BUSINESS IN BRIEF 23/6 Farming sector moves to regain growth amid climate change   Drought kills crops in Mekong Delta region. Minister of Agriculture and Rural Development Cao Duc Phat asked for greater efforts to restore the growth of the agriculture sector which is suffering from El Nino and climate change impacts during a meeting with the media in Hanoi recently. In the remaining months of this year, the agriculture sector must focus on recovering from disasters and propose measures to maintain domestic and foreign markets, he said. He also urged the Ministry’s Cultivation Department to grow rice and vegetables on the largest scale and restore acreages of perennial plants following droughts and epidemics. The Plant Protection Department will closely monitor disease outbreaks and suggest measures to ensure the safety of vegetables, tea and pepper while the breeding sector will continue driving back the abuse of banned substances and antibiotics. The Directorate of Fisheries established a working group in the south to closely monitor technical assistance for shrimp farmers and restore aquaculture in several provinces in the central region. The prolonging drought and saltwater intrusion have damaged nearly 250,000ha of rice, 18,960 ha of vegetables and more than 149,700ha of industrial plants. Over 288,000 households also lacked running water. As of May 20, an estimated 1,355 heads of cattle were killed and thousands of others run short of drinking water while around 6,800ha of aquaculture were damaged. In mid-May, the total loss nationwide was estimated at an upward of 9.7 trillion VND (990 million USD), 700 billion VND (31.8 million USD) of which was caused by severe cold spells, more than 8.9 trillion VND (404.5 million USD) by drought and saline intrusion, and others by whirlwind, lightning and hailstorms. According to the department, the total output of winter-spring crop is estimated at 19.9 million tonnes this year, down 844,000 tonnes year-on-year. The General Statistics Office estimated that pig and poultry stock rose 3-3.5 percent on year while the number of cows increased 1-1.5 percent, thanks to strong investment by major groups over predicted lack of meat supply in China. HCM City sees strong economic growth in first six months Ho Chi Minh City’s economy in the first half of this year grew stronger than the same period last year, especially in the fields of services, industry and agriculture. The information was released at the municipal authorities’meeting on June 20 to review the city’s performance across the fields in the first two quarters. During the reviewed period, HCM City’s gross regional domestic production (GRDP) was estimated at over 476.9 trillion VND (21.46 billion USD), up 7.47 percent year-on-year, with good growth seen in services (up 7.7 percent), industry and construction (7.5 percent) and the farming sector (5.6 percent). According to Tran Thi Binh Minh, Deputy Director of the municipal Department of Planning and Investment, total retail sales of goods and services, and export revenue were higher than the corresponding time of 2015, significantly contributing to local economic growth. The city’s industrial development index posted an estimated year-on-year rise of 6.9 percent. Of note, the four key industries – machinery, electronics, chemistry-rubber-plastics, and food processing – took the lead in expanding the market, upgrading equipment and improving quality as well as competitiveness of products. Despite the high economic growth rate, Chairman of the municipal People’s Committee Nguyen Thanh Phong stressed the need to seek more efficient and specific solutions in order to achieve an economic growth of at least 8 percent in 2016. From January-June, HCM City saw the establishment of 16,322 new firms with total registered capital of 114.6 trillion VND, while 23,718 existing firms added 74 trillion VND to their capital, pumping a total of nearly 219 trillion VND (9.85 billion USD) into the economy, representing a year-on-year increase of 45.9 percent. Phong called on local agencies and departments to create the best possible conditions for domestic businesses, focusing on streamlining administrative procedures in tax and customs and removing difficulties in accessing loans, land and technological innovation. Meanwhile, foreign investments in the city contracted remarkably with only 780 million USD in newly-registered and additional foreign capital, down 35.1 percent compared with the same period last year. Given the decline, the Chairman called for more heed to foreign investment attraction in a bid to prop up the city’s development. HCM City: Ornamental fish exports bring home 7 million USD Ho Chi Minh City earned 7 million USD from shipping 7.4 million ornamental fish abroad by mid-June, up 13 percent in quantity and 32 percent in revenue from the same period last year, according to the municipal Department of Agriculture and Rural Development. Key markets of Vietnamese pet fish include the US and some countries in the Europe and Asia. Last year, the city exported 12 million ornamental fish and gained revenue of 11 million USD, doubling the 2010’s figures. The exports were mainly neon fish, molly fish, sailfin molly, seven-coloured fish, Siamese fighting fish and dicus. They were shipped to 47 countries worldwide with Europe accounting for 60-70 percent of the market share. The city has 10 firms and fish breeding farms involved in exporting. In the past five years, robust annual growth has been seen in the city’s ornamental fish exports, with 8.6 percent in quantity and 6.6 percent in revenue. However, production scale is still small and cannot fill large orders. In comparison with regional rivals like Singapore, Thailand and Malaysia, Vietnam’s ornamental fish exports are still weak. Under a programme to boost ornamental fish breeding development, the city will focus on increasing quantity and product value, making upgrades to the breeding infrastructure to prevent disease and protecting the environment. Ornamental fish production will be branched out to district 8, 9, 12, Go Vap, Thu Duc, Cu Chi, Binh Chanh and Hoc Mon while all breeding farms will join monitor programmes for export. The city has also mapped out breeding and technical programmes and outlined mechanisms to boost ornamental fish development. Along with setting up linkages between pet fish production and consumption, the city will also build a website on ornamental fish to introduce breeding farms and enterprises to customers. Efficient production models which provide disease free fish for export and agricultural markets offering consultancy about pet fish will also be built. Ho Chi Minh City expects to earn up to 50 million USD from exporting 40-50 million ornamental fish each year, according to the city’s ornamental fish development programme from 2016-2020. Besides ornamental fish, the city has sold 4,307 crocodiles and 2,020 pieces of crocodile hide from the outset of this year. Vietnam shows off flagship products at Africa’s biggest trade fair Vietnam’s premium products have attracted much interest from visitors at the Southern African International Trade Exhibition (SAITEX) in Johannesburg city, South Africa. The 23rd SAITEX from June 19 – 21 draws nearly 700 businesses from more than 30 countries in Africa, Europe and Asia. More than 20,000 people have visited the biggest annual international trade event in Africa. Ten Vietnamese enterprises are showcasing their products there. They include Dong Xuan Knitting Co. Ltd specialising in apparel, Thach Ban Group JSC working on construction materials, and Delta Food JSC providing processed food. Other goods on display are housewares, furniture items, silk, ceramics, confectionary and beverages. In the morning of June 19 alone, the Vietnamese pavilion welcomed over 1,000 visitors, including officials of the ruling African National Congress party, the Indonesian and Pakistan ambassadors, and representatives from the diplomatic corp and trade offices of some African and Asian nations. Deputy Director of the Hanoi Department of Industry and Trade Tran Thi Phuong Lan said the city authorities encouraged its businesses to participate in trade promotion activities, especially in new markets like South Africa and other African nations. The SAITEX is a great opportunity for Hanoi-based companies to boost the export of key products like garments, handicrafts, processed food, building materials and housewares to Africa, she added. Trade turnover between Vietnam and South Africa has reached 1.2 billion USD – a bright spot of the Southeast Asian country’s economic activities in Africa, according to Vietnamese Ambassador to South Africa Le Huy Hoang. Australia recognises Vietnamese lychee irradiation centre Australia’s Department of Agriculture and Water Resources has certified the Hanoi Irradiation Centre to irradiate Vietnamese lychees exported to the market. The Plant Protection Department under Vietnam’s Ministry of Agriculture and Rural Development received official recognition from the Australian department on June 20. The lychees will go through irradiation treatment in Hanoi instead of being shipped to the south, which helps reduce transport cost and time. The outcome was attributed to the close cooperation between the Vietnamese Plant Protection Department, Australian competent agencies, and the Australian Embassy in Vietnam, as well as the active engagement of the Hanoi Irradiation Centre and businesses. Head of the Plant Protection Department Hoang Trung said the centre will help lychee exporters reduce cost by around 16 million VND (over 717.4 USD) per tonne. According to Australian regulations, to enter the market, the Vietnamese fresh lychees must apply cultivation measures to mitigate harmful organisms and ensure quality and safety under the Good Agricultural Practices (GAP). Farmers have to record the production process to facilitate the trace of their fruits’ origin. The fresh lychees must be transported to the registered packaging and labeling facilities for further examination at the Plant Protection Department. The fruits will be treated at Son Son and An Phu irradiation companies and Hanoi Irradiation Centre. The Vietnamese plant inspection agencies will grant phytosanitary certificates to batches that satisfy the market’s requirements. Irradiation is considered a safe technology that helps kill all bacteria and microorganisms and keep fruit fresh for longer periods, even up to a few months. Huoi Quang hydropower plant’s second turbine becomes operational The second 260 MW turbine of Huoi Quang hydropower plant in the northern mountainous province of Lai Chau was put into operation on June 19, revealed the Electricity of Vietnam (EVN), the project investor. Huoi Quang plant, the first one completely designed and constructed by Vietnamese engineers, is built on the Nam Mu river in Than Uyen district with its power station located in the neighbouring province of Son La. The 520MW plant is one of the largest hydropower stations in Vietnam after Son La, Hoa Binh and Lai Chau. According to the EVN, the plant has a 184.2 million cubic metre reservoir and 104 metre high dam. It is designed to generate over 1.9 billion kWh of power per year averagely. With the operation of the second turbine, the Huoi Quang hydropower project is likely to be completed within this year as scheduled. The first 260MW turbine of the plant became operational in late 2015.- Growing modern retailing puts greater pressure on domestic firms Modern retail channels will account for 40 percent of the total retail sales by 2020, compared to only 25 percent at present, pushing domestic retailers into a fierce battle with foreign firms who are eyeing a bigger share of the fast-growing Vietnamese market. The view was shared by participants at an online discussion held by the Vietnam Government Portal (VGP) on June 20 with head of the Ministry of Industry and Trade’s Domestic Market Department Vu Van Quyen, President of the Vietnam Retailers Association (VRA) Dinh Thi My Loan and Director-General of Saigon Co-op, Vietnam’s largest retailer, Nguyen Thanh Nhan in attendance. Vietnam is now home to about 800 supermarkets, 168 shopping malls, 8,660 traditional markets and more than 1 million small household shops. Quyen said traditional retail outlets still dominate the market, presenting a great challenge for the growth of modern formats. However, the VRA President noted the country’s open-door economic policy is creating plenty of opportunities for modern retailing, with the entry of many foreign retailers during recent years. The Director-General of Saigon Co-op said he believes that the increasing presence of foreign players in the market will motivate domestic firms to change for the better, particularly in terms of capability and competitiveness. State management officials agreed with experts and business representatives that domestic retailers are suffering from a wide range of issues, particularly limited financial resources and a lack of capable personnel. They are also restrained by the 15 percent cap on advertising expenses of the total legitimate costs while their overseas rivals are not affected by this rule. VRA President Dinh Thi My Loan said that improving competitiveness for local retailers has been top priority of the association which has been engaged in policy-making process for the retail industry and provided human resources and management training courses for its company members. It has also acted as a bridge between the members, producers and consumer protection organisations, she noted. It is vital for domestic firms to shift from traditional shopping channels to modern ones, she added, suggesting that they should invest in convenience stores, supermarkets or cooperatives and encourage the distribution of high-quality made-in-Vietnam products. Quyen revealed that the Ministry of Industry and Trade has undertaken measures to help domestic retailers build their own brand names and enhance competitiveness. But whether they can maintain and protect their brand depends on their own efforts, he said. Project lychee launched in the south A concerted effort has been launched by markets, retailers and distributors to get Vietnamese southerners to eat lychee. A district each in Bac Giang and Hai Duong Provinces and 13 cities and provinces in the south, three wholesales markets in HCM City and retailers like Saigon Co.op, Big C, Lotte Mart and Satra have agreed to increase consumption of the fruit. Tran Quang Tan, director of the Bac Giang Department of Industry and Trade, said the fruit quality now is much better than in previous years, with lychees meeting VietGap and GlobalGap standards accounting for more than 1,050 tonnes. He said 40 per cent of the province's output would be exported this year, with the rest (around 78,000 tonnes) sold in the domestic market. The province has prepared well for the harvest and consumption of the fruit, he said, adding there are nearly 3,000 purchasing points and more than 3,000 local and foreign traders. Nguyen Trong Tue, director of the Hai Duong Department of Industry and Trade, said more than half the province's lychee is expected to be consumed domestically, especially in Ha Noi, Hue, Da Nang, HCM City and other cities and provinces in the south. There are more than 100 lychee purchasing points in Hai Duong, he said. According to the two provinces, early-season harvests have been fully sold and the main harvest has begun. "The domestic market is always the main target for the fruit," Tan said. The meeting to promote lychee consumption in southern cities and provinces is an effective bridge to enable the northern specialty fruit to reach consumers in the south via wholesale markets, supermarkets and distributors, he said. Nguyen Thanh Ha, deputy director of the Thu Duc Wholesale Market Management Company in HCM City, said the volume of lychee transported to her market has increased to 400 tonnes daily, on average, from June 1 to 15. The market has linked up traders in the market with producers, she said. Nguyen Phu Toan of Saigon Co.op said the Co.opmart supermarket chain expects to sell 600 tonnes of lychees this year, 100 tonnes more than last year. More than 200 tonnes are expected to be sold through the Big C supermarket, 30 per cent more than last year. Lotte Mart hopes to sell more than 90 tonnes, Bui Tuan Tu, head of its fresh food purchasing division, said. Under a programme to promote consumption of the fruit, more than six tonnes were sold since June 17 at Lotte Mart outlets, he said. These retailers offer promotions to boost sales. Nguyen Ngoc Hoa, deputy director of the HCM City Department of Industry and Trade, said lychee is now mainly consumed as a fresh fruit, and so preservation methods to keep it fresh for longer are needed. Businesses should also focus on packaging and building brands for the fruit, he added. MoIT promotes mobile services Minister of Industry and Trade Tran Tuan Anh has released Circular No 05/2016/TT-BCT regarding the ministry's online public services. The online services aim to speed the ministry's administrative procedural reforms, including improving processing of paper work, as part of the development of e-Government. The ministry has been working to put in place document management software. Under the circular, all of the ministry's public services would be carried out online, while gradually upgrading services at the local level, based upon the existing infrastructure of information and technology systems. The services are provided at http://moit.gov.vn for those who create an account, filling administrative applications to receive online public services, handling applications and returning results. Individuals and organisations will be asked to provide information on names, tax codes, email addresses, investment certificates and business registration, to register for an account in the website. Also, the ministry's Viet Nam E-commerce and Information Technology Agency will co-operate with other agencies to approve applications for accounts after one working day. The circular takes effect on July 20th. Retailers must find competitive edge: experts  Domestic retailers must improve competitive ability as the sole way to compete with foreign retailers for their survival in the future, according experts in the retail industry. At an online dialogue on the Government website chinhphu.vn yesterday, on improving competitiveness of Viet Nam's retail industry, Vo Van Quyen, head of the domestic market department under the Ministry of Trade and Industry, said Viet Nam has 8,660 markets, 800 supermarkets, 168 trading centres and 1 million household shops, while the modern retail channel has met 25 per cent of local consumer demand. The domestic retail industry is at the first stage, while the nation has a large population with an increasing income. Therefore, Viet Nam still has immense potential to develop the local retail market. However, local retailers have seen growth of foreign retailers on the domestic market with international economic integration, and that was a big challenge for them in terms of survival and developing in the market, he said. Nguyen Thanh Nhan, general director of Saigon Co-op, said that competitiveness would create dynamics for local retailers to improve their abilities. Foreign retailers entering the local market would force local rivals to improve their competitive ability and learn from foreign firms. The local retailers need to have specific competitive and development policies. Dinh Thi My Loan, chairwoman of the Association of Viet Nam's Retailers, said competitive ability was of larger interest to the association and its members, especially due to difficulties in economic development and lower purchasing power. Local retailers have improved their competitive ability in the recent past and the association has also supported them in increasing competitive ability. The association has joined hands to build policies, legal documents and legal framework for retail service industry, she said. Other important tasks of the association have included training for staff and managers in the retail industry and development of a combination between the association's member firms and producers. Loan encouraged local retailers to overcome challenges of shifting from traditional retail models to modern models and investing in a chain of shops and retail supermarkets to develop modern retail. Local retailers should control imports to promote high-quality Vietnamese products at the local retail system creating favourable conditions for the development of the local economy. Viet Nam's retailers have co-operated to develop over the past 10 years but the co-operation has not been efficient, Loan said. Now, there should still be co-operation among local retailers and they must evolve suitable co-operation strategies while the state management offices should create a fair playground for local and foreign retailers to encourage development of local retailers. Quyen said the Ministry of Trade and Industry has had the support of enterprises in production, building of brand and increasing competitive ability. However, the enterprises must develop and protect their brands. HCM City works to address plunge in FDI HCM City authorities plan to address business competitiveness and productivity at meetings with investors to respond to the sharp drop in foreign direct investment (FDI) this year. From January to mid-May, FDI dropped 38 per cent year-on-year in the city, according to the Ministry of Planning and Investment's Foreign Investment Department. Tran Viet Ha, head of the Investment Department of the HCM City Export Processing and Industrial Zones Authority (Hepza), said the drop had occurred mostly because of the lack of new big projects in the garment and textile sector. The number of FDI projects invested in the Sai Gon Hi-Tech Park (SHTP) during the period was modest, with only two projects given investment certificates, worth a total $22.34 million. However, Le Hoai Quoc, head of SGTP's Management Board, said that many large FDI projects were expected to be granted certificates in the near future. SHTP, for example, has recently negotiated with potential investors from the US, Japan and South Korea. Le Thi Huynh Mai, deputy director of the city's Department of Planning and Investment, said HCM City was expanding the second phase of SHTP by an additional 600 hectares and plans to expand Quang Trung Software Park with a goal of creating a software park alliance. As of mid-May, the city had a total FDI of US$674.3 million since January, a drop of $375.7 million over the same period last year. A majority of the projects granted investment certificates during the period were in the sectors of real estate, finance and telecommunications. Meanwhile, the country's total FDI investment reached $10.15 billion, a surge of 136.4 per cent over the corresponding period last year, according to the Foreign Investment Agency of the Ministry of Planning and Investment. FDI opportunities nationwide are expected to increase as a result of new free trade agreements, especially the Trans-Pacific Partnership (TPP), but the country needs to improve the quality of human resources, especially foreign-language skills, according to Quoc. To create favourable conditions for investors, HCM City continues to allocate more cleared land for production and upgrade infrastructure at industrial parks and export processing zones. Tran Vinh Tuyen, the vice chairman of the city's People's Committee, meeting with the State Bank's HCM City branch, said the city's Party Secretary Dinh La Thang would organise a dialogue next month to identify measures that could help enterprises and investors overcome problems. KDC reports revenue of $136m in 2015 Giant foods and flavours producer Kido Group (KDC) has reported sales of  over VND3.1 trillion (US$136 million) for fiscal year 2015. Pre-tax profit was VND6.7 trillion ($294 million). The company sold its snacks business last year. At its annual general meeting last week KDC said the confectionery business contributed in the first six months of 2015, and cooking oil, instant noodles, and seasonings for the whole year. The ice cream and yogurt business continued to contribute significantly as it grew 30 per cent year-on-year. The company has decided to pay a one-time dividend of VND20,000 per share in addition to a normal dividend of VND1,400. For this year KDC targets profit before tax of VND1.5 trillion ($66 million). The company continues to invest in its market leading brands that are expanding further into the frozen food category while also developing new categories of products like oil and noodles. It product portfolio in the frozen foods category will be expanded with a VND400 billion production facility in the northern province of Bac Ninh. The group will continue to seek opportunities to expand into new product categories, working with new partners and considering mergers and acquisitions to penetrate new markets. Startup exchange called not feasible While many enterprises welcome the idea of establishing a stock exchange for start-up businesses, they also expressed concerned about the feasibility of such an exchange. Truong Nguyen, CEO of Ahamove, a start-up using technology for delivery services, said there were three obstacles that prevented start-ups from raising funds. Many of them showed little transparency in their use of business health indicators, while few public investors were focussed on start-ups, and an insignificant growth rate. Truong noted that public investors were not eager to accept higher risks from startups, compared with venture funds, which could foresee the potential to support the development of startups. However, the absence of public investors will prevent the creation of a market. At the same time, to eye venture investors, startups must have an impressive growth rate, though, in the next one or two years, there are not expected to be many high growth startups. Meanwhile Tran Nguyen Le Van, CEO of Vexere.com, a technology-based discount ticket engine and a successful startup in seeking investment from foreign funds, such as Japanese fund CyberAgent Ventures and Singaporean fund Pix Vine Capital, said a start-up market was a good idea, but there were still many issues that needed to be clarified. For instance, Van said, it was not clear how the start-up would be evaluated in the market, since startups were not often profitable, in the short term. Therefore, it is difficult to value a startup to be listed on the market. The CEO also said, at the same time, that many startups did not yet have enough capacity or knowledge of finance to properly report to investors. A founder of a startup for recruitment, which was in the process of raising funds, said he was not expecting the creation of such a market, adding that most investors considered new businesses to be risky investments, and it is not easy to sell shares. Finance and banking expert Nguyen Tri Hieu said the establishment of exchanges was a new issue, not only in Vietnam, but also throughout the world, adding that he had never seen any country that created this model, including developing countries such as the US and European countries. Hieu further said the idea was quite unrealistic, because in their first five years, most startups had little information about their businesses, thus, they receive little attention from investors. Hieu said, instead of a market, the best way to help startups was to set up a trading center, where new businesses could exchange with each other, as well as find potential investors and banks. Workshop: Improving the Business Environment through Tax Reforms A workshop themed “Improving the Business Environment through Tax Reforms” was held by the Ministry of Finance’s General Department of Taxation (GDT), in cooperation with the USAID Governance for Inclusive Growth (GIG) Program in Hanoi on June 21. This workshop aims to facilitate discussions on tax policy and administration in Vietnam, and to identify tax reforms that will improve Vietnam’s business environment. Government Resolution 19 (19/2016/NQ-CP), dated  April 28, 2016, sets key measures for improving the business environment and enhancing national competitiveness. Resolution 19 aims to put Vietnam on par with the average performance of ASEAN’s top four countries in the implementation of tax procedures and tax compliance by 2020.   Specific targets include:  90% of businesses use an online tax service; 65% of businesses register and make their tax payments online; and 80% of tax payers are satisfied with the services provided by their tax authorities. Many laws and regulations have already been enacted to simplify tax policies and administration, including:  Law 71/2014/QH13, which amends and supplementsfive tax laws; Decree 91/2014/ND-CP, which revises four earlier decrees; and Circular 119/2014/TT-BTC, which revises seven earlier circulars. However, the GDT is seeking solutions to further simplify tax procedures and reduce obstacles to compliance. This workshop on “Improving the Business Environment through Tax Reforms” is exploring remaining impediments, specifically issues relating to invoice, filing, payments, refunds, audit, and appeal in order to fully comply with Resolution 19. Following this workshop, the GDT and the USAID GIG Program will jointly coordinate visits to the field to validate information collected from this workshop, and assess specific difficulties in complying with rules on value added tax, corporate income tax, and personal income tax. In addition to tax reform, the Government of Vietnam and the USAID GIG Program are cooperating on a number of other reforms to improve Vietnam’s regulatory environment, its governance structures and systems of accountability, and opportunities to increase inclusive economic growth for all citizens in Vietnam. Chinese manipulate market in Vietnam’s dragon fruit hub The dragon fruit market in the south-central province of Binh Thuan, home to Vietnam’s largest area of the delicious tropical fruit, is now fully controlled by Chinese nationals, who work behind local confidants to manipulate supply and prices. Many of the major wholesaling facilities that collect and trade dragon fruit in Ham Thuan Nam and Ham Thuan Bac Districts are owned and operated by Vietnamese residents, who follow decisions made by Chinese nationals behind the scenes. The facilities are large enough for several trailer trucks to dock for loading at one time, and hang big banners that contain both Vietnamese and Chinese texts. Binh Thuan is home to Vietnam’s biggest crops of dragon fruit, a red-skinned fruit having tasty white flesh, with some 22,000 hectares utilized for its cultivation. According to the provincial police, 12 Chinese nationals have been caught entering the province and conducting illegal activities, particularly trading dragon fruit, in the first half of this year. Police have booked all twelve cases, levied administrative fines on and informed the foreigners of their violations. However, many Chinese nationals are still manipulating the market. A local official from the Ham Thuan Nam administration said it was hard to detect if a Chinese national is behind a facility lawfully registered by a Vietnamese. “Some local traders, lured by profit, have leased their licensed facilities to the Chinese,” he added. On June 9, a Tuoi Tre (Youth) newspaper reporter visited the Nga Minh dragon fruit trading facility in Ham Thuan Nam, requesting shipment of the fruit to the central city of Danang. However, a Vietnamese manager rejected the order, saying that they only ship the produce to China. Two nearby establishments, Tam Huong and Xuan Thinh, also asserted that they do not trade the fruit domestically, but export exclusively to China. The three facilities are run by Vietnamese employees, but the real owners are a Chinese father and son, with local names of Phu and Quy. As requested by the Chinese owners, the Vietnamese employees use tricks to source the dragon fruit from local growers at cheap prices. “They come in the morning and offer to buy at one price, before returning later with a much lower price,” said Nguyen Thi Phuoc, a dragon fruit grower who recently fell victim to the Chinese-employed Vietnamese traders. Phuoc said she was forced to accept the lower price, with the fruit already collected after the traders had made the first bid. The traders will normally say the fruit does not look good in order to force farmers to accept the lower offer. “If we refuse to sell, they simply return the following day with an even lower price, and so on,” she said. On June 13, one Tuoi Tre correspondent followed a local grower to Kien Kien, a facility actually run by Chinese national Luo Zheng Yun, to experience first-hand how farmers are forced to sell their produce at a loss. After the farmer said he wanted to sell at VND7,000 a kg, the Vietnamese employee of the facility made a counter-offer of VND6,000 per kg, saying that the fruit was “of the lowest quality.” Refusing that would mean the growers had to take the fruit home and see them rot. “You can sell your dragon fruit to no one but the Chinese,” Thanh, a Vietnamese fruit broker, revealed. Thanh used to source the fruit directly from local plantations, but has reluctantly switched to working for the Chinese. “Local brokers could not compete with the Chinese-backed traders,” she said. Like Thanh, many other local traders and wholesalers have had to shut down their own businesses and become employees for the Chinese nationals in their homeland. 30 million USD poured in domestic wood company The Vietnamese leading company in wood-working and decorative materials An Cuong Wood Working JSC will receive financial supports worth 30 million USD to branch out its business, as heard a press conference held in Ho Chi Minh City on June 15. The investment comes from the VinaCapital Vietnam Opportunity Fund (VOF) and the Deutsche Investitions-und Entwicklungsgesellschaft (DEG), an investment fund of the German KfW Group. Of the total amount, 70 percent will be contributed by the VOF and the remaining will be provided by the German group’s investment fund. The money will be doled out within one year, with 18 million USD already disbursed in first stage and 12 million USD to be spent in the second round. Established in 1994, An Cuong company has been the manufacturer and distributor of wood and plastic based panels used in interior décor for well-known brands from the US, Germany, Italy, Spain and Australia. The company has 10 luxurious showrooms nationwide and a manufacturing factory in the southern province of Binh Duong. It has enjoyed robust growth of 30-35 percent for years and earned a revenue of more than 70 million USD in 2015. Direct air route connects Cambodia’s port city and HCM City Cambodia’s Angkor Air has opened a direct route connecting Preah Sihanoukville and Ho Chi Minh City, aiming to enhance tourism and trade links between the two nations, according to the Cambodian Times. The HCM City – Sihanoukville route, which was launched on June 17, is Angkor Air’s third route in Vietnam. The airline will conduct five round-trip flights per week on the route, using 70-seat ATR 72 aircraft. The new route is expected to help Cambodia attract not only Vietnamese arrivals but also those from other countries to Preah Sihanoukville, contributing to the port city’s economic and tourism development. Preah Sihanoukville has welcomed an increasing number of Vietnamese visitors recently, hitting 11,200 in the first quarter of this year. In 2015, the number of international tourists to Cambodia by air reached over 6.3 million, including over 100,000 visitors to Preah Sihanoukville, up 118 percent year-on-year. This is the second international route the airline has launched this year, after the Phnom Penh – Seoul of the Republic of Korea (RoK) in April, raising its network to 10 routes to international destinations and two domestic destinations. Established in 2009, Cambodia Angkor Air is a joint venture between Vietnam’s national flag carrier - Vietnam Airlines and the Royal Government of Cambodia, with the former holding 49 percent of the airline. The carrier owns six aircraft, including two ATR airplanes and four Airbus A320 planes. It is planning to double its fleet to 12 jets by 2020, and launch new flights to Hong Kong, Singapore, the RoK and India to meet the increasing travel demands. Exports of computers, electronics, spare parts see strong growth Vietnam raked in 6.37 billion USD from exporting computers, electronics and spare parts in the first five months of this year, a year-on-year rise of 6 percent, according to the Ministry of Industry and Trade. These products have landed in nearly 40 countries and territories worldwide, including China, the US, the Netherlands, the Republic of Korea (RoK) and Japan. From January-May, China was the largest consumer of Vietnamese computers, electronics and spare parts with purchase turnover hitting 1.12 billion USD, making up 17.6 percent of Vietnam’s accumulated export value and up 12.9 percent against the same period last year. It was followed by the US and the Netherlands with purchase values reaching 1.06 billon USD and 642.38 million USD, respectively. Exports to other markets like Hungary, Slovakia and the RoK also grew sharply during the reviewed period. However, the figure decreased in such markets as South Africa, Turkey and the United Arab Emirates (UAE). Hotel Novotel Phu Quoc scoops top prizes at VPA Awards The Hotel Novotel Phu Quoc Resort has been honoured with four top awards at the second edition of the Vietnam Property Awards (VPA) held at the InterContinential Asiana Saigon Hotel in Ho Chi Minh City. The resort, which opened in January 2016, received the award for best hotel development, best hotel architectural design, best hotel interior design and best condo landscape architectural design. The four-star hotel is located at Truong Beach on Phu Quoc Island, about a 10-minute drive from the Phu Quoc International Airport. It features 366 rooms including 120 suites and villas with garden and sea views. hotel novotel phu quoc scoops top prizes at vpa awards hinh 1 It was designed by architects at firm of Kume Design Asia, a multinational architectural firm based out of Japan, well-known for their eco-friendly sustainable designs and projects. Japanese investor looks to develop amusement park in Ha Nam Japanese-owned Frontier International Vietnam One Member Company Limited (Frontier Company) expressed interest in developing an amusement and a water park in the northern province of Ha Nam. The proposal was made in the framework of the working session with provincial leaders on June 14. The company has already surveyed the province to find a favourable location. The company will co-operate with a US partner with experience in amusement park development. However, the company has yet to release specific information about the project. Frontier Company chairman Ikejiri Makoto proposed the provincial leaders to introduce feasible Japanese investors to join the project . According to the company’s plans, its US partner will arrive to Ha Nam in early August to resurvey the area and then they will decide the scale as well as the investment capital for the project. Pham Sy Loi, deputy chairman of Ha Nam Provincial People’s Committee, introduced the Japanese investor four sites to develop the projects. Besides, Loi stated that the province will provide favourable conditions for the investors to complete the investment procedures as well as the construction process. Ha Nam currently ranks sixteenth in attracting foreign direct investment (FDI) capital. As of May 20, the province has attracted $1.49 billion FDI to 173 projects. In the first five months of this year alone, foreign investors poured $122.02 million into 14 newly-registered projects and added $35.9 million to existing ones. SHB to increase charter capital The Saigon - Hanoi Commercial Joint Stock Bank (SHB) has gained approval from the State Bank of Vietnam to increase its charter capital from VND8.8 trillion ($394.59 million) to VND9.48 trillion (425.08 million). The bank has set a target of increasing its charter capital this year to VND11.19 trillion ($501.75 million), an increase of 18 per cent against 2015. Other targets include total assets of VND232.03 trillion ($10.4 billion), customer deposits of VND188.8 trillion ($8.46 billion), customer loans of VND157.74 trillion ($7.07 billion), pre-tax profit of VND1.35 trillion ($60.53 million), and a dividend of 8.5 per cent, with non-performing loans to be managed at less than 3 per cent. SHB has been particularly exposed to the problems besetting the Hoang Anh Gia Lai Group (HAGL), with 6 per cent of its loan exposure being to the Group. Among the ten banks rated by Moody’s, SHB has the highest loan exposure to the agriculture sector, at 20.5 per cent of its loans. According to Moody’s, “Lower commodity prices and the ongoing drought in Vietnam have weakened the debt repayment ability of firms such as HAGL. This may lead to further deterioration in asset quality metrics for banks with large exposures to agriculture and commodities.”   VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR