BUSINESS IN BRIEF 8/7 Property market recovering The property market will continue recovering but experts told an online forum held by Dau Tu (Investment) newspaper yesterday that they do not expect breakthroughs in the second half of this year. According to Tran Du Lich, a member of the National Monetary Policy Advisory Council, the market will not see significant developments in the remaining months of the year. Lich expects the development of housing projects for low-income earners will improve in 2017, driven by the Government's efforts to develop social housing projects. He said it was necessary to warn about imbalanced development of the property market as there was abundant supply in the high-end segment but a shortage in projects for low-income earners. This must be given special attention, especially if banking credits continue to be poured into the high-end segment. "If banking credits target housing development for low-income earners, we will not have to be worried much about a property bubble," he said. Vu Van Phan, Deputy Director of the Ministry of Construction's Housing and Real Estate Market Department, said the ministry would check housing project plans nation-wide to decide whether they should be implemented or not in order to ensure a supply and demand balance, as, in fact, there might be an excess in the supply at the high end over demand. According to Le Hoang Chau, Chairman of HCM City Real Estate Association, although the market is on a recovery path, there are potential risks requiring developers to pay greater attention to affordable projects. Home buyers should also carefully check out the projects and developers' capacity before buying. The recovery of the property market will moderate in the second half of this year, Duong Thuy Dung, head of CBRE Vietnam's Research and Consulting Department, said, adding that the market will see new sales but at similar rates to last year. Second Vietnamese Meet Magento to open this year Meet Magento 2016 Vietnam, one of the most energetic and rapid-growing markets in Southeast Asia, will be held on October 15, 2016, in HCM City. This will be the event's second opening in Viet Nam, organised by SmartOSC, a smart open solutions company, and the Meet Magento Association, following the success of the first event in Asia, MM15Vietnam, which attracted more than 500 merchants, service providers, technology partners and Magento enthusiasts, according to SmartOSC. This year, the event is expected to bring together more than 1,000 decision makers, corporate leaders, technical specialists and many of the large retailers within the region to engage in the e-commerce and Magento ecosystem. Many opportunities are arising out of the rapid e-commerce growth in Asia, especially in Southeast Asian markets, which boast a population of over 600 million, twice that of the US, and with 100 million consumers who have made a digital purchase, according to a survey by Bain & Company. Plenty of insightful sessions will be presented, covering the actual trends of e-commerce in general and the Magento ecosystem in particular, such as B2B commerce, digital marketing, payment and shipping methods and the evolution of Magento 2.0. Meet Magento Vietnam is the very first Asian edition of the Meet Magento worldwide series since 2008, after successful runs in Europe and North and South America, as the leading conference for the e-commerce and Magento community. Vietnam auto imports drop significantly in H1 of 2016 Automotive imports into Vietnam fell significantly in the first six months of 2016, according to data compiled by the General Statistics Office (GSO). Year-on-year, automotive imports fell by 11.2% in volume to 49,000 units and 21.2% in value to US$1.184 billion. The GSO attributes the decline to an increase in the purchase price of vehicles since the beginning of this year due to the Government's adjustment of a special consumption tax on imported vehicles – including all vehicles driven by engines such as cars, pickups, SUVs and buses. Under the new tax calculation, which went into effect January 1, 2016, the special consumption tax for imported vehicles with 24 seats and below is based on the importer's price. However, the price cannot be lower than 105% of the cost of the vehicle, which includes its import price, import tax and special consumption tax at the importing point. If it is lower than this level, the tax is fixed by tax regulations. The new calculation method has been estimated to have caused the cost of an imported vehicle to have increased by five percent. PNJ announces higher jewelry sales and profits Phu Nhuan Jewellery Company (PNJ), the largest jewelry retailer in Vietnam, announced total sales revenues of VND4 trillion ($178 million) and a pre-tax profit of VND304.5 billion for the first half of 2016. These figures represent increases of four and 116 per cent, respectively, over the first half of 2015, said PNJ representative. After the first quarter, the total assets of PNJ stood at VND3.02 trillion, 1.74 per cent higher than on December 31, 2015. PNJ is a jewelry manufacturer with well-established brand names such as PNJ Silver, PNJ Gold, CAO FINE Jewelry and Jemma. PNJ opened 13 additional stores in the first half of 2016, bringing its total number of retail stores to 204 and more than 3,000 wholesalers. Yesterday, PNJ shares ended at 75,000 each on the HCM Stock Exchange. 98 percent of businesses in Can Tho use e-tax payment As many as 98 percent of businesses in the Mekong Delta city of Can Tho make online tax declarations and use the e-tax payment system, Vo Kim Hoang, head of the provincial Tax Department reported on July 1. In 2015, nearly 1,900 local enterprises registered to contact the department through email, while 71 percent of businesses showed their pleasure with the department’s services, said Hoang. This has contributed to the administrative reform of the tax sector and the modernisation of its operation, he added. Over the past time, the department has organised a number of dialogues with tax payers to solve obstacles facing them during the payment. According to the department, in the first five months of this year, it collected over 3.12 trillion VND (140.4 million USD) of taxes, with Binh Thuy district leading the work by gathering 62.94 percent of the yearly estimate, a rise of 37.84 percent over the same period last year. On July 1, the department also honoured 548 good tax payers. Bac Giang commits to full support for enterprises Northern Bac Giang province will create the most favourable conditions for both local and foreign enterprises operating in the locality, Nguyen Van Linh, Chairman of the provincial People’s Committee in his meeting with 140 small- and medium-sized enterprises on June 30. He called on the enterprises to follow market, value, supply and demand and competitive principles, pledging that the province will improve the investment environment and infrastructure. At the meeting, enterprises raised their difficulties, as well as recommendations in order to make it easier for their future activities. Nguyen Huu Phai, General Director of the Bac Giang Garment & Textile Company, said the province needs to focus on improving roads, electricity and water systems in industrial parks as well as continuing reforming administrative procedures. Ngo Van Khanh, Director of the Bac Giang Import & Export Joint Stock Company, recommended that the province instruct vocational training schools to focus on professions that are of market demand. In the first six months of the year, Bac Giang attracted 84 projects, of which 59 were domestic projects with a total investment capital of 9.3 trillion VND (409 million USD) and 25 foreign projects registering a combined capital of 226 million USD. Forty-three projects in the province went into operation, providing jobs for 9,500 labourers. There are 428 newly-registered businesses and representative offices, up 47 percent. As of now, the province has a total of 5,220 registered enterprises with a total capital of 28.7 trillion VND (1.27 billion USD). HoREA: Funding for social housing program stuck Allocations of funds from the State budget for the ongoing social housing program have ground to a halt given the absence of interest rate guidelines from the State Bank of Vietnam (SBV), according to the HCMC Real Estate Association (HoREA). To help low-income earners buy social and commercial homes at low prices, the Prime Minister has issued Decision No. 1013 saying that the Vietnam Bank for Social Policy provides eligible homebuyers in the program with loans carrying an annual interest rate of 4.8% until December 31. However, the SBV has yet to provide instructions on preferential interest rates for banks, including Vietcombank, VietinBank, BIDV and Agribank, to apply. According to HoREA, the program has been delayed as relevant authorities have not reached a consensus on using funds from the State budget for the social housing program. Particularly, the Ministry of Finance does not support the Vietnam Bank for Social Policy to implement a social home loan plan and cover the interest differential. The ministry proposed the SBV provide refinancing capital with the current refinancing rate for credit institutions to lend to eligible homebuyers. However, the Ministry of Construction described the Finance Ministry’s proposal as unreasonable since conditions for the social housing program are specified in the 2014 Housing law and the Government’s Decree 100 on development and management of social houses. Meanwhile, the Ministry of Planning and Investment asked the Ministry of Construction to cooperate with the SBV and relevant agencies to raise funds from other sources to support buyers of budget homes due to financial constraints and huge demand for regular expenditures. Therefore, HoREA suggested the ministries of planning-investment and finance submit to the Prime Minister ways to arrange funds from the State budget to enable the SBV to refinance participating banks and cover the interest rate differential for social home buyers. To generate additional funds and ensure fairness for all beneficiaries of the social housing program, HoREA requested the Vietnam Bank for Social Policy to build a social housing saving fund for households and individuals to make deposits in at least 12 months in order to fully benefit from supporting policies. Besides, the Government needs to continue providing capital for the Vietnam Bank for Social Policy to offer long-term loans with low interest for beneficiaries of the social housing program. The SBV should be approved to give refinancing to credit institutions to lend to enterprises that build budget homes.   The association urged the SBV to issue a decision on the interest rate of 4.8% per year as prescribed in Decision No. 1013 for social housing loans provided by credit institutions which have been assigned to participate in the program. Vietnam reports trade surplus in Jan-Jun Vietnam has enjoyed a trade surplus of US$1.5 billion in the first half of this year though the country has had difficulty boosting exports in the period, according to the General Statistics Office (GSO). In the first six months, Vietnam has earned export revenue of US$82.2 billion, a year-on-year increase of 5.9%, and spent US$80.7 billion on imports, down 0.5% over the same period last year. Again, foreign-invested enterprises have contributed a great deal to the nation’s trade surplus as their exports have been US$11.2 billion higher than their imports while domestic firms have caused a trade deficit of US$9.7 billion in the January-June period. Products with high export growth were made in the foreign direct investment (FDI) sector. Particularly, outbound sales of phones and phone parts have amounted to US$17.1 billion, up a staggering 16.7%, and electronics, computers and components have inched up 7.1% to US$7.9 billion. In contrast, Vietnam has seen a decline in export revenue of key products in the first six months. For instance, rice shipments have dipped by 2.7% to US$1.3 billion while crude oil has plunged by 46.6% to reach only US$1.1 billion. The U.S has remained Vietnam’s biggest importer with total import revenue of US$17.7 billion, up 12.8% year-on-year, followed by the European Union (EU) with US$16.3 billion, rising by 9.8%, and China US$9.2 billion, increasing 14.3%. January-June imports of some products have slid compared to the same period last year, with machinery, equipment, and spare parts falling by 5.9% to US$13.1 billion and fuels by 17.5% to US$2.4 billion. Products with higher imports are electronics, computers and components with US$12.5 billion, up 12.1%, fabrics with US$5.1 billion, up 3.5%, and iron and steel with US$3.8 billion, up 2.8%. If commodity prices continue falling in the second half due to the world economic uncertainty and weak demand, Vietnam is unlikely to post this year’s export revenue growth of 10%. Hanoi serviced apartment market poised for expansion in next two years The serviced apartment market in Hanoi, which has experienced little fluctuation in recent years, is poised to see an increase in both supply and demand. According to CBRE’s report on the Hanoi real estate market for the second quarter of 2016 released on June 28, the supply of serviced apartments is anticipated to reach nearly 4,000 units by 2018, with prominent projects such as Somerset West Point, Somerset West Central, and Trang An complex. All of these are high-end serviced apartment projects located in office-clustered districts of the city. Even though the segment has seen little change in terms of tenancy rates, which has been stable at between 70 and 80 per cent, there should be little worry about whether the new developments will be filled. According to managing director of CBRE Vietnam Marc Townsend, the demand is set to increase soon as the economy grows. “I think as the economy grows and moves towards information technology, it will bring in a lot of consultants. So, groups like CapitaLand, Mapletree, and Frasers are looking at their offering and they have decided to invest more in serviced apartments in Hanoi and Ho Chi Minh City,” he said, adding that foreigners soon coming to Vietnam were mainly Asian and serviced apartments would be a good solution. In April, Singaporean developer Keppel Land Ltd.’s subsidiary Palmsville Investment Pte Ltd., sold 70 per cent of its stake in Quang Ba Royal Park Joint Venture Company Ltd. to Vietnamese BRG Group Joint Stock Company for VND492 billion ($22 million). Quang Ba Royal Park is Palmsville’s joint venture with Hanoi Trade Union Tourism Co., Ltd. established to own and operate the first serviced apartment block in Hanoi, the 155-apartment and 20-villa Sedona Suites Hanoi in Tay Ho district. The leaving of a foreign developer to let a Vietnamese one take over in this case does not mean that the market is no longer attractive, according to Townsend. Similar to the recent sales of assets by foreign developers to Vietnamese ones, the trend comes down to legality. “One of the issues at play is the lease holding structure we have in Vietnam on some of these hotels, office towers, and serviced apartments. A lease can only be held for 20-30 years. Some of these projects are at 20-30 years already, so investors want to get out. Thus, we see Keppel selling some assets in Hanoi. Same with CapitaLand. They are selling good assets that they developed,” he said. According to the report, the second quarter of 2016 recorded no new addition to the supply of serviced apartments for sale in Hanoi. The total supply remained stable at 3,239 units, with more than 30 per cent accounted for by two-bedroom units. Grade A serviced apartments took up to 71 per cent of the total supply, most of which were located in Tay Ho, Ba Dinh, and Tu Liem districts. As of the end of the quarter, the average asking rent of Grade A and Grade B apartments were $31.7  and $21.7 per square metre per month (psm pm), respectively. The highest rent rates continued to be charged in Cau Giay district, at $36.3 psm pm in Grade A and at $28.9 psm pm in Grade B, followed by Ba Dinh and Tu Liem districts. There was a smaller deviation in the average price of grade A apartments by district than those of Grade B, indicating the heated competition among these projects. Saigon Co.op to grow fatter in Dong Thap Leading Vietnamese retailer Saigon Union of Trading Cooperatives, better known as Saigon Co.op, is planning to expand its operations in the Mekong Delta province of Dong Thap to capitalise on the growing local spending power. At a meeting with local leaders on June 23, general director of Saigon Co.op Nguyen Thanh Nhan said that his group was ready to invest in a new supermarket in Hong Ngu town, where the shopping demand is on the rise. "Dong Thap is the only regional locality that Saigon Co.op wants to develop three supermarkets in," Nhan added. Nguyen Hung Trang, Chairman of the Hong Ngu People's Committee, welcomed the plan, recommending Bo Dong residential area, Hong Ngu's trade centre, as a suitable location for the new project. Saigon Co.op has invested in two supermarkets in Dong Thap so far. Cao Lanh supermarket was put into operation in December 2014, while the other one in Sa Dec is scheduled to open gates in the third quarter of 2016. Since late 2014, the firm has sought to develop its network and continue the expansion of its operations, particularly convenience store outlets. To date, Saigon Co.op has opened 91 Co.op food stores, mostly in Ho Chi Minh City. According to its 2016 plan, the company would open eight more convenience stores by the end of the year and hopes to maintain an average of 20-30 new openings per year across the country. German group invests $50 million in Danang component factory Germany’s Marquardt Group plans to develop an automotive component production factory with the initial investment capital between $35 and $50 million in the central province of Danang. Although the group has yet to build a specific plan for the project, the construction is expected to be finished within two or three years. Once the factory comes into operation, it will create 600 jobs, 200 of which will be open for engineers and skilled technicians. According to Marquardt representative Peter Schaumann, the group will train a base of high-quality human resources for Marquardt’s next projects, and Danang has good potential for developing skilled labour. Tran Van Mien, Deputy Chairman of the Danang People’s Committee, said that the city had invested into modern infrastructure to welcome high-tech projects in general and Marquardt’s projects in particular. The province will provide favourable conditions for Marquardt during the construction process. Established in 1925, Marquardt is a leading automotive component producer in Germany. The group currently has factories in 14 countries over the world, with over 8,500 employees. It specialises in supplying products for Mercedes Benz, BMW, Volkswagen, and General Motors. In 2015, Marquardt earned €1 billion ($1.11 billion) in revenue, 85 per cent of which came from the automotive component sector. In May, U-Li Co., Ltd., a subsidiary of Taiwanese Chipech Group, held the ground-breaking ceremony of an automotive component production factory with the initial investment capital of $30 million in the northern province of Thai Binh. Covering an area of 130,000 square metres, the project includes 13 workshops, an office building, a training centre, and other infrastructure units. Once the factory starts operation, it will create 3,000 jobs. Daesang Corporation to buy off Duc Viet Food Company South Korean food-producing conglomerate Daesang Corp. has decided to buy a 99.99 per cent stake in Vietnamese meat processor and distributor Duc Viet Food Joint Stock Company for $32 million, according to newswire Pulsenews.com. Daesang expects to complete the acquisition by August 5. Daesang said that the sale is a move to help the company expand its foothold in the fast-growing Vietnamese meat processing market that is still in its fledgling stages, currently being focused on frozen ham products. The company also expects that the expansion of its operations in Vietnam would help reinforce its food business. Established in 2001, Duc Viet Food specialises in manufacturing and distributing meat products, sausages, spices, and instant food. The company currently has a total asset value of $5.99 million. In 2015, the company earned $26.5 million in sales and $1.7 million in net income. Starting operations in 1956, Daesang Corp specialises in food and seasoning manufacturing, including soybean paste, ssamjang, marinade, soy sauce, soups, and Chinese noodle, among others. Daesang Corp. first entered the Vietnamese food market in the 1990s by building a seasoning manufacturing plant. It currently owns three manufacturing bases across Vietnam. TP Bank buys loan processing, debt collection solutions Tien Phong Bank signed a contract with Fintek Co., Ltd and its partner Diasoft Systems Ltd. on Wednesday for buying their loan origination and debt collection systems. Speaking at the signing ceremony, Pham Dong Anh, TP Bank's deputy general director, said the loan origination system (LOS) would enable his bank to automate the various steps in processing loans, mainly for individual customers. It would help create a solid foundation for all of the bank's credit activities, contributing to increased efficiency and quality of loan processing, and improving overall customer service operations, he said. Other benefits would include increased labour productivity, reduced credit processing costs, effective management of operational and credit risk and improved transparency and safety, he added. LOS is expected to help TP Bank achieve international standards in risk management. Tran Le Quan, CEO of Fintek, which consults and deploys the technologies at banks, said the LOS and debt collection system are expected to be installed bank-wide by March next year. Diasoft provides the two solutions. Quang Nam expands routes to key economic zones The central province of Quang Nam will continue to inject more than 1 trillion VND (45 million USD) from the central and local budgets into expanding and connecting roads with the Da Nang – Quang Ngai expressway to local industrial parks and key economic zones. The 140km expressway, including 92kms running across the province, creates a good opportunity for Quang Nam to improve its transport infrastructure serving socio-economic development, said Chairman of the provincial People’s Committee Dinh Van Thu. The expansion is expected to facilitate trade and cooperation between Da Nang city and Quang Nam province. The Da Nang – Quang Ngai expressway, with a total investment of nearly 1.6 billion USD, will be put into operation in late 2017. This is one of the key transport infrastructure projects that the Party and State is particularly interested in under the national strategy to build and develop the north-south highway network. Once completed, the expressway will help reduce travelling time between the three localities while opening investment opportunities in the central region. It will also contribute to connecting the international transport network in the Vietnam-Laos-Cambodia triangle economic area, through the East-West economic corridor. It plays a crucial role in emergency rescue for locals in flood prone areas. Minister of Transport Truong Quang Nghia said Quang Nam needs to priortise capital for carrying out projects connecting with the Da Nang – Quang Ngai expressway and the north-south transport routes to create sustainable development connectivity between cities and provinces in the region. Japanese agricultural model eyes promoting links with Vietnam Kawakami village in Japan’s Nagano prefecture, a leading hi-tech agricultural model, wishes to boost cooperation with Vietnam in agriculture, Head of the village Fujihara Tadahiko told Vietnamese Ambassador to Japan Nguyen Quoc Cuong. In a working session with Ambassador Cuong on his working visit to Kawakami on June 27-28, Tadahiko stressed that the local authorities hope to receive more Vietnamese agricultural trainees and students, who are interested in working at and gaining more intensive knowledge of agriculture. Greeting the ambassador, almost all outstanding farmers of the village highly valued the quality of Vietnamese human resources, expressing their hope that the two countries’ Governments will continue creating favourable conditions for Vietnamese agricultural trainees and students to pursue studies in the village in the future. The Vietnamese diplomat showed his impression on Kawakami’s development over last decades as it has developed into a leading hi-tech agricultural centre of Japan, with annual turnover hitting 24 billion JPY (233.8 million USD). He pledged to work closely with the local authorities to promote cooperation between Kawakami and Vietnam’s localities, enterprises and education establishments, not only in the exchange of trainees and students, but also in technology transfer, and experience sharing in producing, preserving and marketing farm products. He said he is determined to bring Kawakami’s specific agricultural model to some Vietnamese localities as soon as possible. During his tour, Ambassador Cuong visited a number of farms and breeding centres, medical stations and educational centres in the village. Hai Phong leads in attracting FDI in H1 The northern city of Hai Phong took the lead in attracting Foreing Direct Investment (FDI) with 22 newly-registered projects and 17 existing one with additional capital in the first half of the year. The city's total newly-registered and additional capital in the reviewed period hit US$1.742 billion, accounting for 15.4% of the total amount, according to the Foreign Investment Agency, under the Ministry of Planning and Investment. As of June 20, up to 1,145 projects were granted with investment certificates nationwide, worth US$7.497 billion, a year-on-year increase of 95.3%. Meanwhile, 535 projects were added the total capital of US$3.787 billion. In the first half of the year, the total FDI disbursement obtained US$7.25 billion, up 15.1%. The manufacturing and processing industry took the lead with 488 newly-registered projects and 405 added capital, valued at US$8.06 billion, accounting for 71.4% of the total. The real estate and science and technology sectors came in second and third with US$604.8 million and US$562.3 million, making up 5.3% and 4.9%, respectively. The Republic of Korea was the biggest investor with a total newly-registered and additional capital of US$3.99 billion, accounting for 35.37% of the total. It was followed by Japan with US$1.229 billion and Singapore with US$1.129 billion. Top cities and provinces attracting huge FDI in the first six months included Hai Phong City (US$1.742 billion), Ha Noi (US$1.63 billion) and the southern provinces of Binh Duong and Dong Nai with US$1.07 billion and US$928.9 million, respectively. Exports to China via Hong Kong to enjoy tax exemptions Exports of some products to mainland China from Hong Kong are exempt from tax, so Vietnamese companies should take advantage of this treatment, heard a seminar in HCMC last Friday. At the seminar on Hong Kong as an international trade partner, Samuel Lau, executive director of Kerry Logistics (Hong Kong), said mainland China had issued a list of products like electronics, apparels and industrial products that are free from tariffs if shipped from Hong Kong from April 1. According to Lau, Hong Kong is a free port with a modern logistics system and no tariffs are imposed on export-import goods, except for liquor, tobacco, hydrocarbon oil and methyl alcohol. Hong Kong is also famous for its widespread air network and major ports in Asia. Margaret Fong, executive director of the Hong Kong Trade Development Council (HKTDC), said Hong Kong can be a gateway for Vietnamese goods producers to enter mainland China. Many Vietnamese enterprises now regard Hong Kong as the main partner to stay connected with international buyers, she added. Vietnam is one of the leading export markets of Hong Kong in the region. Trade between Vietnam and Hong Kong reached US$16.3 billion last year, and Vietnam is also the ninth biggest partner of Hong Kong. Talks on the Hong Kong-ASEAN free trade agreement (FTA) will be concluded late this year, which is expected to give a much-needed boost to trade. Le Manh Ha, deputy head of the Government Office, said Hong Kong has an important role in Vietnam’s international trade. In terms of foreign investment, Hong Kong ranks fourth among the countries and territories that have invested in Vietnam with more than 1,000 projects worth over US$16 billion in total. The Vietnamese Government, according to Ha, will present to the National Assembly a resolution designed to solve tax problems faced by enterprises and revise regulations on licensing, export-import activities and business operations in line with international commitments. The Government would also simplify land procedures and construction licensing, and amend rules on labor, Ha told the seminar jointly organized by the HKTDC, the Vietnam Trade Promotion Agency (Vietrade) and the Vietnam Chamber of Commerce and Industry’s (VCCI) HCMC branch. Ha noted Vietnam creates favorable conditions for foreign-invested enterprises, including those from Hong Kong. When meeting HCMC chairman Nguyen Thanh Phong on the same day, Margaret Fong of the HKTDC said HCMC is the top Vietnamese destination for Hong Kong investors. Hong Kong businesses are more interested in Vietnam given the Trans-Pacific Partnership (TPP) trade pact and Hong Kong’s forthcoming signing of an FTA with ASEAN, she told the city chairman. The FTA between Hong Kong and ASEAN will help attract more Hong Kong investors to Vietnam, Fong said, adding that a delegation specializing in logistics will visit Vietnam this August and another business delegation will come in March 2017 to explore Vietnam’s export potential and investment opportunities in HCMC. Phong said Hong Kong is a major trade partner of HCMC and Vietnam as a whole. Hong Kong has 332 projects in the city with combined capital of US$2.9 billion, the fifth biggest foreign investor in the southern city. The city looks to become a financial, trade and service center of Southeast Asia, so it is focusing on developing urban infrastructure, tourism, hi-tech agriculture and hi-tech industries. Fong said Hong Kong is experienced in urban infrastructure construction and could send expert delegations to HCMC to offer assistance and advice, including on metro line projects. ACB to issue VND2 trillion debt Asia Commercial Bank (ACB) has said it will issue VND2 trillion (US$89.5 million) of unsecured debt at the end of this month to mobilize capital. The issue of 20,000 bonds worth VND100 million each comes with a tenor of five years and one day. ACB applies a floating coupon which will be adjusted once a year and equal to an average interest rate of Vietcombank and Agribank for 12-month deposits in Vietnam dong plus 2% per annum. At present, the deposit rate quoted by the two banks stands at around 6.5% per year.   The interest will be paid every 12 months from the date of issuance. The coupon for the fifth year will be paid one year and one day after the previous payment. According to ACB, the debt issue is to supplement its capital and equity, diversify capital mobilization sources and reduce risks of liquidity and of the gap between borrowing and lending. Investors can register to buy the ACB bond from June 15 to 27. The bond will be issued on June 30. The lender said the issue will not leave strong impact on its operation as the ratio of short-term funds used for making medium and long-term loans is  27.45% and the capital adequacy ratio (CAR) is 12.8% at ACB now. These ratios meet the respective requirements of a maximum of 60% and a minimum of 9%. By end-March, ACB had mobilized more than VND193.67 trillion with over 93% of them deposits. Meanwhile, its total outstanding loans had neared VND144.23 trillion, with medium-term loans accounting for 15% and long-term loans for 37%.   VSSA seeks high tariffs for non-quota sugar imports The Vietnam Sugar and Sugarcane Association (VSSA) has proposed the Ministry of Finance impose respective duties of 80% and 85% on raw and refined sugar imports beyond the annual quota to protect the local sugar sector. The association made the proposal in Document No. 41/2016/CV-HHMD sent to the Ministry of Finance on Tuesday after the Ministry of Industry and Trade suggested allowing import of 200,000 tons of sugar beyond the quota to meet domestic demand. The association said a tariff of 5% applicable to sugar imports since 2010 has made life tough for the local sugar sector. Therefore, VSSA threw its weight behind a plan to protect domestic sugar producers by slapping import duties of 80% for raw sugar and 85% for refined sugar. After having weighed supply and demand for sugar on the domestic market, the trade ministry sought the Government’s nod to import 200,000 tons of sugar more than the volume the country committed to the World Trade Organization (WTO). This year’s quota is 85,000 tons of sugar but Vietnam can import about 285,000 tons of sugar. In June last year, the trade ministry unveiled the content of a border trade agreement between Laos and Vietnam. To prop up trade between the two countries, the ministry said import and value-added taxes of 0% should apply to certain types of commodities manufactured in Laos by Vietnamese investors when they are imported into Vietnam. Since Hoang Anh Gia Lai Group (HAGL) has invested in rubber and sugar projects in Laos, sugar produced in Laos by the Vietnamese group can enjoy an import tariff exemption when it is sold to Vietnam. However, VSSA complained there are more incentives for sugar produced in Laos than that made in Vietnam, throwing local sugar producers into a difficult position. Besides, competition pressure would rise if there are no measures to control the origin of sugar imported from the neighboring country. VSSA said the 2015-2016 sugarcane crop has virtually ended and total sugar output for the crop is estimated at nearly 1.2 million tons. VEA to focus on renewable energy planning by 2021 The Vietnam Energy Association (VEA) will focus on evaluating the potential of different energy sources in Vietnam and developing a strategy for investment in new and renewable energy between now and 2021. VEA President Tran Viet Ngai made the statement at the association’s third national congress for the term 2016-2020 held in Hanoi on June 24. The association plans to propose to the government increasing the application of advanced technology to explore crude oil and natural gas at a depth of less than 1,000 metres in the East Sea and on the continental shelf of Vietnam, he said. It will work closer with its members, such as the Vietnam Oil and Gas Group (PVN), the Vietnam Coal and Minerals Industries Corporation (Vinacomin), and the Electricity of Vietnam (EVN) Group, in preparation for new power projects. During the term from 2010-2015, the VEA was involved in designing policies for the infrastructure development of the energy industry, promoted the use of made-in-Vietnam mechanical products and services in many electricity projects, and put forward strategic solutions for the economical and effective use of energy. It has also conducted analysis on the financial issues of power projects and helped them identify barriers to funding access so that proposals for support were sent to the government and related agencies. At the congress, the association and its members were presented with the State’s Labour Order and the Ministry of Industry and Trade’s certificate of merit in recognition for their works. Tran Viet Ngai was re-elected as the association’s president. Vietfood beverage-ProPack exhibition planned The Vietfood and Beverage - ProPack international exhibition will be held from August 10-13 at Sai Gon Exhibition and Convention Centre in HCM City. The exhibition is a gathering place for new and well-known enterprises from all around the world. The core purpose is to promote trade and bring about value to both suppliers and consumers. Small-sized enterprises will enjoy the chance to introduce their latest products, seek potential customers and analyze responses from customers and giants in the industry. "The market in Viet Nam has been constantly developing and putting great demands on food packaging equipment. As a result, our corporation has rapidly developed at the market in the country, especially at the Vietfood & Beverage – ProPack Viet Nam Exhibition. We have approached many potential customers," said Vong Kuong, Director of Solution pack from Malaysia. The exhibition was first held in 1996. After 19 exhibitions witnessing significant and rapid changes in the market, from the initial purpose of serving consumers' basic needs, the food and beverage industry has now become a sector with considerable market share accounting for 15 per cent of gross domestic product, and it will continue to grow. Soc Trang urged to grow shrimp farms Deputy Minister of Agriculture and Rural Development Vu Van Tam has instructed the Cuu Long (Mekong) Delta province of Soc Trang to expand its shrimp breeding models that have proved successful. On a trip to survey brackish water shrimp farming in the province on Thursday, Tam said the local Department of Agriculture and Rural Development should review three major issues in shrimp farming: use of technology, revamp of production and credit policies. "Co-operation between all stake holders in shrimp farming is vital since it helps protect the environment and create conditions for farmers to benefit from credit and insurance policies," he said.   The ministry would urge relevant agencies to draft policies that enable shrimp farmers to obtain loans, he said. According to Nguyen Van Nhiem, chairman of the My Thanh Shrimp Breeders Association in Tran De District, the association's members farm more than 2,000ha. They have recently adopted new farming methods like raising tilapia and sea bass in shrimp ponds, farming fewer shrimp and using probiotics, obtaining successful results. Hua Thanh Hung, a member, said he had 24 shrimp ponds this year and had so far harvested 162 tonnes, earning a profit of nearly 11.2 billion (US$510,000). He attributed the success to the increased number of ponds he has to store water for the shrimp ponds as well as breeding of sea bass along with shrimp. Hai Hong, another member, said his ponds had a low density of 30-50 shrimps per square metre and also tilapia. As a result, of his 30 ponds, only one suffered a loss, he said.    However, Nhiem said the members were breeding shrimp on only a fifth of their more than 2,000ha this year because of disease outbreaks and resultant losses in previous years. Since mid-May it has been raining in Soc Trang and farmers have begun to breed more shrimp in My Xuyen and Vinh Chau districts, according to the province's Fisheries Sub-department. Soc Trang, one of the delta's leading shrimp farming provinces, plans to raise the crustacean in around 45,500ha of ponds this year, with black tiger shrimp and white-legged shrimp farmed in roughly equal areas. The estimated output is 90,000 tonnes. The shrimp farming season usually lasts until September. Business registry increases strongly in Binh Duong The southern province of Binh Duong has seen the business registry of 1,684 enterprises since the beginning of this year, according to Nguyen Thanh Truc, Director of the provincial Department of Planning and Investment. These enterprises represent a combined capital of 8,403 billion VND (370 million USD). Of which, 285 increased their capital with 4,353 billion VND (191 million USD). Until now, the province has had 23,141 valid enterprises with a combined capital of 172,582 billion VND (7.6 billion USD), in which small- and medium-sized enterprises make up 95 percent. Truc said most enterprises registered as multi-sector businesses and mainly operate in trade and services (75 percent), industry and construction (24 percent) and others in agriculture, forestry, fishery and mining. The province has simplified administrative procedures to cut time for business registry from 15 to 8 days. Survey: Local retailers confident about competitiveness Despite increased expansion and entry of foreign retailers in recent years, a number of domestic firms in the sector are optimistic about their competitiveness on the home market, shows a survey of the Association of Vietnam Retailers and the WTO Center. The association’s chairwoman Dinh Thi My Loan told a seminar in HCMC on Tuesday on risks for the retail sector amid the country’s further international integration that the survey was conducted with 100 retail companies. An upsurge in foreign retailers in Vietnam, particularly backed by mergers and acquisitions (M&A) in the past three years, has led investments in the sector to leap. However, concerns have arisen over the competitiveness of local retailers, and the fate of domestic producers. Local media reported a number of local retail firms have had to pull out of the market due to mounting competition triggered by foreign retailers. Domestic enterprises have found it harder to put their products on store shelves of foreign companies. However, the research team of the survey said that it is impossible for foreign investors to take full control of the Vietnamese retail market and that the entry and expansion of foreign retailers are inevitable given Vietnam’s international integration process. When asked about the overall impact of foreign direct investment (FDI) firms on domestic retailers, 31% of respondents said FDI would bring about a positive effect, four times higher than the number of companies holding a negative view. Loan said the survey showed that many domestic retailers have kept a calm attitude toward the increasing presence of foreign retailers on the Vietnamese market, which is different from what has been reported by local media. In terms of competition, domestic retailers said they have an edge over their foreign peers in terms of opening new stores, finding good product supplies, understanding consumers and carrying out marketing activities. The survey also pointed out 50-70% of respondents are confident in competing with foreign retailers in most retail channels, especially traditional ones. Only a small proportion (3-10%) said Vietnamese retailers are at a disadvantage in the competition with foreign peers. Nonetheless, such findings of the survey got fierce reactions from a couple of domestic enterprises and experts in retail. Chairman of the HCMC Business Association Huynh Van Minh, who used to manage HCMC-based retail system Satra, told the seminar that the survey painted a false picture about domestic retailers as the number of local brands is on the wane. Minh requested the research team to verify findings of the survey before presenting them to the Government. Pham Trung Kien, deputy general director of Saigon Co.op, said though Saigon Co.op is self-confident, things should be practical. Vietnamese retailers are facing stronger competition with foreign companies, and those weak will lose despite the fast-growing retail market. Foreign retailers are projected to make up 73% of the modern retail channel by 2020, according to Kien. Vietnam has been named as one of the 30 most attractive emerging retail markets since 2008 as announced by global management consulting firm AT Kearney. Figures showed that retail sales of goods stood at VND2,470 trillion last year, accounting for 76.2% of total retail sales, a Vietnam News Agency report said. Experts said Vietnam holds huge growth potential in the coming years given its population of around 92 million and consumers have spent more. They see more opportunities in modern retail, department store and shopping mall than other areas. Opportunities on the retail market abound but Nguyen Thi Thu Trang, director of the WTO Center, said how to make the most of them would depend on the ability of domestic and foreign retailers. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR