BUSINESS IN BRIEF 9/7 Hilton to operate fourth hotel in Vietnam Hilton Worldwide Group and Sai Gon Cuu Long Joint Stock Company yesterday kicked off the construction of the Hilton Saigon Hotel project in District 1. The hotel project, situated on an area of 2,300 square metres at Me Linh Square Roundabout, will have 350 five-star standard rooms. With an investment of over USD100 million, it is expected to operate in the fourth quarter of 2019.   At the project inauguration ceremony yesterday, Hilton Worldwide Group announced that the hotel would be managed by the Sai Gon Cuu Long Joint Stock Company who is also the investor of the project. Hilton Worldwide Group is now operating three hotels in Vietnam including Hilton Hanoi Opera, Hilton Garden Inn Hanoi and Hilton Danang. Local firms concerned about HCMC business development goal   Many business leaders have cast doubt over HCMC’s ability to realize an ambitious target of having 500,000 businesses by 2020. Instead of tripling the number of businesses, the city should focus on developing major firms which can promote brands on international markets, said corporate representatives at a dialogue between the city’s leaders and businesses on Sunday. HCMC chairman Nguyen Thanh Phong said there are currently 12 million people and 170,000 operational businesses in the city. There are some big enterprises with well-known brands. For instance, when talking about Vietnamese retailers, Co.opmart with 82 operational supermarkets nationwide would be the first to be mentioned. “The city holds much potential, but the point is how to have mechanisms and policies that help unlock potential,” Phong told the dialogue, the second meeting between the city’s leaders and the business community this year. Nguyen Loc, general director of Vietnam Electric Cable Corporation (Cadivi), said the target to have 500,000 businesses is quite ambitious. As only four years are left, the goal would prove to be tough. Nguyen Quoc Anh, chairman of the HCMC Rubber and Plastics Association, told the dialogue that he saw the goal unobtainable. Anh cited statistics of the Vietnam Chamber of Commerce and Industry (VCCI) as saying that capital and revenue of local enterprises remain woefully small. “In my opinion, we don’t necessarily have 500,000 enterprises by 2020, but enterprises should be of high quality,” he said. Anh noted the city government should take bold measures to prop up business operations. Nguyen Van Be, chairman of the city’s association of industrial parks, shared the same view, saying that besides capital, labor and land, enterprises need the business environment and administrative procedures to be further improved, and that inappropriate rules and business conditions should be removed. However, HCMC Party chief Dinh La Thang said the number of businesses in HCMC should rise to 500,000 to meet the Government’s target for one million firms by 2020. The city has around 3,000 startups a month on average, so it needs to increase the number, according to Thang. “Once we have a strong determination, I don’t see why the target would be unattainable,” Thang said, adding the private sector would continue to be the significant contributor to the city’s economic growth. Under the city’s draft plan to implement the Government’s Resolution 35/NQ-CP on backing enterprises towards 2020, the private sector is anticipated to contribute 60-62% of total investments and around 35% of HCMC-based enterprises carry out innovative activities. To realize such targets, HCMC has worked out multiple solutions, including regular dialogues with enterprises to listen to their problems and accelerate administrative reform. The city’s agencies will spend less time on meetings to conduct more field trips. The city will create a favorable environment for startups, especially in the fields of mechanical engineering, electricity-electronics, petrochemical-rubber-plastic and food processing. In addition, as many as 2,000 startup projects will get direct and indirect assistance via consulting, training and networking activities. Shinhan Bank to offer preferential loans to SMEs Shinhan Bank Vietnam will set aside US$100 million to lend to local small- and medium-sized enterprises (SMEs) with interest rates of 8-9% per year, particularly producers of goods for export to South Korea. Tran Khanh Phi, director of customer relations at the bank, shared the information at the signing in HCMC on July 4 of a memorandum of understanding (MoU) between the lender and Small and Medium Enterprises Development Support Center 2 (SMEDEC 2). Phi said credit would be provided from this month to the end of next year with around US$1 million going to each project of producing-trading businesses. According to the MoU, Vietnamese SMEs will receive financial support to promote trade and invest in human resources, sustainable development, energy saving, climate change adaptation and technology application, among others.   Set up in 2009, Shinhan Bank Vietnam completed a merger deal with Shinhan Vina Joint-Venture bank in November 2011 and became a 100% foreign-invested bank in Vietnam. After the merger deal, Shinhan Bank Vietnam had chartered capital of over VND4.57 trillion and total assets of VND18 trillion, and nine branches in big Vietnamese cities. Budget revenues up 6.1% in H1 State budget revenues amounted to US$476.8 trillion (US$21.4 billion) in the first half of this year, up 6.1% compared to the same period last year, according to the Ministry of Finance. Deputy Minister of Finance Tran Xuan Ha told a six-month review meeting in Hanoi last week that State budget revenues in the period met 47% of the full-year target and that the year-on-year rise of 6.1% was the lowest in two years. Budget collections in the first six months of 2014 met 54% of the target for all of that year and grew 18.1% over the same period a year earlier. The respective figures in the first half of 2015 were over 49% and 6.8%. According to the ministry, domestic revenues in the first six months of 2016 represented around 48.8% of this year’s target though they edged up 13.8% against the same period last year. Revenues from crude oil plummeted 44.8% year-on-year and met only 37.2% of the target as the average world oil price in the period was US$39.8 per barrel, US$20.2 per barrel lower than targeted. January-June tax collections from exporters and importers reached a mere 41.9% of the entire year’s target, down 2.2 percentage points over the same period last year. Ha said around 45 provinces and cities had realized at least half of their tax targets and 57 localities reported higher budget collections in the first six months than in the same period last year. However, January-June revenues of the central State budget were equivalent to 42% of the full-year target, well below 46.3% in the same period last year due to the world oil price fall and tax cuts and exemptions under the free trade agreements signed by Vietnam. The Ministry of Finance reported that in the year to June, Government spending picked up 4.9% year-on-year to VND562.5 trillion (US$25.3 billion) and that the budget deficit was put at VND85.6 trillion (US$3.8 billion). Speaking at the meeting, Deputy Prime Minister Vuong Dinh Hue called for the ministry to seek ways to increase budget collections by reconsidering tax calculations for goods imports and exports, and cracking down on tax cheating. It is important to review tax reductions, exemptions and refunds as well as implement tax policies consistently and transparently. Hue told provinces and cities to reduce spending if they fail to realize their budget collection targets, do away with unnecessary expenses and increase the efficiency of spending. He ordered the financial sector not to issue any policy that makes life tough for trading enterprises and to support growth in the agricultural and mining sectors, and imports and exports. The Ministry of Finance was tasked with improving the restructuring of budget revenue and spending, curbing public debt at safe levels, and drawing up a medium-term investment plan. A Ministry of Finance report showed Government debt had reached 50.3% of gross domestic product (GDP) by December 31, 2015, higher than the ceiling of 50% approved by the National Assembly for the 2011-2015 period. State Treasury to issue VND40 trillion bonds The State Treasury will issue VND40 trillion (US$1.8 billion) of Government bonds until the end of the year, chiefly those with tenors of more than five years. A representative of the State Treasury told a conference on G-bonds in Hanoi last week that besides auctions, the agency would issue G-bonds to Vietnam Social Insurance (VSI) via private placements, and continue restructuring the G-bond market through bond swaps. In the first six months of this year, the State Treasury raised over VND182.27 trillion from debt sales, meeting 82.9% of the full-year plan. This is a significant improvement compared to previous years. The average tenor of debt reached 6.79 years. Around 10 investors registered to buy VND6.5 trillion of debt on average per auction, and they were banks, insurance and securities firms, and investment funds. The Hanoi Stock Exchange held auctions to sell debt by lot with tenors of three to 30 years in the first half. The State Treasury began a pilot plan to issue seven-year debt. Data of the Hanoi bourse showed by end-May the primary bond market had had 528 bond codes and six bill codes with a combined value of more than VND830 trillion, equivalent to 17.98% of the country’s gross domestic product (GDP) last year. Transactions totaled over VND496 trillion in January-May, an 18.8% pickup from a year earlier. The average trading value surpassed VND5 trillion per session in the five-month period. The reference index of the market also rose sharply. The average value of each bond code neared VND1.6 trillion, up 5.26-fold compared to 2009 when the market came to life. They indicate an improvement in scale, structure, liquidity and trading volume on the G-bond market in the first half. European dry cleaning giant seeking master franchisee Pressto, a leading European high quality dry cleaner, is seeking a master franchisee in Vietnam. Mr. Sean T. Ngo, CEO of VF Franchise Consulting and the representative of the brand in Southeast Asia, confirmed with VET that Pressto will present franchise opportunities to interested franchisees and investors in Ho Chi Minh City on July 12. “The minimum financial investment is $500,000,” said Mr. Ngo. The “Pressto Discovery Day” will help investors and master franchisees learn more about the franchise opportunities Pressto offers. Pressto was born in 1994 and now has franchises in 23 countries in five continents. Its original business concept, exclusive know-how, unique technology and image as a “Cleaning Boutique” are just some of the key success factors that position the brand as a leader in the market. It has more than 20 years of experience in the market, innovating every day and providing a unique service in garment care to customers all around the world. Pressto offers new business lines such as Pressmatic Self-Service Laundry or Pressto Plus, which include all additional services in Pressto stores, such as Press Toke garment alterations and repairs, Press Upholstery, Press Leather, or Press Shoes. With a passion for continuous improvement, Pressto has launched new cleaning programs to ensure maximum cleanliness consuming minimum resources and preserving the original conditions of fabrics. Pressto has committed to developing a real franchising system abroad with the same guarantees of service and support that it is offered in Spain - its country of origin - through the master franchise formula. Rising tax debts stretch State budget Total tax debts in the first five months increased by VND1.3 trillion ($59 million) to VND75 trillion ($3.4 billion) since last December, putting pressure on the State budget. Bad tax debts, which are unlikely to ever be collected, stood at more than VND15 trillion ($680 million), according to Mr. Nguyen Dai Tri, Deputy Head of the General Department of Taxation (GDT). “The ‘slow’ state of the economy has made businesses struggle with repaying debts while many people have not complied with tax policy, receiving fines that subsequently increase the total amount of late tax payments,” Mr. Tri said at the agency’s quarterly press briefing on July 2. Tax debts owed for in excess of 90 days reached VND44.5 trillion ($2 billion), accounting for 46 per cent of the total. Vietnam faces a tough time as the State budget, which primarily relies on tax collections, has been in deficit for an extended period, with expenditure continually outpacing revenue. State budget collections in the first six months were VND476 trillion ($21.6 billion), equal to 46 per cent of the annual plan and up 6.1 per cent year-on-year, according to MoF reports. As at the end of May more than VND20 trillion ($909 million) in debts from last year had been collected by provincial tax departments. Tax revenue came from joint stock companies (53 per cent of the annual plan and up 22 per cent), foreign invested enterprises (49 per cent of the plan and up 12.8 per cent), personal income tax (56.1 per cent of the plan and up 16.8 per cent), and land use fees (75.2 per cent of the plan and up 34.2 per cent). The declining crude oil price has resulted in low tax revenue from State-owned enterprises (36.6 per cent of the 2016 plan) and taxes on crude oil (37.2 per cent of the plan and down 44.8 per cent), according to MoF. State budget expenditure was VND562.5 trillion in the first half (44.2 per cent of the annual plan and up 4.9 per cent). The government has used VND2.9 trillion ($131.8 million) from the budget to assist people affected by drought in the central highlands and the recent pollution incident on the coast of central provinces. Government debt, meanwhile, was reported at VND1,830 trillion ($86 billion) in 2014, doubled the figure in 2010, according to MoF’s latest report in June. In particular, domestic debt was more than VND1,000 trillion ($47 billion) and foreign debt was some VND800 trillion ($39 billion). The cost of servicing government debt in 2014 alone was VND260 trillion ($11.8 billion). Government debt accounted for 50.3 per cent of the country’s GDP as at December 31, 2015, MoF figures showed. The ratio has exceeded the cap of 50 per cent set by the National Assembly for the last five years. The state of the economy from now to the end of the year remains difficult to forecast with unforeseeable issues, according to Mr. Tri. “MoF will cooperate with authorities to strengthen tax policy, including fighting tax evasion, smuggling, and trade fraud,” he said. Binh Duong runs 1.9 billion USD trade surplus The southern province of Binh Duong recorded a trade surplus of 1.9 billion USD in the first half of 2016, according to the provincial People’s Committee. In the period, the locality’s export turnover reached 10.7 billion USD, up 16.5 percent year-on-year. The foreign-invested economic sector accounted for 80.8 percent of the turnover. The province’s main export commodities all reported growth, including footwear (17.2 percent), iron and steel (15.5 percent), wood products (7.5 percent), and garment (7.1 percent). The increases were attributed to positive impact of the ASEAN Economic Community, the Trans-Pacific Partnership agreement and free trade agreements, to which Vietnam is a signatory. During January-June, provincial leaders directed to effectively carry out trade and investment promotion activities to expand markets both inside and outside the nation, including the signing of cooperation agreements between the province and the Netherlands’s Emmen and Hoovegeen cities. Binh Duong also put into operation a foreign service centre under the provincial Foreign Affairs Department to support operations of investors and businesses. Also in the period, the province spent 8.77 billion USD importing goods, mainly materials, machinery, fabrics, and electronic products and components. The province contributed 21 billion USD to the country’s export revenue of 162.1 billion USD in 2015. Vietnam's Masan invests more in meat businesses Vietnam's consumer giant Masan Group Corporation is now shifting its focus to the meat sector that reportedly made up 46% of its revenue in 2015. The group's subsidiary Masan Nutri-Science (MNS) has bought the remaining 30 percent stake in animal feed company Anco, and increased its ownership in meat producer Vissan to 24.9% from 14%. While the value of the buyout of Anco was not disclosed, MNS reportedly paid VND702 billion (US$31.02 million) for the additional stake in Vissan, after paying more than VND1.43 trillion (US$63.19 million) for acquiring 11.3 million shares of the meat company in March. Established in April 2015, MNS also controls more than 75% of Proconco, another major animal feed producer in Vietnam. The company reported more than VND14 trillion (US$618.67 million) in revenue at the end of last year, or 46% of Masan Group Corporation's earnings, according to local media. The group's unlisted subsidiary Masan Consumer, which owns popular brands such as Chin-su and Vinacafe Bien Hoa, made up 43% of its total revenue, compared to of 81% in 2014. Positive performance from landed property in Q2 Landed property saw active performance in both the Ho Chi Minh City and Hanoi markets during the second quarter, according to the latest reports from real estate consultants. There were 820 landed property sales in Ho Chi Minh City, for growth of 81 per cent quarter-on-quarter and 110 per cent year-on-year, according to Savills Vietnam. Historically a townhouse in Ho Chi Minh City was three times more costly than a high-end apartment. This has now fallen to 1.7 times in newly-developed areas and is well within reach for many. Savills Vietnam also forecast that landed property demand in 2016 would be 103 per cent higher year-on-year in Ho Chi Minh City and 88 per cent higher in Hanoi. Compared to regional peers with similar population densities, such as Kuala Lumpur, Bangkok and Jakarta, Ho Chi Minh City and Hanoi’s primary supply of landed housing (less than 10 per cent) is relatively small, leaving ample room for future growth. The local landed property market promotes sustainability due to a healthy purchaser structure, according to Mr. Troy Griffiths, Deputy Managing Director at Savills Vietnam. “End-users account for the majority of purchasers, with speculators less than 10 per cent,” he added. Investors are substantial in the townhouse segment, prompting an expanding rental market in the near future. “Townhouses have outperformed other residential asset classes in investment returns thanks to land value appreciation and stable rentals,” he went on. In this quarter Hanoi’s landed property market saw eight newly-launched projects, including Vinhomes Thang Long, Gamuda Phase 2 (semi-detached villas), FLC Eco House, Park Hill Shophouse, The Boutique Shophouse (Times City), Lucky House, Thanh Ha B and 622 Minh Khai, adding a total of 1,592 units to the market, or equal to the number of new launches in 2015, according to CBRE Vietnam’s second quarter report. New projects are mainly located in districts that are 7-10 km away from Hanoi’s CBD with abundant land banks, such as Ha Dong, Hoai Duc, Long Bien, Tu Liem and Hoang Mai, said Ms. Nguyen Hoai An, Director of CBRE Vietnam. “While a dominant portion of shophouses were reported to launch in Quarter 1, that of villas and terraced houses returned to be recorded in Quarter 2, taking up 89 per cent of new launches,” Ms. An said.   The average secondary price increased 2.9 per cent quarter-on-quarter and 1.7 per cent year-on-year. Core urban districts with completed infrastructure and available amenities such as Cau Giay, Ha Dong and Hoang Mai continued to witness increases of 0.5-6 per cent quarter-on-quarter in secondary price. In the meantime, suburban districts such as Gia Lam, Hoai Duc and Me Linh saw decreases, ranging from 0.4 per cent to 2.7 per cent quarter-on-quarter. In addition, average secondary prices of landed projects in core urban districts were 1.1 to 2 times higher than the primary prices, CBRE Vietnam’s report noted. Meanwhile, thanks to high-end projects that have already been launched in this quarter, average primary prices recorded in suburban districts were much higher than average secondary prices. This is expected to enhance the secondary value of projects in suburban districts in upcoming quarters. Saigon Hi-Tech Park forwards assistances to investors Deputy chairman of the Ho Chi Minh City People’s Committee Le Thanh Liem and leaders of responsible agencies worked with the management board of Saigon Hi-Tech Park to intensify assistances to businesses and investors in the park on Tuesday. The event accorded with Government Resolution 35 as well as instruction by the city People’s Committee to investment projects in the park. According to the board, it has reduced time to do many procedures for investors. For instance, plan certification has been cut half to ten days. Plan licensing reduces from 45 to 30 days, assessment and approval of 1:500 scale plan drops from 40 to 25 days and construction licensing takes only 15 instead of 20 days as before. However, the board cannot shorten other procedures on fire fighting and prevention, environmental impact report and fundamental design evaluation because they come within jurisdiction of other agencies. Therefore, the board proposed the city People’s Committee and related agencies to streamline procedures under their competence. Deputy chairman Le Thanh Liem required the board and the agencies to continue stepping up assistances to investors and accompany them to quickly solve procedures so that they can implement projects as soon as possible. Saigon Hi-Tech Park must become a destination and incubator of hi-tech investors and firms, the deputy chairman added. Garment exporters see drop in orders in first half Vietnamese garment producers have faced a decline in orders and export values in the first half of 2016, causing a worry that the goal of exporting 31 billion USD worth of garment products cannot be achieved. Big firms like Viet Tien, Nha Be, May 10 and even member companies of the State-owned Vietnam National Textile and Garment Group (Vinatex) are no exception. They are struggling to keep themselves busy until the end of this year. According to Tran Van Khang, Director-General of Dong Binh JSC, there has been a lack of export orders since the beginning of the year, triggering stiff competition between domestic manufacturers for customers. Khang said his firm saw a year-on-year drop of 30 percent in the number of orders in the first five months, for which he blamed overstock and falling demand in import markets. In addition to that, export prices have plunged by 10-15 percent while the firm still has to pay wages, insurances and transportation costs, which are on the rise, he added. Phi Viet Trinh, Deputy Director-General of Ho Guom Garment SJC, said the orders the company received from overseas customers fell significantly in March and April, and only started to rebound in June. Several trade deals, including the Trans-Pacific Partnership (TPP) and the Vietnam-EU Free Trade Agreement, have not yet come into effect so that Vietnam’s garment customers could not benefit from any preferential tax regime from those agreements and importers tend to turn to other foreign manufacturers with more tariff advantages. Many traditional customers of Vietnam have shifted their orders to Myanmar, Laos and Cambodia as these countries enjoy reduced import duties from the United States and the EU, the two largest buyers of Vietnamese garments, noted Chairman of the Vietnam Textile and Garment Association (Vitas) Vu Duc Giang. Statistics by the Ministry of Industry and Trade show that the textile and garment industry earned about 8.6 billion USD from exports during the first five months of 2016, an increase of 6.1 percent from the same period last year, largely thanks to exports by foreign direct investment (FDI) enterprises. However, Vinatex, who contributes about 4 billion USD to the annual export revenue of the sector, forecast that the entire industry could only fulfill 93.6 percent, or 29.5 billion USD, of the export goal. Experts recommend that apparel producers can boost orders and make the most of the FTAs by focusing on improving productivity and strictly following the pacts’ rules of origin. It is vital for them to cooperate with each other to invest or draw foreign investment in developing domestic sources of materials and cut export middlemen. Foreign investment into mechanical engineering expected to surge Foreign capital inflow to Vietnam, especially to the mechanical engineering industry is expected to surge in the upcoming times. The remark was heard at a sideline press conference of the MTA 2016, an international precision engineering, machine tools and metal working exhibition and conference, opened in southern Ho Chi Minh City on July 5. Head of the Republic of Korea International Trade Association’s Ho Chi Minh City rep. office Ko Hyun Kim said in the first six months of this year, his country was Vietnam’s biggest investor with a total investment capital of 3.99 billion USD, accounting for more than 35 percent of the total foreign investment to Vietnam. The RoK’s enterprises in precision engineering, machine tools and metal working have actively approached the Southeast Asian market with a series of products and advanced technologies, he added. Head of the Japan External Trade Organisation representative office in Ho Chi Minh City Takimoto Koji said Japan is one of the countries which have high experience and technology in the area and the application of Japan’s advanced products will help to enhance the development of the supporting industry in the two countries. Several conglomerates have invested in Vietnam in the past years, however, Japan ’s investment waves will continue to flow to the country through small and medium enterprises (SMEs). Tran Viet Dung, Deputy Director of the Vietnam Chamber of Commerce and Industry Exhibition Service Ltd acknowledged that the mechanical engineering sector is experiencing strong growth. The fast growing economy in tandem with abundant manpower will help Vietnam attract more foreign direct investment flows. However, he also stressed that local enterprises in the area should take the initiative in investing in machinery and technology in order to improve productivity, competitiveness and the production chain in the industrial sector. Vietnamese businesses look to expand investment in Japan Vietnamese businesses have invested 7 million USD in approximately 40 projects in Japan, as heard at a conference held on July 5 to further promote the investment. According to Do Nhat Hoang, head of the Foreign Investment Agency, Japan is ranked 45 th out of 68 countries and territories in which Vietnamese investors run their business. Most of the Vietnamese investment has been channeled into IT projects in Japan catering to high local demand, Hoang said, adding that the sector brings in healthy added value while enabling Vietnamese companies and engineers to learn from Japanese advanced technologies. He stated his agency is committed to optimising administrative procedures to encourage Vietnamese businesses to invest overseas. Vice Chairman of the Japan External Trade Organisation (JETRO) Shigeki Maeda also endorsed Vietnamese investment in the IT sector in Japan. He said Japan is implementing a programme on training 10,000 Asian IT engineers, which is a good opportunity for Vietnamese enterprises and engineers. The Japanese Government is reforming the local business climate in a bid to assist foreign investors, he noted. In 2003, the Vietnam Business Association in Japan was established to support Vietnamese companies wanting to invest in the market. Vietnamese firms have so far invested about nine billion USD in more than 1,000 overseas projects. Agreements facilitate Vietnam-Laos trade Businesses from Vietnam and Laos have been provided with the contents of a trade agreement and a border trade agreement signed by the two countries. Speaking at a conference aiming to disseminate the two deals in the Lao central province of Savannakhet on July 5, Vietnamese Deputy Minister of Industry and Trade Nguyen Cam Tu said the trade agreement was signed in March 2015 to replace an outdated pact reached in 1998. The two countries signed the border trade agreement in June 2015, under which they promised to grant special preferences to each other, he added. The official noted his hope that the conference will help Vietnamese and Lao enterprises access business opportunities in their respective countries and map out future operation strategies. The Vietnamese and Lao Ministries of Industry and Trade always stay ready to accompany the two countries’ firms in order to elevate trade and investment ties on par with the fruitful bilateral political links, Tu affirmed. The participating businesses also raised questions regarding the two trade deals, which were promptly responded to by the two ministries’ officials. Phan Thanh Thu, Director of Vietnam’s Hoang Anh Gia Lai Group in the Lao central province of Attapeu, told a Vietnam News Agency correspondent that the two agreements have created a momentum for the two countries’ enterprises to move forward. Kaseumsack Keosayavong, Chairman of Laos’ multi-sectoral Chaleunsap Group based in the Lao central province of Bolikhasay, said the deals, especially the free trade agreement, will help facilitate the trading of goods via the common border line between the two countries, thus benefiting their businesses. He noted that the exemption of export-import tax imposed on farm produce in Vietnam will enable his group to increase its presence in the neighbouring country. The conference was held by the Vietnamese and Lao Ministries of Industry and Trade in conjunction with the Vietnamese Consulate General in Savannakhet province. Local enterprises upbeat about business production in H2 Most of the local processing and manufacturing enterprises feel more upbeat about their business prospects in the second half of the year, according to a recent survey by the General Statistics Office (GSO). The GSO’s statistics revealed that 55.4 percent of local enterprises expect a surge in production, 35.3 percent expect things to remain stable and only 9.3 percent anticipate their production to dip in the six-month period ending in December. Business looks more promising in the third quarter from the previous quarter as evaluated by 47.7 percent of enterprises in the processing and manufacturing sector. About 39.1 percent believe it would be unwavering and 13.2 percent think there would be difficulties. As much as 48.5 percent of businesses surveyed expect more orders to come in the July-December period, while 42 percent said it would remain stable. Only 9.5 percent were pessimistic about fewer orders for the second half of the year. About 38.2 percent, 12.1 percent and 49.7 percent of the businesses predicted export orders to increase, dwindle or remain steadfast in the third quarter, respectively. Regarding employment, the survey indicated that 26.5 percent of firms planned to hire more workers, with 66.5 percent expecting their head-count to remain stable in the period. According to the GSO, 55.6 percent of correspondents foresaw their inventories of finished products to be stable, 29.7 percent predicted reduction and 14.7 percent projected their goods in stock to grow. Total revenue from retail and service sales in the first six months of this year was estimated at 1,724 trillion VND (76.2 billion USD), a year-on-year increase of 9.5 percent. Robust growth in revenue was seen in Binh Duong, Nam Dinh, Thanh Hoa, Khanh Hoa, Quang Nam, An Giang and Bac Giang provinces and Hai Phong city, the GSO said. Precision engineering exhibition opens in HCM City As many as 416 enterprises from 24 countries and territories worldwide, are displaying technologies, products and machines in the precision mechanical sector at an exhibition which opened in Ho Chi Minh City on July 5 . BT Tee from the Singapore Exhibition Services company said the International Precision Engineering, Machine Tools & Metalworking Exhibition (MTA Vietnam 2016) has attracted a greater number of businesses compared to previous events, especially foreign companies (accounting for 76 percent of the total). It helps enterprises promote products, boost trade connectivity and seek potential customers, he stressed. According to the Taiwan External Trade Development Council (TAITRA), up to 50 Taiwanese businesses are participating in MTA Vietnam 2016, including many prestigious brands such as Awea Mechatronics, Hosea and Hannsa Precision Mechanics, and City Tools. In recent years, Taiwan’s mechanics firms and suppliers have seen Vietnam as an attractive investment destination, Director of TAITRA’s representative office in HCM City Tang Ming Hui said, adding that the event offers a good chance for Taiwanese companies to enquire about the Vietnamese market and expand their business in the country. Tran Viet Dung from the Vietnam Chamber of Commerce and Industry highlighted the significance of the event, saying that it has become a trustworthy venue for domestic and foreign enterprises to introduce competitive solutions in the mechanical and manufacturing industry, thus enhancing links in the field. It also plays an important role in supporting and promoting the development of the sector, helping businesses easily select equipment and technologies to improve their production, he said. This year’s event will last until July 8. Foreign investors interested in property M&As in Vietnam Merger & acquisition (M&A) activities are attractive to foreign investors, especially those from Japan, according to a survey conducted by Jones Lang LaSalle Vietnam (JLL Vietnam), one of the foreign real estate services firms in Vietnam. The firm said foreign investors will continue seeking investment opportunities in big cities, citing that the central city of Da Nang is now a preferred destination for property investors as it boasts advantages in infrastructure and environment, and particular products. M&A activities in the sector have been active, especially since the new Law of Real Estate Business took effect last year , according to experts. Marc Townsend, managing director of CBRE Vietnam, said successful M&A activities bring great benefits to both buyers and sellers. It is necessary to have precise and transparent information in order to get M&A activities’ benefits, he said. Foreign direct investment (FDI) in the real estate sector ranked second in Vietnam with 25 newly-licensed projects valued at 634 million USD. The real estate FDI accounts for 5 percent of the total FDI capital in the country, mainly from the Republic of Korea, Singapore and Japan. Insurers optimistic on growth prospects for rest of 2016 Insurers have expressed optimism over the country's insurance sector for 2016 thanks to strong results last year, according to Viet Nam Report (VNR). The company has announced its survey results together with a list of the top five prestigious life insurance companies and the top 10 prestigious non-life insurance companies. Statistics from the Finance Ministry's Insurance Supervisory Authority showed that the country's total premium income climbed by 21.4 per cent from the previous year to reach VND68 trillion (US$3 billion), while total assets grew by 21.7 per cent to VND201 trillion. The non-life segment led sales, accounting for more than 45 per cent of the total and up 14 per cent on 2014. Premium income in the life segment, meanwhile, rose by 29.5 per cent, marking the segment's fastest rate of growth in a decade. By the end of 2015, the total premium income accounted for 2 per cent of the country's GDP. This has been a good sign for the sector as well as a foundation for its development in coming years. VNR said potential for the insurance sector's development is strong. However, each insurer should be transparent about customers' rights, benefits and duties in joining insurance contracts to avoid losses. The company's survey also revealed that most customers often chose insurers that have strong financial capacity, good business results, a high and stable premium and large capital and market share. These factors are considered part of the guarantee of payment for insurance contracts. In addition, customers also pay attention to feedback on the insurer from their friends, the media and the Internet. This is why insurers should build and properly manage their image in the media as well as improve training and employ high-quality human resources. Notably, four out of the top five life insurers are foreign companies, while the rest have foreign strategic shareholders. VNR said the life market had seen the dominance of experienced foreign companies with senior specialists. Specifically, they can design products that have high expenditures. In addition, life insurance products are often long-term contracts, making it difficult for Vietnamese companies to compete with foreign firms. Top five life insurance companies in 2016: 1. Bao Viet Life 2. Prudential Viet Aam Assurance Private Limited 3. Dai-ichi Life Insurance of Viet Nam Ltd 4. AIA (Viet Nam) Life Insurance Company Limited 5. Chubb Life Insurance Viet Nam Company Limited Top 10 non-life insurance companies in 2016: 1. Bao Viet Insurance 2. PVI Insurance Corporation 3. Post & telecommunication Joint Stock Insurance Corporation 4. Petrolimex Insurance Corporation 5. BIDV Insurance Corporation 6. Bao Minh Insurance Corporation 7. Military Insurance Corporation 8. Agriculture Bank Insurance Joint Stock Corporation 9. Bao Long Insurance Corporation 10. Insurance Limited Company of Viet Nam Joint Stock Commercial Bank for Industry and Trade German tech meets VN textiles More than 600 business representatives and experts from Viet Nam's textile and support industries were introduced yesterday in Ha Noi to Germany's latest textile and apparel technologies. The event, held by the by the VDMA Textile Machinery Association, supported by the Viet Nam Textile and Apparel Association (VITAS), provided an opportunity for companies to make contact, exchange information and establish a mutually beneficial co-operation, said Truong Van Cam, VITAS deputy chairman. German machinery is of high quality although its cost is high, said Cam. "However, if Vietnamese textile enterprises want to develop modern technology, they should co-operate with high-technology providers to catch up with global quality and labour productivity," he added. The deputy chairman also said that a considerable proportion of technologies in Viet Nam's textile and apparel industry needed to be replaced to improve quality, especially those supplying cloth for export garment-making. "Due to the recently signed Trans-Pacific Partnership (TPP), Viet Nam is increasingly becoming a much preferred textile manufacturing location by companies worldwide," explains Thomas Waldmann, managing director of the VDMA Textile Machinery Association. TPP will reduce 18,000 tariffs. Viet Nam is almost a sole supplier of textiles among the TPP member countries and an important supplier of textiles and garment to big consumer markets like the US. Textile and garment exports from Viet Nam to TPP markets are expected to grow by more than 10 percent this year. "Viet Nam is a very important market in the area of textile, there is a need for Vietnamese textile industry to invest to modernise the technology and machinery. German companies and VMAD member companies are leading in this area, and that is the reason we are here," said Boris Abadjieff, director of Exhibition and Export Marketing under the VDMA. Phi Ngoc Trinh, deputy director of the Ho Guom Garment JSC, said the forum was a good opportunity for Vietnamese businesses as the country was integrating further and deeper into global markets with many trade agreements, including TPP, as well as the Viet Nam-EU free trade agreement. The VDMA Textile Machinery Association groups 130 companies manufacturing textile machines and equipment with a value of 3.1 billion EUR (US$3.46 billion) in 2015. A similar event will be held in HCM City tomorrow. Viet Nam, Cuba join hands to produce construction materials The Viet Nam Glass and Ceramics for Construction Corporation (Viglacera) and Cuba's Geicons Group are set to establish a joint venture producing ceramics sanitary wares and tiles in October. According to Viglacera, the two sides signed an agreement on the joint venture in April. The joint venture, once established, will contribute to meeting the demand on construction materials in Cuba as well as the Latin American market. Viet Nam is the second biggest trade partner of Cuba in Asia, with bilateral trade value exceeding US$207 million in 2014, according to the General Department of Viet Nam Customs. Viet Nam's major exports to Cuba include rice, coal, chemicals, textiles and computers; while Cuba exports pharmaceuticals to Viet Nam, worth nearly $1.3 million. According to the Ministry of Planning and Investment, as of December 2015, there was one Cuban project operating in Viet Nam with a registered capital of $6.6 million. Viet Nam also had one oil project in Cuba. Vietnamese firms urged to invest in Japan Vietnamese firms should seek more investment opportunities in Japan, especially in the information and technology (IT) sector, said Shigeki Maeda, vice president of the Japan External Trade Organisation, during a conference held yesterday in the capital. After investing successfully in Japan's IT sector, Vietnamese companies could then expand their investment in other potential markets worldwide, the vice chairman said. The Japanese Government has made great efforts to attract foreign investors, he said, adding that his organisation has also established a consultancy centre to help foreign enterprises navigate the administrative procedures of investing in Japan, he noted. Do Nhat Hoang, head of the Ministry of Planning and Investment's Foreign Investment Agency, said Vietnamese firms have so far pumped about US$9 billion into 1,000 overseas projects, mainly in the agriculture, telecommunications and IT industries. In Japan alone, domestic firms had 40 projects worth about $7 million. That helped Japan rank 45th among countries and territories that have seen Vietnamese investment, Hoang said. He vowed that his agency would create the most favourable conditions for local firms to invest abroad, including Japan. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR