BUSINESS IN BRIEF 12/6 Deloitte Vietnam talks corporate governance with public companies The audit committee is established with the aim of enhancing confidence in the integrity of an organization's processes and procedures relating to internal control and corporate reporting including financial reporting. The committee has thus become one of the main pillars of the corporate governance system around the globe in public companies and its establishment is thus a fundamental prerequisite to the attraction of portfolio equity investment. This is according to auditors of Deloitte Vietnam, who on June 9 presented for Vietnamese listed companies a seminar addressing international norms in corporate governance. At the seminar, Ha Thu Thanh, chair and CEO of Deloitte Vietnam explained in considerable detail the need for public companies to raise their awareness of the ramifications of corporate governance and the role of audit committee in supervising the efficiency and effectiveness of internal audits. The seminar was cosponsored by the International Finance Corporation, Hanoi Securities Exchange and Ho Chi Minh City Securities Exchange (HOSE) and is part of an effort to bring public companies on par with their global counterparts in the competitive world of attracting capital in the equity markets. US imposes anti-dumping duty of 113.8% on Vietnamese CWP The US Department of Commerce (DOC) has issued a preliminary decision on anti-dumping duties on circular welded carbon-quality steel pipes (CWP) imported from Vietnam, the Vietnam Competition Authority (VAC) announced recently. Accordingly, the DOC applied a common tariff of 113.8% on Vietnamese CWP exporters while only three businesses working hand in hand with the DOC during the investigation process were subject to anti-dumping duties ranging 0-0.38%. The duty equals to the dumping margin that proposed by the plaintiff in November 2015 and is seen as the highest level compared to the four countries in the US lawsuit - Oman, the United Arab Emirates, the Philippines and Pakistan. More aid pledged to Dak Lak’s economic development Representatives from foreign enterprises and organisations have committed to providing more official development assistance (ODA) and non-governmental aid for the Central Highlands province of Dak Lak in the time ahead. Addressing a conference in the locality on June 9, they promised to help Dak Lak deal with natural disasters and resume production, promote investment in the sectors of the province’s strength. Foreign firms said they continue exploring investment opportunities in agriculture, infrastructure development, electricity, energy, education and health care in Dak Lak. Vice Chairman of the provincial People’s Committee Y Dham Enuol appreciated non-governmental organisations (NGOs) and businesses for their recent assistance, and affirmed to facilitate businesses’ operations. As many as 92 projects valued at US$500 million, mostly ODA and foreign direct investment ones, are being implemented in Dak Lak, mainly in infrastructure development, agriculture, education, irrigation, environmental protection, and agro-forestry-fishery processing. Dak Lak has so far received 99 aid packages worth US$21.6 million from NGOs in the fields of health care, education, agriculture and community support, with many of them proving effective, helping improve living conditions for the locals. The province is calling for ODA in environmental protection, irrigation and transport infrastructure, education, sustainable development support, and climate change adaptation. It expects to attract FDI projects in agro-forestry-fishery development, bio-technology application, expansion of large-scale specialised cultivation areas, and tourism. Vietnam Airlines opens Da Nang-Bangkok route National flag carrier Vietnam Airlines will open a route from central Da Nang City to Bangkok on June 26. The carrier will conduct four flights per week on Mondays, Wednesdays, Thursdays and Sundays in aircrafts Airbus A321. The flights will depart from Da Nang at 10.55pm and at 1.45am from Bangkok. The flight time is one hour and 35 minutes. This is the fourth international flight departing from Da Nang, after flights to Siem Reap, Seoul and Tokyo. It is expected to boost trade, especially tourism between Southeast Asia and the country's central region through Da Nang City. On this occasion, Vietnam Airlines launched a preferential ticket price programme for passengers on this route. The return ticket is priced at VND669,000 (US$30) for economy class and VND4.6 million for business class. The tickets will be sold from June 10 to July 10 for flights departing from June 26 to December 31. The prices do not include other fees and taxes. Passengers can visit the carrier's website at www.vietnamairlines.com for further information. ACV takes on legal advisor YKVN, a full service Vietnamese law firm, has won a VND6 billion ($268,740) contract to provide legal consultancy to Airports Corporation of Vietnam (ACV) in its negotiations over share sales to its strategic investor, Aéroports de Paris (ADP). The contract will come into effect as soon as it is signed and is valid until December 31. ADP was approved as ACV’s strategic investor by the Ministry of Transport last January. The ministry then assigned the ACV Equitization Steering Committee to prepare for the share sale. ACV and ADP have had three official meetings and agreed that all deals will be completed this year. The ADP investment is one of the reasons behind the scheduled visit by French President François Hollande to Vietnam in September. Just 48 hours after the Prime Minister approved ACV’s equitization plan, ADP sent a letter to the Ministry of Transport expressing its determination to become ACV’s strategic investor. A global group, ADP’s capital stood at $4.81 billion at the end of 2014. It operates 37 airports around the world via its subsidiary ADP Management. Charles de Gaulle and Paris - Orly Airports are its largest in Europe. In 2014, revenue from its airports in Asia, Europe, and South America totaled $3.377 billion, with after-tax profit of $486 million. In ACV’s initial public offering in March, ADP was offered AVC shares at the lowest price, of VND13,100 ($0.58), meaning it will have to part with at least $97 million to secure its 7.4 per cent. According to ACV’s equitization plan it will sell 20 per cent in total. BIDV and other major Vietnamese investors hoped to purchase shares but the standards for becoming a strategic investor were so strict that they could not be met by any Vietnamese investors. Officially becoming a joint stock company in March, ACV has charter capital of over VND21 trillion ($940 million), equal to 2.177 billion shares at a price of VND10,000 ($0.44) each. The government still holds 95.4 per cent. ACV operates 22 airports in Vietnam. In its targets for 2016 it is to welcome 73 million passengers, a 12.4 per cent year-on-year increase, 53 million of which are domestic, and cater to 516,000 commercial flights. Revenue is targeted at almost VND12.1 trillion ($541.9 million) and pre-tax profit at over VND2 trillion ($89.5 million). YKVN has previously consulted the Vietnamese Government, international financial institutions, and multi-national corporations such as Procter & Gamble, Diethelm, Aventis, Sampoern and ExxonMobil. It also consulted Vietcombank, BIDV, VietinBank, and Agribank on legal issues. Pledged ODA, concessional loans soar in H1   Total official development assistance (ODA) and concessional loans committed by international donors for Vietnam in the first half of this year have jumped 61% from a year earlier to over US$2.56 billion. The Ministry of Planning and Investment unveiled the figures in a report delivered at a meeting of the national steering committee for ODA and preferential loans in Hanoi on June 8. However, the amount disbursed has dropped 4% year-on-year to US$1.85 billion, including US$1.75 billion in ODA loans and US$100 million in ODA grants, according to the Vietnam News Agency. The ministry attributed the disbursement fall to legal obstacles, project adjustments, paperwork mismatches between Vietnam and ODA donors, delayed arrangements of reciprocal capital and slow site clearance. The biggest hindrance is disbursements must not exceed the planned amount as stated in the National Assembly’s resolution on State budget projections for this year, the ministry said. According to the Ministry of Transport, which got 45% of the ODA and preferential loans for its projects in the 2011-2015 period, it currently has 36 projects funded by ODA and concessional loans. Of the figure, 18 projects have seen ODA disbursements going well, 10 projects with a medium disbursement pace and seven with a slow disbursement rate. At the end of the first quarter, more than VND151 trillion (US$6.76 billion) out of the VND238 trillion in ODA pledged for transport projects had been disbursed. The disbursed counter capital was over VND33 trillion out of the VND71.9 trillion needed. Between January and June, the ministry has signed agreements on over US$890 million of ODA loans for six more projects. ODA-funded projects in the transport sector are big with the participation of foreign contractors and major impacts on socio-economic development. Therefore, slow ODA disbursements for the projects will lengthen construction and thus result in cost overruns. Deputy Prime Minister and Foreign Minister Pham Binh Minh, who chaired the meeting, asked the national steering committee for ODA and concessional loans and the Ministry of Planning and Investment to streamline procedures to boost disbursements. The State Bank of Vietnam and relevant ministries need to draw up a suitable roadmap for ODA mobilization as Vietnam will no longer have access to low-cost funding sources in the coming time, Minh said. EU supports phytopharmaceutical firms A European Union-funded project was launched on June 8 to help Vietnamese phytopharmaceutical enterprises enhance competitiveness by bringing their products up to international standards. The “Scaling up Ethical BioTrade Initiatives within phytopharmaceutical sector” project worth two million euros is jointly implemented by HELVETAS Vietnam, National Institute of Medicinal Materials (NIMM) and Center for Rural Economy Development (CRED) in 2016-2020. Vietnam has a large resource of natural ingredients, which could be used as raw materials in the pharmaceutical, cosmetic and food industries, but the domestic supply has been on the wane due to overexploitation and lack of conservation solutions. Therefore, the national pharmaceutical sector becomes vulnerable to foreign competition as local producers have to import large quantities of raw materials from countries such as China and India. The selected phytopharmaceutical enterprises account for about 80% of the medicinal material based products market in Vietnam and are those with commitments to sustainability by ethical sourcing of ingredients and establishing of value chains in compliance with international standards. The project is expected to involve a dozen phytopharmaceutical enterprises, 5,000 farmers/households and relevant agencies from the ministries of health, and natural resources-environment. The project also aims to raise income of farmers/households through support for the effective implementation of Ethical BioTrade value chains, consolidation of knowledge and skills in cultivating, harvesting/collecting, and processing of ingredients in a manner that respects biodiversity and environmental protection. It will contribute to the improvement of a policy environment that backs sustainable development of the phytopharmaceutical sector in Vietnam. Alejandro Montalban, head of cooperation and development of the EU Delegation to Vietnam, told the launch event that the project marks an important milestone in promoting a sustainable Ethical BioTrade business model within the natural ingredients sector of Vietnam. “We hope to see the goal of making Vietnam an internationally recognized supplier of natural ingredients become visible and noticeable in the future,” Montalban said. Australia asked to check alleged antibiotic residue in Vietnam fish The National Agro-Forestry-Fisheries Quality Assurance Department (Nafiqad) has asked Australia to double-check news that a fish batch exported to Australia by a Vietnamese firm contains a high level of antibiotic residue. After Saigon Food Joint Stock Company had rejected the allegation that its red tilapia shipment to Australia was found to contain Enrofloxacine, Nafiqad wrote to the Australian import authority saying it had requested Saigon Food to check the information. However, according to Nafiqad, Saigon Food said it did not produce or export frozen red tilapia to Australia and has no trade relations with Always Fresh Trading Co Ltd which said it had imported fish from Saigon Food. Le Thi Thanh Lam, deputy general director of Saigon Food, said her firm had not sent any such shipment to Australia and had had no trade ties with the importer. As a result, Nafiqad asked the Australian authority to provide more information to track the shipment. Regarding the frozen shrimp shipments of Ngo Bros Seaproducts Import-Export One Member Company and Minh Phu-Hau Giang Seafood Processing Corporation that have higher-than-permitted microorganism, Nafiqad said they have taken appropriate remedial measures and hence wants Australia’s Ministry of Agriculture and Water Resources to remove enhanced checks on seafood shipments exported by the two companies. Busan Bank to open local branch this year South Korea’s Busan Bank will open a branch in HCMC in August this year, heard a meeting on Tuesday between Park Soo Kwan, Vietnam’s honorary consul general in Busan City, and HCMC chairman Nguyen Thanh Phong. The branch, whose license took effect on May 27, will provide financial services for Korean clients in Vietnam, particularly those from Busan. It will be located at the Kumho Asiana Plaza Saigon building at 39 Le Duan Boulevard in District 1. Phong said South Korea is the fourth biggest investor in HCMC with 1,200 projects capitalized at US$4.22 billion. Phong said a big-ticket project of Lotte Group in Thu Thiem New Urban Area would help increase Korean investments in HCMC. The project is scheduled to get off the ground in September. Park said Busan Bank is the fifth largest bank in South Korea and that the bank has assisted 60 Korean firms to come to Vietnam for business and investment. Liquidity in banking system seen falling The interbank interest rate spikes since the end of last week indicate that liquidity in the banking system is inching down and this market movement is seen continuing given the central bank’s credit loosening stance. Interbank rates for overnight to two-week loans in the Vietnam dong slid by 0.1 percentage point on Tuesday. However, the rate for overnight to one-week credit still stayed high, at 2.5% per year. Meanwhile, the respective rates for two-week, three-week and one-month loans were 2.9%, 3.2% and 3.6% per year. Interest rates on the interbank market usually rise sharply at the beginning or the end of month due to banks’ demand for dong funds to meet compulsory reserve requirements, and drop to normal levels later. Nevertheless, interbank rates remain high at the moment. Open market operations (OMO) did not record new transactions on Monday, and zero dong had been in circulation on OMO as of last Friday. Two weeks earlier, the State Bank of Vietnam (SBV) net injected VND35.69 trillion (US$1.6 billion) into OMO for the second consecutive week while no loan fell due. The central bank held no auction of treasury bills on Monday while VND8 trillion worth of bills reached maturity. In the week ending June 3, the SBV sold VND35 trillion worth of treasury bills and adjusted their tenors to attract buyers. Their coupons were revised up significantly to prevent dollar hoarding and speculation. As a result, the winning coupons of Government bonds dropped slightly. Net injections into OMO and rising interbank rates show that liquidity in the banking system has edged down and may fall further in the coming time, according to Bao Viet Securities Company.   Credit has grown well at banks and more loans are expected to be made following the central bank’s issuance of Circular 07/2016/TT-NHNN. The circular amending Circular 24/2015/NHNN and taking effect on June 1 permits exporters to take out short-term loans in foreign currency at low interest rates and convert them into Vietnam dong funds to finance their production of goods for export. A couple of banks said they are boosting lending and this trend will continue in the coming time. Dong Nai pledges to tackle obstacles facing Japanese firms The administration of Dong Nai province promised to remove obstacles facing Japanese companies in the southern locality during a dialogue on June 10. The event, held by the provincial Customs Department and the Japanese Business Association in Dong Nai, attracted representatives from more than 100 Japanese firms. They spoke highly of the local administration’s administrative procedure reforms and the favourable conditions for operating their businesses. Meanwhile, others pointed out problems pertaining to import-export procedures, new taxation and customs regulations, the establishment of affiliates, and hotlines for the firms to talk to relevant agencies. Le Van Danh, Director of the Customs Department, said authorised agencies will devise measures to tackle hindrances to business operations. His department will step up administrative reforms to smooth the path for trade activities. Regarding matters at the national scale, they will ask the General Department of Vietnam Customs, the General Department of Taxation and the Government to fine-tune related regulations. Vice Chairman of the provincial People’s Committee Nguyen Quoc Hung said Dong Nai always stands side by side with the business community to tackle obstacles efficiently and facilitate their business operations. Maeno Kojil, Chairman of the Japanese Business Association in nearby Ho Chi Minh City, said the dialogue helps both sides look into and seek to address arising issues, helping enterprises operate profitably in line with laws. He asked for similar functions to be held in the future. At the dialogue, the provincial Customs Department and the Japanese Business Association in Dong Nai signed a cooperation agreement to facilitate their information connectivity, which will enhance the companies’ adherence to trade-related rules and the State’s customs management. In the first five months of 2016, Dong Nai continued to be a leading FDI destination in Vietnam with nearly 900 million USD poured into the province, accounting for 15 percent of the country’s total FDI and 90 percent of the local target for the whole year. Japan invested in 10 projects with a registered capital of 49.6 million USD in Dong Nai between January and May. The province currently ranks fourth nationwide in terms of Japanese investment attraction with more than 205 projects worth over 3.7 billion USD. Over 26,000 cars sold in May Vietnam’s automobile sales in May totaled 26,028, increasing just one percent from April but 45 percent from the same period last year, released the Vietnam Automobile Manufacturers’ Association (VAMA). During the month, the number of passenger cars sold inched 2.2 percent against last month to 14,039. The figure for commercial cars increased 6.7 percent to 10,312 units, whereas special-purpose cars sales slid 27 percent to 1,677. They were sold by both VAMA members and non-VAMA-member businesses, which imported completely-built-up (CBU) cars. Up to 19,117 units of the sales were domestically assembled, 2 percent lower than April, while the purchase of CBU imported cars hit 6,911 units, an 11-percent monthly rise. The gain of CBU imported cars stemmed from consumers’ concern over a new tariff that will push up prices of imported cars with engine capacity above 2,500 cm3 after it comes into effect in July 1. By the end of May, overall auto turnover has surged 31 percent compared with the same period last year. The sales of passenger cars, commercial cars and special-purpose cars rose 22 percent, 42 percent and 59 percent, respectively. Of 111,442 cars sold in the five-month period, 85,238 were domestically assembled and 26,204 were imported cars, up 37 percent and 16 percent year-on-year.- Gamuda Gardens wins Malaysia landscape architecture award Renowned Malaysian-backed developer Gamuda Land has won an honour award for the Property Developer category at the 8th Malaysia Landscape Architecture Awards (MLAA) for its Gamuda Gardens, a residential precinct in Hanoi. It has also earned the same title for two more projects in Malaysia – Kota Kemuning Wetland Park and High Park Sales Gallery. Last year, the project won the Best Residential Development in Hanoi award at the 2015 Vietnam Property Awards. Gamuda Gardens is one of four main parts of Gamuda City, a new mega city in the south of Hanoi. The 73-hectare township provides its residents with modern facilities and community-based amenities, including a recreational club, public and international schools, neighbourhood shops and kindergartens. It was built upon five key pillars of design quality, community & amenities, safety & security, a healthy lifestyle, and sustainable values. Its high-rise buildings and low-density garden homes are built around refreshing green parks and lush landscaping that offer a comfortable and tranquil experience. More than 60 percent of the residential precinct’s area is covered with trees or dedicated to public buildings, said Director of Gamuda Land Vietnam Cheong Ho Kuan. The landscape design of Gamuda Gardens is a work of Land Sculptor Studio (LSS), a group of designers from Thailand who have joined multiple projects in China, the Middle East, Singapore and Vietnam. The annual Malaysia Landscape Architecture Awards was founded by the Institute of Landscape Architects Malaysia (ILAM) and sponsored by the International Federation of Landscape Architects (IFLA). Vietjet launches Hanoi – Tuy Hoa service Low-cost carrier Vietjet Air has launched a new flight route between Hanoi and Tuy Hoa city in the central coastal province of Phu Yen. From the capital city, the maiden flight carrying 180 passengers on board landed at Phu Yen’s Tuy Hoa airport around midday of June 10. Flight duration lasts for about one hour and 40 minutes per leg. As scheduled, the flight departs from Hanoi at 11:15 am and the return flight takes off at 13:30 pm. On the occasion, Vietjet Air presented health insurance cards to 200 needy residents in Tuy Hoa city. Tuy Hoa is a popular beach destination known for natural sightseeing and activities. Vietjet Air boasts a fleet of 35 aircraft, including A320s and A321s, and operates approximately 250 flights on a daily basis. It has already opened 47 routes in Vietnam and across the region to international destinations such as Thailand, Singapore, the Republic of Korea, Taiwan, China, Myanmar, and Malaysia. Italian furniture exhibition opens mid-June Famous Italian furniture brands will present around 200 of their products at the Italian Legacy exhibition, organised at Daewoo Hotel in Ha Noi in mid-June. The 10-day exhibition, beginning on June 16, is the first of its kind organised in Việt Nam. Through the event, visitors can understand more about the Italian furniture industry and view products from famous designers, including Colombostile, Medea, Carpanelli, Rozzoni, Luigi and Minotti. At the event, products showcased will include Colombostile's Kalamos sofas, Swarovski designs by Silvio De Ponte and Pietro Geata, and Medea by Pinuccia Provasi. The organiser of the exhibition is Eurasia Concept, a distributor of 30 Italian furniture brands in Việt Nam. Vietnam, South Africa discuss 3 bln USD trade turnover Vietnam and South Africa agreed to double efforts to lift bilateral trade revenue to 3 billion USD by 2020 at the third meeting of their joint trade committee in South Africa’s capital of Pretoria. The five-day session convened on June 6. As heard at the meeting, the revenue hit approximately 1.15 billion USD in 2015, almost doubling the figure for 2010, at 659 million USD. Vietnamese Deputy Minister of Industry and Trade Do Thang Hai underscored South Africa’s role as the biggest import market of made-in-Vietnam products in Africa. Hai proposed the signing of a memorandum of understanding on trade promotion between the Vietnam Trade Promotion Agency (Vietrade) and the Trade and Investment South Africa (TISA) . He mentioned trade liberalisation and the establishment of a distribution channel for Vietnamese goods in the host nation by direct links with local distributors as key measures. He asked the South African Government to facilitate coal exported to Vietnam and local enterprises investing in thermo-power, wind-power and solar-power in Vietnam. He also expected local authorities to support Vietnamese investment in their coal mining activities in South Africa. The Vietnamese official urged South African investors to invest in the export sector of Vietnam, particularly in garment-textile and food processing, capitalising on preferential tariffs brought about by free trade agreements. All of Hai’s proposals were concurred with by South African Deputy Minister of Trade and Industry Mzwandile Masina. The South African official requested Vietnam create favorable conditions for the import of farming produce and processed food from his country and called for additional Vietnamese investment in South Africa. During his stay, Hai had a meeting with South African Deputy Minister of Mineral Resources Godfrey Oliphant, who also agreed with his suggestions on mineral collaboration. Mr. Oliphant said he endorsed the signing of a memorandum of understanding with Vietnam on cooperation in the field. After the meeting, the two industry-trade ministries together with the Vietnam Embassy in South Africa held a trade conference. The event gathered more than 50 local businesses who are interested in forming partnerships with Vietnamese firms, opening representative offices, making inroads into the retail sector in Vietnam and exporting coal to the country. On the occasion, the Vietrade signed a cooperation pact with Swaziland Investment Promotion Agency to encourage trade and investment in industry. Audi displays latest models in Hanoi The German carmaker Audi opened its first automobile exhibition in Vietnam on June 9 in Quan Ngua Sports Stadium in Hanoi to introduce its latest models to Vietnamese customers. The four-day Audi Progressive event is displaying the most advanced models of the luxury brand, namely the TT Coupe, all-new A4, A5 Sportback, A6, A7 Sportback, A8L and Audi R8 Coupe. Highlights of the auto show include the all-new A4 model, which will be sold in Vietnam within this month at a cost of about 1.67 billion VND (72,600 USD), and the “2016 World Performance Car” award winner R8 Coupe. In line with the Audi Progressive event, the Italian motorcycle manufacturer Ducati is also displaying its latest models, including the Multistrada 1200, Monster 821 and Monster 1200 R. According to the Ducati representatives, this is the first time Audi and Ducati have joined forces to build the largest-ever auto exhibition in Vietnam, and is a spectacular beginning in joint market development in Vietnam. 5,000 estate agents to gather at Vietnam real estate brokerage day Some 5,000 estate agents and more than 300 real estate exchanges will gather at the Vietnam real estate brokerage day in central Da Nang city on June 25. According to Secretary-General of the Vietnam Association of Estate Agents (VAEA) Nguyen Van Dinh, the event aims to foster the development of the real estate industry by connecting different market players such as developers, investors, real estate agents, financial institutions, suppliers of building materials and customers. A number of major projects have registered to join the event including those of CenGroup, Eurowindow Holdings and Taseco. It will also honour top estate agents in Vietnam and provide a platform for attendees to share their experience and practices. The VAEA has selected June 29 as the annual day of the real estate brokerage industry. Mixed views on SMEs support draft law Different opinions on the draft Law on Supporting Small and Medium Enterprises (SMEs) will be gathered at a consultation conference held by the Ministry of Planning and Investment in Ho Chi Minh City between June 9-11. At the opening ceremony, Deputy Minister of Planning and Investment Dang Huy Dong said that Vietnam is working to complete a legislation system suitable for international economic integration with a focus on creating a legal corridor for economic actors to boost their competitive capacity. The draft law was built on the basis of the national economic development and the satisfaction of commitments as regulated in the country’s signed free trade deals, he noted. The draft should turn a spotlight on the strategic significance of SME development in the country’s industrialisation process, highlighted Dr. Tran Du Lich, deputy head of the Ho Chi Minh City’s National Assembly Deputy Delegation, adding that SME development support will set forth social progress and equity. According to experts at the conference, the draft should evidently define the roles of local authorities in giving assistance to businesses, as seen in other countries’ experience. Business associations also agreed to set up a national SME development council. To Hoai Nam, Vice Chairman and General Secretary of the Vietnam Association of Small and Medium Enterprises (VINASME) underscored that by orienting policies as well as encouraging and consolidating the role of the private economic sector, the council will promote SME sustainable development. He also suggested the Government give detailed stipulations on the council’s functions, missions and organisational structure. New law set to strongly assist SMEs The law on support to small- and medium-sized enterprises (SMEs), which is being drafted, is set to facilitate the development of the firms making up 97 percent of the businesses in Vietnam. A three-day consultation on the draft was opened in Ho Chi Minh City on June 9. At a press conference as part of the event, Deputy Minister of Planning and Investment Dang Huy Dong said in many developed countries, it is normal to have SMEs accounting for more than 90 percent of the enterprises. In Japan , about 99.7 percent of local companies are SMEs, and they are working effectively and greatly contributing to local development. It is a must to improve the view about SMEs in Vietnam as they generate 40 percent of total GDP and create jobs for 52 percent of the workforce, he noted. He admitted that Vietnamese SMEs are facing an array of difficulties in loan, land and technology access and market expansion. That fact partly explains the private economic sector’s modest competitiveness and vulnerability to policy and social vagaries. The law drafting, supported by USAID Governance for Inclusive Growth Programme, aims to provide a comprehensive approach for SME support. Dong said under the draft law, there will be five SME support programmes that assist start-ups, give advice on production improvement, develop inter-sectoral connectivity and value chains, support innovation and help SMEs in integration. Some of the programmes will be applied for all SMEs while others will focus on the most potential firms. Other incentives include a 5 percent reduction in the corporate income tax for up to five years from an SME’s inception, along with preferential treatment during public procurement and in forming a distribution chain. In the draft, the Government also encourages commercial banks to give more loans to SMEs. Organisations and persons who provide support services for SMEs such as research institutes, universities and businesses will also receive certain benefits. Deputy Minister Dong said the incentives target high potential and creative companies. They are necessary and in conformity with international practice and commitments, especially free trade agreements like the Trans-Pacific Partnership and the EU-Vietnam FTA which will take effect soon. Livestock production development amid drought discussed A conference was held in Nha Trang city, Khanh Hoa province on June 9 to seek ways to boost livestock production in the context of drought. The event saw the participation of over 50 delegates from ministries, sectors and eight localities in the south central coastal region. According to the Department of Livestock Production under the Ministry of Agriculture and Rural Development, the region is endowed with favourable conditions for breeding animals such as sheep, goats and ostriches. Ninh Thuan, Binh Thuan and Khanh Hoa together produce over 98 percent of the nation’s mutton. Khanh Hoa and Quang Nam produce over 83 percent of the nation’s ostrich meat. However, prolonged drought has taken a toll on livestock production in the region since 2014, the department said, adding that it cost farmers more to feed their livestock, so productivity has fallen. Agricultural officials from the regional provinces and cities highlighted the need for restructuring animal farming. The localities should promote their own potential, for example, Khanh Hoa focusing on raising ostriches and Salangane, and Ninh Thuan farming goats and sheep. Doan Duc Vu from the Institute of Animal Sciences for Southern Vietnam said it is crucial to ensure food and water for livestock in the context of prolonged drought. The region needs to grow drought-resistance grass and food varieties while applying technologies in processing and preserving agricultural by-products, Vu said. Deputy Minister of Agriculture and Rural Development Vu Van Tam said the localities need to develop livestock production in a bid to enhance the sector’s competitiveness in international integration. Viet Nam's 2016 Property Awards winners to be honoured The country's best property developers and professionals will be honoured on June 10 at a debut ceremony to be held at the Intercontinental Asiana Saigon Hotel in HCM City. The annual second Viet Nam Property Awards, followed by a gala dinner, rewards top developers and the finest developments and resort destinations, most of which are in Ha Noi, HCM City, Da Nang, Phu Quoc Island and Nha Trang, areas where the property sector has seen a steady recovery. The Awards are designed to provide a much-needed boost for developers during this active period for the local property sector, according to the chairman of judges, Thien Duong, managing director at Transform Architecture. Terry Blackburn, founder and managing director of the Asia Property Awards, which is now in its 11th year: "These are world-class developments that will be judged by an independent panel of judges. The official shortlist gives a clear picture that developers in Viet Nam are committed to produce the finest real estate the country has seen to date." Competing for the year's top honour – Best Developer – are four of Viet Nam's biggest developers: Deutsches Haus Ho Chi Minh Stadt Ltd, Phu Quoc Development & Investment Joint Stock Company, Thao Dien Condominiums and Acteam International Co Ltd. Acteam International and Phu Quoc Development & Investment lead at least with five nominations each, including Best Green Development, Best Commercial Development, Best Hotel Architectural Design, Best Hotel Interior Design, Best Condo Architectural Design, Best Residential Interior Design and Best Condo Landscape Architectural Design. Due to the anticipated demand following the landmark Law on Residential Housing, all eyes will be on the residential categories, covering affordable, mid-range, resort condo and luxury segments in HCM City, Ha Noi and the rest of the country. The top winners at the Viet Nam Property Awards will be eligible to compete with regional peers at the sixth annual South East Asia Property Awards 2016 to be held in Singapore in November. Presented by Hansgrohe, the annual event is a unique networking venue for professional realtors to meet industry leaders and stay in touch with their peers. Viet Nam News, Property Report and the Robb Report, among other media partners, have promoted the Viet Nam Property Awards throughout the country and across South East Asia. Great Eastern Vietnam sold to FWD Group Life insurer Great Eastern Vietnam has been sold to the FWD Group after nine years in the country. Though the Singapore-registered Great Eastern Life Assurance Company did not announce the sale in Vietnam, the FWD Group, the insurance arm of the Asia-based Pacific Century Group, announced on June 7 it had secured regulatory approval to proceed with the acquisition of Great Eastern Vietnam. Great Eastern Vietnam will become wholly-owned by FWD and be re-branded. FWD plans to invest significantly to develop the company’s technology infrastructure and enhance the customer experience, with a vision of becoming a leading insurer in Vietnam. Ms. Vo Thi Tho, Assistant Manager of Marketing & Corporate Communications at Great Eastern Vietnam, confirmed with VET that “the company in Vietnam is being transitioned to FWD” but did not provide any further details or reasons behind the sale. “We have to get the sale completed before June 21,” she said. The move into Vietnam will be an important strategic milestone for FWD’s Southeast Asian ambitions, as it expands its reach into underserved markets in the region to realize its vision of becoming a leading pan-Asian insurer that changes the way people feel about insurance, according to Mr. Huynh Thanh Phong, CEO of the FWD Group and former CEO of Prudential Vietnam. “Vietnam’s economic transformation has been remarkable, and coupled with low insurance penetration we see a great opportunity in the market for a new, Asian-born insurer to meet the protection needs of Vietnamese people,” he said. In a statement released on June 7, FWD said that Great Eastern Vietnam’s business would continue as normal and FWD intends to retain and grow the current employee base. It is actively recruiting a solid senior management team with deep local experience to lead the organization and is expecting to hire new talent at all levels. Great Eastern Vietnam’s customer coverage and policies will be honored by FWD and remain unaffected by the transfer of ownership. The company’s headquarters will remain in Ho Chi Minh City, with a branch in Hanoi. The move marks FWD’s second new market entry this year, following the majority acquisition of group medical provider Shenton Insurance in Singapore in April. Headquartered in Hong Kong, FWD’s presence spans Hong Kong, Macau, Thailand, Indonesia, the Philippines and Singapore, offering life and medical insurance, employee benefits, and general insurance. It is focused on creating fresh customer experiences, with easy-to-understand products supported by leading digital technologies. Great Eastern Vietnam began operations in 2007. In 2015 its total revenue was VND83.6 billion ($3.74 million). It employs about 120 staff and has 300 insurance agents nationwide. Great Eastern CEO Mr. Khor Hock Seng told Singaporean media that the decision was made after a comprehensive strategic review. It will increase its focus on growing its core markets of Singapore and Malaysia, where it is among the market leaders, as well as its businesses in Indonesia and Brunei. Bac Giang litchi on way to US One ton of litchi from Bac Giang has been exported to the US by the Anh Duong Sao Trading Service Company. Demand for litchi in the US will be higher this year because the litchi season in Mexico will be two weeks later than in Vietnam, the Director of Anh Duong Sao said. Although competition in the US’s litchi market is fierce, the company still decided to export more to the market than last year, totaling 20 tons. According to a report from the Bac Giang Provincial People’s Committee, the total litchi area in the province is 30,000 ha this year, down by 1,000 ha compared to last year. The total harvest is expected to be 130,000 tons, down 65,000 tons under the province's restructuring plan. Early ripening litchi is estimated at 23,000 tons, accounting for 17.7 per cent of the province’s total. The remaining 107,000 tons will ripened litchi. Prime growing areas in the province are Luc Ngan, Luc Nam, Tan Yen, and Lang Giang districts. Despite less growing area the amount of high-quality litchi grown under VietGap and GlobalGap standards has increased, according to the people's committee. The province expects domestic consumption to be 78,000 tons, or 60 per cent of its total, with exports accounting for the remaining 52,000 tons, or 40 per cent. The “high season” for Bac Giang’s litchi will be in about ten days, or around the 18th of the month, but local exporters are a little concerned. There are difficulties with the Hanoi Irradiation Center (HIC), under the Ministry of Science and Technology, which opened this year. After completing its tasks it doesn’t automatically arrange for security inspections, with enterprises having to contact State agencies themselves. If such inspections are not conducted immediately after irradiation, the quality of the litchi cannot be guaranteed. It normally takes months for enterprises to arrange security inspections by the Civil Aviation Authority of Vietnam (CAAV). Though CAAV leaders have said that procedures will be conducted quickly, the litchi must be processed at Hanoi’s Noi Bai International Airport. The Plant Protection Department under the Ministry of Agricultural and Rural Development is concerned that if inspections take too long then exporters will be at a disadvantage given how short the season is. CAAV is attempting to assist enterprises to gain quick inspections at Noi Bai and is cooperating with HIC to conduct security inspection services at the center. CAAV said a solution will be identified prior to June 10. Transport costs for one kilogram of litchi onboard Vietnam Airlines are from 30 to 40 cents higher than for other goods, cutting into Vietnamese litchi’s competitiveness against those from Thailand and China. Transport and irradiation is estimated to represent two-thirds of the litchi sales price, a representative from Hoang Ha International Logistics said. Vietnam Airlines explained that the transport costs are contained within its general price schedule but, to support Vietnamese litchi, it will cut transport costs by 30 per cent on direct flights to Australia. Under sponsorship from the Swiss Government and guidance from Vietrade at the Ministry of Industry and Trade, Bac Giang is researching new technology to keep litchi fresh, using sulfur steam. The technology meets EU standards and, if applied successfully, will allow for litchi to be transported by ship instead of air, cutting transport costs. Businesses boost investment into Africa More Vietnamese companies have planned to invest in African countries, seeing them as lucrative markets for their projects, said a representative from the Vietnamese Ministry of Industry and Trade at a recent trade promotion conference held in Hanoi. Speaking at the conference on trade promotion between Vietnam and Africa held in Hanoi on July 6, deputy head of the West Africa and Southwest Asia Markets Department under the Ministry of Industry and Trade Hoang Huu Nhuan, said that many African countries are focusing on infrastructure development, which offered a big opportunity for Vietnamese investors. Africa has huge import demand for food, agricultural, seafood and consumer products that Vietnam was capable of providing. According to the Ministry of Planning and Investment, by the end of 2013, Vietnamese companies invested around USD730 million in 18 projects in 11 African countries. The projects are mostly concentrated on petroleum exploration, agro-forestry-fisheries processing, construction material production and telecommunications services. Among those, the military-run telecom group Viettel is Vietnam's biggest investor in Africa with its projects in Mozambique, Cameroon and Tanzania. It is followed by PetroVietnam. At the conference, PR Manager of Viettel Nguyen Ha Thanh said that the rate of mobile phone users in Africa remains low, which provides a good chance for Viettel and many other telecom investors. Just one month after the Viettel project in Tanzania became operational; the group had attracted one million customers in the country. Thanh also noted that Viettel's projects in African have generated 3,000 direct jobs and 300,000 indirect jobs in the continent. Thai Kieu Huong, vice president of the Vietnam-Africa-Middle East Business Forum, said Africa is a potential growth market but Vietnamese firms have little knowledge about it, so doing business there is risky. The Vietnamese government needs to hire African experts to support local companies in setting up a contingent of consultants on trade and investment laws when doing business in Africa as well as seeking markets and partners, Huong suggested. “It is also essential to form a network of banks to help Vietnamese companies which invest in Africa", Huong emphasised. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR