BUSINESS IN BRIEF 1/5 Hanoi takes lead in attracting FDI    Hanoi is the leading locality nationwide in foreign direct investment (FDI) attraction, drawing over 810 million USD from 110 newly-licensed and capital-added FDI projects in the first quarter of this year, a five-fold increase year-on-year. Late last month, representatives from the municipal People’s Committee granted an investment certificate to Samsung Electronics Vietnam under the Samsung Group to build a research centre in Hoang Mai district. The 300-million-USD project aims to research and develop electronics and high-tech telecommunication products. It is expected to create about 4,000 jobs and significantly contribute to the city’s export turnover. Previously, Japan’s AEON Group launched its AEON Mall commercial centre in Long Bien district, with a total investment of 200 million USD. Including various works such as shopping centres, hotels, restaurants, entertainment centres, and offices for lease, the project has become an attractive destination for locals, serving about 60,000 visitors a day. In recent years, Hanoi’s investment climate has improved, contributing to attracting more foreign investment. Last year, the city lured 1,637 FDI projects worth 7.5 billion USD from 72 countries and territories, ranking third nationwide. Foreign-invested enterprises contributed about 15 percent to the city’s total investment of all sectors, accounting for the highest export-turnover proportion (about 49.5 percent) among economic sectors. Many projects helped provide high-quality products and services. Municipal authorities have taken a series of measures to better the local business climate and facilitate enterprises’ production and business. IT applications were promoted to simplify administrative procedures related to taxes and business registration, helping businesses save time and expenses. Many dialogues between city leaders and representatives from foreign businesses were also arranged. Meanwhile, investment and tourism promotion conferences were held. Retailers roll out promotions Retailers have announced a slew of promotions during the long Liberation Day-May Day holidays. Since they fall on a weekend, they have been moved to May 2 and 3, and supermarket chains Co.opmart and Co.opXtra expect sales to be 50-100 per cent higher than on normal days. They have stocked up on essential and price-stabilised products and launched promotions, Vo Hoang Anh, marketing director of Saigon Co.op, the owner of Co.opmart chain, said. Co.opmart and Co.opXtra supermarkets are offering a buy-1-get-1-free deal and discounts of 50 per cent on thousands of items, including electrical kitchen appliances and utensils, fashion products, fresh and processed foods, and beverages. In addition, for the first time Co.opFood has launched a meals package that customers can go to its stores and order for free home delivery. Saigon Co.op joint ventures HTVCo.op, Sense City department stores in Can Tho and Ben Tre and SC VivoCity in HCM City are also running promotions. French supermarket Big C has announced two promotions until May 2 with discounts of up to 49 per cent on more than 2,000 items, including fresh, dried and frozen foods, beer, beverages, clothes, cosmetics, and kitchen utensils. Big C said it expects sales to rise sharply during the holiday and has double the normal stocks, especially of ready-to-eat foods, processed foods, meat, fish, bread, vegetables, fruits and beverages. South Korean retailer Lotte Mart, which opened its 12th outlet in Go Vap District on April 28, is offering attractive promotions at the new store. Shoppers will also have the chance to win lucky draw prizes like a Honda Vision 11cc. Metro, Satramart and other supermarkets are also set to run promotions as are major electronics stores like Thien Hoa, Cho Lon, Phan Khang and Nguyen Kim, who are offering big discounts on a range of products. Rice exports likely to reach 1.6 million tonnes in Q2 The Vietnam Food Association (VFA) aims to export 1.6 million tonnes of rice in the second quarter of this year, 200,000 tonnes lower than initially planned. In the first three months of this year, the country exported 1.59 million tonnes of rice. As so, rice exports in the first half of this year are expected to hit over 3 million tonnes, up 12 percent against the same period last year. For the whole year, the export volume is expected to remain at last year’s 6.5 million tonnes. In 2015, Vietnam earned 2.68 billion USD from rice export, a decrease of 3.94 percent in value. Asian countries were the main buyers, accounting for 74.5 percent of exports, followed by Africa (13.77 percent) and the US (6.72 percent). Early April, the Ministry of Agriculture and Rural Development was assigned to closely monitor rice production and exports. The move intended to ensure domestic food security and effectively manage export activities, given that prolonged and serious drought and saline intrusion are hitting major granaries in the country, particularly in the Mekong Delta. This year, the delta expected to plant over 4.3 million hectares of rice fields, which would yield approximately 25.7 million tonnes of rice. According to preliminary estimations, drought and saltwater have reduced the expected output by 700,000 tonnes, which are equivalent to 350,000 tonnes of rice. Car registration fees may reach 50% Passenger cars with less than 10 seats (driver seat included) will be subjected to a fee of 10 per cent for a first-time registration. This is stated in a draft decree, which the Ministry of Finance posted on its website late last week. The fee may be increased to no more than 50 per cent based on the practical situation in different localities, and people's councils of provinces and cities directly under the central government will decide on the adjustment. While registering a second time, passenger cars with less than 10 seats (driver seat included) will be subjected to a fee of two per cent, a level applied nationwide. For other types of automobiles or trailers, the registration fee will be two per cent. A general fee of two per cent will also be applied for motorcycles. However, motorcycles of organisations and individuals residing in cities or towns where the provincial people's committees are headquartered, will be subjected to a fee of five per cent while registering for the first time. Motorcycles registered for the second time will be levied a fee of one per cent. The one per cent fee will also be applied for the registration of airplanes, ships, boats, and yachts, as well as barges and canoes. The registration fee for shotguns and sport guns will be two per cent, and that for lands and houses will be 0.5 per cent. The draft decree states that people's committees of provinces and cities directly under the central government will be responsible for defining house and land prices used to calculate registration fees, following principles stipulated by the finance ministry. The ministry will be in charge of setting prices of the other assets to calculate registration fees nationwide. These are different from existing regulations, which only say that prices used for registration fee calculations are defined by people's committees of provinces and cities directly under the central government. Road use fees for motorcycles dropped The government has released Decree No. 28/2016 on terminating regulations on charging road use fees for two and three-wheeled motorcycles, to take effect on June 5. The Ministry of Finance (MoF) had previously sent documents to the Office of the Government and the Ministry of Transport (MoT) acknowledging that the collection of fees on motorcycles faced many difficulties and was ineffective and it therefore asked the government to terminate relevant regulations. According to the Ministry of Planning and Investment (MPI), in the three years of implementing such fees the amount collected was modest. In 2013 and 2014 only VND550 billion ($24.67 million) was collected each year and in the first half of 2015 only VND175 billion ($7.85 million) went to the State coffers. LafargeHolcim Group considers restructuring its business in Vietnam Cement manufacturer LafargeHolcim Group, a joint venture between Swiss Holcim Ltd. and French Lafarge Group, may withdraw from Vietnam due to the oversupply of cement in the domestic market. The detailed plan will be published in the next three weeks, according to a VIR's source, adding that the group was restructuring its overseas market including Vietnam. According to industry insiders, Vietnam’s cement output is estimated at 81.56 million tonnes, while the consumption demand in 2016 is estimated between 75 and 77 million tonnes. Besides, later this year, Song Lam cement producing plant’s opening its gates, with the annual capacity of four million of tonnes, is expected to intensify competition amongst domestic cement manufacturers. In December 2015, Lafarge Vietnam, a subsidiary of French Lafarge Group, officially merged with Holcim Vietnam to form LafargeHolcim, which is currently the largest multinational cement producing company in the world by installed capacity. LafargeHolcim is present in 90 countries and focuses on manufacturing cement, aggregates, and concrete. In Vietnam, the post-merger LafargeHolcim has five cement plants and eight ready mixed concrete plants, with an annual capacity of six million tonnes of cement and one million cubic meters of concrete per year, overtaking Nghi Son Cement Corporation and Phuc Son Cement Company as the largest foreign-invested cement producing company in Vietnam. The firm retains the brands of Lafarge and Holcim’s products, namely Lavilla (Lafarge) and Holcim Power-S (Holcim). Holcim Vietnam presently holds a 26 per cent of domestic market share, while Lafarge Vietnam takes another 12 per cent, with their main products being cement, concrete, and aggregates. VietinBankSc profit exceeds $1 million in Q1 The VietinBank Securities Company (VietinBankSc) recorded pre-tax profit of almost VND24 billion (just over $1 million) in the first quarter, a 39 per cent increase year-on-year. Securities investment brought in the largest revenue, of VND16.7 billion ($750,430), a 17 per cent increase. Revenue from brokerage services was VND9.5 billion ($430,000), up 31 per cent, while stock issuing and stock guarantees brought in VND2.343 billion ($105,130), an increase of 51-fold year-on-year. Financial consultancy earned the company VND4.8 billion ($216,991), a six-fold increase year-on-year. In the first quarter VietinBankSc finalized 33 consultancy contracts, primarily on equitization, share trade registrations, divestment, and capital arrangements. The company consulted on the equitization of the Savina Vietnam Company, with share sales totaling VND218.8 billion ($9.8 million), and the equitization of 36 corporations under the Ministry of Defense, with up to VND64.9 billion ($2.9 million) in shares being sold. VietinBankSc also consulted nine subsidiaries of Vietnam Railways on divestment and assisted the Ministry of Agriculture and Rural Development in divesting from the Vietnam Livestock Corporation Joint Stock Company. Regarding capital arrangements, it consulted enterprises over capital totaling VND700 billion ($31.4 million). In 2016 VietinBankSc will continue to focus on financial consultancy. It is expected to complete about 150 contracts on financial consultancy, bringing in about VND50 billion ($2.24 million). VIC reports 11% dividend payout for 2015 Real estate developer Vingroup (VIC) announced an estimated profit of VND1.1 trillion (US$49.2 million) for the first quarter of 2016 at its annual shareholder's meeting in Ha Noi on April 22. Vingroup's consolidated turnover was VND34 trillion for the whole of 2015, up 23 per cent compared with 2014, with after-tax profits of VND1.419 trillion (US$63.3 million). At the meeting, Vingroup said it would pay shareholders an 11 per cent dividend in shares for 2015. The group said it planned to pay the dividend, or over 213 million shares, in the second quarter of 2016, adding there was no restriction on the transfer of those shares. The shares, equivalent to some VND2.1 trillion, for the dividend, would make the charter capital of the group to more than VND21.5 trillion. Vingroup has targeted achieving VND45 trillion in net revenue this year, an increase of 32 per cent over 2015, and a profit-after-tax of VND3 trillion, doubling its increase from 2015. At present, the group has six ongoing projects – Vinhomes Gardenia in Cau Dien Ward in Ha Noi, with a total investment of VND4.85 trillion and Vinhomes Riverside No. 2 in Long Bien District, with a total investment of VND4.9 trillion. In addition to a combination Metropolis project on Pham Hung Street in Tu Liem District, Vinhomes Central Park project in Binh Thanh District in HCM City, Vinhomes Hai Phong in Hai Phong City and Vinhomes Dragon Bay in Ha Long City, with a total investment of some VND4.8 trillion, VND37.7 trillion, VND4.9 trillion, and VND12 trillion, respectively. The group is also expected to open some 15 trading centres and launch 19 shophouse projects across the country this year. On April 22, each VIC share rose 5.8 per cent to reach VND54,500 (US$2.5) on the HCM Stock Exchange. 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. TLH to open $3 million plant in Cambodia Tien Len Steel Group JSC (TLH) plans to open aUS$3 millionplant in Cambodia as a replacement for its plant in Dong Nai Province, which is to be shut down because it is located in a residential area. Tien Len Steel said the plant in Cambodia, which was expected to open in October, would not only serve the local demand in Viet Nam and Cambodia, but also serve the ASEAN market. Based in the southern province of Dong Nai, Tien Len with 12 subsidiaries and associated companies, also worked in real estate and automobile industries together with its core business of steel production and trading. In the shareholder meeting in April, the firm announced it anticipated revenues of VND4 trillion ($179 million), with a profit of VND290 billion this year. Two foreign investors want stake in PIJICO Petrolimex Insurance Company, PIJICO (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 April 21. Without revealing the names of the investors, general director of PIJICO 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. Ha Noi-based PJICO, serving the vehicle and asset insurance industry, reported VNĐ2.2 trillion in revenues last year, an increase of 5 per cent over 2014. It also seeks another five per cent increase in revenues this year. On April 21, each PGJ share rose 0.6 per cent to close at VNĐ15,500 on the HCM Stock Exchange. Audi to unveil latest models in Hanoi in June Audi Vietnam said it would organise an Audi Progressive event in Quan Ngua Sports Stadium in Hanoi from June 9-12 to introduce its latest models to Vietnamese customers. Laurent Genet, General Director of Automotive Asia Limited, the official Audi importer in Vietnam, said this is the first edition of an Audi Progressive event in Vietnam. The highlight of Audi Progressive is that the showcase of the full range of Audi models in Vietnam in a dynamic performance combining choreography, technology, lights and sound. The first day of the event will be reserved for the press and its customers. From June 10-12, Audi Progressive will be open to the public. Audi, the German carmaker, opened its first Vietnamese showroom in Ho Chi Minh City in 2008 and another in Hanoi five years later. Its third showroom was inaugurated in the central city of Da Nang last December. In 2013, Audi’s sales in Vietnam grew 80 present year on year to 600 units while the figures in 2014 and 2015 were 400 and 700 cars, respectively. Vietnam’s shrimp exports to UK rise sharply Vietnamese shrimp exports to the United Kingdom (UK) enjoyed remarkable growth in recent months, in spite of slumps in other markets. The Vietnam Association of Seafood Exporters and Producers (Vasep) cited the General Department of Vietnam Customs statistics showing that Vietnam earned 17.3 million USD from selling shrimp to the UK in the first two months of this year, up 38 percent from the same period last year. In the period, the UK accounted for 4.6 percent of Vietnam’s total export turnover of shrimp. In May 2015, the UK surpassed Germany to become Vietnam’s biggest shrimp importer in the European Union. Vasep attributed the growth to the country’s increasing demand for warm-water shrimp. Statistics from the International Trade Centre (ITC) showed the price of Vietnamese shrimp in this market was about 11.5 USD per kilo, lower than that of Canada, Thailand and Bangladesh – the UK’s other main shrimp suppliers. According to Vasep, the UK’s demand for warm-water shrimp is likely to continue rising in the remaining months of this year. Vietnam’s shrimp export turnover is expected to reach 3.3 billion USD this year, a year-on-year rise of 12 percent. House prices in Vietnam may have bottomed out: industry group House prices in Vietnam may have hit bottom and are likely to remain stable before rising again in 2018, industry insiders have said at a recent conference in Hanoi. “It is not possible for prices to fall further. Prices have dropped by around half since 2010 and the profit margin for developers is now 10%-20%," said Nguyen Tran Nam, chairman of Vietnam Real Estate Association (VNREA). After the existing stock is cleared, prices will increase again in 2018, he said. According to the association, the property market started to pick up in 2014, with strong recovery in Hanoi and Ho Chi Minh City. “Transactions have increased not only for apartments but also villas, resorts and land,” Nam said. Industry insiders said that buyers have become more demanding and investors are also rushing to diversify their products. Vietnam's average housing area per person is around 20 square meters. The Ministry of Construction is seeking to increase that to 30 square meters. Le Khac Hiep, deputy chairman of Vingroup, said the market is demanding for houses with good quality and location. “Building a civilized and friendly community in a green and smart space is important in urban housing projects,” he said. Regarding a plan on categorize apartments, Nguyen Manh Khoi of the construction ministry said his ministry will issue a relevant circular in May that will specify criteria to classify apartments in A, B and C grades. The categorization, which will be implemented for apartments built from July 2015, will be the basis to calculate prices and relevant fees. Organic farming remains meager Organic farming has applied to a mere 0.1% of the total agricultural land in Vietnam although relevant agencies have provided support to expand the clean farming model. Nguyen Van Hoa, deputy head of the Department of Plant Cultivation, told a conference on sustainable development of the agricultural sector in An Giang Province last week that organic farming accounts for 12,000 hectares nationwide. Vu Anh Phap, deputy director of the Mekong Delta Development Research Institute at Can Tho University, pointed out multiple causes for the small area under organic agricultural production. While farmers still stick to the habit of using chemical fertilizers and pesticides for their crops, there are no major differences in prices of organic and normal products, Phap said at the conference organized by the department in cooperation with the Mekong Delta Rice Research Institute and Loc Troi Group. The rampant use of chemicals for farming has severely impacted the environment and soil, Phap said. But he said more consumers have shifted to using clean and safe goods amid the lack of food safety and hygiene. Hoa said the department under the Ministry of Agriculture and Rural Development is boosting the restructuring of the agricultural sector with priority given to organic farming. “We regard it as one of the key targets,” he stressed. Hoa hailed Loc Troi Group for its investment in sustainable rice production and large-scale rice fields, and hoped that the model will be expanded in the future. Speaking to the Daily on the sidelines of the conference, Le Thanh Tung from the department said organic farming would help turn out safe products and Vietnam’s farm produce would have a bright future if more enterprises invest in the safe production model. However, Loc Troi chairman Huynh Van Thon told reporters on the sidelines of the conference that organic farming was not an easy target to achieve and that the group would manage to realize the goal step by step. “We can’t replace all normal products by organic ones immediately, so we have to select appropriate products for the replacement,” Thon said. Three quarters of housing credit package already disbursed The disbursement of a 30 trillion VND (1.3 billion USD) housing credit package has reached 22.4 trillion VND (1 billion USD), or 75 percent of its value, according to the Agency for Management of Housing and Real Estate Market. The banks have signed contracts committing loans worth 24.2 trillion VND to 49,877 households. In Hanoi, banks committed to loans worth 9.2 trillion VND to 18,176 households while the respective figures for HCM City were 6.75 trillion VND and 11,967. Most households borrowed to buy social and low-price housing units. For business customers, banks committed loans worth 7.77 trillion VND to 60 projects. Of which, 3.72 trillion VND was committed to 16 projects in Hanoi and nearly 1.2 trillion VND to eight projects in HCM City. Plastic sector eyes alternatives The Việt Nam Saigon Plastic Association will focus on research to develop renewable raw materials replacing fossil-based materials for making plastics in the 2016-20 period, its president has said. Speaking at the association’s congress held in HCM City yesterday to review its performance in the 2011-15 period and make plans for the next five years, Trần Công Hoàng Quốc Trang, said using renewable materials to make biodegradable plastics would protect the environment. The association would work to enable more members to join the industry’s human resource training programmes arranged by the city in collaboration with French and South Korean partners, he said. It would enhance co-operation with the Phương Nam Scientific and Technological Institute to implement a programme called “Decoding technology”, which has been trialled since last year, to help plastic firms execute all contracts with Japanese and South Korean firms related to supporting industries, he said. They have the technological capability to accept 80-90 per cent of outsourcing contracts from foreign firms, he said. The association yesterday signed agreements with the HCM City Computer Association and HCM City Association of Mechanical Engineering to respectively develop an online trading platform for plastic products and mechanical engineering services. These are among the tasks to be carried out in the next five years to ensure the industry’s development, Trang said. Prof Nguyễn Ngọc Giao, president of the HCM City Union of Science and Technology Association, said Vietnamese firms, including those in the plastic industry, mainly used imported technologies. For its long-term development, each country should develop its own technologies, he said. The Government encourages local firms to invest in research, but progress remains slow since enterprises are afraid of the risks involved in developing their own machinery and the Government’s support policies are admittedly vague. Trang said it was hard for local firms to take advantage of the Government’s support policies, including interest rate subsidies. He was referring to red tape at banks. According to the Ministry of Industry and Trade, the plastic sector’s exports grew at an average of 12.9 per cent in 2011-15 to reach nearly US$2 billion last year. Vietnamese plastic products are exported to 80 countries and territories, with the US and the EU being large importers, Trang said. The association regularly organises meetings to apprise its members about free trade agreements the country signs to help them capitalise on opportunities they throw up and cope with challenges, he said. HSC advances cautiously towards lifting foreign cap It may take some time for Ho Chi Minh Securities Corporation to lift its foreign ownership limit, much to the disappointment of its shareholders. At the annual general meeting last week, shareholders of the corporation (HSC) were eager to find out if the securities firm would scrap its current limit for foreign investors. This is particularly important because securities trading is not included in the list of conditional business, and Saigon Securities Incorporation – HSC’s major rival – removed its cap last year. The 49 per cent limit at HSC has been filled for a long time already, leaving foreign investors with precious few opportunities to pour capital into the firm. However, keen investors may have to wait a little longer, as HSC executives replied that they must take careful steps with this matter and ensure that HSC encounters no setbacks when lifting the foreign cap. The firm is currently working closely with the State Securities Commission (SSC) to find the most suitable method. “First, we’ve requested the SSC to give us more detailed instructions on this matter. Second, we’re collaborating with consultants to assess tax-related issues. Third, we’ve also asked the State Bank of Vietnam to clarify whether HSC will be prevented from overseas indirect investment if we become a foreign-owned firm. This is really important since it will affect the number of services we can offer to foreign investors,” said Johan Nyvene, CEO of HSC. At the meeting, HSC executives also revealed that they have some mergers and acquisitions plans in mind. Takeovers are now an industry-wide trend, and so HSC is weighing up the pros and cons of acquiring as many as three securities companies. However, similar to lifting its ownership limit, the firm will move forward cautiously as it evaluates the feasibility of these deals. In 2016, HSC will also launch services for the soon-to-come derivatives market. Johan Nyvene noted that because the derivatives market is still new, HSC will not expect to make a profit from this service until 2019. For now, the firm is focused on training its staff and improving its risk management processes. This year, HSC aims to reach VND301 billion ($13.5 million) in after-tax profits, a 41-per-cent increase from 2015. Targets for stockbroking and margin profits also went up, but HSC is mostly betting on consulting profits, as it expects this service to grow by 209 per cent this year. One major consulting deal for HSC in 2016 is Saigon Co.op’s potential buy out of the supermarket chain Big C. Regarding last year’s disappointing results, which saw a 43-per-cent fall in after-tax profits, HSC executives were apologetic towards investors. The firm’s leaders promised that changes in business would improve its profitability and dividends this year. Kinh Bac in search of foreign partners Kinh Bac City Development Holding Corporation considers seeking investors to co-develop its long list of projects in Vietnam. In its shareholders’ meeting held recently in the northern province of Bac Ninh, Kinh Bac City Development Holding Corporation chairman Dang Thanh Tam said that foreign funds from Singapore, Hong Kong, Malaysia, Thailand, and Finland had advised the company to find more foreign partners to co-invest in its current projects. All these funds are operating mostly in Asian countries and are keenly interested in Vietnam’s market. “By inviting foreign partners to co-invest in our project, Kinh Bac could balance both short- and long-term benefits,” Tam said, adding that apart from the traditional business of industrial leasing, Kinh Bac still had a large fund of residential land and this could be used to entice more foreign investors with a wealth of financial management experience. Kinh Bac now owns 600 hectares of cleared land in the northern port city of Haiphong. Tam plans to either transfer part of this land to other investors, or develop housing projects here. “2016 is the right time for housing development, so Kinh Bac will reserve a fund of land for this purpose,” he said. Kinh Bac has a total of 4,500ha earmarked for industrial zoning, and another 1,300ha for residential development nationwide. With more than ten years of experience in the real estate market, Kinh Bac’s portfolio features a wide range of development projects, including industrial zones in Que Vo in Bac Ninh, Trang Cat and Trang Due in Haiphong, Quang Chau in the northern province of Bac Giang, and residential areas in Phuc Ninh and Quang Chau in Bac Giang. Kinh Bac is also the owner of a 6-star hotel, office, and trading centre complex in Hanoi’s My Dinh area. Five years ago, Kinh Bac assumed control of the Diamond Rice Flower complex from a Japanese investor who could not implement it. Although the company has plans to invest $1 billion into this project, so far the site remains a vacant plot littered with broken glass. As of April 2016, Kinh Bac had disbursed VND119 billion ($5.6 million) in the development of this project. However, this  has remained frozen for the last four years. Bac Lieu cooks up plans for first-ever shrimp festival A taste of the ocean will come to Bac Lieu City on June 24-26 as organizers cook up plans to hold the first-ever shrimp festival at the Cao Van Lau Theatre in the city’s downtown centre. At a press conference on April 27, Nguyen Viet Thang, head of the organizing board, said the goal of the – VietShrimp International Fair –  is to promote the positive social and economic impact of the shrimp industry on the citizens of the region. “We specifically want to educate the public about shrimp and its importance to the local economy and publicize the wide variety of seafood indigenous to Vietnam as well as provide the opportunity for people to enjoy it,” said Mr Thang. Seafood offerings will include both wild-caught and farm-raised shrimp, along with plenty of traditional Vietnamese fish and seafood fare and beverages of all types – soft drinks, craft beer and wine as well as coffee and tea, said Mr Thang. The event is expected to draw about 150 exhibitors and additionally showcase the work of Vietnamese photographers, displaying more than 100 select photos reflecting the working life of fishermen, said Mr Thang, who is also chairman of the Vietnam Fisheries Association The gallery will be open throughout the three-day day event and there is no admission to view the exhibit, he said. Le Anh Xuan, director of Truc Anh JSC, said the event also provides an excellent opportunity to boost tourism and recreation in Bac Lieu City and surrounding region as well as highlight the region’s inherent natural beauty. “We want to get the word out that the VietShrimp International Fair is an all-Vietnamese family weekend of food and fun not to be missed, and festival planners hope to exceed expectations and hold a festival that is bigger, better and more fun than ever,” he said. Local companies look to gain footholds in global markets To further internationalize operations, many Vietnam local companies are planning to expand their outward foreign direct investment (FDI) in the years ahead, says the Foreign Investment Agency (FIA). In 2015 they registered total FDI of US$625 million in 102 new business ventures and increased their supplementary investment significantly in another 53 that were already in existence as of the beginning of last year, said the FIA in a recently released report. The FIA report says the companies in 2015 not only increased the scale of funds committed but “fanned out to new non-traditional markets in the US, Russia, Singapore and Germany.” “However, the bulk of outward FDI for 2015 was in Laos and Cambodia, two markets where investment has historically been strong.” They focussed investment on the mining, farming, forestry and aquaculture industries, areas they consider their strong points, says the FIA, while spreading out to other industries such as real estate, banking and insurance. Phan Huu Thang, former head of FIA and current director of the Foreign Investment Research Centre, said the higher levels of investment, though modest is a step in the right direction. Local companies have become more willing to invest overseas largely as a result of an amendment to the Law on Investment passed by the NA in 2014 that came into effect on July 1 of last year, said Mr Thang. Mr Thang underscored the point that the amended law has created a clearer picture of the investment landscape saying it “substantially reduced the risks of investing overseas that previously existed.” “The revised law along with a raft of free trade agreements have stimulated an eagerness on the part of many local companies to internationalize and bump up their overseas investment in business gambles heretofore considered too precarious.” As it relates to investment strategy, Mr Thang said the lion’s share of outward FDI is flowing into Laos and Cambodia, more traditional markets local companies feel they have a good understanding of. But we are seeing more activity in markets in Africa and in North America, Central America and South America along with the Caribbean, particularly with the Vietnam National Oil and Gas Group (PetroVietnam). “Most recently PetroVietnam received a license to explore for oil and gas in Myanmar,” said Mr Thang, “which is a monumental development.” Meanwhile, Viettel started to operate in Tanzania and Burundi in 2015, bringing the total number of foreign markets it is operating in to 10, said Mr Thang.  Viettel is actively pursuing expansion plans boasting it plans to be operating in 20 foreign countries by 2020. Thang said only the oil, gas and telecom business endeavours have been substantive large scale FDI initiatives with most undertakings of local firms having been on a relatively small scale. However, Tran Huu Huynh, chairman of the Vietnam International Arbitration Centre (VIAC), has a different take.  He said the important thing is that local companies have taken a step in the right direction. Local companies are laying the foundation for future growth and getting toeholds in foreign markets, said Mr Huynh, which with some innovation and creativity along with experience operating in global markets will most likely quickly turn into footholds. Heus harbours big plans for Vietnam The Netherlands' Royal De Heus, an international organisation with a leading position in the animal feed industry, has boosted its presence in Vietnam with the installation of its seventh animal feed plant. Located in Mang Thit district in the Mekong Delta province of Vinh Long and costing over $30 million, the new factory is the Dutch firm's second facility of this kind in the area. The new facility, called Vinh Long 2, will produce feed for cattle, pigs, and poultry at a capacity of 250,000 tonnes a year in the first phase, thus helping increase De Heus Vietnam's total output to one million tonnes a year. Vinh Long 2 is the first plant with a river port. Utilising the water ways, the logistics of incoming raw materials and outgoing finished products can be organized in a more efficient way between Vietnam, Cambodia, and the Mekong Delta region. "The new facility is an important step in our ambition to contribute to the agricultural development of Vietnam,” said Gabor Fluit, De Heus Asia’s business group director. Coinciding with the operation of its seventh plant, De Heus Vietnam announced that Vietnam had been selected as the official headquarters of of its Asia branch. Operating in Vietnam for eight years now, De Heus has continued expanding its operations in the country to become one of the five biggest animal feed producers in the country. The Vietnamese animal feed market has developed rapidly, with an average growth rate of 10-13 per cent a year. The animal feed market is expected to reach $10.55 billion by 2022. According to a recent report released by the Ministry of Industry and Trade, foreign companies account for a smaller quantity but hold 60-65 per cent of the domestic market. Thai CP Vietnam Livestock Corporation and the US’ Cargill Vietnam Co., Ltd. hold the largest market share, with a combined 30 per cent. Industry insiders said that, together with the increasing involvement of Vietnamese firms, the expansion of foreign players would make competition in the local animal feed market fiercer in the months to come. HCM City: 100 businesses established each day As of April 15, as many as 10,450 enterprises, including 225 private ones, 1,186 joint-stock ones and 9,038 limited liability ones were established in Ho Chi Minh City, according to the city’s Customs Department. A total of 100 enterprises were set up every day. Nearly 80% of the newly-established businesses are operating in the service sector. The total registered capital increased 82.3% against the same period last year, reaching VND81,506 billion. The capital poured into agriculture-aquatic-forestry, trade and service doubled. The city gained VND9,591 billion from personal income tax, VND1,300 billion higher than the same period last year. Of the figure, the State sector and the foreign-invested sector contributed VND17,434 billion and VND17,610 billion, up 30.5% and 16.5%, respectively. CIEM proposes macro-economic solutions The Central Institute for Economic Management (CIEM) has proposed the government issue more efficient macro-economic solutions, both fiscal and monetary, to boost economic growth in the second quarter of the year. In its recently-released Q1 economic report, CIEM said that the slowdown in the first quarter’s GDP, which stood at 5.46 per cent and was lower than the 6.02 per cent recorded in the same period last year, is indicative of the country’s unstable economic recovery. According to CIEM research, enterprises face higher costs for inputs and investors are less hopeful about macro-economic reform. Monetary policy should be carefully adjusted to adapt to future inflation in order to make enterprises feel safe about long-term investment. It should also not be used to boost economic growth. A stable exchange rate between the VND and the USD is a necessary component in maintaining growth in the second quarter, according to the report, and the government should allow for unfavorable fluctuations in the USD in the international market. The reform of commercial banks should continue and operating costs reduced. CIEM proposed no limit on banks participating in government bond bids. Regarding fiscal policy, it proposed cuts to operational spending and the building of detailed plans on repaying public debt in the medium and long terms to cement faith in the stability of public debt. 2,460 resettlement condos handed over to beneficiaries Around 2,460 out of 4,536 resettlement apartment units have been handed over to households affected by key development projects in the Thu Thiem New Urban Area in HCMC. Some 1,565 of the 2,460 apartments had been put into use, according to a first-quarter review report of the HCMC Department of Construction. The city government is completing handover procedures for the remaining 2,076 condos as part of a program to build 12,500 resettlement apartments in the Thu Thiem New Urban Area in District 2. The department will continue urging investors to speed up construction of resettlement housing and complete handover procedures. The city has spent big on the program to help affected households and individuals settle down. However, many of them have left the resettlement apartments as they cannot afford to pay monthly service and management fees, said Tran Trong Tuan, director of the department. Tuan said the resettlement housing program has contributed greatly to improving the lives of local citizens. Over the past 20 years, the city has relocated and arranged resettlement homes for around 36,000 households affected by urban rehabilitation projects, including the upgrade of Nhieu Loc-Thi Nghe, Tan Hoa-Lo Gom, and Tau Hu-Ben Nghe canals. Wood processors can find 70% of materials at home Local wood processing firms can now find 70% of the materials they need on the domestic market as heavy investments in forest replanting have been made over the years. Data of the General Department of Forestry under the Ministry of Agriculture and Rural Development showed the spending on timber and wooden product imports rose to US$1.15 billion in 2010 from US$755 million in 2006, and reached US$1.66 billion last year. In 2006-2010, due to material shortages on the domestic market, local wood processors had to rely heavily on imports. But they can now find more timber at home. The department’s deputy head Nguyen Van Ha said wood imports accounted for 4.7 million of 27 million cubic meters needed by local wood processing firms last year. Ha ascribed the change to the replanting and protection of forests since 2000. The department’s data showed the local wood processing sector has grown strongly in the past 10 years, especially in terms of export value. According to the department, wooden goods exports rose from US$1.93 billion in 2006 to US$3.4 billion in 2010 and US$6.9 billion last year. The Vietnam Timber and Forest Products Association (Vifores) forecast wooden products exports would grow 10% to US$7.6 billion this year over last year. Moreover, new markets including Japan and Korea have boosted imports from Vietnam. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR