BUSINESS IN BRIEF 28/7 First-half FDI approvals in Mekong Delta at 20-year high Foreign direct investment (FDI) approvals in the Mekong Delta region amounted to nearly US$1.4 billion in the first half, the highest in almost 20 years, according to the Vietnam Chamber of Commerce and Industry (VCCI) in Can Tho City. At a press conference on July 25 on the Mekong Delta provinces’ socio-economic performance in January-June, Nguyen Phuong Lam, deputy director of VCCI Can Tho, said foreign firms registered US$987 million for 79 new projects and US$412 million for 51 operational projects. VCCI Can Tho reported that the FDI pledges were made by Asian investors, mainly for textile-garment and footwear projects. This signaled that foreign firms are preparing to bank on opportunities from the Trans-Pacific Partnership (TPP) trade deal that Vietnam and 11 other Pacific Rim countries signed in February this year. Agriculture, a key sector in the delta, made up a small fraction of the total FDI approvals. Only one agricultural project worth US$68,000 and relating to medicinal herb farming was registered by a Japanese investor, Lam said. In the first two quarters, 13 Mekong Delta provinces posted combined gross domestic product (GDP) of over VND255 trillion (US$11.43 billion), up 6.5% year-on-year, the report showed. Meanwhile, total development investment in the region increased by 6-10% from the same period last year to VND107 trillion. The delta earned export revenue of over US$6.12 billion in the period. Long An Province took the lead with over US$1.8 billion, followed by Tien Giang Province with over US$908 million and Can Tho City with US$650 million. Total imports in the region stood at over US$2.8 billion in the period. Business accelerators needed to fast-track startups Startups have attracted a lot of attention from the business community and the State but there is no strategic cooperation between large enterprises and young companies, so the business accelerator (BA) model can provide a solution to bridge this gap and help fast-track startups in Vietnam. Amir Gelman, an expert from The Junction, a well-known BA in Israel, said at a recent innovative course organized by the Center of Business Studies and Assistance (BSA) and the Embassy of Israel in Vietnam that around 200 big corporations in the world have BAs to prop up startups. Some of the big names include Microsoft, Samsung, IBM, Coca-Cola, and Unilever. A BA will choose startups that meet its criteria and provide a three-to-six-month support program including training, consulting and professional networks to help those startups develop as fast as possible. The program will end with a Demo Day where startups present their ideas to investors. Gelman took Microsoft as an example. He said the BAs of Microsoft recruit startups in sectors such as cloud computing, Internet and mobile application, which are in the company’s wheelhouse. Microsoft does not ask for a stake or investment right in return, so it can attract the best startups. The company itself benefits from this program, Gelman said, pointing out that Microsoft’s seven BAs around the world can know more about market trends from the startups that it supports. According to Gelman, the BA model or similar programs offer big enterprises five basic benefits: they can learn about changes in the market and stay competitive, build their brand image, identify consumer pains, boost the morale of their employees by working with startups, and test new technologies of startups without investment costs. The success of startups will bring back value to enterprises, Gelman said. Not all companies, especially small and medium enterprises in Vietnam, can have a BA. However, big enterprises can sponsor BAs established by investment funds or by State agencies and then they can work directly with startups. Or they can get information from BAs and join a Demo Day to seek potential startups. Currently, BAs are not popular in Vietnam but Pitching or Demo Days are often held by startup supporting centers such as SECO EP, Viet Youth Entrepreneurs, Startup Vietnam Foundation and DreamPlex. Notably, the BA of Vietnam Silicon Valley, a project under the Ministry of Science and Technology, also has attracted interest from many enterprises. Restaurant serving Vietnamese dishes opens in Malaysia A restaurant only serving Pho (Vietnamese signature noodle soup) and other Vietnamese dishes opened in Selangor State, Malaysia, on July 26. Rae Ng, Marketing Director of Singapore-based Select Group Limited, said the Pho Street Vietnamese Restaurant, or Pho Street for short, is the company’s first restaurant exclusively serving Pho and Vietnamese food in Malaysia. According to Rae, most ingredients used for Pho are imported from Vietnam with a careful selection process to ensure the original taste of Vietnamese Pho. The restaurant offers several versions of Pho like beef noodles with sliced rare steak, sliced well-done steak, beef meatballs, or flank steak. Besides Pho, the restaurant also serves about 30 unique Vietnamese dishes like Vietnamese rice noodles and pork wrapped in rice paper, fried spring rolls, Hue-style barbecued shrimp. Located in the Paradigm Mall in Petaling Jaya city, which is home to many restaurants serving Malay or Chinese dishes, Pho Street is hoped to succeed. Rae said Pho is Vietnam’s most famous dish and is known worldwide and that would ensure the company’s success. Ha Vi Cang, 29, from HCM City, is a chef for Pho Street. Cang has been working as a chef in HCM City for 10 years and two years for the Select Group Limited. Cang said he hopes that Pho and other Vietnamese dishes are enjoyed in more countries across the world. Select Group Limited has launched six Pho Street Vietnamese Restaurants in Singapore, Malaysia’s neighbouring country. Vinamilk rolls out sweetened condensed milk products Giant Vietnamese dairy firm Vinamilk and Driftwood Dairy Inc. – a company 100 per cent owned by Vinamilk in the US, introduced sweetened condensed milk and creamer products during the Summer Fancy Food Show in the US. Vinamilk's two new products attracted the attention of customers visiting the fair, opening up opportunities to export Vinamilk's milk products, the company said. Vinamilk's products have received quality certificates and an import licence from the US Food and Drug Administration (FDA) and the US Department of Agriculture (USDA) after meeting all requirements on quality and food safety for the dairy industry. With this, Vinamilk has further promoted its integration process into the international market with high-quality products, the company said. In addition, Vinamilk's Driftwood also brought its traditional pasteurised milk products to the food show this year. Vinamilk joined the fair to seek distributors for its high quality, competitively priced products to large supermarket chains in the US. Right after the event, its condensed milk and creamer products will be available on supermarket shelves in Arizona and California states. The show, held twice every year, is one of the largest fairs for the US food industry and attracts thousands of well-known businesses around the world in food processing and production. The Summer Fancy Food Show 2016 attracted nearly 3,000 enterprises displaying their products at the Jacob Javits Centre in New York and more than 47,000 visiting food experts. The Fancy Food Show is a channel connecting food processors and producers to distributors in America. HVG sees 17-fold increase in Q2 profit Fisheries Hung Vuong Corporation (HVG) reported revenues of VND6.6 trillion (US$295.5 million) and a gross profit of VND 472.6 billion in Q2, up 45 and 39 per cent, respectively, over the same quarter last year. As the one of the largest tra catfish producers in Viet Nam, HVG said its domestic market grew 20 per cent over the same period in 2015, in which revenues from aquaculture increased 2.5 times. According to the HVG financial statement, the company saw VND226.4 billion in profits after taxes for the quarter, an increase of 17.4 times over the same period last year, when the firm suffered losses of VND13 billion. In the nine months from October 1, 2015 to June 6, 2016 the firm reported sales of VND14.94 trillion, an increase of 26.5 per cent, and profits after taxes of VND244 billion, an over four-fold increase compared to the same period last year. Accordingly, the firm has carried out 63 per cent of its plan, as pledged during its general shareholders meeting. On July 27, shares of HVG rose more than 15 per cent over the last three days to reach VND11,400 on the HCM City Stock Exchange. HP to recall computer batteries for safety The Hewlett-Packard Viet Nam Co, Ltd and the Viet Nam Competition Authority (VCA) under the Ministry of Industry and Trade announced the company's battery recall programme. These batteries, which were produced between March 2013 and August 2015, have the potential to overheat, posing a fire and burn hazard to customers. The affected batteries were shipped with HP 450, HP 240, HP 246, HP ProBook 440 G0, HP ProBook 440 G1, HP 1000 or were sold as accessories or spares, or provided as replacements through Support, the ictnews.vn reported. The serial numbers of products with potentially affected batteries follow the patterns of xxx311xxxx - xxx444xxxx. The VCA recommended to users that they check their battery codes at HP's official website http://www.hp.com/go/batteryprogram2016. Users have been asked to stop using the batteries and to remove them, before contacting HP for further support, VCA said. Hoa Phat Group pays $100 million for dividends in September Steelmaker Hoa Phat Group (HPG) has declared a big dividend payout in September which is worth VND2.2 trillion (US$100 million), a move that shows the company's confidence in its bright business prospects this year. The steel making giant offers a 30-per-cent dividend for last year's profits, with 15 per cent to be paid in cash and another 15 per cent in shares. Payments would be made in the next two months, the company announced. This decision was made right after the firm disclosed a surge in revenue and profits in the first half of this year on Tuesday. Hoa Phat Group posted a revenue of VND15.4 trillion ($691 million) in the first six months, up 12.4 per cent over the same period of last year and a completion of 55 per cent of the firm's yearly plan. It earned a net profit of VND3.05 trillion ($137 million). The steelmaker sold 785,000 million tonnes of steel during January-June, accounting for 20.5 per cent of the domestic market shares. Steel pipe sales reached 211,000 tonnes. The company reported a net profit of more than VND3.5 trillion ($157 million). Its undistributed profits have accrued VND5.5 trillion ($247 million) by the end of 2015. Hoa Phat Group is among top 10 listed companies on the HCM Stock Exchange with a capitalisation of over $1.4 billion. After the issue of nearly 110 million shares to pay dividends in September, its charter capital will touch VND8.43 trillion ($378 million). Along with rises in global steel prices, its share price has climbed almost 48 per cent since the beginning of the year, hitting VNDD43,200 ($1.94) a share on July 27. The decision to impose anti-dumping tax on certain stainless steel product imported from China, Malaysia, Indonesia and Taiwan by the Ministry of Industry and Trade in May is considered a big support to domestic steel makers as well as shares of listed steel companies in the future. Ha Noi loans increase in seven months Credit in Ha Noi's commercial banks in the first seven months of the year rose 11.8 per cent against December last year to reach VND1,384 trillion (US$61.785 billion), the Ha Noi General Statistics Office estimated. The increase in credit was lower than the 12.5 per cent increase in H1 2015. Short-term loans rose 10 per cent, while medium- and long-term loans surged 12.2 per cent, the office said. In the first seven months, Ha Noi-based banks also mobilised VND1,568 trillion, up 6.3 per cent. Of the total, capital in Vietnamese dong accounted for nearly 78 per cent. The deposit interest rate in the period remained stable at 4.5-5.4 per cent per year on average for short-term deposits and 5.4-7.2 per cent per year for terms of more than six months. The central bank aims to achieve credit growth of 18 per cent this year. Industry insiders said the target was feasible as lending often surged sharply in the second half of the year. Vietnam needs greater efforts to maintain exports to France Trade promotion activities should be increased to help Vietnamese goods earn a firm foothold in the French market, according to the Ministry of Industry and Trade (MoIT). France is an important partner of Vietnam in the EU with a huge purchasing power. Vietnam mainly ships telephones and spare parts, footwear, garment, computers and handbags to the European market. Vietnam’s export to France has been on a steady increase from the beginning of this year. However, with Britain’s exit from the EU, France is likely to face difficulties and thus reduce imports, including those from Vietnam. To maintain export growth in France, domestic businesses must improve their product quality in order to meet this market’s strict regulations. The European Union – Vietnam Free Trade Agreement (EVFTA) is expected to open more rooms for Vietnamese exports to this market, said MoIT Minister Tran Tuan Anh. According to statistics from the MoIT, as of June 2016, the export value to France reached 1.1 billion USD, up 4.37 percent from the same period last year, with phones and spare parts, footwear and garments being key products. Vietnam’s lychee exports to France strongly increased from eight tonnes in 2015 to around 70 tonnes in 2016. France is also a market for Vietnam’s wooden products and seafood. Exports: rice down, pepper up The agro, forestry, fisheries export turnover in July was estimated at US$2.64 billion, lifting the sector's export value in the first seven months to reach $17.8 billion, up 5.1 per cent year-on-year. According to the agriculture and rural development ministry, the country exported 2.93 million tonnes of rice in the reviewed period, earning $1.32 billion. The exports, however, fell 18.4 per cent in volume and 14.4 per cent in value year-on-year. China remained the largest importer of Vietnamese rice, accounting for more than 35 per cent of the market share. Indonesia came second with 11.6 per cent. Over the last seven months, pepper exports experienced a 26 per cent year-on-year increase in quantity to reach 122,000 tonnes. But the turnover surged only 9 per cent year-on-year to touch $988 million due to a 13 per cent drop in export prices. Likewise, the average export price of coffee in the period also plunged by 15.6 per cent year-on-year. As a result, coffee exports earned $1.98 billion in turnover, up 18 per cent year-on-year, despite a significant 38 per cent growth in volume at 1.13 million tonnes. A decrease of 15 per cent in export prices was also seen in the rubber industry. From January to July, rubber exports stood at 564,000 tonnes, worth nearly $705 million, representing an 8.8 per cent growth in volume, but a 7 per cent fall in value year-on-year. The volume of tea exports in the first seven months rose by 5 per cent to touch 69,000 tonnes, but the value declined slightly by 2 per cent at $110 million. Among major farm produce, cashew nut exports increased in both value and volume. The sector earned $1.46 billion from shipping 189,000 tonnes of products overseas, surging 9 per cent and 3 per cent in value and volume, respectively, year-on-year. The value of seafood exports for the seven-month period topped an estimated $3.65 billion, a yearly rise of 3.3 per cent, while the forestry export turnover grew a modest 1 per cent to reach about $3.98 billion, with the US, Japan and China being the largest importers. Government should stick to growth goal: experts The Government should not adjust the economic growth target of 6.7 per cent even though it is unlikely to meet it this year, experts said during a conference in Ha Noi yesterday. "I suppose it is good that the Government keeps the target intact," Nguyen Dinh Cung, Director of the Central Institute for Economic Management (CIEM), said as the agency issued its economic update for the second quarter of 2016. "By not adjusting it, we will have things to dissect at the end of the year – why we failed to achieve the goal. We need to seek measures and opportunities rather than to sit clapping hands [for attaining a lower target]," he said. The report of the CIEM, an agency advising the Government on economic management policies, reiterated that Viet Nam's aim for a 6.7 per cent growth rate is almost unfeasible – just like expert forecasts reported by local media earlier this year. Cung said the country had not regained the momentum for gross domestic product (GDP) growth, which was around 5.5 per cent in the first half of the year. The country continued to witness significant impact from global and regional fluctuations, while it needed more time to resolve inherent problems in its growth model, he said. According to Cung, the agriculture-forestry-aquaculture sector improved very slightly in Q2, growing by 0.06 per cent quarter-over-quarter. Export value totaled US$82.1 billion in the first half of 2016, an increase of 5.7 per cent over the end of 2015 – the lowest H1 growth level in the last few years. Export growth was mainly driven by foreign direct investment enterprises. Bad debts in the economy increased slightly to 2.62 per cent at the end of March. Economist Nguyen Quang Thai agreed with Cung, saying that an unchanged growth target will force the country to try harder. "Foundations for growth remain fragile, especially with declines in agriculture and manufacturing. It is necessary to increase revenues and reduce spending, restructure public investments and improve employment and incomes," he said. Another economic expert, Le Dang Doanh, said Viet Nam was likely to see more economic fluctuations in the face of global uncertainties. While a British exit from the European Union might affect the Vietnamese economy in an indirect way in the long term, ongoing territorial water disputes over the East Sea would definitely affect trade in Southeast Asia, he said. Domestically, Cung said there were bases for more sustained economic growth, as the new Cabinet sent a series of messages about stimulating the business climate and creating a business environment that is easier to be anticipated. Achim Fock, the acting country director for the World Bank (WB) in Viet Nam, said during an economic review in Ha Noi last week that the country's medium term outlook remained positive. WB economists said that while the country was facing stronger global headwinds, its GDP growth was expected to reach 6 per cent this year. Goods through sea ports increase 13 percent Goods through the sea ports of Vietnam are estimated to have hit over 230 million tonnes so far this year, a year-on-year increase of 13 percent and accounting for 48.9 percent of the overall yearly target, the Vietnam Maritime Administration reported. Of the figures, container goods reached 6.5 million TEUs, up 19 percent against the same period last year, making up 52 percent of this year’s target. Vietnam has 44 sea ports and 250 wharfs with a total designed capacity of up to 500 million tonnes of goods a year. To increase the country’s sea ports capacity, the Vietnam Maritime Administration will focus on completing projects on developing an Inland Container Depot system to 2020, with a vision 2030 and on maintaining Vietnamese maritime vessels in the Black-Grey-White list of the Tokyo Memorandum of Understanding on Port State Control. Japanese firm explores investment in Ha Nam A delegation from Japan’s Oates Chemical Company had a working session with Ha Nam authorities on July 26 to explore the investment climate in the northern province. The company has four factories in Japan and plans to expand its production of rubber components to Vietnam , Director Goda Kengo said, adding that Ha Nam boasts good policy to attract investment, especially from Japanese businesses. The locality also has a favourable geographical location and trade exchange with Hanoi, as well as with neighbouring cities and provinces. Therefore, the Japanese company is determined to build a factory there, he confirmed. Vice Chairman of the provincial People’s Committee Vu Dai Thang said authorities plan to arrange an area of 6,000 square metres at Dong Van I Industrial Park in Duy Tien district for the company to build its factory. He noted that the location has a good transport network and the necessary infrastructure, with scores of Japanese firms investing and operating effectively. Local authorities pledged to create the best conditions for the company, as committed to for foreign investors, specifically handing over land for building accommodation for workers, exempting land lease costs during the first two years of investment, and granting a 50-year operating licence. Goda Kengo hailed the local policies and hopes the province will facilitate the company’s investment. 30-day programme to promote consumption in Ha Noi Several activities will be held in a month-long sales promotion from October to November this year in Ha Noi to encourage public consumption in the last few months of 2016. The promotion will also be in response to the "Vietnamese people use Vietnamese goods" campaign. This information was released at the conference held by the city's department of industry and trade yesterday, to announce the "Ha Noi 2016 Promotion Month" programme. Deputy Director of the department Tran Thi Phuong Lan said this was an opportunity for all enterprises to boost production, enhance competitiveness, and advertise their products and brands among local consumers as well as domestic and foreign tourists. Lan said the programme had drawn the attention of many consumers since it was first organised seven years ago, but this year, the organisers wanted to consolidate the trust of consumers and affirm the prestige of participating enterprises by providing practical benefits to customers. Various good quality products of certified origins, ranging from electronics, home appliances to clothes, would be sold at reasonable prices, she said. During the programme, about 100 booths displaying products of Vietnamese enterprises and 50 stalls of universities showcasing creative products made by students will be the highlight of an event entitled "Vietnamese youth accompanying Vietnamese goods," to be held from October 7 to 9. As part of the programmes, two conferences entitled "Vietnamese goods – From awareness to consumption" and "Start-up with Vietnamese goods" will be organised to help enterprises and consumers discuss issues related to products made in Viet Nam. A "Credit Festival Day" to be held from October 18 to 20 will provide an opportunity to commercial banks to join hands with supermarkets, trade centres, convenience stores and transport companies to boost consumption with card payments. In order to promote tourism and the city's image, a three-day "Tourism Sale Festival" will be held at Ly Thai To Flower Garden, with 50 booths being set up by well-known tourist agencies. As in previous years, a "Golden Day" sales promotion will also be launched, with enterprises offering discounts of up to 50 per cent and "one-price" zones. A "Golden Promotion Festival" with 200 booths, some of which will feature regional specialities and organic and safe food, will mark the end of the programme. Dong Nai wants funds for airport site clearance Leaders of the southern Dong Nai Province have requested the Government's permission to use VND1 trillion (US$44.76 million) from the State Capital Investment Corporation (SCIC) to build two resettlement areas. The resettlement areas will be for people being shifted from the site of the international Long Thanh Airport to be built in 2019. The airport will be the largest in Viet Nam. The VND1 trillion amount is part of the VNĐ5.44 trillion project to build two resettlement areas and to compensate for the removal of a cemetery from the airport construction site, according to the province's estimates. To ensure enough funds for the projects, the provincial authorities also asked the Government to issue Government bonds, which should have terms of one year and more, with the interest rate being included in the project's investment capital. About 5,000ha area to be cleared in six communes of Binh Son, Suoi Trau, Cam Duong and Long An, besides Long Phuoc and Bau Can in Long Thanh District, to permit the construction of the new airport. This will affect about 4,730 households, comprising 15,000 people, besides other organisations, businesses and religious establishments. According to the province's survey, households and individuals own nearly 3,000ha of the 5,000ha of land. Site clearance is a huge challenge for local authorities as they have to hand over at least 2,500ha by the beginning of 2019. The airport's first phase is scheduled to become operational by 2025. Funding for the resettlement plans is part of the province's proposal for a special mechanism for the project, focusing on land acquisition, compensation and relocation policies as well as the construction of infrastructure for relocation, job training and sources of funding. In particular, Dong Nai asked the Government to compensate the Dong Nai Rubber Corporation, which will have to give up 1,777ha for the airport project. About VND600 million is proposed to be given as compensation for each hectare that is contributed. The province also proposed regulations to help pay the school fees of children of households that would be relocated and also the lunch costs for kindergarten children. Each person in the affected areas will get a health insurance card for three years. Long Thanh Airport is expected to handle 100 million passengers and five million tonnes of freight per year when it is fully completed by 2050. The first phase, including the construction of a terminal and a runway with a capacity of handling 25 million passengers per year, is expected to be finished in 2025, after several threats of delays. It's expected to ease pressure on the overloaded Tan Son Nhat Airport in HCM City, which has been handling 20 million passengers a year since 2013 and is expected to exceed its maximum capacity of 25 million passengers this year. Vietnam faces headwinds to meet full-year growth target Signs of slowdown appeared across all sectors of the Vietnamese economy in the first half of 2016, with overall GDP growth reaching only 5.52%, significantly lower than the rate of 6.32% during the same period last year. Growth decelerated as a result of several factors, including extreme weather as seen in cold spells, drought and saltwater intrusion, falling global commodity prices and increasing pollution, especially marine pollution, which caused seafood output to drop sharply. As such it is a formidable challenge to achieve an economic expansion of 7.6% over the remaining six months of the year to reach the targeted full-year growth figure of 6.7%. Supporting enterprises and maintaining growth drivers will be the primary task of the government, executive agencies and the business community itself. Growth in the second half of the year cannot rely on increasing public investment as the ratio of public debt is approaching the ceiling of 65% of GDP and is likely to exceed that threshold by the end of the year. Other measures such as lowering interest rates and expanding preferential lending programmes have also been exhausted as deposit rates are trending upwards along with rising inflation. Growth now can only be achieved by a number of drivers including accelerating disbursement of approved public investment projects, newly established enterprises, enterprises expanding their business or resuming their operation, and actions to attract more tourists. Vietnam can also take advantage of lower import prices which on average fell 7.8% compared with a 3.85% in export prices, which makes imports cheaper, thereby reducing input costs and saving foreign currency. Other drivers could come from increases in money supply, outstanding credit, social investment capital and foreign capital funds. However, further government efforts are needed to improve the business environment, enhance the national competitiveness and support enterprises. The government is currently considering cutting numerous regulations stipulated in legal documents that are restraining the ability to do business, and making sure that new regulations are compatible with the amended investment and enterprise laws. In addition, the government will continue to pursue a flexible exchange rate policy, channel credit to priority sectors, restructure agriculture to make it adaptable to climate change and step up trade promotion activities. The Vietnamese economy is continually growing below its potential. As such it is absolutely necessary to tap into and direct more sustainable growth drivers so that Vietnam can achieve not only this year’s target but also accelerate and enhance the quality of growth over the years ahead. Electric wire and cable exports jump 4.7% in H1 Exports by foreign invested and domestic manufacturers of electric wire and cables operating in Vietnam jumped 4.7% year-on-year to US$422 million in the first half of the year, according to the General Department of Vietnam Customs. Japan, China the Republic of Korea and the US were the top four export markets in descending order of magnitude.   According to the Department ,there are an estimated 200 manufacturers of wire and cables including both foreign-invested and domestic producers. Goods from China’s Zhejiang province to be promoted in Hanoi The 2016 Zhejiang export fair will be held in Hanoi from August 4 – 6, showcasing the best products hailing from the Chinese province. The fifth Zhejiang export fair will feature 150 booths of nearly 100 prestigious businesses, said Nguyen Khac Luan – General Director of the event’s organiser – the Vietnam National Trade Fair & Advertising Company (Vinexad). Products on show will include machinery made in the province’s Wenzhou and Taizhou cities, metal products from Jiaxing, garment materials from Hangzhou and Huzhou, and handicrafts from Yiwu, which have become popular in Southeast Asia, including Vietnam. Luan said he hopes visitors to the fair can see the attraction of Zhejiang-made goods. It will also be an opportunity for businesses to seek partnerships. Zhejiang is a coastal province located in the southeast of China with ideal natural conditions. It posted rapid economic growth in recent years and boasts economic relations with over 230 countries and territories around the world. In the first half of 2016, the province exported 9.36 billion USD worth of goods to ASEAN countries, a year-on-year increase of 1.81 percent. The turnover included 2.13 billion USD of shipments to Vietnam, up 13.55 percent from a year earlier. Business opportunities in Vietnam introduced to Egypt A seminar took place in El Gouna of the Red Sea Governorate, Egypt on July 25 to introduce to local firms the potentials and business opportunities in Vietnam and boost bilateral trade between the two countries. The seminar entitled “The Vietnamese market: Potentials and Business Opportunities” was organised by the Vietnamese Embassy to Egypt and the Egyptian Chamber of Commerce in the Red Sea Governorate, during the Vietnam-Egypt Cultural Exchange Week. Addressing the event, Vietnamese Ambassador Do Hoang Long briefed attendees on Vietnam’s economic development over the past 30 years of reform and the milestones in the history of Vietnam-Egypt relations. Vietnam and Egypt have huge potential for cooperation in the fields of agriculture, forestry, aquaculture, mining and tourism, the ambassador said, urging state agencies of the two nations to put forward solutions to unleash such potentials. He suggested businesses from both sides should establish direct communication channels to reduce trade through middlemen. Long unveiled that the Vietnamese Embassy has been supporting Egyptian enterprises to set up a business forum for information exchange and firms from Red Sea Governorate are welcomed to join. He also expressed his hope for the establishment of a twining relationship between the central Vietnamese city of Da Nang and the Governorate which share a common advantage in tourism. For his part, president of the Red Sea Chamber of Commerce Hazem Mohamed Ali reiterated that local companies are looking for cooperation and business opportunities from Vietnam, and he hoped that further similar events will be held for them to learn about Vietnam’s business climate. The local firms said they need more support from the embassy to do business with Vietnamese partners; with the focus on farming and forestry, electronics, timber and footwear products. On HCM City bourse, investors fancy property stocks Trading in real estate stocks has shot up in the last month, with the volume reaching a total of 1.1 billion shares, a seminar heard in HCM City on Monday. Dang Tran Hai Dang, deputy director of Vietinbank Securities Joint Stock Company's Research Centre, said this was much higher than sectors like resources (730 million), construction materials (637 million) and food and beverages (385 million). There are 28 real estate companies listed on the HCM City Stock Exchange, accounting for 13 per cent of its market capitalisation. The prices of real estate stocks have risen by 4.2 per cent in the period, compared to 2.61 per cent for chemical companies and 2.56 per cent for the medical sector, he said. Le Hoang Lan Nhu Ngoc of CBRE Viet Nam said the recovery in the property market has made the stocks of real estate companies more attractive. The supply of mid-level apartments surged 33 per cent in the second quarter, while that of luxury apartments increased by 18-20 per cent, she said. She listed the factors stimulating demand, saying the amendments to the housing law allowing foreigners to buy property has created a euphoria in the market, with 700 foreigners buying houses by the end of the first quarter. The prospects for the economy, especially the real estate market, are good, she said. Some 600 new real estate firms sprang up in the first quarter, an increase of 146 per cent year-on-year, she said. The real estate inventory shrank by 26 per cent in the first half, she said. Infrastructure development, including metro lines, has created a surge in both supply and demand, especially in the eastern part of the city (along route No. 1), she said. A young population with high marriage and divorce ratios means large demand for housing, she added. Dang said the middle-income segment has seen an increase in demand, accounting for 54 per cent of all apartment sales in HCM City in the first quarter. He provided investors with information about ongoing property projects by listed companies, especially projects for middle- income people. Delegates agreed that the mid-level segment would see solid growth in the coming time. The seminar was organised by the HCM City Stock Exchange, VietinBank Sc, Thu Duc Housing Development Corporation, and CBRE Viet Nam. IFC, media co-operate to raise corporate governance awareness Corporate governance reform became a priority for both regulators and companies in Viet Nam recently when firms tried to improve their competitiveness amidst closer economic integration in the region. These comments were made by Nguyen Vu Quang Trung, deputy CEO of the Hanoi Stock Exchange, at the two-day corporate governance workshop that began on July 26 to update the regional media on effective practices among public companies. The workshop was hosted by IFC, a member of the World Bank Group in Bangkok. Two dozen business editors and reporters from Cambodia, China, Indonesia and the Lao People's Democratic Republic, as well as Mongolia, Myanmar, the Philippines, Thailand and Viet Nam attended the workshop, where the key corporate governance issues discussed included company structure, board leadership, risk management and environmental and social standards. Chris Razook, IFC Corporate Governance Lead for East Asia and the Pacific, said the media could help champion transparency and accountability in public firms, so having a deeper understanding of what constitutes good and bad corporate governance practices would improve journalists' ability to spot red flags and uncover stories that are of public importance. The establishment of the ASEAN Economic Community last year was expected to boost economic integration in the region. In response, companies in the Community needed to improve market transparency and corporate governance practices to raise their performance and competitiveness. The IFC official added, "Well-run companies are more profitable and sustainable and can attract more foreign investment." Also during the conference, IFC met with representatives from the China Securities Regulatory Commission and the stock exchanges in Ha Noi, HCM City, and Shenzhen to discuss the challenges of promoting good corporate governance in their home markets. HCMC products to showcase in Russia A HCM City products fair will be held in Moscow from September 9 to 14 at the Hanoi-Moscow Culture-Trade Complex (Incentra). The major products to be showcased during the week are garments, leather footwear, handicrafts, wood products, agricultural products, and tourism and financial services. Nguyễn Phương Đong, deputy director of the HCM City Department of Industry and Trade, said the event would be a good opportunity for city enterprises to introduce their quality goods to Russian consumers and explore investment opportunities in that market. The exhibitors will receive support for participation, with Incentra sponsoring all booth rentals and providing rooms in its hotel at half price besides urging Vietnam Airlines to offer a 50 per cent discount on cargo rates and two tickets for each company. Firms have been told to register before August 10 for participation. An exhibition of high-quality Vietnamese goods was held last November at the venue and attended by 163 Vietnamese firms, including 42 from HCM City, with many businesses managing to find long-term business partners. A Hà Nội products fair will be held there from October 6 to 14. According to the fair's organisers, Russia is among Việt Nam's traditional markets and has high demand for apparel, footwear, handicrafts, farm produce, processed foods and wooden products. US study finds TPP will provide modest gains for clothiers A recently published US International Trade Commission study found that US clothing imports and exports would increase modestly under the proposed new 12-nation Trans-Pacific Partnership (TPP) free-trade region. The study forecast that US clothing imports would rise by 1.4% for a total US$1.9 billion increase by the year 2032 while exports would most likely experiences a slight 0.3% rise, for a total US$10 million bump. The 12 member countries currently negotiating the TPP pact are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam. The study shows that Vietnam would benefit the most from the free-trade pact when it comes to manufacturing and exporting apparel to the US because tariffs would be eliminated on many items produced in the Southeast Asian nation, provided regional yarns and fabrics are used. In 2015, US tariffs on clothing imports from Vietnam totalled US$10.5 billion, according to the study, and the average tariff rate was set at 17%. Vietnam is the number two provider of clothing to the US, accounting for a 10% market share of all US apparel and textile imports. China is number one with consignments accounting for 38% of all apparel and textiles shipped into the US. If the TPP is ratified and comes into effect, additional clothing imports from Vietnam are expected to be only moderate because of the country’s inability to meet many of the yarn-forward requirements needed to qualify for duty-free status. Vietnam, said the study, purchases roughly 88% of its yarn and fabric from China, the Republic of Korea and Taiwan, which are not TPP members, and exports produced from these raw materials do not qualify for duty free import into the US. Although there is some limited domestic textile production that takes place in Vietnam, only about one-fourth of it is considered export quality. In addition, Vietnamese-produced yarns and fabrics are more expensive than similar items produced in China, contributing to a weakening of demand. In 2014, Vietnamese yarns were estimated to be 5% to 10% more expensive than similar yarns manufactured in China while Vietnamese fabric prices were 5% to 8% more expensive than Chinese fabrics. As of 2014, the study said, the textile industry of Vietnam consisted of 145 yarn spinners, 401 weaving facilities, 105 knitting mills, 94 dyeing and finishing plants, and seven nonwoven manufacturers. Given the Southeast Asian nation’s immediate inability to produce yarns as required for duty-free entry, manufacturers have universally expressed concern that the demand for regionally made yarns would lead to higher prices in the immediate future and make Vietnam less competitive in supplying clothing to the US. However, the study concluded that in the long run, increased domestic yarn and fabric production in Vietnam would shorten lead times and prices, benefiting the country’s apparel exports. The report estimated that Vietnam has attracted only about US$1 billion of foreign direct investment to improve its fibre and textile capabilities far short of the requisite amount needed to provide any significant benefit from the TPP. Bio Ethanol Dung Quat closed for unpaid debts The Bio Ethanol Dung Quat Plant was closed for defaulting on the VND1.3 trillion debt it owed the banks, the State Bank of Viet Nam's Quang Ngai Province branch said. The branch confirmed the information in its Report No. 06/BC-QNg1, issued this month. The report said the E5 bio fuel products of the plant had not been consumed, so the plant was not able to repay the debt of VND1.3 trillion to banks in the province. The banks considered the plant's debt to be a bad debt. The Bio Ethanol Dung Quat Plant was built in 2009, with a total investment of VND2.02 trillion and a designed capacity of 100 million litres of ethanol per year for mixing with petrol to form a bio fuel product, Vietnam News Agency reported. The plant started commercial operations in 2012, and so far, it has not gained a significant hold on the market, leading to heavy losses. The Bio Ethanol Dung Quat Plant is one of seven eligible plants producing ethanol for E5 bio fuel products, for which 5 per cent of ethanol is mixed with A92 petrol. Four other plants have been forced to shut their doors or suffer losses as well. The remaining two plants under Tung Lam Ltd, Company, have produced moderate amounts of ethanol due to low demand. Meanwhile, the State has asked eight large provinces and cities, including Ha Noi and HCM City, to sell their E5 bio fuel reserves from June 1, 2016. So far, according to the HCM City Industry and Trade Department, consumers in HCM City have continued using A92 petrol because the price of E5 petrol was not much cheaper than A92 petrol, reported Sai Gon Giai Phong newspaper. The department expected the State to create a new plan to promote the consumption of bio fuel in the future. Recently, the prime minister directed the Ministry of Industry and Trade and related ministries to host a programme encouraging the use of bio fuel, including providing tax incentives and expanding the distribution system for bio fuel products. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR