BUSINESS IN BRIEF 16/5 Fair trade a priority among EU consumers Fair trade is now one of the most important concerns for European Union (EU) consumers, along with concern for sustainable development, a Ministry of Trade and Industry official said. Tran Ngoc Quan, deputy director general of the Europe Market Department, Ministry of Trade and Industry, made this observation at the policy dialogue "Promoting fair trade in Viet Nam" in Ha Noi yesterday. The dialogue was held by the Viet Nam Rural Industries Research and Development Institute, in collaboration with Viet Nam Tea Association, Viet Nam Cocoa – Coffee Association and Viet Nam Handicraft Exporters' Association. "The FTA between Viet Nam and the EU has brought big advantages for the market and Vietnamese enterprises when exporting to the EU market," he said. "The EU cares for economic development with opportunities for future generations. As such, in the EU member states, especially more developed countries, consumers need to have higher requirements for products and services," Quan highlighted, adding "The market requirement is strict, including requirements for producers for environment and society." If Vietnamese enterprises actively sought voluntary labels such as ecolabel, social responsibility and fair trade, it will give EU consumers more confidence while choosing Vietnamese products, he added. According to EU statistics, EU revenue of fair trade products has increased steadily, especially for coffee, tea and handicrafts. Fair trade represents 1.5 million producers and labour in 1,200 manufacturers in 74 countries, according to Nguyen Bao Thoa, director of the "Promoting fair trade in Viet Nam" project. Speaking at the dialogue, Thoa said that for producers and labour, fair trade helped them by creating a fair and stable price for their products, welfare funds to re-invest into their community, empowerment to voice their opinions in decision making process, and improvement in working and living conditions based on the establishment of production, or a consumption model with responsibility. For businesses, fair trade is a global certification for easier recognition, meeting market demands, pricing themselves according to the fair trade criteria, improving their organisational structures, and being part of a global market, in addition to exchanging opportunities to learn and voice their opinion on fair trade itself. Consumers of fair trade will buy products according to values and rules of fair trade, choosing good products, with clear origin, showing producers' responsibility to the economy, society and environment. Fair Trade was a tool for delivering sustainable development, Christine Gent, director of World Fair Trade Organisation in Asian region, said. Fair Trade supported sustainable rural livelihoods and helped to stem the tide of urban migration, she added. However in Viet Nam, fair trade was relatively new and yet to be well known, Thoa said. A coffee grower in Dak Lak Province said at the meeting that as soon as his co-operative applied fair trade practices, it saw improvements. "The quality of coffee was enhanced, while the awareness of both planters and buyers on social responsibility increased," he said. However, as the province was still weak in financial capacity, he proposed to organisations that they support the co-operative with a fee to build a trade promotion brand, and hoped the Government would lend support through investment funds on materials. A representative of the handicraft sector also spoke highly on the advantages of fair trade in exporting to foreign markets, especially the European Union (EU) market. She also recommended to the State that they have policies to attract more companies and enterprises taking part in fair trade activities to further promote fair trade in the country. The project "Promoting fair trade in Viet Nam" is funded by EU with the total budget of more than 504,000 euro (US$574,000) in a period of 35 months from June 2014 to May 2017. The project aims to develop and increase the fair trade business ability in Viet Nam following all requirements to the EU market. Firms urged to be more inclusive Enterprises that engage in inclusive business could tap into new markets and ensure their business efficiency, according to a conference held in the capital city on Wednesday. Ho Sy Hung, head of the Ministry of Planning and Investment's Enterprise Development Agency said it was necessary for countries including Viet Nam to facilitate inclusive business – a sustainable business model that benefits low-income communities. Promoting this business initiative in Viet Nam would speed up the country's achievement of Sustainable Development Goals (SDGs), he said. Viet Nam has made increasing efforts to improve the environment for inclusive business with a focus on facilitating development of the private sector and supporting small- and medium-sized enterprises. Since 2000, the private sector has been performing a greater role in the nation's economy. In 2015 alone, the sector contributed about 48.3 per cent of the country's GDP while their investments made up 38.5 per cent of the total social investment capital. Over past years, the sector has also created more jobs for local people including low-income earners, he noted. Participants at the event also discussed how the momentum of SDG implementation could be leveraged to improve the environment for inclusive business at the national level. They also underlined the need for closer co-operation to build ecosystems for inclusive business, speeding up the achievement of the SDGs. Several firms that have been involved in inclusive business shared their stories at the event. Ecofarm representative Nguyen Hong Quang, said his company has engaged in inclusive business by creating links between enterprises, farmers, the Government and scientists. The company has been working to boost technology transfer and research and development activities, help farmers access soft loans and technical support besides building agriculture co-operatives, Quang said. Meanwhile, Traphaco Group chairman Nguyen Huy Van said as a medicine manufacturer, his company has set up one of its factories with a 100ha farming area for medicinal plants in Lao Cai Province's Sa Pa Town, that employs about 600 local farming households. Emerson Network Power expands footprints in Vietnam Emerson Network Power, the world’s leading provider of critical infrastructure for information and communications technology systems, continues to expand its footprint in the country. Emerson Network Power has appointed Quang Dung Technology Distribution Company Limited (QD.TEK) as its latest distributor for data centre solutions. QD.TEK’s appointment comes at a time when more and more organisations are increasingly investing in IT to address business challenges brought by technology disruptors such as the Internet of Things (IoT), cloud computing and edge computing. With these trends, businesses require holistic power, thermal and infrastructure management solutions that give them the agility, flexibility and efficiency they require for growth. “Vietnam is poised to become one of the fastest growing ICT markets in Southeast Asia, with some experts predicting that it will be the next Silicon Valley. And as more organisations become increasingly reliant on IT, they require efficient and agile solutions to support their critical infrastructure,” said Quangdzung Truong, general manager, Emerson Network Power in Vietnam. “We remain committed to supporting businesses’ IT initiatives and with the help of QD.TEK we will be able to reach more customers,” he added. Established in 2004, QD.TEK is a leading telecom infrastructure provider in Vietnam. Since then, the company has been a vital contributor in many of the largest ICT projects in the country. One of the key Emerson solutions carried by QD.TEK is the Liebert® GXT4, providing critical power protection for edge applications such as branch offices and remote sites. “We are honoured to have been appointed Emerson’s distributor in Vietnam,” said Dang Thach Quan, QD.TEK general director. “Together, with our strong sales and service footprint in the country, we will be able to take both our business and Emerson Network Power’s to new heights.” QD.TEK was officially appointed distributor during a ceremony on May 10, 2016 at Caravelle Hotel in Ho Chi Minh City. Aside from QD.TEK, Emerson Network Power distributors in Vietnam also include Advanced Technology Distribution (ATD). Phu Tho bio-fuel plant left idle A USD114.2 million bio-fuel plant in the northern province of Phu Tho has been left unused for years. Following the government’s approval on bio-fuel development, many localities nationwide licensed large-scale ethanol production projects. However, until now, most of the projects are barely operational. Some have seen sluggish construction, while others are on the verge of bankruptcy. The ethanol project in Tam Nong District, Phu Tho Province, invested by Bio-Petroleum and Petrochemical Joint Stock Company (PVB) is among those. Work on the plant started in 2009 and it was slated for operation in 2012. The 50-ha project had an initial investment of USD1.7 trillion, but later, the figure was raised to VND2.4 trillion. By late 2011, around 80% of the work was completed as the management building, stores, main production area, waste treatment system and some other facilities were built. However, since then the plant has been at a standstill. The site is covered by wild grass, while hundreds of tonnes of iron and steel imported from EU, the US, Denmark, Thailand have become rusty. Piles of equipment being covered with canvas have been left in the yard for years. According to a representative from the Ministry of Industry and Trade, the project delay is attributed to the capital shortage as the investor and its shareholders have not yet reached a consensus on the capital increase. Meanwhile, demand for bio-fuels remains slow. Many households in Tam Nong District had to give their land to the construction. Nguyen Dang Luong from Co Tiet Commune said that, “Our land was compulsorily purchased many years ago, but to date, the project has still been delayed. The investor promised to recruit local residents, but this hasn’t happened.” Phan Van Ngoc, Vice Chairman of Tam Nong District, said that local authorities have requested the investor to continue the project for many times, and had informed provincial leaders of the problem, but to date, no improvement has been seen. In the related news, Dung Quat Ethanol Plant in the central province of Quang Ngai has had to shut down after just four years due to major losses. Construction on USD90.5 million plant started in September 2009. VinaTrucking unattractive to transport firms Since its launch more than five months ago, VinaTrucking has seen only 40 successful transactions though many firms have put their names down to join the first transport trading floor in Vietnam. VinaTrucking general director Ta Cong Thuan said 490 firms and individuals have registered to take part in transactions via the exchange as of May 5. Of the total, truck operators make up 334 and cargo owners account for 103. Though firms have registered to conduct 225 transactions, only 40 of them have been translated into reality. Time-consuming procedures are one of the reasons behind the small number of successful transactions. The director of a transport firm in HCMC said enterprises have to complete a complicated process before they gain membership and transact on the exchange. Another problem is that the management of VinaTrucking does not clarify the charges suggested by cargo owners for transport firms to consider. Thuan admitted that VinaTrucking has not been performing as well as expected given the much higher number of registered truck operators than that of cargo owners. The trading floor is still new and many enterprises have not known about it. Besides, cargo and truck owners have yet to build mutual trust, according to Thuan. Thuan said it would take more time to encourage businesses to quit the traditional way of conducting transactions. Firms are afraid of losing some benefits as transport charges are not transparent. To do transactions on VinaTrucking, transport enterprises and cargo owners have to register for membership at www.sanvantaiviet.vn. Members can log on the website to see offers or requests, then send their transaction request and proposed charges to their potential partners. Once the request receiver accepts, the exchange will connect the two parties and suggest an appropriate transaction method. At present, enterprises can make membership registrations and transactions on VinaTrucking at no charge. The floor only collects fees from tenders organized to pick transport firms for large volumes of cargo. Fruit, car parts imports surge in Jan-Apr The first four months saw vegetable and fruit imports picking up 37.3% and auto parts imports surging 24.3% compared to the same period last year, showed a report of the Ministry of Industry and Trade. The ministry said imports of vegetables and fruits, and auto parts should be put under control. The ministry noted this group of items posted average import growth of 11.3% in the period, higher than 9.1% in the same period of 2015. Nearly US$2.2 billion was spent on the group of import goods, making up 4.3% of total imports in the first four months. Imports of other goods also surged in January-April, with coal up 125.9%, urea up 163.7% and steel ingots up 64.1%. The group of items subject to import limits grew 8.9% over the same period last year. However, the group of goods whose import is encouraged was put at US$44.8 billion in the first four months, down 2.3% year-on-year. Vietnam enjoyed a trade surplus of US$1.46 billion in January-April. The foreign-invested sector registered a surplus of US$7.06 billion (excluding crude oil) and contributed 70% of Vietnam’s total exports in the period, while local firms ran a trade deficit of US$5.6 billion. PVPower NT2 to invest in liquefied carbon dioxide project PetroVietnam Nhon Trach 2 Power JSC (PVPower NT2) has clinched a contract with Chemical Industry Engineering Corporation to execute a project to collect liquefied carbon dioxide from emissions by Nhon Trach 2 Power Plant for commercial purposes. PVPower NT2 said in a statement that it had reaped positive preliminary results of producing liquefied carbon dioxide from emissions by Nhon Trach 2 Power Plant in the southern province of Dong Nai. Under the contract, CECO will survey, collect and analyze relevant data, select appropriate technology, calculate investment cost and assess the economic efficiency of the project. The company will present results to PVPower NT2 three months after the feasibility study for the project is implemented. The technology of collecting liquefied carbon dioxide has been applied worldwide. In Vietnam, liquefied carbon dioxide has not been collected from emissions by a power plant but from emissions by chemical-related plants like those producing sugar or ethanol. Demand of enterprises in the machinery, ship building, steel and food sectors for liquefied carbon dioxide is huge, and local firms have to import from China at high prices. Therefore, PVPower NT2 wants to grasp the opportunity by implementing the project as it has sufficient resources of industrial emissions and a large market in the southeastern region. The proposed project is expected to increase the operational efficiency of Nhon Trach 2 power plant and help reduce environmental pollution. Heat wave sends air-conditioner, fan sales up Home appliances stores in HCMC have reported robust sales growth in air-conditioners and electric fans in recent months due to hot weather in the city. Tran Tan Hoang Hau, marketing director of Thien Hoa Electronics and Furniture Shopping Center, said many customers have rushed to buy air-conditioners and fans as temperatures have been high in recent weeks. Sales of these products have jumped more than 130% over the same period last year and 180-200% against the previous months. Air-conditioners at Thien Hoa have recorded the highest revenue rise of over 200%, followed by water misting fans with a rise of more than 180%. Tran Dinh Luu Phong, director of marketing and communication at De Nhat Phan Khang Co Ltd, said air-conditioner sales in the final three weeks of April shot up 205% compared to earlier periods and demand for refrigerators and washing machines increased 30-50%. As there are signs that the rainy season would come soon, Phong forecast that demands for air-conditioners and fans would slide slightly in the next three weeks. More consumers have preferred energy-saving products, including air-conditioners and refrigerators. Hau of Thien Hoa said prices of inverter air-conditioners are high, at around VND10 million (US$448.6) per item, but they still attract a lot of consumers. Compared to last year, sales of the products have risen more than 50%. Meanwhile, low-income consumers prefer water misting fans thanks to reasonable prices ranging from VND1.8 million (US$80.74) to VND3 million (US$134.6) per item. Phong said prices of most brands have been kept unchanged but products of some brands have been sold at higher prices. For example, Daikin air-conditioner prices have inched up 5%. Electronics stores Nguyen Kim in District 1, Thien Hoa in District 3, Dien May Xanh in Binh Thanh District, and Phan Khang in Tan Binh District have wooed large numbers of customers, especially at night and weekend. More visitors are seen at the air-conditioner display area of these stores these days. Despite high demand, many electronics stores offer discounts of hundreds of thousands or millions of dong for many products on sale. Electric fans are sold at VND200,000 (US$8.9) each and water misting fans at VND1.7 million (US$76.4) to VND4.3 million (US$193.3) each. Air-conditioners of brands like Daikin, Samsung, Sharp and Hitachi with a capacity of one horsepower are sold at VND5.8 million (US$260.8) an item or higher. Meanwhile, prices of Aqua, Electrolux, Samsung, Sharp, Hitachi, and Sanyo refrigerators range from VND3 million (US$134.6) to VND70 million (US$3,147) each depending on capacity, brand, and features. PM asks to control key projects Prime Minister Nguyen Xuan Phuc asked Ministry of Invesment & Planning in coordination with relevant ministries, departments to re-check the national key existing projects which use public investment capital from VND 10trillion up. This move aims to specify total budget capital for public investment, ensuring effectiveness and avoid losses. The PM asked to strengthen inspection concerns in the public investment law; carry out the government’s regulations strictly adding that the government will control expenses needed in accordance with the bidding law; strictly check on selling of public property… Cash still king in e-commerce E-payment is developing quickly in Vietnam but remains modest compared with other countries worldwide. Ninety-one per cent of online customers continue to prefer cash payments, 48 per cent conduct bank transfers, and 20 per cent use a credit card, according to Ms. Nguyen Thi Nhieu from the Ministry of Industry and Trade (MoIT). E-commerce faces a number of obstacles and difficulties in the country, she said, such as an inadequate legal framework, an absence of support policies, poor socioeconomic factors, and the use of cash and lack of belief in e-payments. Despite e-commerce developing quickly its scale remains small and the proportion of e-commerce out of all commerce is still low, according to Ms. Tran Thi Thap from the Posts and Telecommunications Institute of Technology. In order to improve e-payment methods, Ms. Nhieu suggested that the government be more active in creating favorable conditions for its development, for example using e-payments in its own affairs and creating a national e-commerce management system. Real estate still hot property Vietnam’s real estate market has maintained its heat over recent months, consultants JLL wrote in their latest report, released on May 12. With the economy back on track the property market has gathered momentum over the last 18 months, predominantly focused around the residential sectors in major cities such as Ho Chi Minh City and Hanoi. “Residential sales in each city recorded all-time highs in Quarter 1, 2016, reaching approximately 9,000 units and 8,000 units, respectively,” according to the report.    Grade A office rents in Ho Chi Minh City are increasing due to a lack of supply and increased demand and vacancy rates across all Grades are down to 6 per cent; last achieved in the fourth quarter of 2008. The retail market remains a mixed bag, with some centers performing well, notably Vivocity, Crescent, Lotte and AEON, with the much-anticipated Saigon Centre Phase 2 coming on line in mid-2016, anchored by Takashimaya.    Many new international brands are looking to enter the market, including Zara and H&M. The hotel and hospitality sector is also experiencing a resurgence, with many hotels in CBD locations reporting strong occupancy rates and a large number of new operators entering the market, especially in coastal areas such as Da Nang, Nha Trang and Phu Quoc Island, the report notes. Activity within the industrial sector has improved, with many companies looking to enter Vietnam due to low labor costs and improving infrastructure.   The sector will receive a further boost once a number of trade agreements take effect, including the EU - Vietnam FTA and the TPP. Vietnam stands to be one of the biggest beneficiaries of the TPP over the next five to ten years. Foreign investors have been circling Vietnam for some time, it went on, with many groups kicking the tires and trying to understand how to gain a foothold in the market. More transactions are now being registered, with Japanese groups leading the way. The question on everyone’s lips is how long will market conditions last? “In some respects, the real estate market is like the weather. We are currently experiencing a heat wave but we know at some stage the rainy season and cooler conditions will come,” said Mr. Stephen Wyatt, Country Head of JLL Vietnam. “If we look back over the past 26 years Vietnam has witnessed four market cycles - I will leave it to you to do the math!” HNX divides stocks by classification principles on Upcom  The Hanoi Stock Exchange (HNX) will divide stocks on the official unlisted market (Upcom) into two sets from June 24. The bourse officially issued two sets of classification principles on May 9. The Upcom Premium set will include the stocks of firms with good financial health and transparency, while the Upcom Warning set will hold the remaining stocks. The northern bourse regulated that firms with stocks listed in the Upcom Premium set must have charter capital of at least VND120 billion (US$5.3 million), be profitable in 2015 and have no accumulated losses, or they must have the minimum chartered capital of VND30 billion, with a return after tax on equity of at least 5 per cent in 2015 and no accumulated losses. All these details must be mentioned in the firms' audited financial statements. Firms listing on Upcom Premium must also have their financial reports sent to the HXN on time. In particular, the HNX said, stocks on Premium Upcom will be allowed to indulge in margin trading if they meet the conditions for such trading, set by the State Securities Commission. On the other hand, the Warning set will group all restricted stocks with suspended trading due to the firms' accumulated losses or failure to report their financial statements and other problems. According to the HNX, the separation of stocks based on the firms' health will contribute to promoting market transparency and will better protect the legitimate interests of investors. Last year, there were 265 firms listed on Upcom, showing growth 1.6 times higher than the previous two years combined. In 2015, the registration capital held in Upcom was VND50.4 trillion, and market capitalisation reached VND61 trillion. Most of the securities experts forecast better growth for the market this year both in terms of size and quality. Together with policies on equitisation and IPOs on Upcom, the classification will provide a boost to attract more investors to the unlisted market. Taiwan ranks 3rd among investors in Vietnam China’s Taiwan ranked third among 50 countries and territories running investment in Vietnam in the first four months of 2016. According to the Foreign Investment Agency under the Ministry of Planning and Investment, Taiwan had 39 newly-licensed projects and 25 others with capital adjustments, worth over 664 million USD in total. Taiwanese investors injected money into 10 out of 21 economic sectors in Vietnam, mainly in processing and manufacturing industries, with more than 600 million USD going to 28 new projects and 22 existing ones. Other attractive fields include water supply, waste treatment and logistics services. In January-April, Taiwan’s investment projects were present in 17 out of the 63 cities and provinces across Vietnam. The southern province of Tien Giang took the lead in the number of projects and the amount of investment capital with a combined newly-registered and added capital of over 229 million USD, accounting for 34.5 percent of total Taiwanese investment in the country. It was followed by the central province of Ha Tinh with nearly 184 million USD. HCM City expects new wave of US investment via TPP Ho Chi Minh City are working to catch a new wave of investment from the United States as the Trans-Pacific Partnership (TPP) was sealed early this year. Statistics by the municipal Department of Planning and Investment show that the city lured 26 foreign direct investment (FDI) projects, worth 135.4 million USD, from the US last year. Bigger numbers are expected this year as Vietnam remains among three priority markets for future business expansion of US companies in ASEAN, according to the ASEAN Business Outlook Survey in 2016 by the US Chamber of Commerce (AmCham) in Singapore. About 31 percent of respondents region-wide indicated their plans to expand in the country. The US pumped more than 630 million USD into 321 FDI projects in Ho Chi Minh City, making it the twelfth largest out of 74 countries and territories investing in the city. US investment mainly focuses on projects in real estate, banking, services and technology. A group of US investors, including Steelman Partners, Cantor Fitzgerald and Weidner Resorts Vietnam met with the city’s authority in early May to seek an investment permit for a 4-billion-USD complex of shopping and office buildings in the Thu Thiem New Urban Area. They are among many others who are looking for investment opportunity in the southern economic hub. To translate the potential into reality, the city has put effort into administrative reforms, particularly in terms of business registration. Since May 19, it only takes a company four days to be granted a business registration certificate. Solution sought to assist farmers in adapting to TPP A workshop was held in Hanoi on May 12 to look into challenges facing millions of Vietnamese farmers when the Trans-Pacific Partnership (TPP) agreement takes effect. The event, held by the Vietnamese Farmers Association, brought together over 100 experts from ministries and agencies as well as scientists and successful farmers nationwide. Participants agreed that while the TPP will open up large markets for Vietnam’s farm produce and boost investment of the pact’s member countries in Vietnam, over 10 million Vietnamese farmer households are anticipated to face with an array of difficulties due to small scale operation. Farmers are the most vulnerable to outside competition due to their lack of knowledge and low competitiveness, experts said, noting that the animal husbandry in particular is likely to be at a disadvantage compared to their peers in other countries who have long adopted modern and industrialized production process. Against the setbacks, experts said the most important solution at present is raising awareness of farmers about the opportunities and challenges when joining the TPP, so that they will change their mindset on business production towards increasing productivity and product quality. Farmer associations at all levels need to serve as bridges to connect farmers with businesses to sell products to the market, experts recommended, saying this is a way to protect the legitimate rights of farmers through contracts. Chief Representative of the Food and Agriculture Organisation of the UN (FAO) in Vietnam JongHa Bae said Vietnam is forecast to benefit the most from the TPP compared to 11 other member economies. However, Vietnam ’s agriculture will face fierce competition from foreign manufacturers when the tariff and non-tariff barriers are reduced and eliminated, he added. He suggested setting up a mechanism to attract private investment in agriculture and urging the country to improve food quality and safety via strengthening institutional frameworks and building competitive capacity for farmers. FDI less than in 2015 for HCM City A shortage of new large garment and textile projects caused foreign direct investment in HCM City’s manufacturing sector to fall this year compared to 2015, according to the HCM City Export Processing and Industrial Zones Authority (Hepza). Hepza’s report pointed out that industrial parks and export processing zones in the city attracted only US$115.67 million in FDI for the first quarter of the year, a year-on-year decrease of 69.49 per cent. Projects included a US$35.5 million project by Yazaki Eds Việt Nam Co Ltd in the Tân Phú Trung Industrial Park, a US$30 million increase in its capital by Furukawa Automotive Parts Co Ltd, both in the automobile support industry, and a US$25.6 million project by Nam Dương International Food Company (Singapore) at Hiệp Phước Industrial Park to produce sauces and condiments. Trần Việt Hà, head of the Investment Management Department at Hepza, said that in the same period last year, IPs and EPZs attracted US$379.14 million in foreign capital, mostly for garment and textile projects such as the US$300 million project of Worldon Việt Nam of Hong Kong and South Korea’s Nobland Việt Nam, which increased investment capital by US$18 million to US$61 million. This year, no licenses have been granted to garment and textile projects, Hà told the Đầu tư (Investment) newspaper. In recent years, the city has outlined policies to limit investment in labour-intensive and large industries, including the garment and textile sector. But with expected growth after the Trans-Pacific Partnership agreement takes effect, some IPs in the city like Đông Nam and Hiệp Phước will continue to receive key garment and textile projects, which are committed to use hi-technology, modern machinery and equipment, and have a design centre, he said. For instance, on its investment certificate, Worldon Việt Nam pledged to build a centre for fashion design and produce high-quality clothing to supply to famous brands such as Uniqlo, Nike, Adidas and Puma. Hepza will tightly supervise the number of labourers, production technology and equipment in the garment and textile investment projects. Closer supervision might be why garment investors have decided to open projects in other localities. Meanwhile, a US$2 billion Samsung project at Saigon Hi-Tech Park, which is expected to open in the second quarter of this year, is expected to create a new wave of investment in the park. But the number of new projects granted investment licenses this year has been modest. Hepza targets a total investment of US$700 million this year, and encourages companies to invest in areas like high technology and support industries, electronics, IT and chemicals. HCM City eyes 50 million USD in ornamental fish exports Ho Chi Minh City expects to earn up to 50 million USD from exporting 40-50 million ornamental fish each year, according to the city’s ornamental fish development programme from 2016-2020. Last year, the city exported 13 million pet fish and gained revenue of 12 million USD, doubling 2010’s figure. The exports were mainly neon fish, molly fish, sailfin molly, seven-coloured fish, Siamese fighting fish and dicus. They were shipped to 47 countries worldwide with Europe accounting for 60-70 percent of the market share. The city has 10 firms and fish breeding farms involved in exporting. Although growth has seen in the city’s ornamental fish exports, production scale is still small and cannot fill large orders. In comparison with regional rivals like Singapore, Thailand and Malaysia, Vietnam’s ornamental fish exports are still weak. Under the programme to boost ornamental fish breeding development, the city will focus on increasing quantity and product value, making upgrades to the breeding infrastructure to prevent disease and protecting the environment. Ornamental fish production will be branched out to district 8, 9, 12, Go Vap, Thu Duc, Cu Chi, Binh Chanh and Hoc Mon while all breeding farms will join monitor programmes for export. The city has also mapped out breeding and technical programmes and outlined mechanisms to boost ornamental fish development. Along with setting up linkages between pet fish production and consumption, the city will also build a website on ornamental fish to introduce breeding farms and enterprises to customers. Efficient production models which provide disease free fish for export and agricultural markets offering consultancy about pet fish will also be built. Vietnam enjoys growing tourism contribution to GDP The direct contribution of tourism to Vietnam’s GDP was nearly 279.3 trillion VND (12.57 billion USD), or 6.6 percent of GDP, ranking 40 th among 184 nations in the world. The figures were released by the World Travel and Tourism Council in its 2015 report on the economic impact of tourism in 184 nations. In 2015, the total contribution of the tourism sector to Vietnam’s GDP hit 584.88 trillion VND (26.32 billion USD), accounting for 13.9 percent. The sector also created 6,035,500 jobs, accounting for 11.2 percent of total employment, including 2,783,000 direct jobs, or 5.2 percent. Vietnam earned 213.39 trillion VND (9.6 billion USD) from international visitor exports, accounting for 5.6 percent of the total export value. Last year, Vietnam welcomed 7.94 million foreign visitors, according to the General Statistics Office (GSO). Investment in the sector also reached 113.50 trillion VND (5.1 billion USD), or 10.4 percent of the year’s total investment. Manufacturing investment falls in City, few garment projects licensed A shortage of new large garment and textile projects caused foreign direct investment in HCM City's manufacturing sector to fall this year compared to 2015, according to the HCM City Export Processing and Industrial Zones Authority (Hepza). Hepza's report pointed out that industrial parks and export processing zones in the city attracted only US$115.67 million in FDI for the first quarter of the year, a year-on-year decrease of 69.49 per cent. Projects included a $35.5 million project by Yazaki Eds Viet Nam Co Ltd in the Tan Phu Trung Industrial Park, a $30 million increase in its capital by Furukawa Automotive Parts Co Ltd, both in the automobile support industry, and a $25.6 million project by Nam Duong International Food Company (Singapore) at Hiep Phuoc Industrial Park to produce sauces and condiments. Tran Viet Ha, head of the Investment Management Department at Hepza, said that in the same period last year, IPs and EPZs attracted $379.14 million in foreign capital, mostly for garment and textile projects such as the $300 million project of Worldon Viet Nam of Hong Kong and South Korea's Nobland Viet Nam, which increased investment capital by $18 million to $61 million. This year, no licenses have been granted to garment and textile projects, Ha told the Dau Tu (Investment) newspaper. In recent years, the city has outlined policies to limit investment in labour-intensive and large industries, including the garment and textile sector. But with expected growth after the Trans-Pacific Partnership agreement takes effect, some IPs in the city like Dong Nam and Hiep Phuoc will continue to receive key garment and textile projects, which are committed to use hi-technology, modern machinery and equipment, and have a design centre, he said. For instance, on its investment certificate, Worldon Viet Nam pledged to build a centre for fashion design and produce high-quality clothing to supply to famous brands such as Uniqlo, Nike, Adidas and Puma. Hepza will tightly supervise the number of labourers, production technology and equipment in the garment and textile investment projects. Closer supervision might be why garment investors have decided to open projects in other localities. Meanwhile, a $2 billion Samsung project at Saigon Hi-Tech Park, which is expected to open in the second quarter of this year, is expected to create a new wave of investment in the park. But the number of new projects granted investment licenses this year has been modest. Hepza targets a total investment of $700 million this year, and encourages companies to invest in areas like high technology and support industries, electronics, IT and chemicals. State-funded projects to be reviewed Major projects with State investment of at least US$448.9 million will be reviewed to calculate the exact total capital needed and avoid losses. The Ministry of Planning and Investment (MPI) will work with relevant sectors and localities to investigate, Prime Minister Nguyen Xuan Phuc said at a recent meeting with the ministry. The MPI is tasked with inspecting compliance with public investment regulations, reviewing the implementation of the Law on Public Investment and proposing measures to accelerate the disbursement of public investment capital. It must also examine build-operate-transfer and public-private partnership projects to fine-tune regulations to attract more non-State capital. While ensuring the transparency of bidding processes, the MPI also has to monitor the sale of public assets and evaluation of businesses with big land and trademark ownership. The Cabinet leader asked for stronger administrative reforms to improve the investment climate as well as the competitiveness of the nation, enterprises and Vietnamese products. Foreign invested projects that use high technology, manufacture high added-value products and are environmentally friendly should be prioritised. Start-ups also need optimal conditions to develop, the PM said. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR