9% of the market last year, in collaboration with Australian-owned Qantas. Early this week the transport ministry sought the government's permission to license military-run aviation company Vietstar to provide passenger and goods transport services. Vietnam's air market is forecast to see a rise of 19% to 45 million passengers this year, with the domestic sector accounting for more than 58 percent. Vietnam, Laos enhance financial cooperation Minister of Finance Dinh Tien Dung and his Lao counterpart Lien Thikeo signed a cooperation agreement between the two ministries for the 2016-2020 period in Vientiane on April 3. The document will orient bilateral collaboration activities, prioritising the completion of the Laos’s finance strategy, legal framework, institutional reform, training scheme for senior officials, and high-level delegation exchanges. It also covers investment in infrastructure and equipment for Laos’s training facilities. The cooperation between the Vietnamese and Lao finance ministries have reaped good outcomes over the past few years, particularly in the building of important financial laws for Laos such as the Law on Personal Income Tax, Law on Value-Added Tax, and Law on Management and Use of State Property, between 2011 and 2015. The Vietnamese side also helped its Lao counterpart to improve capacity of officials through a number of training courses on inspection, managerial and lecturing skills; and build infrastructure for financial training schools. The two sides regularly shared experience in tax, customs, and treasury from central to local level. The cooperation agreement was signed on the occasion of Minister Dung’s working visit to Laos to attend the 20 th ASEAN Finance Ministers’ Meeting. Bianchi, Dahon Folding bicycles hit Vietnamese market Top-notch bike distributor Velo Chic in Vietnam introduced renowned Italian Bianchi bicycles and US Dahon Folding bicycles to the market on April 3. Each brand will be sold from 8 million VND (358.8 USD) to over 15 million VND (672.8 USD), depending on each model. On the same day, the company added a new outlet at 511 Quang Trung Street, Ha Dong District, Hanoi, to its lineup. Bianchi’s official presence in Vietnam will allow customers to own genuine ones, said Tran Trong Quang, business director at the new outlet. Meanwhile, Dahon folding bikes will deliver convenience and great riding comfort to the users, Quang highlighted, adding that it only takes the owners only 15 seconds to metamorphose a bike into a compact block. Velo Chic, the only representative of leading bicycle company Cycleurope in Vietnam, has distributed high-end bikes in the country since 2013 with such famous brands as Peugeot, Puch, Definitive and Gitane. In the past two years, more than 3,000 bikes have been consumed in the Vietnamese market, which have received rapturous welcome from the users, Velo Chic’s representative said. Prospects for Ukraine-Vietnam cooperation stressed Cooperation is strategic to Ukraine and Vietnam, according to Yulia Kovaliv, Ukraine’s First Deputy Minister of Economic Development and Trade. Kovaliv, also Co-Chairperson of the Ukraine-Vietnam Intergovernmental Committee, said Ukraine will make the maximum effort to accelerate the two countries’ cooperation. She has recently granted an interview to the Vietnam News Agency speaking about the two countries’ cooperation prospects and Ukraine’s current economic performance. She said she pins her hope on the upcoming meeting of the Ukraine-Vietnam Intergovernmental Committee, which is within this year, expecting that a playing ground will be created for businesses of both sides. She named agriculture, energy, industry, aviation and machinery manufacturing as prioritised sectors for bilateral cooperation in 2016. In addition, transportation, infrastructure, science and technology, education and tourism are potential, the Ukrainian official said. Two-way trade between Ukraine and Vietnam reached 340 million USD in 2015, a decrease of 18 percent compared to 2014. Regarding Ukraine’s economic situation, the deputy minister said the country’s industrial growth increased 7 percent in February. In 2016, Ukraine’s GDP is expected to grow 1 percent and inflation rate is to go down to about 12 percent from over 40 percent in 2015. VietChallenge motivates startup spirit among youngsters A device which aligns and supports shoulders and spine to prevent backache and neck pains won the first prize of “VietChallenge”, the first global business idea contest for young Vietnamese. The winning Bifrost Biotech team took the 10,000 USD cash prize, which was presented at the final round held at the Massachusetts Institute of Technology (MIT) in the US’s Boston city on April 1. VietChallenge, organised by the Association of Vietnamese Students in the US, looks to nurture startup ideas among young Vietnamese around the world. The competition attracted 80 teams with about 300 young Vietnamese across the globe, including those from the US, France, Italy, Japan, and Vietnam. Addressing the event, Ambassador Nguyen Phuong Nga, Permanent Head of Vietnam's Mission to the UN, said that VietChallenge offers an ideal opportunity for young Vietnamese to introduce and realise their business ideas. It also instills a spirit of entrepreneurship that could help the homeland’s current modernisation process, the Ambassador said. Regional connectivity needed in economic restructuring Regional linkage in the economic restructuring and growth model shifting in Vietnam was spotlighted at a workshop in Hanoi, on April 3. Head of the Party Central Committee’s Economic Commission Vuong Dinh Hue said that the region economic and connectivity issues have received due attention from the Party and State since the 8th National Party Congress. A political report delivered at the 12th Party Congress in January stressed the need to promote each region’s potential and strengths with a priority to developing key economic areas to create motivation for others. Since 2000, the Government and Prime Minister have issued a lot of relevant documents and region-related issues have been included in socio-economic development orientations, economic restructuring and growth model shifting, Hue stated. Regional economic development has yet to be fully understood as a natural rule of the market economy and a foundation for sustainable socio-economic growth. Development gap between regions has yet to be narrowed, regional connectivity among cities and provinces remains weak, and value chains of intra-regional and inter-regional economic connectivity are still absent, he noted. Therefore, it is a must to clarify the role of the State in zoning and building development plans for economic regions, and discuss mechanisms and policies to address regional economic development-related issues in line with climate change adaptation and natural resources protection, he said. German Ambassador to Vietnam Carl Georg Christian Berger pointed out that strong regional coordination will help localities address issues out of their reach and contribute to the country’s socio-economic development. It is necessary to see the regional connectivity process as a chance for localities and regions to work together to boost economic development and protect the environment, he added. Victoria Kwakwa, World Bank Country Director for Vietnam, affirmed that the bank will collaborate with international organisations and the Vietnamese Government in promoting regional development and regional coordination in Vietnam. On this occasion, development partners in Vietnam had a joint statement backing an initiative to foster regional coordination in Vietnam initiated by the Party Central Committee’s Economic Commission and the Government. According to participating delegates, region-level urgent issues that cannot be handled by each locality include climate change and saltwater intrusion in the Mekong Delta, drought and water resources management in the Central Highlands, forest management in the northern region, and infrastructure upgrade and pollution and investment management in the western central region. They emphasised the need to build and issue a socio-economic development strategy for each region to make it a foundation for localities to build their own strategies. For key economic zones, participants proposed promulgating policies to boost competitiveness with economic centres in ASEAN, Asia and the whole world. Jointly held by the Party Central Committee’s Economic Commission, the German Embassy in Vietnam and the Coordination Committee for the Central Coastal Region, the event aimed to collect ideas and recommendations on regional economic and regional connectivity development to facilitate the implementation of the 12th National Party Congress resolution in the next five years. Private developers lead way in Vietnam Seven in 10 of the most prestigious property developers in Vietnam are private enterprises, with the top three being property developers with headquarters in Hanoi, the Vietnam Report has announced. According to the report carried out by the Vietnam Report Joint Stock Company from February 2015 to February 2016, the top 10 prestigious property developers were Vingroup Joint Stock Company, FLC Group Joint Stock Company, Hoa Phat Group JSC, Viglacera Corporation, Novaland Group, Ha Do Group, Urban Infrastructure Development Investment Corporation, Him Lam Corporation, Hoa Binh Company Limited, and Phu My Hung Development Corporation. The report also listed the top five prestigious real estate consulting and brokerage firms in 2016, led by well-known brokerage Dat Xanh Real Estate Service and Construction JSC. Following Vingroup on the list were Sai Gon Thuong Tin Real Estate Joint Stock Company and two FDI consulting companies CBRE Vietnam, and Savills Vietnam. Hai Phat Investment JSC is the only Hanoi–based company on the list. Vietnam Report also announced polling results of property enterprises on business prospects in 2016. All respondents said that 2016 revenue would be higher than 2015. Eighty-three percent expected revenue to increase sharply in 2016, and the remaining 17 percent only a little. The Vietnam Report is an independent research report, developed based on scientific and objective principles. Companies are evaluated and ranked based on criteria of finance and media reliability. Data on project numbers, progress, rate of successful transactions, price of sales, and others, were used as complementary elements. “Companies named on the lists all have stable financial capability, have development and business experience, and have made great contributions to general development of the entire Vietnam’s real estate sector,” the report said. HCM City needs green growth: experts Achieving growth while also safeguarding the environment is a challenge that Ho Chi Minh City faces, experts admitted at a recent conference on green growth held in the city. Nguyen Thị Thanh My, deputy director of the city Department of Natural Resources and Environment, said since the city plays a key role in the economic development of the southern region, its desire for economic growth is reasonable. But it must focus on green development, which needs co-operation between society, authorities, enterprises and consumers, she said. Le Van Khoa of HCM City’s University of Technologies said non-sustainable production and consumption in developed countries had had serious consequences for the environment, and that was why they are making efforts to achieve green development. Many companies do not bother with waste treatment and fail to invest in modern technologies and materials that are friendly to the environment. All 14 processing and industrial zones in HCM City have invested in wastewater treatment, but a closer examination found that the treatment at some zones failed to meet standards. Besides, many plants in these zones emit waste, harmful particles and bad odours, he said, with 35 percent of all enterprises violating wastewater and particle emission regulations. He blamed the problem on the low awareness of the companies’ bosses and their resultant ignorance about environmental protection. Moreover, since green development was expensive, not all companies can afford it, he admitted. Nguyen Van Minh, director of the green development at the Vietnam Dairy Products Joint Stock Company (Vinamilk), said since it began investing in sustainable development, the company’s costs have increased by 30 percent. But it is inescapable since Vietnam has become a member of many free trade agreements and pledged to protect the environment, which would help Vietnamese products enter the international market, he said. At the conference, the department introduced the city’s environment protection foundation, which offers companies credit at preferential rates to invest in green growth. Hanoi hosts CEO Forum 2016 Representatives of more than 300 Vietnamese enterprises participated in Việt Nam CEO Forum 2016, entitled “Boosting Strengths for Businesses in global integration”, held in Hà Nội on April 1. The event brought together the CEOs of numerous local and foreign firms, economic experts and policymakers, who shared their practical experience in cross-border business and penetrating new markets. Key issues discussed during the forum included identifying businesses’ strengths and weaknesses, updating businesses on integration opportunities and challenges, and helping them learn from domestic and foreign firms so they could enter overseas markets after establishing a strong position in their local markets. In addition, the impact of the government’s policies in improving the business environment, controlling inflation and maintaining stable interest rates for enterprises, as well as evaluating business performance, were also topics addressed by the forum’s participants. In his speech, Director of the Việt Nam Economics Institute Trần Đình Thiên said Việt Nam’s economy showed many positive signs during the last year, but there were still urgent and long-term problems, adding that the government, as well as the business community, had to conduct comprehensive preparations to enlarge the nation’s business life. “Enterprises have to try their best to enhance their competitiveness so they can be completely confident in their abilities when they are integrating deeper into the international market,” Thiên said. The government needs to create a positive and transparent business environment for local enterprises, nurture their passions, and encourage and promote their entrepreneurial spirits, according to Trần Du Lịch, a member of the Economic Commission of the Việt Nam National Assembly. Further, Hoa Sen Group Chairman Lê Phước Vũ said international integration created competitive pressures, forcing companies to become more innovative. However, he added, the economy was becoming unbalanced due to the uneven development between the two blocks of FDI and domestic enterprises, noting that the government should formulate policies that more effectively support domestic enterprises. For his part, Lê Khắc Hiệp, deputy chairman of Vingroup, said local firms should not be nervous about the penetration of foreign companies into the local market. “Vietnamese enterprises have their own strengths, and competition helps them grow,” Hiệp said. The Việt Nam CEO Forum was first held in 2012, and 2016 is its 5th year of operation. Despite being newly founded, the forum has become the most anticipated event by CEOs across Việt Nam, attracting special attention from policymakers, economic experts and media, with its sharp and up-to-the-minute discussions about key issues faced by businesses, as well as Việt Nam’s economy. VN needs clearer windpower laws: conference Delegates at a workshop asked for more specific procedures for small wind power projects, longer validity for investment and generation licences, and a stricter Standard Power Purchase Agreement (SPPA) from Việt Nam Electricity (EVN). These were among the petitions related to administrative procedures that were raised at a validation workshop held last Friday in HCM City. The aim of the workshop was to create more opportunities for further wind power. The Validation Workshop on “Wind Power Investment Guidelines” was co-hosted by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH in Việt Nam and the General Directorate of Energy (GDE) under the Ministry of Industry and Trade (MOIT) in Viet Nam. Aurelien Agut, a GIZ consultant, said that interest to invest in small wind turbines was strong, but there were no clear regulations on the import of small turbines as well as on relevant procedures. In addition, the timeline of three years for the Decision on Investment is too short and could create risks and unnecessary additional adjustments in administration, leading to more work for authorities as well as the project developer, he said. “The generation licence has a validity of 10 years,” Agut said. “However, the standard lifetime of a wind farm is 20 years. This brings regulatory risk for wind farm developers.” Agut identified several problems in the current Standard Power Purchase Agreement from EVN, including dispatch risk, foreign exchange, and changes in law and tax. “The EVN  SPPA  template  does  not  provide  the  developer  with  comfort  that  the  offtaker will  pay in circumstances of curtailment,” Agut said. “And investors  expect  the  SPPA  price  to  be  denominated  in  an international  reserve currency or linked to the currency of the developer’s debt.” The EVN SPPA requires the tariff to be denominated in đồng. In addition, SPPA should clearly define risk allocation for changes in laws or taxes that would affect the project cash flow. “Reducing the developer’s exposure to this risk is often seen as particularly important in circumstances with public sector offtakers like EVN,” he added. The EVN SPPA should define the acceptable circumstances and process for termination, and allow for assignment under the collateral agreements, he said. Agut also pointed out that the regulation on decommissioning at the end of the life time of the project was not clearly defined. The workshop presented the wind power project development phases and a first version of the study on Wind Power Investment Guidelines to the private as well as public sector. GIZ has been working in close cooperation with the Clean Technology Innovation Private Finance Advisory Network on “Wind Power Investment Guidelines for Project Development and Project Financing”. The guidelines aim to provide more transparency and clarity on the different development phases of a wind project in Việt Nam. They are also expected to bring clarity on the different financing possibilities and schemes for wind power under the current regulatory framework, and provide an opportunity for public authorities at the provincial level to gain understanding of the process. The Validation Workshop targeted senior officials from relevant ministries, including the Ministry of Industry and Trade and Ministry of Planning and Investment and relevant provincial departments of southern provinces including the Department of Natural Resources and Environment, Department of Planning and Investment, Department of Industry and Trade as well as the private sector. The workshop is part of the MOIT/GIZ Energy Support Programme under the German Technical Development Cooperation project ”Support for the Up-Scaling of Wind Power” (DKTI Wind Project). The aim is to assist the Vietnamese Government to develop and utilise wind energy for socio-economic development. The project, with a total budget of EUR 6.9 million, was commissioned by the Federal Ministry of Economic Development and Cooperation (BMZ) under the German Climate Technology Initiative (DKTI). Estimations from an existing 2011 wind atlas cite around 24 GW of potential in Việt Nam. According to the revised Power Development Plan VII, the installed capacity of wind power would be raised to 800 MW by 2020 and 6,000 MW by 2030. Despite promising wind resources, only 114 MW of wind power farms are operational due to a number of regulatory and market barriers as well as capacity. Brands aim to boost name ahead of TPP Product quality and brand names are two key requirements for Vietnamese companies to compete when the Trans-Pacific Partnership (TPP) is enforced, a conference heard in HCM City yesterday. Speaking at a conference held to connect companies in TPP member countries by the HCM City Enterprise Association, deputy chairman of the business group, Phạm Ngọc Hưng, said the TPP would make competition tough in the domestic market when products from many countries are imported cheaply. With a small domestic market, Vietnamese companies should therefore find ways to enter other member countries. To compete there, quality and service must be the first priority, he added. Many companies do not yet focus on quality, he warned. Besides quality, they also need to focus on developing brand names, he said. Vietnamese companies should establish links among themselves to exchange information about foreign markets and their regulations. Discussing ways to obtain information about companies and products, the conference heard that an online database where companies can share information about themselves is required. Minh Phạm, director of Minh Phạm and Brothers Company, said exporters often need to open an office in foreign countries, which is a big challenge for Vietnamese companies, especially small and medium-sized enterprises, due to the high costs involved. In Việt Nam, a website called www.nocndeal.com has been set up for companies to upload information about themselves so that prospective partners can find them. An association spokesperson said the website would be promoted in the future among companies in the city and elsewhere in the country. Need for regional links highlighted at conference Regional connectivity amid economic restructuring and a shifting growth model in Việt Nam was in the spotlight at a workshop in Hanoi yesterday. Head of the Party Central Committee’s Economic Commission Vương Đình Huệ said that the regional economic and connectivity issues received due attention from the Party and State since the 8th National Party Congress. A report delivered at the 12th Party Congress in January stressed the need to promote each region’s potential with developing key economic areas a priority. Since 2000, the Government and Prime Minister have issued many relevant documents and region-related issues have been included in socio-economic development orientations, economic restructuring and growth model shifting, Huệ stated. Regional economic development has yet to fully use the market economy as a foundation for sustainable socio-economic growth. Development gaps between regions have yet to be narrowed, regional connectivity among cities and provinces remains weak and value chains of intra-regional and inter-regional economic connectivity are still absent. It is a must to clarify the role of the State in zoning and building development plans for economic regions and discuss mechanisms and policies to address regional economic development-related issues, according to Huệ. German Ambassador to Việt Nam Carl Georg Christian Berger pointed out that strong regional co-ordination will help localities address issues and contribute to socio-economic development. Victoria Kwakwa, World Bank Country Director for Việt Nam, said that the bank would collaborate with international organisations and the Vietnamese Government in promoting regional development and co-ordination in Việt Nam. Development partners in Vietnam released a joint statement backing an initiative to foster regional co-ordination in Việt Nam initiated by the Party Central Committee’s Economic Commission and the Government. According to participating delegates, region-level urgent issues that cannot be handled by one locality include climate change and saltwater intrusion in the Mekong Delta, drought and water resources management in the Central Highlands, forest management in the northern region and infrastructure upgrade and pollution and investment management in the western central region. They emphasised the need to build and issue a socio-economic development strategy for each region. For key economic zones, participants proposed promulgating policies to boost competitiveness with economic centres in ASEAN, Asia and the world. Held by the Party Central Committee’s Economic Commission, the German Embassy in Việt Nam and the Coordination Committee for the Central Coastal Region, the event aimed to collect ideas on regional economic and regional connectivity development to facilitate the implementation of the 12th National Party Congress resolution in the next five years. MSN won’t pay dividend again Masan Group Corporation (MSN) posted better revenue and profits but decided not to pay dividends for 2015 at the annual general shareholder meeting in HCM City yesterday. MSN announced net sales of VNĐ30.6 trillion (US$1.37 billion) and a profit after tax of nearly VNĐ1.5 trillion, an increase of 90 per cent and 37 per cent respectively from 2014. It clarified that of the total sale, Masan Nutri-Science (including Anco and Proconco) contributed VNĐ14 trillion. Masan holds 75.2 per cent of stake in animal feed producer Proconco and 70 per cent of stake of International Agriculture Nutrition JSC Anco. The food and beverage segment contributed VNĐ13.9 trillion with the strong growth of coffee and beer products. The mineral mining and processing segment contributed VNĐ2.65 trillion, down six per cent from 2014 as the prices of Tungsten fell 38 per cent last year. Techcombank, a member of the group has reduced the non-performing loan ratio to below 1.5 per cent from the past year and recorded an increase of 43.8 per cent in profit before tax. This year, Masan planned a net sale of VNĐ42 trillion to VNĐ45 trillion, as much as an increase of between 37 and 47 per cent from 2015. It also planned a profit after tax of VNĐ1.9 trillion to VNĐ2 trillion, or 29 to 35 per cent up over 2015. MSN chairman Nguyễn Đăng Quang said the recent investment in meat producer Vissan of Masan Nutri Science would shorten the group’s tour to complete the close chain from animal protein, livestock husbandary and food products. While posing better revenues and profits, MNS decided not to pay the dividend for 2015, just as they decided for the previous seven years. Chairman Quang said the group had more than $1 billion in cash that can make up the strength of the group in its high-return investment. He said MSN would not pay the dividend this year as it still needed capital for further development and investment. However, MSN issued 10 million shares of ESOP for employees at a price of VNĐ10,000 each. The ESOP would help employees to stay and contribute for the group. At the meeting MSN also announced it would issue nine million shares for Jade Dragon (Mauritius Limited) - JDML or its associated company based on the convertible loan between 2016 and 2017. Chubb Life name launched in Vietnam Chubb today announced the official name change of its life insurance subsidiary in Vietnam from ACE Life to Chubb Life. The new name will not affect the company’s business operation in the marketplace, and all rights and obligations between existing clients and business partners with ACE Life remain fully intact under Vietnam laws and regulations. The company’s new name in Vietnam follows ACE Limited’s acquisition of The Chubb Corporation that was completed on January 14, 2016, creating a global insurance leader operating in 54 countries under the renowned Chubb name.  The new company combines Chubb, a venerable U.S.-based insurer with over 130 years of history, and ACE, a global leader known for its underwriting excellence and global presence.  The new Chubb is the world’s largest publicly traded property and casualty insurer. “With ACE’s acquisition of Chubb globally, 2016 marks a significant milestone for us in Vietnam and around the world.  Our name is new, but our commitment remains the same - to provide our customers, business partners, employees and other stakeholders with superior quality and service that both ACE and Chubb have developed over many years,” Lam Hai Tuan, chairman and country president of Chubb Life in Vietnam, said. “The new Chubb is defined by superior underwriting, service and execution. Together, these three elements form the basis for what we believe is superior insurance craftsmanship.” “The company is also distinguished by its extensive product and service offerings, broad distribution capabilities, exceptional financial strength, superior claims handling expertise and local operations globally,” he said. Beginning today, people in Vietnam will see the company’s new and colourful brand identity.  The new logo is a simple expression of the Chubb name – a clear, refined, modern expression of Chubb.  To balance the simplicity of the logo, the company has chosen an ‘out-of-the-box’ approach by using nine colors to represent the new Chubb brand, reflecting the diversity and energy of its culture, thinking, global presence, the many different customers it serves and the many products it offers.  All this will be backed by the company’s ‘signature’ – “Chubb. Insured.” - a mark of craftsmanship. “We look forward to focusing on the craft of insurance to deliver unmatched quality and service to customers and distribution partners.  Leveraging outstanding resources from our parent company and our local expertise and presence, Chubb Life in Vietnam expects to achieve continued success on its journey ‘From Good to Great’,” Lam said. National park manager unveils plan to build $45mn safari in Vietnam’s Central Highlands A multimillion-dollar safari park is poised to be set up in the Central Highlands province of Lam Dong, the project developer, a national park management board and a travel firm, revealed on Friday. The 490 hectare wildlife park, named Highland Safari, is expected to be located in Lac Duong District, Le Van Huong, director of the Bidoup – Nui Ba National Park, said at a meeting that set duties for its 2016 plan. Bidoup – Nui Ba will team up with Dalat Tourist to develop the VND1 trillion ($44.64 million) facility, VND350 billion ($15.63 million) of which is funded by the government, according to the national park director. The zoo will be zoned inside a protection forest in Lat Commune, and is slated for completion by 2020, Huong said. Highland Safari will be a sanctuary for wild animals that can live well in the climate of Vietnam’s Central Highlands, according to the developer. The zoo will be developed as a semi-wildlife park, in which the animals will live in the forests but under the care of humans. The developer has received an in-principle approval to implement the project from the Lam Dong administration. They have also hired consultant groups from Austria and Singapore to study the terrain, environment, and the status of rare animals in Lam Dong, as well as taking reference from major safari zoos around the world to build ideas for the Highland Safari. The Ministry of Planning and Investment has also agreed to finance the project. Once open, Highland Safari is expected to receive some 1.2 million visitors on an annual basis, raking in around VND300 billion ($13.39 million) in annual revenue. Doan Van Viet, chairman of Lam Dong administration, showed support to the project at the Friday’s meeting. “Safari is a new product that will appeal to tourists in many other places, and it is also suitable with the local ecosystem,” he said. Last Christmas, a safari zoo, considered the first of its kind in Vietnam, was inaugurated in the southern island of Phu Quoc. The Vinpearl Safari phase one spans 380 hectares, and is comparable to major parks of its kind in Asia, according to its developer, Vietnamese realty conglomerate Vingroup. Samsung licensed despite concerns South Korean tech giant Samsung Group’s recent investment certificate for a large-scale research and development centre in Hanoi has been met with mixed sentiments as many believe that the company’s investment demands may outweigh the benefits to Vietnam. This $300-million project, which would be Vietnam’s largest ever research and development (R&D) centre, also marks the first time a global tech giant has chosen Vietnam as an R&D hub. Foreign tech firms such as Bosch, HP, Intel, and Samsung have previously funnelled considerable funds into R&D activities in Vietnam. These investments, however, are project components – not independent projects as is Samsung case. Once completed, the 116,000-square metre R&D centre will consist of 21 stories, as well as two basements, and is set to start operations in the first half of 2020, employing a workforce of about 4,000. A Samsung Electronics Vietnam (SEV) representative said that the project may begin construction late this year, in accordance with Korean quality standards. Despite the benefits that this centre will engender in terms of employment and raising the profile of Vietnam as an R&D hub, recent media reports have questioned what long-term gains Vietnam will enjoy from it. This suspicious interpretation of the project is due, at least in part, to the 12 demands that the Korean tech giant presented to the Vietnamese government before it would invest in the project. Some include land rent exemption for 50 years; tax exemption for machinery and equipment imports, building materials, and facilities serving R&D activities, and the right to transfer assets established on site, as well as granting land use rights to other parties without any limitations, provided that there is a reasonable cause. However, Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises, noted that interpreting Samsung’s proposals as “demands” is somewhat unfair as many of the proposals are already enshrined in current Vietnamese laws, including the transfer of assets established on site and land use rights for another party. “For every investor, the more incentives they are given the better. Their proposals and what we can accept are two different stories. Saying that Samsung has demanded too much would be unfair,” Mai commented. Mai, a noted economist, cited a previous example concerning US chip-making giant Intel. He noted that before it would invest in Vietnam, the company presented the Vietnamese government with a list of 28 “demands”. The Vietnamese government accepted 22 of its demands, including the provision of financial support for the project, which is still an unprecedented privilege enjoyed by any foreign investor. Mai said that this decision was justified because “at that time Intel’s arrival was of great importance to help Vietnam appeal to other global players”. Indeed, a raft of global tech giants followed in Intel’s footsteps, including Samsung, LG, and Microsoft. “The Vietnamese government has poured a lot of money into building national R&D centres which have generated below-expected results. Now, Samsung willingly brings $300 million into Vietnam, then recruits and trains 4,000 hi-tech staff members. This alone is encouraging and worth the high incentives,” Mai added. Nippon Sheet Glass to suspend production of display in Vietnam starting May Japanese glass producer Nippon Sheet Glass (NSG) will suspend production of thin flat glass for display in Vietnam temporarily starting in May, according to a press release posted on the company’s website. According to the release, this is an exit from loss-making businesses, “thus minimising losses, aiming to swiftly eliminate obstacles to a further recovery in [NSG]’s performance.” The timing for restarting this line will be decided, assessing the market situation, inventory levels, and other relevant factors. The group currently operates two thin glass float lines: one in Japan and the other in Vietnam. Of these, the line in Vietnam is operated by wholly-owned subsidiary NSG Vietnam Glass Industries Limited (VGI) in the southern province of Ba Ria-Vung Tau’s My Xuan A industrial park. The company started operation of the $123 million production line in June 2014. Alongside the thin float glass line, VGI also operates another float glass line for thin film solar products. The line will continue to operate, with no impact on production or sales. NSG operates in architectural, automotive and technical glass. As part of the technical glass business, NSG supplies ultra thin glass for small LCD applications. Its ultra-fine flat glass products are used in touch panel, computers and mobile devices. For the fiscal year 2016, which started on April 1, 2015 and ended on March 31, 2016, NSG expects a group net loss of ¥50 billion ($445 million), far deeper than its previously projected ¥7.5 billion ($67.2 million) loss. Last August, Samsung announced an additional $3 billion investment in its display business in Vietnam, bringing its total investment in this business to $4 billion. FIEs disregard Vietnam’s economic concerns Almost 67 per cent of foreign invested enterprises (FIEs) in Vietnam are operating in low-value manufacturing sectors with out-dated machinery, which is a major reason for the severe pollution problems the country is facing. This was the opinion of experts at the conference on decreasing the environmental impacts of FIEs in Vietnam, organised by the Central Institute for Economic Management (CIEM) on March 30 in Hanoi, according to newswire Dantri.com. Nguyen Thi Tue Anh, CIEM’s deputy director, noted that during inspections between 2011 and 2015, more and more FIEs were detected to have out-dated machinery, most of which operated exclusively in the textile and garment, chemistry, electronics, and footwear sectors. Notably, as of 2013, only 5 per cent of FIEs used high-technology, 80 per cent used medium-tech, and 15 per cent used out-dated machinery. Besides, from 1998 to 2013, there were only 28 wastewater treatment projects among the 1,600 foreign-invested projects in Vietnam, equalling 0.2 per cent of the total number. It shows the contradiction in FIEs’ commitment to invest in modern technology lines in Vietnam. Numerous industrial parks (IPs) have yet to either build wastewater treatment systems or connect to the available facilities, according to CIEM’s documents. Especially, in the Mekong River Delta region, 75 per cent of IPs and 85 per cent of industrial clusters lack sufficient wastewater treatment systems. Recently, authorities detected a series of environmental violations at a number of FIEs. Notably, on January 8, on an unannounced inspection the police detected that Chinese company Pou Hung Vietnam Co., Ltd. in Tay Ninh province discharged wastewater directly into Ben Dinh canal, leading to severe pollution. The canal is directly linked to the Vam Co Dong River, exacerbating the danger and magnitude of the damage. Notably, the company’s wastewater pipe is connected to the conduits of 15 workshops’ rain-water pipes to discharge wastewater directly into the canal. In 2015, hundreds of households living in the central province of Quang Nam’s Nui Thanh district complained that their daily life was affected by environmental pollution caused by Chu Lai SODA Processing Joint Stock Company. The company discharged coal and black carbon, both substances being banned by regulations, into the environment. Along with violations of the discharging process guidelines, the company failed to build appropriate wastewater and solid waste treatment facilities. Phong Phu-Daewon-Thu Duc starts construction of Green Pearl residential project Phong Phu-Daewon-Thu Duc Housing Development JSC on April 2 started construction of the Green Pearl project in Hai Ba Trung district of Hanoi. The project has total area of 2.8 hectares, a building density of 37.31 per cent, and includes apartments, shophouses, villas, a kindergarten and an area of services. The 504 apartments are going to have areas of between 71.4 square metres and 114.6 square metres each, with three bedrooms. The 41 shophouses are going to have areas of between 70.9 square metres and 166.4 square metres. The 20 villas are going to have areas of between 165.4 square metres and 324.8 square metres. Saigon-Hanoi Commercial Joint Stock Bank is going to provide finance for the project and for homebuyers. “Green Pearl marks a new step in the development of Phong Phu-Daewon-Thu Duc,” said Le Chi Hieu, chairman of the company, emphasising the project’s prime location in the middle of the city, close to major schools, hospitals and malls. Phong Phu-Daewon-Thu Duc is the joint venture between garment producer Phong Phu Corporation which produces fibre, fabric, towels and clothes. Developer Daewon-Thu Duc. Daewon-Thu Duc has developed six office and apartments projects including Cantavil Premier and Cantavil An Phu in District 2 of Ho Chi Minh City and Cantavil Long Hai in the southern province of Ba Ria-Vung Tau. Perfect or nothing unseemly demands slow progress Vietnam may have such high ambitions with each of its IT projects that it may well delay the country’s realisation of its desired goals. According to FPT Information System’s general director Pham Minh Tuan, based on FPT’s practical experience in developing so-called smart cities, through the Internet of Things (IoT), the drawbacks in any given IT projects come down to the budget, executive determination, implementation methods, communications management, and human resources. The implementation method, in particular, is arresting the country’s IT development at present, said Tuan. “IT contractors around the world generally praise Vietnamese people for being clever. And yet because we are clever, we often come up with unusual ideas or requests, which can be complicated or rather different from the rest of the world, to actually put into practice,” said Tuan, during an interview following the conference on the Vietnam Digital Government 2016, organised by the Hanoi Department of Information and Communications and IDG Vietnam last week. “It could therefore take twice as long to implement an IT project in Vietnam than in other countries,” he stressed, citing that while it took FPT a total of eight years to implement a budget management system for the nation, it only took 16 months to put the exact same system into practice in Cambodia. “Also, it merely took a year for us to execute a tax system for Bangladesh.” Tuan said that these countries were willing to follow the world’s best practice, and they made no attempts to innovate, which cut short the implementation process. In addition, Vietnam is also acting as a perfectionist, in a sense that it always desires to perfectly downsize each IT project, which in turn leaves the country struggling to come up with ideal solutions. “What is actually needed the most is really putting each project into practice,” Tuan said. By developing digital government (eGov), for instance, enables the government to improve its management, administration, and services through the effective application of information technology. While IT applications can obviously do their job and meet perhaps 50-60 per cent of the government’s requirements at first, local authorities, on the other hand, expect the new system to work seamlessly at once. “And because the system cannot meet their full anticipation in one go, they will not even try to apply the technology,” he shared. “For any technology employed around the world, it normally takes four or five years to see tangible results or fine-tune it to fully meet the desired expectations. Vietnam should not rush the end results.” The development trail of IT applications in Vietnam’s e-government has in fact faced numerous challenges from an undeveloped IT infrastructure and implementation methods. In 2015, Vietnam was ranked as the 102nd in the ICT Development Index of International Telecommunications Union, falling behind its 94th spot attained in 2014. IT applications in the operation of local government organisations is urgent in the sense that Vietnam has started to integrate deeply into the global economy. The country, as such, must put up its eGov as quickly as possible. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR