BUSINESS IN BRIEF 10/5 HCMC Customs Dept collects VND 150bln after customs clearance The Ho Chi Minh City Customs Department said at the beginning of 2016, the department founded & collected over VND 150billion from checking after customs clearance. Of these, H.Vietnam Co.Ltd was collected taxes worth up to VND 5.2billion; a FDI Company specializing in cosmetic production was collected over VND 3.2billion due to making wrong tax rate & tax code… In 2015 alone, the department’s tax collection sent to the city’s budget over VND 600billion, an increase of 3 fold compared to 2014. In 2016, the department planned to collect an increase of VND 700billion against the same period last year from checking after customs clearance. It will focus on checking import customs declaration within 60 days after customs clearance. FPT earns 384 million USD in first quarter of this year Vietnam’s giant software FPT earned revenue of 8.56 trillion VND (384.4 million USD) in the first quarter of this year, exceeding its target. Profit before tax was 563 billion VND, 10 percent higher than targeted. Profit after tax was 346 billion VND, or 104 percent of the target, while earnings per share stood at 870 VND (0.039 USD), or 104 percent of the target. While revenue and profit results all exceeded the year-to-date target they are lower than last year due to greater investments in telecom infrastructure and saturation in the domestic market. The company expects that from the third quarter investment in telecom infrastructure will be lower and domestic-related segments, including software solutions, systems integration and IT services will record higher revenue.- 80 businesses granted with quality awards Eighty businesses were honoured with the 2015 National Quality Awards and Global Performance Excellence Awards (GPEA) at a ceremony held in Hanoi on May 8. Among the winners, 20 received National Quality Gold Awards while 57 took silver, according to Deputy Minister of Science and Technology Tran Viet Thanh. The GPEA went to Thien Long Group from Ho Chi Minh City, the National Oil Services JSC of Vietnam (OSCVN) in Ba Ria – Vung Tau province and Nam Duoc Ltd., Co. in Nam Dinh province, he announced. He said 2015 was the 15th year Vietnam has engaged in the GPEA and to date 37 Vietnamese businesses have won this international award. Launched in 1996, the annual National Quality Awards serve as an effective tool for companies to evaluate their operational efficiency and management to increase productivity, goods and service quality, and competitiveness. Over the past 20 years, as many as 1,690 businesses have been presented with the awards, including 188 winners of gold prizes. The granting ceremony forms part of activities to celebrate the Vietnam Science and Technology Day which falls on May 18. Fiber factory to be built in HCM City The Viet Nam National Textile and Garment Group (Vinatex) plans to build a garment and fiber factory in HCM City's rural district of Can Gio in an effort to reduce the poverty rate. The plan to build a factory employing 2,000 workers was approved by Dinh La Thang, secretary of HCM City's Party Committee, who met with Vinatex's leader on Friday. Up to 44 per cent of households in Can Gio live under the poverty line, Thang said. The garment factory would be a short-term solution to alleviate the poverty rate in the district, he said. The factory is expected to offer 2,000 jobs, with priority given to local residents, according to Le Tien Truong, general director of Vinatex. Thang asked Vinatex and leaders of Can Gio to promptly complete necessary procedures for the project. Export garment producers see decline in orders  Producers of export quality garments are facing a reduction in orders, according to the Viet Nam Textile and Apparel Association (VITAS). Vu Duc Giang, VITAS chairman, said they were considering moving export garment orders from Viet Nam to Cambodia, Laos, and Myanmar, because customers of those countries would join the preferential export tax when exporting to the United States (US) and Europe. Meanwhile, the Trans-Pacific Partnership Agreement (TPP) and Viet Nam-European Free Trade Agreement have not yet come into effect. Therefore, partners of Viet Nam's export garment producers could not join any preferential tax regime from those agreements. According to the General Department of Customs, Viet Nam gained a year-on-year growth in export values of garments at 7 per cent to US$7 billion in the first four months of this year, lower than the expected rate of 10 per cent. Import of materials for export garment production dropped in four months. Hoang Trong Khang, deputy head of the import and export division at the Viet An Joint Stock Company specialising in garment exports to the US, European Union (EU) and South Korea, said the company saw reduction in exports to some major markets, including South Korea. In fact, export orders for production in the second and third quarters have reduced by 5 per cent to 7 per cent against the same period last year, according to the association. The local enterprises were worried about the ability to move export orders of traditional customers to other regional countries in the second and third quarter. That situation would affect exports of enterprises as well as the garment industry. To take more export orders and set up professional production and business activities, the Viet Nam Textile and Garment Group (Vinatex) has developed Vinatex International Joint Stock Company (VTJ) and the Supply Chain Development Center (SCDC). The two businesses would combine and support member companies of Vinatex to exploit and expand the export market, seek customers and develop a supply chain from material to finished products, Tran Quang Nghi, Vinatex chairman, said. So far, the SCDC has had eight regular customers for garment products and been developing 20 customers in the US, the Europe, South Korea and Japan. The centre has had 10 customers for cotton and fibre and has been developing 30 customers of the products in Chile, China, Thailand, and Malaysia, in addition to South Korea. VTJ has had 10 customers and it has concentrated on the US and Japan markets with large export volumes. Viet Nam expected to gain total export value of $30 billion for this whole year, which is $3 billion more than in 2015. Petrol makers, distributors want more State support E5 petrol producers and distributors need more State support to sell the product on the local market due to the numerous difficulties they face, the Viet Nam Petroleum Association said. The E5 grade bio-fuel, which comprises 5 per cent ethanol and 95 per cent petrol, was scheduled to replace RON 92 petrol at all petrol stations in eight major provinces and cities on June 1, 2016, including Ha Noi, Hai Phong, Da Nang and Quang Nam, as well as Quang Ngai, HCM City, Can Tho and Ba Ria Vung Tau. Meanwhile, 50 per cent of the petrol stations in other centrally-controlled cities and provinces will sell E5 petrol. Recently, the Ministry of Finance produced a draft resolution on amending and adding some regulations to Circular 39/2014/TTLT-BCT-CTC on using the petrol stabilisation fund and managing petrol prices on the local market. The draft has proposed a specific calculation for the selling price of E5 petrol, with a lower input price than that of other kinds of petrol, to create favourable conditions for selling that petrol on the market. However, Phan The Rue, chairman of the association, said enterprises producing and distributing E5 petrol still face many difficulties in trading the bio petrol, noting that they needed more support from the State to successfully increase the market share of bio-petrol. To achieve this target, the State must re-organise the ethanol production system to reduce production costs and meet the demand for ethanol from bio-petrol processors, Rue said. At present, Viet Nam has 10 factories that produce ethanol and mix E5 petrol, but many of them have halted or temporarily stopped production. He said the State should have policies in place to resume the development of regions that grow cassava, a raw material used to produce ethanol, to meet the demand for ethanol. In addition, the State should adopt a policy to further reduce the price of E5 petrol to encourage local consumers to buy it, he said. At present, the price of E5 petrol is VND500 per litre lower than the price of RON 92, but the gap should increase from VND500 to VND900-VND1,000, reported vietnamplus.vn. Meanwhile, to sell E5 petrol, the traders must absorb high costs in building the infrastructure to store and sell petrol, such as petrol tanks and pumps, leading to increased production and land allotments, he said. The increased real estate needed for selling petrol is a problem in large cities. Thus, to successfully sell E5 petrol on the local market, the State should support enterprises in building facilities for mixing and selling bio-petrol and petrol stations for selling E5 petrol and should create favourable conditions for them to acquire land to build the necessary infrastructure, he said. National Quality Awards presented Seventy-seven domestic enterprises yesterday were granted the National Quality Award 2015, the country's only prize to recognise outstanding enterprises regarding their product quality and performances. Twenty companies were awarded the golden triumphs while another 57 received the silver prize in a ceremony held by the Ministry of Science and Technology (MoST) yesterday morning in Ha Noi. "The awards are for those pioneering in applying advanced machinery and management system, achieving excellence in production and business performance which actively contributed to society," said the Party's Central Economic Commission Head Nguyen Van Binh. The award judgment board selected the winners – all from manufacturing or services sectors – based on seven criteria regarding the companies' leadership, operation strategies as well as market and customer policies. This year also marked the 20th year of the award, which was first initiated in 1996 as a part of a national movement to promote goods quality and productivity of domestic enterprises. "Since then, the National Quality Award has gone beyond being just a movement and has become an effective means to help Vietnamese firms improve themselves by increasing their competitiveness, management capability and credibility to the customers," said Tran Viet Thanh, MoST Deputy Minister, also the National Quality Award Council Chairman. "It is also a motivation for Vietnamese firms to deepen their integration into the regional and global markets". On occasion of the anniversary, ten enterprises were granted merits as an acknowledgement of their efforts and contributions to the award though its history. Another three domestic enterprises which won the Global Performance Excellence Award (GPEA) 2014 were also called onto the stage at the ceremony for celebration. The National Oil Services JSC of Viet Nam, the Thien Long Group and the Nam Duoc JSC became the latest award winners among the 37 Vietnamese companies granted the GPEA since 2010. The GPEA is a quality award for outstanding enterprises in Pacific-rim nations or countries that border on the ocean. Kyoei Steel has its mettle tested by foreign imports A delayed $218 million steel project in the northern province of Ninh Binh, which is wholly owned by Japan’s Kyoei Steel Company, has been left hanging due to a steel glut and frequent knock-backs in the Vietnamese market. According to a ministry source, the Ministry of Industry and Trade (MoIT) might cut the high-quality steel project from its new master steel plan to 2020 with vision to 2030, which is currently being drafted, as the project has only moved at a snail’s pace since 2012. The source, who declined to be named, added that Kyoei Steel blamed its delays on market oversupply, which made it difficult to sell its output. The project, with a capacity of 500,000 tonnes, held its groundbreaking ceremony in March 2012 and was expected to operate commercially from 2015, becoming the second-largest steel project in Vietnam’s northern region after the Thai Nguyen steel project. Its capacity might rise to about one million tonnes of steel bar products later on. Kyoei Steel officially entered Vietnam in 1994 as Vina Kyoei Steel, established as a joint venture company between Kyoei Steel, Mitsui & Co. and Itochu Corporation (Japan), and Vietnam Steel Corporation. Its factory is located in the Phu My Industrial Zone in Ba Ria-Vung Tau province. Last year it began an extension project in Ba Ria-Vung Tau with a total investment of $220 million, and an annual design capacity of 500,000 metric tonnes of billet, and 500,000 metric tonnes of finished product. The MoIT predicted that the steel firms in Vietnam will see their overall manufacturing output increase to 35.3 million tonnes per year in the next five years, while demand will be around 15 million tonnes. In early March, the MoIT announced a decision to issue temporary safeguard duties of 23.3 per cent on steel billets and 14.2 per cent on steel bars for a maximum of 200 days, as it noted that the recent surge in imports has caused “serious damage” to the local production of steel billets and rods. This is down to the fact that imported steel billets have undercut local products since 2014, especially since the price of imports dropped by 30 per cent last year. However, Kyoei Steel protested the safeguard duties, saying that the firm has demand for imports. The MoIT previously stated that Vietnam’s current production of these items could satisfy domestic demands. Korea nudges out rivals in electronics Korean tech giants like Samsung and LG Display are rapidly replacing Japanese firms in electronics production of TVs and other consumer electronic goods in Vietnam. One of South Korea’s leading manufacturers of electronic displays, LG Display, started construction on its $1.5 billion hi-tech screen (OLED) production factory in the northern port city of Haiphong’s Trang Due industrial park late last week. The project will churn out OLED screens for smartphones, iPads, watches, TVs, and automobiles, with the factory’s $1.5 billion in investment capital to be disbursed between 2015 and 2028. Other huge Korean firms also see Vietnam as a hot investment destination, highlighting it as part of the electronics sector’s global supply chain by pouring billions of dollars into the country. For instance, Samsung entered Vietnam in 1996 and currently has three major manufacturing complexes in the country: the Samsung Vina Electronics facility in Ho Chi Minh City, the $2.5-billion Samsung Vietnam Electronics complex in the northern province of Bac Ninh, which became operational in 2009, and the $5-billion Samsung Vietnam Electronics complex in the northern province of Thai Nguyen, which came on line in March 2014. Through the deployment of these billion-dollar projects, Samsung is nearing its goal of turning Vietnam into the group’s primary global manufacturing base. These developments have raised Samsung’s overall investment capital in Vietnam to nearly $15 billion, making it the biggest sole foreign investor in the country. In 2015, the company exported an estimated sum $30 billion worth of products from Vietnam. Japanese electronics giants once ruled the world, and brands like Sony, Toshiba, and Sharp were household names. These firms used to operate factories in Vietnam, but Toshiba and Sony, are gradually halting production here. Toshiba used to have a small-scale TV production facility in Vietnam, but production at the factory stopped in February 2010. In 2008, Sony closed its TV manufacturing plant in Vietnam after nearly two decades in the country. In a previous email to VIR, a representative of Toshiba Corporation explained that “economy of scale in production and change of tariffs were among the reasons for the decision. We continually consider measures to optimise our manufacturing operations and production sites.” He confirmed that “driven by the healthy growth of the Vietnamese economy, we anticipate the steady growth in the demand for electronic components and digital products. We forecast the annual growth of over 20 per cent in the markets for TVs, refrigerators, and washing machines”. Sony, Sharp, and Panasonic together reportedly lost billions of dollars in the last fiscal year. These figures stand in sharp contrast to the glory days of the late 1970s and early 1980s, when Japan started to dominate the world of consumer electronics. As the Japanese economy surged, electronics conglomerates ruled the market for memory chips, colour TVs, and videocassette recorders, while their research labs gave birth to gadgets that would define an era, such as the Walkman as well as CD and DVD players. After taking over as Panasonic’s new leader following the largest annual loss in its 94-year history, president Kazuhiro Tsuga stated at a press conference in June 2012 that “Japanese firms were too confident about our technology and manufacturing process. We lost sight of the products from the consumer’s point of view.” Tra Vinh welcomes one more wind power project The Tra Vinh People’s Committee has licensed Korean investor Woojin Construction Co., Ltd. to develop the $247.6 million second phase of the Korea-Tra Vinh wind power farm in Duyen Hai town. About $49.52 of this $247.6 million, equalling 20 per cent of the total investment capital, is the investor’s equity capital, while the remaining $198.08 million will come from loans. Covering an over 2,400 hectare area of land and water surface, the plant will have 48 wind turbines, each rumbling with 2MW. “Once the plant comes into operation, it will, in collaboration with other wind power plants, contribute to ensuring the energy security for the Mekong Delta region in general and the province in particular,” said Pham Van Re, deputy director of the Tra Vinh Economic Zone Management Authority. “The investor has proved its sound finances, however, the management authority will ask  them to submit a specific implementation schedule. We will be willing to co-operate with the investor to deal with difficulties arising during the construction process,” Re added. In February, Woojin held the ground-breaking ceremony for the first phase of the Korea-Tra Vinh wind power plant. The $130 million first phase has a designed capacity of 48MW with 24 turbines, which will span over 1,200ha of land and water surface in Truong Long Hoa and Dan Thanh communes of Duyen Hai town. Re stated that the first phase’s construction is being implemented on schedule. The management board is currently trying to hand over land for the investor to construct its administrative building. The first phase is expected to start operation in February 2017 and generate an electrical output of over 173,000 MWh per year. According to data released by the Ministry of Industry and Trade, a total of over 50 wind power projects have been registered but only 5 saw implementation, so far. Three of these, namely Tuy Phong in Binh Thuan, with a capacity of 30 MW, the 6 MW wind power project on Phu Quy Island also in Binh Thuan, and the 99 MW Bac Lieu plant, are generating commercially. Thai Hemaraj to become second foreign IP developer in Nghe An Thai infrastructure developer Hemaraj Land and Development PLC. (Hemaraj) plans to cooperate with Civil Engineering Construction Corp. No. 4 (Cienco 4) to develop two industrial parks (IPs) in the central province of Nghe An, according to newswire Nghean.gov.vn. Accordingly, the consortium will build the 2,000 hectare WHA Hemajai 1-Nghe An IP in Nghi Loc district and the 1,160 hectare WHA Hemajai 2-Nghe An IP in Dien Chau district. Both locations are in the province’s Dong Nam economic zone. Within the framework of the working session on May 4, representatives of Hemaraj and provincial leaders discussed the site clearance fee as well as long-term plans over site clearance and investment application procedures. On the same day, representatives of Hemaraj and Cienco 4 signed an agreement to cooperate to develop the IPs. After the working session, Hemaraj will draw up specific plans regarding the investment capital and implementation schedule. The company will submit the necessary dossiers to the local authorities in July. Chairman of the Nghe An People’s Committee Nguyen Xuan Duong said that the province would create favourable conditions, especially for speedy site clearance, for the investors to ensure that the project is implemented on schedule. Hemaraj will become the second foreign infrastructure developer to invest in the province’s IPs, after Vietnam-Singapore Industrial Park Company (VSIP). Hemaraj acquires land, develops infrastructure, and provides industrial estate utilities, including site grading, roadways, storm drainage, wastewater treatment, electricity substations, and gas pipelines. The company owns eight IPs with a combined area of over 7,000 hectares, including seven locations along Thailand’s vibrant Eastern Seaboard and one in Saraburi province. In addition, it holds numerous factories for rent. Dawon Vina to expand losing business The Bac Giang Industrial Zones Management Board is considering whether Korean Dawon Vina’s increasing capital to its existing factory makes its loss increased as much as its added capital when the company made a loss of $1.68 million in 2015, higher than its originally registered $1 million investment amount. In late April, Korean Dawon Vina Co., Ltd. proposed the management board to license the additional sum of $6.6 million to its existing $1 million investment capital, however, the management board refused due to the company’s continuous losses, as well as the proposed additional capital’s unclear purposes. According to the management board, Dawon Vina has yet to prove its hale finances and submit its 2014 financial report. Furthermore, in its application for a new investment certificate, the company failed to outline the purposes and specific plans for its operations once approved. In 2015, a fire broke out at the company, destroying its paint warehouse, furniture, machinery, and electronic component products. It was considered the major reason for the company’s losses, leading to a narrowing down of its operations in 2015. The added capital is considered to be used for the recovery and expansion of the company’s operation. Starting operation in February 2011, Dawon Vina is a wholly Korean-owned company. It specialises in manufacturing electronic components. Site chosen for mega complex South Korean company Jimiro has teamed up with local company Dai Tan Phu to co-invest in a $500 million complex in the triangle of land  site between Tran Hung Dao, Pham Ngu Lao, and Nguyen Thai Hoc streets in the heart of Ho Chi Minh City’s District 1. This area is on the list of over 20 prime locations that the Ho Chi Minh City People’s Committee accepted tenders on from eligible financial investors. At 13,000 square metres located near Ben Thanh market and 23/9 Park, this site is considered one of the best potential investments within the city centre. It will be the terminus for both metro and bus systems, and will include a pedestrianised street. According to the city’s zoning plan, this complex could reach up to 260 metres in height, and will serve multiple functions, including hotels, financial and trading centres, and commercial office spaces. An Tae Su, a representative from Jimiro, told local press that his company would work alongside SsangYong (Korea) and a domestic partner to create a new tourist landmark in Ho Chi Minh City. An said that the future complex would be the combination of a 55-storey office building, a 30-storey hotel and a 10-storey high-end trading centre. This area was brought to tender and was available to suitable investors since 2008. In 2015, a consortium of Thai Son Construction, Chi Thanh Finance, Anh Duong Finance, Vietnam Development and Investment Bank, and the two Korean companies of Hanwha and Hanshin took over the project. However, this group could not implement the construction at the site due to problems with financial mobilisation, and it was turned back to the local authorities to choose another potential investor for the project. In 2007, Ho Chi Minh City mapped out 20 “golden land” sites in the city centre, and called for private and foreign investment for development. So far only four of those sites, including the above-mentioned project, have been occupied by investors, while the rest remain vacant. The three other sites were invested in by Vingroup and HDBank. Meanwhile, although other sites on the list were registered for development by foreign companies, land compensation and clearance difficulties forced these investors to withdraw. Lao Cai promotes investment, tourism More than 500 domestic and foreign experts and businesspeople were brought together at a conference on investment and tourism promotion in the northern mountainous province of Lao Cai on May 8. The event was jointly held by the provincial People’s Committee, the Steering Committee for the Northwestern Region, the Ministry of Planning and Investment, and the Bank for Investment and Development of Vietnam (BIDV). Addressing the conference, Deputy Prime Minister Trinh Dinh Dung suggested Lao Cai make use of advantages to develop itself into an economic hub in the northwestern region. Towards this goal, Lao Cai should create an attractive investment climate and direct investment on infrastructure and key products, he said, noting that the province should push forward administrative reform to pave the way for investors, pay attention to human resources development and enhance cooperation with partners to promote investment. The Deputy PM also reminded the province to attach importance to ethnic issues, social order, environmental protection, and preservation of local culture while promoting tourism. Participants contributed their ideas to attract investment and develop tourism in popular locations such as Sa Pa, Bac Ha, and Lao Cai city. Chairman of BIDV Board of Directors Tran Bac Ha said Lao Cai boasts a lot of strengths to become the region’s economic hub. He highlighted a number of local attractions such as the foggy Sa Pa resort town, the 3,134m high Fansipan peak – dubbed the Roof of Indochina, and numerous must-see ecotourism and community-based tourism destinations. He, however, pointed to challenges arising when local infrastructure and human resource development fails to catch up with the fast growing flow of visitors. Those problems should be dealt with promptly in order to achieve sustainable development, Ha said. Vice chairman of Sun Group urged Lao Cai to accelerate administrative procedure reform and transport projects. At the conference, the province granted investment licences to six businesses with the total registered investment of nearly 2 trillion VND (90 million USD). The event also witnessed the signing of tourism agreements between investors and BIDV as well as tourism cooperation deals between Lao Cai and other provinces that have maritime strengths in preparation for the 2017 National Tourism Year which will be hosted by Lao Cai and other northwestern provinces. Endowed with high mountains and deep valleys, Lao Cai has rich flora and fauna and cool climate. It is home to 25 ethnic groups with unique customs and traditional festivals. Tourism has become a significant part in the local economy, contributing 11.5 percent of the provincial gross regional domestic product (GRDP) in the 2010-2015 period. Quang Ninh appeals for investment in agriculture The northern province of Quang Ninh will focus on improving the investment climate and competitiveness to help businesses invest in agriculture, a local official has said. Speaking at a conference held in the locality on May 7, Chairman of the provincial People’s Committee Nguyen Duc Long called on the business community to boost investment in animal husbandry, modern abattoirs and seafood farming and processing. He noted the province’s resolve to develop commercial production of agricultural products and improving their quality and economic value. Deputy Minister of Agriculture and Rural Development Ha Cong Tuan suggested the province concentrate on three pillars of agriculture, which are value-added production, new-style rural areas, and infrastructure and capacity to mitigate natural disasters and protect natural resources. Recently, Quang Ninh has built a chain of products for agriculture, including the one commune one product (OCOP) programme, which aims to promote local farm produce. The province has planned hi-tech agriculture parks such as Dong Trieu, Dam Ha and Van Don. It also attracted investments from a number of domestic and foreign companies in major projects. At the conference, the provincial People’s Committee granted certificates of investment to two projects: the Vietnam-Australia Seafood Company’s major shrimp breeding project using greenhouse technology in Dam Ha district and the Vingroup’s Vineco Agricultural Investment, Production and Development Co., Ltd, worth over 628 billion VND (28.26 million USD). The province also signed memoranda of understanding on investment cooperation with research institutes and strategic partners in pig farming and hi-tech application in agriculture.- Jetstar Pacific opens new domestic routes Jetstar Pacific Airlines has launched two new routes connecting Hanoi with Chu Lai and Quy Nhon in the central provinces of Quang Nam and Quy Nhon, respectively. The first flights on the routes will take off on June 1, using the 180-seat Airbus A320. The low-cost carrier will operate three return flights a week on Wednesday, Friday and Sunday on the Hanoi – Chu Lai route; and on Monday, Wednesday and Sunday on the Hanoi – Quy Nhon route. The airline is also operating routes connecting Ho Chi Minh City with the two sites. Jetstar Pacific is a member of the Jetstar Group, a leading low-cost airline brand in Asia-Pacific with a fleet of 75 aircraft and a network of routes in 17 countries.- State firm IPOs The Government’s determination to speed up equitisation of major State-owned enterprises has livened up initial public offering (IPO) activities on the securities markets. And some of the IPOs have been an unqualified success. The State Capital Investment Corporation, for instance, earned over VNĐ1 trillion (US$44.8 million) by auctioning 3.65 million shares of Kim Liên Tourism Company, which primarily operates in the field of restaurants and catering. These shares were sold for VNĐ274,200 ($12.19), nine times the starting price of VNĐ30,600. Analysts said the company’s biggest attraction was its 3.5ha Kim Liên Hotel in Hà Nội’s Đào Duy Anh Street, which is seen as a golden piece of real estate. The hotel is also close to famous tourist destinations like Thống Nhất Park, Hỏa Lò Prison Museum, the Temple of Literature and Hòan Kiếm Lake. On March 7 State-run Vissan Co, Vietnam’s leading foodstuff processor raised VNĐ906.84 billion ($41 million) through an initial public offering of 14 percent of its shares, beating its own projection. Vissan sold all 11.33 million shares on offer at an average price of VNĐ80,053 ($3.60) compared with a starting price of VNĐ17,000. Vissan’s IPO attracted a total of 142 domestic and foreign investors, who together bid for 63.59 million shares. The huge demand for its shares was due to its outstanding business results, nationwide production chain and brand name. Also thanks to owning prime lands, Việt Nam Book Company (Savina) saw its recent IPO attract huge strategic investors though its business results are rather modest. In March giant property developer Vingroup had bought 65 per cent of Savina, or more than 44 million shares, at VNĐ10,700 a share. Vingroup’s presence as the major stakeholder helped Savina sell more than 16.7 million shares, or a 24.6 per cent stake, at its initial public offering on March 24 in Hà Nội. According to Hà Nội Stock Exchange, the shares were sold for an average of VNĐ13,072 as Savina raised VNĐ218.7 billion ($97.2 million). Analyst said that the participation of major investors in companies’ IPOs is an important factor since it improves their prestige in the market, thus attracting more investors in turn. Stalled building crisis Construction of the Sài Gòn One Apartment Project by M&C Joint Stock Company began in 2007. The US$200 million project near Khánh Hội Bridge in HCM City’s District 1 was to have had a mall, international standard offices and 133 high-grade apartments. But the work stalled three years ago. On Điện Biên Phủ Street, Bình Thạnh District, there is a half-finished building named DB Tower by Cận Viễn Đông Trade and Investment Ltd. Designed to rise 22 floors, its construction began in 2010 and stopped in mid-2012. Near DB Tower is the V-Ikon building halted two years ago because of a shortage of funds. The grade A office building was designed with 26 floors. Several incomplete projects are also seen in District 7, one of which is Kenton Residences. The 9.1ha, $300 million property was to have had nine towers and 1,640 apartments but work came to a halt in 2008. According to the HCM City Real Estate Association (HoREA), the city now has 137 buildings unfinished or abandoned due to various reasons. According to Trần Trọng Tuấn, director of the city Department of Construction, they are spread over many districts and have many reasons for their half-finished state, but the most common is lack of funding. Some investors are waiting for positive signs in the estate market to resume work. Analysts said the golden age of property in 2007-08 sparked off a mad rush to develop big projects though many did not have enough money. They then borrowed from banks. But soon enough the market plummeted and banks pulled the plug on funding, leaving many buildings standing as shells and developers unable to continue work. This also caused great loss for the economy. The abandoned projects are a burden on the banks since their developers cannot repay. For instance, the Sài Gòn One Apartment Project is mortgaged to BIDV and the lender now has look for buyers to sell the project to get back its money. Some experts said it is necessary for the city to have favourable policies to support stalled projects so that they are completed. One of them is to allow developers to sell their projects without land-use rights certificates since many incomplete projects cannot afford to pay the fees and so do not have the certificates. PM pushes public finance project The Prime Minister has recently approved a technical assistance project involving consultations and analyses of public finance management in Việt Nam. The project is funded by the Swiss Economic Co-operation and Development (SECO) organisation and Global Affairs Canada through the World Bank (WB). The project aims to improve the public finance system in Việt Nam in terms of efficiency and effectiveness of public expenditure and public service. The project comprises five components - improving the connection between planning and the State budget, improving efficiency in controlling budget use, improving the provision of budget information, improving systems to ensure budget stability and determining and managing the fiscal-year risks. The Ministry of Finance (MoF) will implement the project over five years. The total cost of the project is US$6.33 million, of which $5.73 million is sourced by non-refundable aid from SECO and sponsorship by Global Affairs Canada. The remaining $600,000 is being funded from Việt Nam’s budget. The Prime Minister assigned the MoF to finalise the documents and made the ministry accountable for the appraisal and implementation of the project. Vietcombank, Binh Son refinery company step up cooperation The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) will continue providing comprehensive financial services to the Binh Son Refining Petrochemical Company Limited (BSR) under an agreement inked between two sides on May 7. Those services, including trade finance, international payments, credit services, personal loans and cards, will be delivered to the BSR with preferential policies. According to Chairman of Vietcombank Executive Board Nghiem Xuan Thanh, the bank has granted loans worth 5 trillion VND (224.3 million USD) for BSR’s long and short-term projects over the last 10 years and loaned the firm more than 2 trillion VND (89.73 million USD) in 2015. He said that BSR’s more than 600 million USD in international payments and guarantees were provided by Vietcombank last year. Vietcombank praised BSR’s position as a leading refinery in Vietnam, he said. Chairman of the BSR Board of Directors Nguyen Hoai Giang said that the agreement was a significant milestone, marking 10 years of cooperation between two sides. BSR is responsible for the management, operation and business of Dung Quat Refinery, the first of its kind in Vietnam, which provides the foundation for the country’s petrochemical industry. The company has produced 36,283 million tonnes of gasoline products and raked in about 710 trillion VND (31.8 billion USD) since Dung Quat Refinery became operational in 2009.- Protracted drought sends coffee prices soaring Coffee prices on the Vietnamese market have edged up in recent months as output of Robusta beans is projected to tumble in the 2016-2017 crop due to severe drought in the Central Highlands region. The rise in domestic prices of Robusta coffee, which makes up a lion’s share of coffee output in Vietnam, has been confirmed by the Vietnam Coffee and Cocoa Association (Vicofa) and traders. They said a coffee undersupply is in sight as many farms in the Central Highlands have dried up and farmers have been holding on to coffee beans in anticipation of higher prices. Tran Van Phuong, director of Trung Hoa Powdered Coffee Production Joint Stock Co in Daklak Province, said coffee is quoted at VND34-35 million (US$1,525-1,570) a ton, VND3-4 million higher than in the period before the Lunar New Year holiday (Tet) in February. Drought has worsened in Daklak, the country’s largest coffee producing province. Nguyen Van Tien, a coffee grower in the province’s Cu M’gar District, said severe water shortages have taken a heavy toll on coffee farms in the province over the past two months. More households in Cu M’gar District have shifted to growing pepper and short-term crops that need less water to avoid losses. Despite price rises, Tien said farmers can earn an average of VND40 million (US$1,794) per hectare, so a number of households may rack up losses of VND100 million (US$4,485) as they have had to spend on irrigation. Statistics of the Ministry of Agriculture and Rural Development showed more than 100,000 hectares of industrial trees, especially coffee, have been damaged. Severe drought and salinity since end-2014 have caused losses of more than VND5.5 trillion (US$245.8 million). Nguyen Viet Vinh, general secretary of Vicofa, said Vietnam’s coffee output could drop by 30% compared to the previous crop. The El Nino-induced drought has also hit coffee production in Brazil. International organizations projected that global coffee output would decline by around one million bags of 60 kilos. Furthermore, current coffee inventories are low so prices are forecast to go up in the coming time. Though domestic coffee prices have increased significantly, export prices have not risen correspondingly. A report of the agriculture ministry showed Vietnam shipped abroad 681,000 tons worth US$1.16 billion in the first four months, rising by 44.6% in volume and 18.2% in value. This meant export coffee prices went down sharply compared to the same period last year. According to the ministry, export coffee prices stood at US$1,697 per ton in the first quarter, down 18.3% year-on-year. Meanwhile, Robusta beans on the London market were quoted at US$1,554 per ton. Pham Thi Kim Dung, head of the analysis department at the Institute for Policy and Strategy of Agriculture and Rural Development (IPSARD), said demand for coffee on the domestic market has surged as cafés have mushroomed in recent years. Export prices are based on those of futures contracts and they have not jumped as foreign traders are waiting for more news about coffee output in Vietnam. Dung said rising domestic demand and a projected reduction in coffee output in the coming crop will affect supply for exporters. Commissions in public procurements to go to State budget Ministries and government agencies will have to transfer commissions and discounts offered in public procurement deals to the central State budget as specified by new Ministry of Finance regulations. Circulars 34/2016/TT-BTC and 35/2016/TT-BTC provide lists of items and guide procedures for purchases of public assets by ministries, agencies and provinces. These circulars specify procurement mechanisms for national projects and those made by ministries, agencies and local authorities. The new public procurement mechanisms are different from the old ones that allowed public procurements at organizations and agencies using State money but did not set quotas. The old public procurement mechanisms caused many problems with procedures and maintenance of public assets bought by ministries and government agencies. Nguyen Tan Thinh, deputy head of the Department of Public Property Management under the Finance Ministry, said the new mechanisms will help save a lot for the State. Notably, commissions and discounts offered in public procurement contracts must be publicized and transferred to the State budget, instead of being retained by the ministries and agencies that carry out the public procurement projects in line with Circular 35. Thinh did not say how much the State could save when the new mechanisms apply but said they would help save around 10-17% of total spending on public procurements. Every year, the Government spends some VND200 trillion (US$8.97 billion) on public procurements. According to the Ministry of Finance, autos are among the most essential items for annual public procurement. There are 37,960 State-owned autos, according to the ministry. The figure does not include cars of the ministries of public security and national defense, State-owned enterprises and public service units. Marketing firm probe results to be announced in mid-June The Ministry of Industry and Trade planned to officially announce in mid-June results of the inspection to scrutinise seven multi-level marketing companies following the Lien Ket Viet scandal that defrauded 60,000 victims, officials said at a meeting yesterday. Nguyen Phuong Nam, the ministry's deputy head of Competitive Management Department, said there had been no official conclusion to the inspection so far as it was a complicated issue. In the near future, the department would focus on three areas including enhancing check-ups on multi-level marketing companies, increasing people's awareness, and revising some legal documents related to the issue. The department submitted to the Government that they should revise the Decree No 42 on multi-level marketing companies. The draft would be completed by the end of this month with an aim to tighten the activities. Earlier, the ministry had announced the establishment of an inspection team, managed by the MoIT and police forces to oversee the operations of four Ha Noi-based multi-level marketing firms, including Thien Ngoc Minh Uy, Lien Ket Viet Nam, Lien Ket Tri Thuc and Thang Long Franchise. Other firms subjected to such inspections include Unicity Marketing Viet Nam in HCM City, Amway Viet Nam in southern Dong Nai Province, and Lien Minh Tieu Dung Viet Nam in northern Bac Ninh Province. The formation of the inspection team is the latest move by authorities to manage pyramid-type businesses in Viet Nam after the Lien Ket Viet multi-level marketing firm was caught swindling about 60,000 people in more than 27 cities and provinces nationwide, appropriating a total of VND1.9 trillion (US$85 million) since 2014. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR