BUSINESS IN BRIEF 7/5 PM attends construction of LG display manufacturing facility Prime Minister Nguyen Xuan Phuc attended a ceremony to begin construction of LG Display – a maufacturing facility that will produce and process OLED monitors in the northern port city of Hai Phong on May 6. Invested in by the LG Corporation’s LG Display, the 1.5 billion USD facility lies on a site of 40ha in Trang Due industrial zone. Speaking at the ground-breaking ceremony, PM Phuc said LG Corporation’s project along with others will create a major electronics and information technology complex in Vietnam. With the policy of creating a favourable business environment, the Vietnamese government will do its best to support businesses, he promised. The RoK is currently the third largest trade partner of Vietnam, while Vietnam is also the RoK’s third largest importer. Two-way trade has surged 75-fold from 1992 to nearly 38 billion USD. The RoK is also the biggest investor in Vietnam with nearly 4,800 projects worth around 45 billion USD. New Kia Cerato debuts in Viet Nam market Kia Motors and Truong Hai Automobile JSC (Thaco) launched a new model – Kia Cerato – for the Vietnamese market, the deputy general director of Thaco, Bui Kim Kha, told Bizhub. The sedan C class, based on the popular Kia K3, is the eighth Kia model to be introduced in the Vietnamese market. According to Thaco, Viet Nam is the first market in Southeast Asia region where Kia Motors has decided to introduce the new Kia Cerato model under its global brand development strategy, with luxury design, hi-tech equipment, safety and protection. Kia has already achieved a 60 per cent growth in sales with 9,000 cars sold in the first four months of this year in Viet Nam. The price of the new Kia model is yet to be announced. The Quang Nam-based automobile manufacturer has produced and distributed vehicles for several car manufacturers, including Kia from South Korea, Mazda from Japan and the French giant Peugeot. Thaco plans to produce over 112,000 cars in 2016, with expected revenue of US$3 billion. New Zealand eyes investment in HCM City   New Zealand wants to boost cooperation with Ho Chi Minh City in various fields, including agriculture, technologies, food safety, aviation and human resource training, said New Zealand Ambassador to Vietnam Haike Manning. The diplomat made the statement during a meeting with Secretary of the municipal Party Committee Dinh La Thang in HCM City on May 5, reported Saigon Giai Phong Newspaper. Thang spoke highly of sound cooperation in many fields between Vietnam and New Zealand. Earlier, Ambassador Manning was received by Chairman of the municipal People’s Committee Nguyen Thanh Phong. A direct air route connecting the city and New Zealand’s Auckland will be opened on June 4. A New Zealand culture week will also take place in the city in June. Cambodian Angkor Air opens HCM City – Sihanoukville route The Cambodian flag carrier, Angkor Air announced a new international route connecting Vietnam’s Ho Chi Minh City and Cambodia’s Sihanoukville City from June 17. The airline will offer five roundtrip flights per week every Tuesday, Thursday, Friday, Saturday and Sunday. The one-hour flights are scheduled to take off at 12:40 pm from Sihanoukville City and 14:50 pm from Ho Chi Minh City. An airline representative said Vietnam is one of its key markets. The carrier has prioritised expanding its network to the country. The HCM City – Sihanoukville route will be Angkor Air’s third route in Vietnam. This is the second international route the airline has launched this year, after the Phnom Penh – Seoul of the Republic of Korea in April, raising its network to 10 routes to international destinations and two domestic destinations. Angkor Air will offer discount prices for the route from 9 USD. The promotion will apply to flights departing from June 17 to October 30 this year. Tickets will be distributed at all sales channels, including www.cambodiaangkorair.com, ticket offices and agents nationwide. Singapore’s investment in Vietnam surge Singaporean businesses have pledged to invest US$730 million in 50 new projects and 23 existed ones in Vietnam in the first four months of this year, ranking second among foreign investors in Vietnam, according to the Foreign Investment Agency (FIA). By April, Singapore came third out of 114 foreign investors in Vietnam with 1,600 valid projects valuing at nearly US$36.28 billion. The Ministry of Planning and Investment reported that Singapore businesses  have invested  in 18 out of 21 economic sectors, mainly  manufacturing and processing industries (494 projects with a total registered capital of US$16.1 billion), and real estate (81 projects with US$10.9 billion). Many Singaporean projects in Vietnam have been operating effectively, contributing to job generation, export promotion and economic growth. Worthy of note are the Vietnam-Singapore Industrial Parks (VSIP), which has been built in Binh Duong, Bac Ninh, Hai Phong, Quang Ngai, Hai Duong, and Nghe An. According to  FIA, Singapore’s investment has expanded from Ho Chi Minh City, Hanoi, Hai Phong and Binh Duong to other provinces and cities such as Nghe An and Thai Nguyen. Singaporean businesses have invested in 46 out of total 63 provinces and cities in Vietnam. HCM City took the lead in attracting Singapore’s investment with 799 projects valuing at US$9.75 billion and Hanoi came second with 256 projects with US$4.65 investment capital. Jan-Apr FDI up 85% y-o-y Total foreign direct investment (FDI), both newly-registered and additional, reached nearly $6.88 billion in the first four months of the year, a year-on-year increase of 85 per cent, according to the General Statistics Office. Disbursed capital was $4.7 billion, up 12 per cent compared to last year. Newly-registered FDI capital was $5.08 billion, up 89.9 per cent year-on-year, in 697 projects, up 55.6 per cent, as at the end of April. There were also 314 existing projects that added capital, by $1.8 billion in total. Processing and manufacturing attracted the most FDI capital, of $5.25 billion, or 76.2 per cent of the total. Following was science and technology, with $334.6 million, or 4.9 per cent, and automobile and motorbike retail, wholesale and repair with $242.5 million, or 3.5 per cent. Forty-one cities and provinces received new FDI projects between January and April, led by Hai Phong city with $1.59 billion, or 31.3 per cent of the total. Hanoi followed, with $595.5 million, or 11.7 per cent, then Binh Duong with $329 million, or 6.5 per cent, Bac Ninh with $309.3 million, or 6.1 per cent, and Dong Nai with $268.9 million, or 5.3 per cent. Of the 45 countries and territories with newly-registered projects in Vietnam, South Korea led with $2.48 billion, or 48.8 per cent of the total, followed by Singapore with $502.1 billion, or 9.9 per cent, and Taiwan, Japan, Malaysia and China with $430.1 million, $307 million, $248.1 million and $177.5 million, representing 8.5 per cent, 6 per cent, 4.9 per cent, and 3.5 per cent of the total, respectively. Newly-registered enterprises up 11% in April There were 10,954 newly-registered enterprises in April, up 11 per cent against March, with capital of VND62.2 trillion ($2.79 billion), down 14.7 per cent, for a year-to-date figure of 34,721 with capital of $248.2 trillion, up 22.9 per cent and 52.8 per cent year-on-year, respectively, according to the General Statistics Office. Average registered capital was $320,000, up 24.2 per cent year-on-year. An influx of foreign direct investment (FDI) and solid business operations around the country saw the number of employees in the industrial sector increase 6 per cent in the first four months compared to the same period last year. Vietnam enjoyed a trade surplus during the period, with export turnover estimated at $52.9 billion, up 6 per cent year-on-year, while imports were estimated at $51.4 billion, down 1.2 per cent year-on-year. There are also optimistic signs in industrial production. The industrial production index in April was estimated to have increased 7.9 per cent, with processing and manufacturing rising by 9.6 per cent. The consumption index in the industrial sector grew by 36.5 per cent compared to the previous month and 12.7 per cent year-on-year. Int’l organizations make positive assessments on VN’s economic picture Viet Nam is one of the six emerging economies to achieve high economic growth rates which were forecast at 6.2% in 2016 and 6.3% in 2017, according to the World Bank (WB). The Asian Development Bank (ADB) predicted that the Southeast Asian nation would maintain an economic growth rate at 6.7% in 2016 and 6.5% in 2017 thanks to increasing FDI attraction, recovered customer confidence index, and enforced FTAs towards creating a more transparent and open business environment. The ADB proposed Viet Nam build macro-economic buffer zones which are able to respond to future economic shocks; especially focusing on fiscal sustainability, foreign reserve, prevention of NPLs, improvement of productivity, and support for SMEs to integrate into the global value chains. The Hongkong and Shanghai Bank (HSBC) cut its growth forecasts for Viet Nam in 2016 and 2017 to 6.3% and 6.6% (instead of 6.7% and 6.8% in earlier publication) due to negative impacts of climate change and saltwater intrusion. However, the bank still made positive medium-term outlook. The HSBC praised the Vietnamese Government on cautious macro-economic regulations in favor of economic recovery. Meanwhile, the WB attributed Viet Nam’s private business booms to abundant labor force, increasing wages, and stable prices. The WB and ADB praised the development of the private sector as helping spur economic restructuring. So far, the state sector holds 40% of the density and agricultural production makes up 18% of GDP. However, the WB warned that slow economic restructuring and fiscal pressure would hold back growth. The HSBC forecast that credit safety measures would lead the construction and real estate sector to enter a new recession period. The WTO reported that Viet Nam attained the fastest export-import growth rates among 20 leading trade economies in the world. Amidst global trade gloominess, the Southeast Asian nation still gained an export growth rate of 7.9% to US$162 billion in 2015. The country’s import turnover expanded 12.3% to US$166 billion last year. International organizations regarded Viet Nam’s export goal of 10% as “ambitious” but “within reach” if the nation seizes FTA opportunities and boosts key export commodities like electronics, leather, garments and textiles. A survey of  1,584 FDI enterprises showed that Viet Nam is one of the most attractive investment destinations in the Southeast Asian region. As much as 11% of FDI enterprises reported that they expanded business operation and recruited 62% of new employees. These figures showed the highest growth pace over the last five years. FDI enterprises hailed Viet Nam’s business environment with reasonable tax and less asset risks. However, they still criticized high unofficial costs, cumbersome legal regulations, poor public administrative services, and limited infrastructure. Gov’t discusses draft Resolution on business development The Government discussed the draft Resolution on business development in Viet Nam during the second day of its regular meeting on May 5. According to the Resolution, by 2020, up to one million enterprises will be operating in Viet Nam. The private sector will contribute 48-49% of the GDP. The total investment from the private businesses and individuals will make up 49% of the total social investment. Every year, around 30-35% of the Vietnamese businesses will launch creative and innovative activities. The Resolution also proposes principles such as all kinds of businesses are equal to get access to resources, including capital, resources, land, market and business opportunities. It also sets to reduce unnecessary licenses and unsuitable expenditures. The Resolution suggests specific measures to tackle difficulties and create favorable conditions for enterprises, including the organization of dialogues between local leaders and businesses and the establishment of hot lines and online question-and-answer sessions for businesses. Chairman of the Viet Nam Chamber of Commerce and Industry (VCCI) Vu Tien Loc consented with the draft Resolution, saying that the Resolution will create trust among businesses, which are the pioneering force in economic development. He expected that enterprises will uphold their responsibilities for the nation and people as well as strictly follow the law and regulations. PM Nguyen Xuan Phuc assigned the Government Office to coordinate with the Ministry of Planning and Investment and the VCCI to complete the draft Resolution. The Resolution has to manifest the message announced to the businesses, which means removing difficulties and obstacles and facilitating businesses' development, he stressed. ACV profit tumbles in 2015 Airports Corporation of Vietnam (ACV) posted after-tax profit of some VND1.65 trillion (US$73.8 million) last year, down sharply from VND2.4 trillion in the year earlier, according to its 2015 audited financial report. The report showed the Japanese yen’s appreciation against the Vietnam dong currency led ACV’s loans in the yen and interest to edge up. By end-2015, ACV had had five major loans in foreign currency, mainly yen. Its short- and long-term loans amounted to over VND13.25 trillion. Of them, the biggest loan was VND3.8 trillion provided by Japan in official development assistance (ODA) to build Terminal T2 at Noi Bai International Airport in Hanoi.       The firm borrowed from Japan Bank for International Cooperation (JBIC), in addition to loans taken out to finance the international terminal at Tan Son Nhat International Airport in HCMC. The appreciation of the yen against the dong compelled ACV to spend an additional VND638 billion to pay debts and interest, pushing up its losses caused by exchange rate volatility by VND746 billion. Those loans have low interest rates, at around 0.3% per annum for construction and 0.21% for consulting, and carry a term of 40 years plus a grace period of five years. ACV’s unpaid financial expenses reached VND641 billion at the end of 2015, including the abovementioned VND638 billion and a sum of around VND22 billion in previous years due to exchange rate fluctuations. Its financial expenses rose nearly two-fold to VND751 billion last year. ACV has operated as a joint stock company from April 1 after its initial public offering in December last year though just 3.47% of the shares were sold to 128 individual and 19 institutional investors. The firm operates and manages 22 airports nationwide with 65% of revenues coming from sales of duty-free goods at airports. Digital Emotion exhibition to be held in HCM City  Nearly 90 exhibitors from seven nations and territories will participate in the Digital Emotion exhibition in HCM City next week from May 12 to 14. The exhibition, with 200 booths, includes famous brands broadcasting, radio, imaging and AV. They will showcase advanced technology such as Canon's DSLR EOS 1Dx Mark II and flycam. Six flycam competitions will be conducted on three days of the exhibition, according to the organiser. Pay TV development trends will be discussed at a conference and new services will be launched. The exhibition is expected to attract 30,000 visitors. It is being held at the Sài Gin Exhibition and Convention Centre in District 7 of HCM City. Onsky unveils smart home, security solution Onsky, a US company that makes smart home technologies, and local Quang Trung Software City unveiled the Onsky iRoomate solution for smart homes and security at the IoT (Internet of Things) conference held in HCM City on May 4. Hung Nguyen, Onsky's chairman, said most current smart home solutions on the market are just to switch lights and appliances on and off through smart phones, but a iRoomate user does not even need to touch a phone or tablet to control their smart devices. With its multiple embedded sensors, it can automatically control lights, air conditioners, heaters and fans for energy saving and comfort and is also a security centre with motion sensors that can detect intruders and send an alert to users' mobile devices, he said. Lam Nguyen Hai Long, CEO of QTSC, said smart homes, smart buildings and smart cities would be the next big wave in the IT sector in Viet Nam. US groups desire to invest in HCM City’s urban area Several US groups delivered their intention to develop a large-scale project in the Thu Thiem new urban area in Ho Chi Minh City during their meeting with Chairman of the Ho Chi Minh City People’s Committee Nguyen Thanh Phong on May 5. They said the project targets to support the city’s urban development and facilitate the growth of trade and financial services in Vietnam. At the meeting, representatives from the US groups, who are in the city to seek investment opportunities, proposed recommendations on investments. William Weidner, Chairman and CEO of Global Gaming Asset Management, said that after the Trans-Pacific Partnership (TPP) agreement was signed, many US enterprises wanted to seek investment and cooperation opportunities in the city. All businesses that want to invest in the project in Thu Thiem have strong economic capacity and rich experience in building leisure centres all over the world, he stated. According to him, the implementation of the project will help attract more direct investments from the world’s leading financial groups, thus contributing to making Ho Chi Minh City a financial centre of the region. For his part, Phong said that the city is doing its utmost to create a favourable environment for foreign investors. Regarding the Thu Thiem project, he assigned the municipal Departments of Planning and Investment and Architectural Planning, and the Thu Thiem new urban area construction and investment management board to work with the US partners on specific contents.- BIDV launches 1.5 trillion VND credit for fishermen The Bank for Investment and Development of Vietnam (BIDV) has launched a line of credit worth 1.5 trillion VND (68.1 million USD) for fisheries production and processing. Of the sum, 500 billion VND (22.7 million USD) will be offered to enterprises while the remaining for households and individuals at an annual interest of 6-8 percent. Ship-owners will be entitled to an interest waiver for six months, starting from April 8. Those who had their fisheries suffer from mass deaths are able to repay their loans interest-free for three months from April 8, and those who suffered slow consumption can enjoy a one-month interest-free payment starting from April 8. Borrowers who are indirectly affected are entitled to a 50 percent discount of interest on their outstanding loans, also from April 8. All outstanding loans and interest will be restructured. Vietnam’s PMI highest in nine months The Hong Kong- Shanghai Banking Cooperation (HSBC) anticipated on May 5 that Vietnam’s manufacturing output will continue to expand in the following months as the Purchasing Managers' Index (PMI) in the country surged to a nine-month high, despite a gloomy scenario in the region. The Nikkei PMI soared from 50.7 in March to 52.3 in April, which showed a sign of recovery in the second quarter of this year. Productivity and new export orders also continued to climb in April. Higher recruitment levels reflected a brighter business prospect. The bank also acknowledged that the possibility of Vietnam’s production recovering presents the country’s success in market expansion in the context of the global trade downturn. It noted the remarkable outcome came mainly from foreign direct investment (FDI), which has continued to flow to the country in 2016. The Republic of Korea remains Vietnam’s largest investor with registered capital hitting 2.5 billion USD in April. With numerous manufacturing plants to begin operating this year, the bank expects FDI will help Vietnam’s exports increase over 10 percent against the same period last year. Over 170 enterprises attend Top Thai brands trade fair More than 170 Thai enterprises have brought along their internationally recognised products to the Top Thai Brands 2016, which opened at the Saigon Exhibition and Convention Centre in Ho Chi Minh City on May 5. The event, formerly known as the annual “Thailand Week” trade fair, is jointly held by the Department of International Trade Promotion under the Thai Ministry of Commerce and Thai Consulate-General in Ho Chi Minh City. On display at 250 stands are food and beverages, home appliances, cosmetics, healthcare and automobile and motor spare parts. The exhibition also covers other service sectors such as education, tourism, business franchising and catering services. Alongside the Thai product exhibition, there will be cultural performances, a cuisine showcase and a lucky draw at the fair. According to Pitinun Samanvorawong, Commercial Consul at the Thai Consulate General in Ho Chi Minh City, the exhibition, which has been successfully organised over the past 14 years, is a golden opportunity to connect businesses from both nations, helping promote trade cooperation between two countries. It has been billed as a venue for Vietnamese and Thai enterprises to enlarge their networks and further develop strategic partnerships, she added. The trade fair runs until May 8. Vietjet Air takes 40 percent domestic market share in Q1 Private low-cost carrier Vietjet Air took almost 40 percent of the domestic aviation market share in the first quarter of 2016 and grew by 6 percent from a year earlier. The firm reports that it currently owns 36 A320 and A321 airplanes and operates nearly 250 flights every day on about 50 domestic and foreign routes. It has provided services for more than 20 million passengers since its inception in 2007. Nearly 1,700 flights carrying some 300,000 passengers were conducted by the airline during the four-day holiday marking the National Reunification Day (April 30) and May Day. That number of flights increased by 686 compared to the same period last year, the airline said. Vietjet Air plans to launch its initial public offering in the next three months to sell 30 percent of its shares. It hopes to raise 800 million USD through that IPO, CEO Nguyen Thi Phuong Thao told Bloomberg. In 2015, Vietjet Air received the International Air Transport Association’s certificate for operational safety audit. It also won the “Best Asian Low-Cost Carrier” title at the TTG Travel Awards. Famed Vietnamese resort town faces risks from Chinese arrivals A surge in Chinese tourist arrivals brings joy and worry to Nha Trang, a Vietnamese city known globally for its beautiful beaches and islands. An increasing number of holidaymakers from China are flocking to Nha Trang, the capital of the south-central province of Khanh Hoa, bringing a healthy boost to local tourism. But concerns have begin to emerge as travel firms run by Chinese nationals and disguised as Vietnamese-owned entities have started to pop up, posing threats of market manipulation, according to authorities. Although registered under the names of Vietnamese nationals, the operations are in fact run by Chinese executives exclusively offering services to Chinese tourists. Should these firms have problems with the law, it is the Vietnamese ‘owners’ who act as the patsy while the Chinese hiding behind the curtains get off scot free. Souvenir shops along Nguyen Thi Minh Khai, Nguyen Thien Thuat and Hung Vuong Streets in the city’s downtown area are frequented by buses carrying Chinese tourists. The keepsakes available at these stores are very expensive, leading to huge commissions to tour leaders who take the groups there. “While the tour leaders are usually Chinese, it is the Vietnamese souvenir sellers who are blamed if the buyers later complain of expensive yet poor-quality products,” said Vo Thanh Minh, managing director of a local hotel. “Nha Trang has become a lucrative business destination for the Chinese but we are finding that they are forcing a bad reputation on the Vietnamese.” Bui Minh Thang, director of a Nha Trang travel firm, said the Chinese will first cooperate with local partners to establish tourism companies and familiarize themselves with the market. “Once they are familiar with doing business here, the Chinese will open their own companies and connect with restaurants, souvenir shops and even massage parlors to solely serve Chinese tourists,” Thang said. “The Chinese firms will soon control the entire market share and profit from the Chinese tourists if we do not take any action.” Dao Trong Tung, head of the Nha Trang branch of the Vietnamtourism-Hanoi JSC, warned that some local tour organizers are cutting prices to attract Chinese customers. “This will reduce the quality and reputation of Nha Trang tourism in the long term,” he said. Tran Son Hai, deputy head of the Khanh Hoa administration, said authorities are keeping a special watch on the Chinese-related tourism services. “The huge number of Chinese arrivals to Nha Trang is a good sign, but local travel firms and relevant regulatory agencies must strictly follow the law,” he said. Hai said competent agencies have carried out frequent checks to detect wrongdoings from travel firms that serve Chinese holidaymakers in recent times. “We will focus on Chinese travel firms that disguise as Vietnamese-owned, and those that may have violations in taxes, price listing and product quality,” he added. At a recent meeting with 27 local travel firms that service Chinese tourists, the province’s tourism department requested that Vietnamese companies should try not to lose the market share to disguised Chinese firms. Mango farmers plagued by false rumor of unsafe wrapping bags Mango farmers in several Mekong Delta provinces are rattled by rumors that their fruits are wrapped in unsafe Taiwanese-made bags before harvest. Mango prices have slumped 50 from last month after rumors surfaced that farmers are afraid to eat their own fruit due to safety concerns. A kilogram of Cat Chu, a specialty of Dong Thap Province, now sells at only VND15,000 (US$0.67), Tran Hoang Dan, who runs the province’s largest fruit wholesale facility, said. Farmers said the media has reported that the bags typically used to wrap the fruits in an effort to improve their color and appearance are of “dubious origin.” The rumor was first spread in May 2015, prompting the Dong Thap agriculture department to look into the issue, according to the department's deputy director Nguyen Thanh Tai. “All tests have shown that there is nothing abnormal with the Taiwanese bags and the quarantine processes applied to the mangos as rumored,” Tai said. The official added that Dong Thap exports thousands of metric tons of its mangos to Japan, Russia, the Republic of Korea (RoK), and New Zealand on an annual basis, with no shipment failing to pass quarantine. On May 4, the administration of Tien Giang Province, where mango farmers suffered from the same hearsay, also tasked relevant agencies with probing the case to assist growers. Do Van Phuoc, head of Tien Giang’s market surveillance agency, said that importers of the Taiwanese bags have all the necessary paperwork and that the bags are not banned from being imported as per Vietnamese law. Dr. Vo Huu Thoai, deputy head of the Southern Fruit Research Institute, said wrapping fruits before harvest is a modern technique used widely around the world. The expert said the bags help protect the fruits from pests, birds, and diseases and keep the skin color bright. The wrapping is also meant to limit the effect of insecticides on the fruits and make them ready for consumption, he added. Such techniques have been used in Japan for over a century, and Taiwan and China began to follow suit more than 50 years ago, according to Tai, the department's deputy director in Dong Thap. “Nearly 100% of the 9,000 hectare mango crops in Dong Thap apply this technique,” he said. “RoK and Russian companies that have plants in the province and source mangos from local farmers also request that the fruits be wrapped before harvest.” Japan makes its mark on the future of HCM City The Investment and Trade Promotion Centre (ITPC) recently entertained dozens of Japanese business leaders at a conference showcasing the booming economy of Ho Chi Minh City and push for new foreign direct investment in city assets. Pham Thiet Hoa, director of the ITPC said the city is seeking companies from Japan to joint venture 10 sizable metro projects including two monorail projects, several waste water treatment facilities, a trade centre and a botanical garden in the city downtown area. “The two monorails are quite sizable,” said Mr Hoa. The larger project has a proposed budget of US$1.33 billion while a smaller one has a US$715 million budget for a combined total estimated cost right at US$2.05 billion. Meanwhile the Saigon Zoo and Botanical Garden in the city downtown area, currently under consideration, will span 460 hectares and set the city back nearly US$500 million, said Mr Hoa. The city also wants to build a new trade centre in connection with the underground monorail system, he said. The figures that are being tossed around for the project cost are somewhere in the neighbourhood of US$312.05 million. “There’s never been a better time for Japanese companies to invest in the city,” said Mr Hoa. “Our economy is growing, and more people are choosing to live, work, visit, and study here than ever before.” “Ho Chi Minh City is on the move— and some great entrepreneurs from Japan are helping to power our economic resurgence, by building or expanding innovative businesses that are shaping its future.” “I’m committed to bringing even more Japanese investment into our city,” said Mr Hoa, and to ensuring the commercial and cultural ties between the two parties as strong as can be expected. The Japanese companies that invest in Ho Chi Minh City tend to be extremely large, diversified, multinational corporations, said a speaker from the Japan International Cooperation Agency (JICA). Japanese parent companies that have invested in the city are also significantly diversified, he said. On average, they are active in 17 different industries, with some involved in as many as 149. Further, he said, some of these companies have almost 600 foreign subsidiaries in 57 countries, although the average is 16 nations. The parent corporations are focused mostly on Asia, which accounts for 42% of their foreign ventures, on average. Further, they are about equally invested in Europe and North America (23% and 24%, respectively), with only a small investment in South America (5%). In general, the Japanese companies that invest in Ho Chi Minh City are successful and are active in a wide range of markets and in a large number of countries. Clearly, they are sophisticated organizations that are very familiar with investing and operating in international settings. Through March, Japanese companies have invested US$2.87 billion in 865 enterprising ventures in the city, making them the sixth largest foreign investment group, said the JICA speaker. The conference, convened by the ITPC brought together more than 100 participants primarily form the two regions – including investors, credit analysts, bankers, and underwriters. It also featured presentations from private sector partners on the economic advantages of doing business in Ho Chi Minh City with extended discussion of the economic impact of the ASEAN Economic Community and the highly controversial Trans-Pacific Partnership (TPP). Tariff revenues down in April Revenue from tariffs in the first four months of the year totaled VND77.4 trillion ($3.47 billion), or 28.67 per cent of estimates, according to the General Department of Vietnam Customs. Export tax stood at VND1.59 trillion ($71.34 million), import tax VND19.45 trillion ($872.72 million), special consumption tax VND5.73 trillion ($257.10 million), value added tax VND50.35 trillion ($2.25 billion), and environmental protection tax VND160 billion ($7.17 million). Revenue from tariffs in April reached VND21 trillion ($942.27 million), a decline of VND1.78 trillion ($79.86 million), or 8.4 per cent, against March. Vietnam Customs put the April decline down to completely-built-unit (CBU) motor vehicles falling 6.4 per cent in volume and 12.4 per cent in value and iron and steel trade falling 17.4 per cent in volume and 12.2 per cent in value. The two public holidays in April also had a negative effect on import and export activities. FPT overseas revenue up 36% in Q1 FPT earned revenue of VND8.567 trillion ($384.4 million) in the first quarter of the year, reaching 101 per cent of its target. Profit before tax (PBT) was VND563 billion ($25.2 million), 10 per cent higher than targeted. Profit after tax was VND346 billion ($15.5 million), or 104 per cent of the target, while earnings per share (EPS) stood at VND870 ($0.039), or 104 per cent of the target. While revenue and profit results have all exceeded the year-to-date target they are lower than last year due to greater investments in telecom infrastructure and saturation in the domestic market. Such factors were anticipated and reflected in the first quarter’s plan. The company expects that from the third quarter investment in telecom infrastructure will be lower and domestic-related segments, including software solutions, systems integration and IT services will record higher revenue. Software outsourcing and the retail segment continued to be highlights in the corporation’s business performance in the first quarter, with the former seeing revenue and PBT increasing 42 per cent and 18 per cent, respectively, equal to 104 per cent and 100 per cent of the year-to-date target. The retail segment delivered impressive growth of 35 per cent in revenue and 47 per cent in PBT, equal to 107 per cent and 105 per cent of the targets, respectively. In Japan, which is FPT’s largest overseas market, growth of 57 per cent growth year-on-year has been recorded in recent years. The Going Global strategy continued to bring positive results, with overseas revenue rising by 36 per cent year-on-year to VND1.242 trillion ($55.72 million). PBT from overseas markets was VND175 billion ($7.85 million), an impressive increase of 53 per cent year-on-year. Higher duties imposed on Chinese, Indonesian cold rolled steel The Ministry of Industry and Trade (MoIT) has announced the results of a review into anti-dumping duties on cold rolled steel imported from China, Malaysia, Indonesia and Taiwan. Duties on Chinese imports will increase from 4.64-6.87 per cent to 17.47-25.35 per cent. Those applying to the Shanxi Taigang Stainless Steel Company will go up from 4.64 per cent to 17.47 per cent while those for other Chinese exporters will rise 25.35 per cent. Indonesian imports will see duties increase from 3.07 per cent to 13.03 per cent while those on Malaysian imports will fall from 10.71 per cent to 9.55 per cent. Those on Taiwanese imports will remain unchanged. The new rates will be effective from May 14, 2016 to October 6, 2019 and may be changed following any subsequent review. Events to boost startups on horizon Vietnam Silicon Valley (VSV) will organize two events to support the country’s startup community - Acceleration to Demo Day on May 10 and the VSV Angel Camp Summer 2016 from May 13-15 in Ho Chi Minh City. The events are the biggest VSV has ever held and will provide opportunities to startups in Vietnam to develop their products, find solutions, and link with angel investors. The two events have different targets, with Acceleration to Demo Day focusing on helping startups identify a better strategic direction and will therefore aim at those with completed products and a customer base and looking to extend markets and call for investment. VSV Angel Camp Summer 2016, meanwhile, will present comprehensive knowledge to startups and investors via workshops and discussions and experience sharing in evaluating a startup. The event also provides opportunities for the sharing of training among startups, investors and policy makers to improve the country’s startup community. Printing firms bemoan sub-licenses Printing enterprises have complained that many requirements in the Government’s Decree 60 force them to apply for all sorts of sub-licenses. In particular, Article 11 of the decree issued in 2014 requires the manager of a printing facility to hold a college/university degree in printing or higher, or attend a short training course to get a printing management certificate issued by the Ministry of Information and Communications. According to Nguyen Thai Linh, office manager of the HCMC Printing Association, such a requirement runs counter to the liberal spirit of the Enterprise Law. In addition, to join a four-day training course, participants must pay VND5 million each to get informed of regulations in the field before they can get a certificate. “Such a kind of certificate is indeed a sub-license,” Linh said. Besides, for Article 27, enterprises must get approval from the ministry when importing certain printing machines and equipment as a condition for their imports to be cleared. The rule does not make sense, according to printing enterprises. Garment firms also bemoan the rule as they need to import machines to print patterns on fabric. According to the Vietnam Chamber of Commerce and Industry (VCCI), Decree 60 does not specify licensing criteria and this is a chance for the agencies in charge of licensing to take advantage, thus leading to corruption. Applications should be sent to the competent authority by mail and applicants will get replies within five working days. But enterprises said they only have their applications processed after they have directly met officers in charge. The association has several times proposed revising the unreasonable rule but to no avail. The customs has requested the Ministry of Finance to work with the Ministry of Information and Communications to make life easy for apparel enterprises, but its effort has not borne fruit. HCM City seeks to aid unbaked brick makers The HCMC government has proposed the ministries of finance and industry-trade take policy steps to support the production and consumption of unbaked bricks in the city as demand for this building material is still dismal. The city suggested the finance ministry offer incentives for the production and consumption of unbaked construction materials and the industry ministry issue policies to boost manufacture of machines and technology transfer for unbaked brick producers. The city government asked the industry-trade ministry to encourage mechanical engineering enterprises to design and make equipment and molds for producing concrete bricks, and equipment for producing lightweight concrete bricks to reduce imports. The industry ministry needs to announce a list of equipment and unbaked construction materials which are not produced domestically and are exempt from import tariffs to support local makers. According to the city government, unbaked bricks are environmentally friendly and heatproof. However, unbaked bricks cannot compete with baked clay bricks on the market due to a lack of supporting policies and investors of private construction projects still prefer the traditional product. Statistics show that unbaked bricks have been used at a small number of construction projects in HCMC though the city shut down all producers of baked clay bricks in 2010. Last year, about 306 construction projects in the city were asked to use unbaked materials. The Department of Construction told them to report on the use of unbaked building materials as regulated in the Ministry of Construction’s circular issued in 2012 but got feedback from only 53 of them. The department said it could not impose fines due to the absence of guidelines. There are two manufacturers of equipment and machinery for production of unbaked building materials in HCMC. They are Trung Hau Machinery and New Material Production Joint Stock Company (JSC) and Duc Thanh Investment and Technology JSC. Unbaked materials include cement bricks and lightweight materials. In Vietnam, there are currently about 25 unbaked brick factories with a combined annual capacity of 250 million products. Unbaked bricks are sold at VND1,100-1,300 each. In 2012, the Ministry of Construction issued Circular 09/2012/TT-BXD requiring construction projects funded by the State budget in certain cities to use 100% unbaked building materials from 2013. The percentage for buildings of nine stories or higher is at least 50% and is applied after 2015 no matter whether the projects are funded by the State budget or private investors. Jan-Mar trade deficit with S.Korea put at US$4.4 billion Vietnam ran a trade deficit of over US$4.4 billion with South Korea in the first three months of 2016, although exports to the Northeast Asian country jumped 35.5% year-on-year in the period. According to data of the General Department of Customs, Vietnam’s exports to Korea amounted to US$2.44 billion, up a staggering 35.5% year-on-year, while imports from Korea totaled US$6.85 billion, up 4.1% year-on-year. Korea was among the few countries and territories with more shipments bound for Vietnam in January-March. In the period, Korea was Vietnam’s second biggest exporter after China and far exceeding Japan. The customs said Vietnam’s imports from most major markets declined in quarter one. Chinese exports to Vietnam reached US$10.66 billion in the period, down 5.9% year-on-year. Vietnam bought over US$5.39 billion and US$3.16 billion worth of products from ASEAN and Japan respectively, down 5.9% and 12.1% compared to the same period last year. Imports from Europe stood at US$2.24 billion, down 14.2% year-on-year. A bilateral free trade agreement (FTA) between Vietnam and Korea went into force in December last year, thus fueling bilateral trade growth. According to the department, bilateral trade between Vietnam and Korea totaled US$36.56 billion last year, with the latter’s exports growing 27% year-on-year to US$27.63 billion. The two countries expect their two-way trade to soar to US$70 billion by 2020. Vietnam’s major products shipped to Korea are textiles, seafood, furniture, computers, electronic products, and phones and phone parts. Meanwhile, the country mainly imports fabrics, machinery, equipment, tools, spare parts and other components from the northeast Asian country. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR