BUSINESS IN BRIEF 30/5 Restructuring agriculture sector critical: conference   Restructuring the agricultural sector to improve quality and promote co-ordination between farmers and firms is critical for the sustainable development of the sector amid unpredictable movements in the global market, members of a conference said yesterday. At the Viet Nam Agriculture Outlook conference held by the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD), in collaboration with the National Assembly Office, experts said that adopting agricultural technology to improve product quality would enable the agricultural sector to confront external shocks like the impacts of climate change or exchange rate policies. This requires the engagement of firms and a link with farmers to bring forth technologies in agricultural production, thereby enabling the creation of competitive products, said institute Director Do Anh Tuan. Agricultural technologies could firstly be applied in the production of coffee, rice, pepper and seafood, Tuan said. After struggling in 2015 with falling export revenues, the agricultural sector saw improvements in the first five months of this year. Still, Tuan said that the recovery would be threatened by the consequences of natural disasters and disease for the remainder of the year – obstacles the sector must prepare for and overcome to boost supplies and ensure food hygiene and safety, one of the most concerning issues today. Le Van Binh, Deputy Director of the National Assembly Office's Department of Economic Affairs, said that while new-generation free trade agreements were creating opportunities for the Vietnamese agricultural sector to expand its reach in the global market, improving product quality to meet the requirements of importing markets had become a prerequisite. Binh said policies should be created to encourage private investment in agricultural production technologies to boost product competitiveness. JongHa Bae, FAO representative in Viet Nam, said the country should increase investment in rural infrastructure, develop geographical indications for quality products and boost farmers' adaptability in the integration process. According to IPSARD, agricultural exports, besides traditional markets, should focus on expanding to new markets to avoid dependence on a single market. In addition, the association said the Government should hasten the restructuring of the farming sector, tighten management of smuggling and trade fraud, and enact flexible exchange rate policies to support exports. Currently, Viet Nam's agricultural export revenue is at about US$30 billion, while the global revenue is estimated to be $15 trillion. The capital city and 13 localities in the Cuu Long (Mekong) Delta region will foster co-operation in the agricultural sector, following an agreement inked between the Southwestern Steering Committee and the Ha Noi People's Committee on Thursday. The agreement will also facilitate co-ordination among the above-mentioned cities and provinces in ensuring good supply and improving product quality. It will also create favourable conditions for enterprises in these localities to provide the Ha Noi-based distributing channels with their agricultural goods in a move to establish an effective agro-product chain in the long-term. The Southwestern Steering Committee represents 13 provinces and cities in the Cuu Long (Mekong) Delta region, including Long An, Tien Giang, Dong Thap, Vinh Long, Tra Vinh, Hau Giang, Soc Trang, Ben Tre, An Giang, Kien Giang, Bac Lieu, Ca Mau and Can Tho. HCM City residents decry threat of eviction Nearly 2,000 residents living in an apartment building in HCM City's Tan Binh District are concerned about a bank's plan to take back the property because of overdue loan payments from the building's investor. On May 24, the Bank for Investment and Development of Viet Nam's (BIDV) North Sai Gon branch asked Tan Binh Import Export Material Joint Stock Company (Tamexim), the investor of The Harmona apartment building, to hand over the mortgaged property to the bank. "The investor must hand over the entire apartment building to the bank at 9am on June 9," the bank's statement said. About 600 families could be forced to leave their apartments for which they have already made full payment. A resident in the building, who declined to be named, said the residents had not been involved in the investor's loan with the bank. "We don't have an obligation to leave our own apartments. This is an issue between the investor and the bank. We have signed a contract to buy the apartments with the investor, so the bank cannot distraint our apartments," he added. Local media have reported that the apartment building was mortgaged to the BIDV North Saigon branch by the investor in 2011. The loan is due, but the investor has failed to complete its payments. Nguyen Van Liem, chairman of the board of directors of Thanh Nien Corporation, the project developer, said the firm would make the full payment no later than mid-June. "We have developed a good credit relationship with BIDV. We once received a loan of up to VND1.2 trillion (US$53.61 million). For this project, we received a loan of VND500-600 billion ($22.34-26.8 million), and still owe only more than VND240 billion ($10.72 million)," Liem said. According to Deputy Director of the State Bank of Viet Nam's branch in HCM City Nguyen Hoang Minh, both the bank and investor were at fault. If the investor fails to pay back the loan to the bank by mid-June, the bank would change the classification of the loan to bad debt while the investor would have to seek another source to pay the bank. Minh said they were not allowed to foreclose the building and evict residents from their apartments. At a meeting between the investor and residents on Thursday, Tran Sinh Hung, vice chairman of Ward 14's People's Committee of Tan Binh District, asked the investor to work with the bank to resolve the issue. Tamexim later announced that under an agreement between project developer Thanh Nien Corporation and BIDV, full payment would be made by Thanh Nien Corp by June 15. "We are sure that a full payment to the bank will be made and the ownership certificates will be given soon to the owners," Liem said. In a document, the bank also said that it would remove its decision as soon as it received the full payment from the project developer. The company has committed to issuing ownership certificates for the apartments in August. Nguyen Huy Hoang, deputy director of Tamexim, apologised to the residents and promised to work with Thanh Nien Corp to speed up the ownership issuance procedures. Covering an area of 9,137 square metres, The Harmona apartment located on Truong Cong Dinh Street in Tan Binh District includes three blocks with nearly 600 apartments. Construction began in late 2009 and was sold at VND20 million ($893.6) per square metre in 2010. The project was completed and delivered to its residents in 2013. Despite risky business, corporations still issue bonds  While the recent violation of Hoang Anh Gia Lai Group, which issued its bonds on a lower collateral basis, told a story of how risky corporate bond issuances could hurt the market, it did not stop other corporations from issuing their bonds in the country. This year, HAG has to pay VND6.7 trillion (US$300 million) to its bondholders, which were some local banks. However, due to the firm's losses in 2015, it was unable to pay it on time, and the banks must consider an extended period for the payment. Pham Phu Khoi, Deputy General Director of Viet Nam Prosperity Bank (VPBank), was among the HAG bondholders. He said it was not easy to rate the safety level of corporate bonds, as there was still no independent rating organisation for it. He said the Government set the legal framework for the credit rating agency in 2014, but there had been no sign of such a credit rating agency in the market. Thus, investors had to analyse the firms themselves using their own methods, sometimes leading to risks or delays in transactions. Most recently, Ha Noi Stock Exchange (HNX) submitted to the State Securities Commission a scheme to promote the corporate bond market in Viet Nam, in which it would develop the bond quality, diversify investors and enhance the transparency of information. However, most firms found bond issuance a good capital mobilisation channel. Most recently, Bien Hoa Sugar JSC's (BHS) board of directors recently approved the issuance of VND500 billion in convertible bonds with a par value of VND1 billion for a maximum of 100 investors, including foreign ones. The bonds were reported to have a maximum term of five years. Though BHS has not disclosed the specific rates, it would pay interest to the bondholder, which was said to be one of the local commercial banks, over six months. Thanh Cong Tay Ninh Sugar JSC (TTCS) also issued VND1 trillion bonds to Tien Phong Bank, with VND600 billion, and Viet Nam Investment Bank, with VND400 billion, respectively. The bonds with each par value of VND1 billion, which would mature in 2021, were traded with secured assets in a non-convertible manner. Nguyen Thanh Ngu, CEO of TTCS, told local media that with the successful mobilisation, TTCS would continue to study the plans for raising funds on a larger scale in the upcoming issuance with good plans and projects to attract investors. Ngu said bond issuance was an effective method for firms to find investors with good financial capacity and operational transparency to reduce the burden of traditional credit procedures in Viet Nam. It also helped firms make the best use of capital to grasp investment opportunities, particularly for those with potential and feasible strategic objectives. As for TTCS, he said, it needed significant capital to timely develop a concentrated material zone, but it took much more time to have capital from the current credit due to the complicated regulations for loans. Ngu said the corporate bond market would become increasingly attractive for issuers and investors, and it would become a flexible and transparent channel for capital mobilisation. Tran Du Lich, a member of the National Advisory Council, said that with the issuance of corporate bonds, firms could use their funds with long-term maturities from five to ten years or longer with only a one-time payment. Thus, they could ease the burden of regular loan payments. Furthermore, bond interest rates were formed on the agreement level between the two sides, so it should be much better than other credit channels, Lich said. Bond interest payments were calculated based on the cost of business operations, so firms with bond issuance would face more advantages than firms issuing shares. According to statistics from the Ministry of Finance, in 2015 the total value of the local bond market increased by 7 per cent compared to 2014. Of the total value, corporate bonds reached VND140 trillion, an increase of 9.38 per cent over 2014. In terms of percentage of GDP, the value of corporate bonds increased from 3.25 per cent to 3.39 per cent of GDP. Corporate bonds were issued in at least a three-year term with the floating interest rate (normally of 2 to 4 per cent per year). Previously, firms such as realty developers FLC Group and Vingroup, as well as construction firm Fecon, successfully raised capital by selling their bonds to their existing shareholders. Some more firms planned to issue their bonds this year, including Rong Viet Securities Company, which aimed to sell VND300 billion in bonds, and Thong Nhat Investment and Manufacturing JSC, which was scheduled to release VND800 billion worth of convertible bonds. More than 44,000 firms set up this year There were more than 44,700 newly established enterprises in Viet Nam with total capital of VND349.5 trillion (US$15.5 billion) in the first five months of this year. According to the Department of Business Registration, this represents a 24 per cent year-on-year increase in the number of new businesses, and a 59 per cent year-on-year increase in capital. The department said that in the January to May period, the additional registered capital was VND655.9 trillion, bringing the total to VND1 quadrillion. The average registered capital was VND7.8 billion a business, representing a year-on-year increase of 28 per cent. It added that during this period, most of the sectors saw a higher number of newly established firms than in the same period last year. The real estate sector rose 121 per cent with 1,076 firms; healthcare rose 82 per cent with 198; education and training rose 44 per cent with 993, and science, technology, consultancy, and advertising rose 37 per cent with 3,475. The property sector also saw a surge of registered capital of VND85.9 trillion or 456 per cent higher from last year. Information and communications rose 383 per cent with VND15.2 trillion; science, technology, consultancy and advertising rose 143 per cent with VND29.9 trillion; manufacturing and processing rose 135 per cent with VND49.4 trillion, while finance, banking and insurance rose 115 per cent to VND6.7 trillion during this period. The entertainment area had been the only sector which had a decrease of 26.5 per cent with 583 firms. The number of labourers in the registered companies in the five months was 2.6 per cent higher than the corresponding period last year to 532,000 people. In the first five months, the manufacturing and processing sector attracted the highest number of 254,455 labourers; the wholesale, retail and repairing had 96,338 new labourers, while construction and transport sector had 25,144. During the period, 13,000 firms also resumed operations. However, the number of firms that have either suspended or shut down operations in the month was also high at more than 33,200. In the January to May period, the number of enterprises, which have completed disclosure procedures and shut down operations was 22,431. Further, companies that have declared a temporary suspension of operations numbered 10,794. Danish breeding pigs arrive in Vietnam The Hoa Phat Agricultural Development Joint Stock Company has announced that is has received a shipment from Denmark of 500 young pigs 10-18 weeks old, weighing 40-60 kg each, that will be used for breeding stock purposes. “This import brings exciting new breeding prospects to Vietnam,” said Tran Tuan Duong, the general manager of the company, as it brings new blood lines not yet present in the country. The pigs have unique lines from DanBred International, one of the globe’s leading breeding coordinators, he said, which guarantees our future stock will have strengthened competitiveness on the world market. We are extremely excited about what these pigs will offer to our Vietnamese breeding program and are confident this import will lead to establishing us as the largest breeder in Vietnam in the very near future. VN finds difficulties enforcing environment protection policy: experts Vietnam will face challenges in implementing policies and laws on environmental protection, especially in industries seeing strong growth, said Nick Thorpe from the People and Nature Reconciliation (PanNature) centre. Speaking at a seminar themed “Free trade: Investment movement and environmental issue in Vietnam” held by PanNature in Hanoi on May 27, Nick Thorpe highlighted that Vietnam will meet difficulties in abiding by environmental standards regulated in the Trans-Pacific Partnership (TPP) agreement, and those concerning land compensation at the local level. There are loopholes in Vietnam’s policies on environmental management for businesses, he stressed. Le Dang Doanh, former Director of the Central Institute for Economic Management, said by joining free trade agreements (FTAs), Vietnam has to commit to ensuring regulations related to indicators on ozone-depleting substances , pollution at sea, transparent cooperation in protecting the environment, and reduction of fishing activities detrimental to fisheries resources. Doanh suggested building a relevant regulation system, adding that it is necessary to enhance supervision of environmental protection for foreign-invested enterprises. FDI businesses’ operation ought to obey regulations on management of waste water, dust, and noise – right from the first phases of design and technology selection, to construction and operation, he noted. According to Do Thanh Bai from the Chemical Society of Vietnam, industries that will most benefit from TPP such as textiles, footwear, and electronics are the most prejudicial sectors to the environment because they use many toxic and persistent chemicals. Bai underlined the need to carefully select investors, aiming to seek those using environmental friendly technologies. Vietnam has joined and negotiated 15 FTAs so far, with the TPP officially signed in October last year after five years of negotiation. The trade pact is said to give Vietnam the chance to upgrade its investment and business environment, attract foreign investment, speed up its restructuring process and shift its growth model. Local retailers still ignoring traditional market channels Despite positive results of the “Vietnamese give priority to use Vietnamese goods” campaign, the ratio of Vietnamese goods being sold in traditional markets remains quite modest. Lê Ngọc Sơn, head of Đồng Xuân Market Management Division of Đồng Xuân Joint-Stock Company, said Vietnamese goods were being displayed in the market, mostly made by small-sized local companies or traditional handicraft villages. Big producers prefer to stay away from this traditional market channel. A retailer in Đồng Xuân market said local retailers often purchase a small volume of new products depending on the demand from local consumers first. Due to their limited capital, they always pay owners in full at the end of the year. Meanwhile, Vietnamese businesses often require them to place big orders and pay in advance thus causing much difficulty for them. In addition, local retailers are ignorant about Vietnamese products due to their inflexible payment methods, undiversified samples and high prices. Phạm Thị Thanh Hà, deputy director of Đức Giang Fashion Centre, said her company has never distributed garments to traditional markets because her company wants to retain its image. She, however, said that if local retailers can prove their eligibility, her company is willing to deliver garments to them. Most of Vietnamese products sold at traditional markets have low-added value. According to the Ministry of Industry and Trade, Việt Nam has more than 9,000 traditional markets and distributes some 80 per cent of goods to local consumers. If Vietnamese goods can enter this channel it would become a very useful distribution channel. For this, a consensus should be reached between retailers and businesses that will be a key to developing this channel. Market management divisions also play an important role in linking retailers and businesses. Sơn said his company will soon conduct meetings between retailers and businesses to sell goods in this market. According to Vũ Vĩnh Phú, chairman of the Hà Nội Supermarkets Association, local retailers must co-operate with each other and compete by improving the quality of products, prices and customer care services. And local businesses needed to pay more attention to local income earners via distribution channels at traditional markets, he said. A representative of a manufacturing company said traditional markets have advantages as compared to supermarkets such as diversified and cheap products, and convenient locations. However, local businesses need to provide better product design and quality with reasonable pricing. According to the ministry, to bring more Vietnamese goods into traditional markets, businesses should allocate their goods to local retailers at wholesale markets for distribution in rural areas. This would help businesses save costs while establishing their sales agents in rural areas. – Sê San 4A Hydropower JSC shares will trade on HoSE Some 42.2 million shares of Sê San 4A Hydropower JSC (S4A) will be traded on the HCM Stock Exchange (HoSE) today. The reference price of the shares in the first trading day would be VNĐ15,000 each. Based in the Gia Lai Province, Sê San Hydropower was established in 2007 with charter capital of VNĐ360 billion (US$16.07 million). It was the second largest plant on the River Yaly in the central highlands region, contributing 1.5 billion KWh per year Becoming a public company in February, 2015, Sê San 4A Hydropower JSC has worked in the field of hydropower plants management and investment, construction of lines and transformers as well as hospitality. Sabeco plans a decreased pre-tax profit in 2016 The local biggest brewer Sài Gòn Beer-Alcohol-Beverage JSC (Sabeco) planned VNĐ35 trillion (US$1.56 billion) in sales this year, a 4 per cent increase over 2015 and a pre-tax profit of VNĐ4.2 trillion. According to the brewer shareholder meeting’s documents, the pre-tax profit represents a decrease of 6 per cent. It also expected to pay a dividend of 25 per cent this year. Sabeco targeted production of 1.54 billion litres of beer including 96 per cent of Sài Gòn Beer. According to Sabeco, the lower profit was due to higher consumption tax rate for beer, which increased from 50 per cent to 55 per cent in 2016. Until now, the brewer with about 90 per cent of State-holding stakes was not yet listed on the local exchange. Vinapharm to launch IPO with 42 million shares Việt Nam Pharmacy Corporation (VinaPharm) will sell more than 42 million shares in its initial public offering, with a starting price of VNĐ10,000 each on the Hà Nội Stock Exchange (HNX). Under the equitisation plan, the IPO shares represent nearly 18 per cent of the stake, the Ministry of Health on behalf of the State will hold 65 per cent of the stake, while a strategic investor will hold about 17 per cent. According to Vinapharm, its strategic investor will be a local investor with a minimum of 10 years experience in the medical field. The investor must have a minimum charter capital of VNĐ800 million, accumulated in three years from 2012 to 2014. Based in Hà Nội, VinaPharm will then have a charter capital of VNĐ2.37 trillion. VinaPharm has currently invested in big pharmaceutical companies such as Imexpharm, MPK, OPC and Vidipha, in addition to Vimedimex and Phytopharma. It also owns several plots in prime locations in Hà Nội and HCM City. Kon Tum Province halts HAG cow project  The central highlands province of Kon Tum is withdrawing approval for a VND1.6 trillion cattle project run by Hoang Anh Gia Lai Group (HAG) in Ia H'Drai District, officials said. The action will halt progress on the project, which aimed to raise 35,700 cows and expand to 112,000 cows, according to the provincial People's Committee. The HAG chairman told the local media that he had not done any work on the Kon Tum project after receiving the investment certificate in 2015, adding he had no plans to develop it either. However, chairman Duc did not give any reasons for not completing the project. In the first quarter of this year, cow trading earned over VND1.2 trillion, or 62.5 per cent of the total revenue for the group. HAG started raising Australian-breed cows in 2014 and have delivered them to the market from March 2, 2015. In 2015, HAG announced it was spending VND6.3 trillion on raising cows. Currently, it is estimated to own 236,000 beef and dairy cows. Last year, the group also inked deals with local giant meat supplier Vissan and food producer NutiFood, to supply them with beef and milk respectively. On the market, due to having run up debts amounting to some VND30 trillion with local banks, HAG shares fell by more than 60 per cent to its lowest level since the group first listed its shares in 2008. On May 27, each HAG share was traded at VND7,900 on the local market. Firms boost fresh lychee exports via Lao Cai border gate Businesses sought to promote the exports of Vietnamese fresh lychees to China via Lao Cai border gate at a meeting in the northern mountainous province of Lao Cai on May 27. The event was jointly held by the People’s Committees of Lao Cai, Bac Giang, Hai Duong and Hung Yen provinces which account for a large lychee-growing area in the country as part of the national trade promotion programme 2016. Authorities pledged to facilitate administrative procedures, ensure transport safety, and enhance market management to reduce frauds in the trade of the fruit. Deputy Director of the Lao Cai Department of Industry and Trade Nguyen Truong Giang said the provincial management board of economic zones has asked farmers to study the market to have proper export policy in place. The province also advised farmers and businesses to export via trade contracts to avoid the risk of economic losses. It pledged to create the best conditions for firms to export fresh lychees through Lao Cai border gate, he added. Yang Peng, deputy chief of the Hekou district in China ’s southern Yunnan province said the Chinese side will make it easier for bilateral trade and customs procedures. The district’s authorities asked Vietnamese firms to strictly follow the customs procedures of the two countries, he added. More than 26,000 tonnes of fresh lychees worth 11.6 billion USD were exported to China via Lao Cai international border gate in 2015. In 2016, the volume of fresh lychees exported via the gate is expected to be equal with the previous year, about 420 tonnes per day. Coca-Cola beverages to be served aboard The Vietnamese private airline and Coca-Cola Vietnam signed a deal on May 25 to boost cooperation, including an agreement to paint Coca-Cola’s logo on Vietjet’s new planes and serve Coca-Cola beverages on board. In a press release on May 25, the Vietnamese carrier said the agreement between the two companies will diversify each other’s service and product lines, thus increasing value-added benefits to the community and society. The deal follows historic agreements inked between Vietnam and the United States during President Barack Obama’s recent visit to the Southeast Asian country. Obama left for Japan yesterday after beginning his first visit to Vietnam on Monday, during which Vietnamese and U.S. sides closed deals worth tens of billions of dollars. Vietjet placed an order to buy 100 planes from Boeing at a cost of $11.3 billion. The airline and Coca-Cola will together promote co-organized activities, develop and expand mutual sales channels, provide better customer service, and launch co-promotion programs for customers. “Through this agreement, besides the current nine hot meals and beverages on Vietjet’s flights, passengers will now have more drink choices from the world’s number-one beverage company, Coca-Cola,” said managing director of Vietjet Luu Duc Khanh. “Vietjet will also soon welcome new aircraft with the Coco-Cola brand livery into the world’s most lively fleet,” he added. “The Coca-Cola brand will fly with Vietjet into domestic and international skies, bringing more air travel opportunities to people in the region.” According to the agreement, Vietjet and Coca-Cola Vietnam will cooperate in sales activities, promoting both brands through appropriate promotions, events, communication, and more. The two companies will also cooperate in increasing opportunities of mutual information exchange to promote the cooperation between both companies and deploy customer care activities for up to 150 million passengers on both domestic and international flights. “Aiming to become one of the most successful U.S. investors in Vietnam, Coca-Cola Vietnam is committed to continuing sustainable development investment to build up an effective and comprehensive value chain in terms of production, business, and community activities,” said Vamsi Mohan, regional director of Coca-Cola Indochina & Myanmar. “With that vision, we have been looking for the right partner to share our common values with,” he added. “We recognize Vietjet as a company who operates on the passion and desire of success foundation. That is also the values that Coca-Cola appreciates and follows in the company’s business direction.” Businesses’ engagement needed for agricultural production The agricultural sector must draw businesses’ more engagement as they will bring new technologies into production to help farmers create competitive products, according to experts. Speaking at a conference in Hanoi on May 27 on the prospects of Vietnam’s agricultural market in 2016, Nguyen Do Anh Tuan, head of the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD) under the Ministry of Agriculture and Rural Development, said that in the medium and long term, the sector needs to restructure its products, firstly coffee, rice, pepper and seafood. It is necessary to overcome consequences of natural disasters and control diseases to boost supplies while ensuring food hygiene and safety, one of the hot issues today, he noted. Le Van Binh, deputy head of the National Assembly Office’s Department of Economic Affairs, said free trade agreements would open up opportunities for Vietnam to expand its agriproduct export market in the face of technical barriers as well as fierce competition from other countries. However, climate change and new diseases are posing challenges to Vietnam’s agriculture, he said. JongHa Bae, FAO Representative in Vietnam, said Vietnam should increase investment in rural infrastructure, develop geographical indications for quality products as well as boost farmers’ adaptability in the integration process. FPT to work with Japanese printing and education firms FPT signed contracts with Toppan Printing Co. and Tokyo Shoseki on May 26 in Nagoya during Prime Minister Nguyen Xuan Phuc’s visit to Japan from May 26 to 28. Toppan Printing and FPT will cooperate in software outsourcing and expand their business in Southeast Asia. The cooperation is expected to bring more orders to FPT for software outsourcing from the company, especially in business process outsourcing (BPO), in which there is competition from China and the Philippines. The contact between FPT and Tokyo Shoseki is focused on digitizing electronic textbooks for Japan and Vietnam. The Ministry of Education in Japan will pass plans this year to digitize all textbooks in primary school and secondary school by 2020. Signing a contract with Tokyo Shoseki gives FPT a major opportunity to secure orders in this regard. These are two key sectors where FPT wishes to expand in Japan. Gaining a contact with a large Japanese firm like Toppan Printing will help boost Vietnam’s brand in the BPO field. Over recent years Japan has been the most important market in FPT’s software exports, which contributes 50 per cent of its revenue. In first four months of this year FPT’s revenue in Japan was its highest ever, increasing 59 per cent year-on-year. FPT now has 4,500 engineers working for Japanese partners. In 2017 FPT expects the Japanese market will earn it revenue of $200 million and create job opportunities for 8,800 employees in Japan and Vietnam. Toppan Printing was established in 1900 and is a leader in the printing sector but also involved in many others, such as information technology, electronics, healthcare, and furniture. Tokyo Shoseki was founded in 1909 and is the largest Japanese textbook publisher. Companies on HNX submit quarterly reports Three hundred and seventy two of the 379 companies listed on the Hanoi Stock Exchange (HNX) have submitted their financial reports for the first quarter of 2016. Figures indicate that in the first quarter the 372 companies recorded a combined after-tax profit of VND2.86 trillion ($127.92 million), an increase of about 1 per cent against the same period last year.   Some 319 of the 379 companies (86 per cent) earned a profit, totaling VND3.06 trillion ($136.87 million), an increase of 3.55 per cent against the same period last year. Fifty other companies (14 per cent) incurred losses of VND193 billion ($8.63 million) in total, an increase of 67.97 per cent year-on-year. Industrial enterprises saw the best performance, with 104 out of 319 enterprises recording profits totaling VND949 billion ($42.44 million), accounting for 31 per cent of the total. Following were finance companies, with 25 recording profit of VND898 billion ($40.16 million), accounting for 29.3 per cent, then trade and hospitality companies, with 43 recording profit of VND467 billion ($20.88 million), accounting for 15.2 per cent. The industrial sector also saw the largest amount of losses, with 12 enterprises losing VND65 billion ($2.90 million). Vietinbank to sell 5.48% of SGB The Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank - stock code CTG) has released a notice of divestment from the Saigon Bank for Industry and Trade (stock code SGB). SGB’s charter capital is around $138 million, of which more than $14 million, or 10.39 per cent, is held by Vietinbank. Vietinbank expects to conduct a public auction of nearly 17 million voting shares, or 5.48 per cent of capital, in the second quarter of this year at an initial price of VND10,800 per share. The divestment is to comply with the provisions of Point B, Item 3, Article 20 of Circular No. 36/2014/TT-NHNN dated November 20, 2014 from the State Bank of Vietnam, which regulates limitations and capital safety ratios in the operations of credit organizations and foreign bank branches. Garment companies encouraged to use more domestic raw materials According to the Vietnam Textile and Apparel Association (Vitas), textile and apparel exports in the first four months of this year exceeded US$8.1 billion, up 6.2 percent over the same period last year. Of which, garments exports topped $6.8 billion, an increase of 6.95 percent; staple fiber exports reached $824 million, an increase of 2.87 percent; raw materials exports were at $273 million, up 4.14 percent; whereas, nonwoven fabrics exports hit $145 million, down 3.97 percent. Countries participated in the Trans-Pacific Partnership account for 65 percent of Vietnam’s total textile and apparel exports, with the US accounting for 48 percent, and Japan 12 percent. The EU market accounts for 15 percent and South Korea takes about 10 percent. The representative of Vitas said that although the country’s raw materials exports bring in billions US dollar annually, several garment companies still have to import fabrics for manufacturing of export clothes. Vitas recommended that garment companies and raw material producers should strengthen connection and try each other’s products. Raw materials producers should focus on meeting requirements for quality, quantity, competitive price, and delivery time. In long term, garment companies should shift from doing outsourcing to making products to export under FOB (free on board), ODM (original design manufacturer) or OBM (original brand manufacturer) modes and cut down exporting via intermediary. Thenceforth, garment and textile companies are able to meet the rules of origin under the TTP and FTA. Vietnamese fruits enter demanding markets The Department of Plant Protection under the Ministry of Agriculture and Rural Development on May 26 said that the entrance for Vietnamese fruits to demanding markets, including the US, has become wider and wider. In the first four months of this year, fruits and vegetables exports reached US$764 million, an increase of 47.7 percent compared to the same period last year. It is expected that fruits and vegetables exports will exceed $900 million by the end of May. Most markets have posted moderate growth, of which exports to demanding markets were more than 3,400 tons of fresh fruits. The country has exported 2,522 tons of dragon fruits to the US, Japan, and South Korea; more than 229 tons of mangos to Japan and South Korea; more than 160 tons of rambutans and nearly 500 tons of longans to the US. According to the department, countries including the US, Japan, South Korea, Australia, New Zealand, Chile, Argentina, and Brazil usually have strict plant quarantine regulations, especially on fresh fruits. However, the US has allowed import of white-flesh dragon fruits, red-flesh dragon fruits, rambutans, longans, and lychees from Vietnam. The US is in progress to complete procedure to allow import of Vietnamese mangos and star apples. Japan has also given green-light to import of white-flesh dragon fruits and mangos from Vietnam. Currently, Vietnam is asking for permission to export red-flesh dragon fruits, lychees, and longans into Japan. South Korea agreed to import Vietnamese white-flesh and red-flesh dragon fruits, and mangos and will import Vietnamese star apples in the near future. Especially, Taiwan officially announced that it will reopen doors for Vietnamese dragon fruits from June 1 this year. Earlier, Thailand opened their gates for Vietnamese longans and lychees from May 13. Shrimp export continues growing According to the Vietnam Association of Seafood Exporters and Producers (VASEP), April shrimp export continued growing 7.6 percent over the same month last year to hit US$239.6 million. The total value in the first four months this year went up 7.8 percent over the same period last year to hit US$858.8 million. The world’s shrimp export prices have been on the rise because the monetary market has showed little volatility. During the four months, domestic shrimp prices were higher than the same period last year. Demand from main markets increased because of stable supply and demand and inventory reduction. Vietnamese businesses have enjoyed benefits from cutting anti-dumping duties under the preliminary results of the ninth antidumping duty administrative reviews (POR 9) by the US Department of Commerce. Material supply sources from main export nations such as India, Thailand and Ecuador have dropped because of diseases and bad weather. Vietnam’s shrimp export is expected to reach US$780 million in the second quarter, up 10 percent over a year ago. Restructuring pangasius aquaculture In light of the recent export value of pangasius fish witnessing continuous growth thanks to increasing demands, it is high time for pangasius aquaculture to be restructured with hi-tech applications to meet market requirements and to study as well as adhere to the strict rules and regulations of importers. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), as of the beginning of May, the export value of pangasius reached over US$435 million, a 4% year-on-year rise, in which exports to the US and China markets accounted for approximately 10% and 39% respectively. Notably, the Brazilian market resumed and saw sharp growth from the beginning of the year after a period of stagnation between the fourth quarter of 2014 to the middle of 2015. The markets’ growth has made local pangasius material prices increase, reaching a maximum price of VND22,000 per kilogram, bringing in from VND2,500 to VND3,000 per kilogram to farmers. It was a positive sign for the pangasius aquaculture and export sector, along with concerns attributed to reduced raising area and yields. As of May, the Mekong Delta region harvested 314,140 tonnes of pangasius on 989ha raising area. The area decreased by 22% and the yield fell by 13% year on year due to unceasing declines in pangasius prices. Many farmers faced debts or even narrowed the production to cut investment costs. In addition, processors had their own material regions, gradually decreasing the raising area of farmer households. The Vietnam Pangasius Association (VPA)’s statistics showed that in the Mekong Delta, processors actively created their own pangasius material sources, making over 80% of the total pangasius yield while farmers merely supplied around 20%. The situation shows that the pangasius sector has overcome the eye-popping growth while processors have become active in stablising the material area whilst farmer households were more careful in their investment and collaboration with plants to sell their products. This helps to facilitate the sector’s restructure with applications of advance techniques in raising pangasius in order to meet market requirements while studying and following rules of importers. Efforts should be intensified to improve the quality of pangasius breeds and harvested fish in the raising process, as well as to boost environmental improvements. The VPA has completed a pangasius trading information website and a map of pangasius raising regions to modernise the trading process and publicise the quality of material regions. With such steps, the pangasius export value is expected to surpass the target of US$1.5 billion this year. Renewable energy - future of Vietnam’s power sector Vietnam’s renewable energy market has tremendous potential, and it is necessary to apply the right national policies and incentives to realise the country’s international commitments as well as to maximise the benefits of renewable energy. The view was shared by participants at a workshop on renewable energy development in Vietnam, organised by the General Directorate of Energy under the Ministry of Industry and Trade, and the United Nations Development Programme (UNDP) in Hanoi on May 24. During the workshop, Pham Trong Thuc, Director of Renewable Energy Department under the General Directorate of Energy, introduced the National Renewable Energy Development Strategy to 2030 with an outlook to 2050. The strategy aims to have 32.3% of total primary energy consumption come from renewable energy by 2030 and reduce greenhouse gas emissions in Vietnam (as co-benefit) by 25% in the same year. It also targets most households to have access to modern, sustainable and reliable energy services with reasonable prices by 2030 and fuel imports reduced by 40 million tonnes of coal and 3.7 million tonnes of oil products. According to Thuc, focus will be given to proven technologies in the renewable energy fields, including hydropower, wind power, solar power, biomass energy and biogas. The strategy aims to encourage and mobilise all resources from society and develop renewable energy with reasonable prices, to gradually increase the renewable energy share in the national energy production and consumption, said Thuc. The measures will help ensure less dependence on fossil sources and contribute to better energy security, climate change mitigation, environmental protection and sustainable socio-economic development, he added. Addressing the event, Nguyen Viet Son, Deputy Director of the General Directorate of Energy, stressed the urgent need to develop renewable energy, particularly as Vietnam’s demand for energy use has been rapidly increasing over recent years and fossil fuels are gradually running out. Forty three countries around the world have established national target programmes on renewable energy, Son said, hailing the national strategy as an important initial step and a legal base to boost development of renewable energy in Vietnam. On the occasion, the German Agency for International Co-operation (GIZ) presented a wind energy development programme in Vietnam and the UNDP shared its latest paper: “Greening the Power Mix: Policies for Expanding Solar Photovoltaic (PV) Electricity in Vietnam”. The UNDP paper highlights the advantages of solar PV power and recommended measures to boost this energy source. It argues that solar PV power has very few negative environmental, health and economic impacts while its production can enable remote communities and islands, and small and large businesses to improve power supply and reduce their electricity bills. In his speech, Bakhodir Burkhanov, UNDP Deputy Country Director in Vietnam, hailed the Renewable Energy Development Strategy as a pivotal step in the right direction, which reflects Vietnam’s commitment to low-carbon development and is strongly aligned to its Intended Nationally Determined Contribution (INDC) submitted to the United Nations Framework Convention on Climate Change (UNFCCC). The strategy also strongly supports the implementation of the Paris Agreement on climate change, which was signed last month at the United Nations headquarters by over 175 countries, including Vietnam, Burkhanov added. “Globally, the technical and financial aspects of renewable energy are changing positively and fast, and Vietnam must be poised to benefit from this,” said he. “It needs policies and concrete guidelines to encourage adopting electric transport, bio-gas digesters and solar photovoltaic rooftop installations such, which reduce our electricity bills while protecting the environment”. Burkhanov strongly welcomed the Renewable Energy Development Strategy and pledged to join other development partners to support a clear roadmap for its implementation. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR