BUSINESS IN BRIEF 11/8 Vietnamese consumer confidence dwindles in Quarter II   Vietnam’s consumer confidence index in Quarter II dropped by 2 points from the previous quarter to 107 points, according to the latest Consumer Confidence Index released recently by Nielsen Vietnam, a leading market research company. Despite the fall, Vietnamese consumer confidence is still at a high level, with the country the 7th most optimistic across the world, Nielsen stated. The Vietnamese remain optimistic about the local economy in comparison to other nations, Nguyen Huong Quynh, Managing Director of Nielsen Vietnam said, with the continued growth of the middle class and the Government’s stable economic outlook contributing to the confidence. “Vietnamese consumers pay close attention to what is happening, being easily influenced by word of mouth, social media, etc. This means manufacturers and retailers have to move fast to foresee and address concerns,” Quynh added. The report also revealed that Southeast Asian consumers are still among the most confident worldwide at 113 points. The Philippines hit a new record in Quarter II with 132 points, surpassing India with 119 points. Confidence in Thailand edged down 4 points from the previous quarter to 101 points while that of Malaysia inched up 6 points to 87. Singapore remained stable at 88 points. Consumers in the region are the world’s most avid savers, with 68 percent of those interviewed putting their spare cash into savings. In Vietnam, 76 percent consumers save some of their income, followed by Indonesia (70 percent), the Philippines (65 percent), Malaysia and Singapore (63 percent) and Thailand (62 percent). However, after covering essential living expenses, consumers in Vietnam were also willing spend their savings on big items such as holidays and vacations (41 percent, up 5 percent from last quarter), new clothes (38 percent) and out of home entertainment activities (37 percent). Interest rate lowered by 0.5 percent State-owned commercial banks and a number of commercial joint stock banks lowered annual rates for short-term loans by 0.5 percent in late April in order to remove difficulties facing businesses. They also adjusted the rates for medium and long-term loans for production and business activities to no more than 10 percent per year while offering various preferential programmes, according to the State Bank of Vietnam (SBV). The central bank said thanks to synchronous measures, interest rates have remained stable after increasing by about 0.2-0.3 percent in the first three months of this year. It will keep a close watch on developments of the macro-economy, the monetary market and banking activities while continuing to instruct credit institutions to take measures to balance capital sources, it said.- VND value expected to track yuan Following a meeting of its central bank in late July, the US did not raise interest rates despite painting a rosier economic picture than it did just a month ago. The Federal Open Market Committee kept its overnight interest rate target in the 0.25 percent to 0.5 percent range. The FED’s decision has had a positive impact on the foreign exchange market in Việt Nam. On July 15 the State Bank of Việt Nam quoted a central rate for the đồng of VNĐ21,864 to the US dollar, a decrease of 0.12 per cent since early this year. Thus, unlike in previous years, the đồng has not depreciated against the greenback and in fact has gained. But no one is sure how long this sanguine state of affairs will continue since the global economy is still waiting to see what will come of Britain’s exit from the EU. But what are the possible factors at work? The first is the difference between supply of and demand for the greenback. Demand for the dollar has recently been rising and is likely to continue going up in the coming months since the central bank has again allowed exporters to borrow foreign currency from June 1 after a two-month ban. Besides, the year-end is the peak business season as companies prepare for the Lunar New Year early in the new year. But the supply of foreign currencies, especially the greenback, has showed signs of declining because many people have been shifting out of the dollar and to the đồng since the central bank decided that the interest rate on dollar deposits would be zero. Analysts said the forex rate would possibly be affected by the central bank’s policies to regulate money supply if it finds it necessary. It would also be impacted if banks switch to buying foreign currencies fearing the economy’s ability to absorb capital flows has weakened and profits that the lenders expects to earn from government bonds become lower However, this possibility seems not easy to happen since the country’s foreign exchange reserve was enriched by US$8 billion since the beginning of the year. The third and most important factor is the movement of the Chinese yuan. China is Việt Nam’s biggest trade partner with the two countries’ trade topping $95.8 billion last year, or equivalent to a full third of Việt Nam’s total foreign trade. Because of this, any fluctuation in the yuan will directly affect the đồng’s competitiveness, an especially important factor since the two countries export similar products to major markets like the US and EU. This year, while the đồng has appreciated, the Chinese Government has weakened the yuan by 2.8 per cent. This has made Vietnamese goods less competitive than Chinese ones. Clearly, the movement of the yuan will be the main factor in deciding where the đồng goes. But the central bank has plenty of experience in handling exchange rate volatility and can be expected to keep things under control. Deposit rates up, lending rates steady Hoàng Thị Ngọc Thanh of HCM City’s Tân Bình District said she wants to borrow money from a bank to buy an apartment worth around VNĐ1 billion (US$44,444), but is afraid loan interest rates will rise since deposit interest rates have been going up. At VietCapital Bank, the highest interest rate on deposits is now 7.7 per cent after the lender recently made hikes of 0.1-0.2 per cent on normal deposits and 0.05-0.3 per cent on online deposits. VPBank also recently adjusted its interest rates for individual customers, hiking them by 0.2-0.3 per cent for deposits of from five to 12 months. The highest rate now is 7.4 per cent for 36 months. Some analysts have predicted banks will continue to increase deposit interest rates, meaning the chances of lending interest rates remaining stable are slim. There have already been some minor adjustments, particularly for individual customers. Meanwhile, the Government wants rates to be cut. Many analysts felt that while it would be difficult to do that, rates are likely to remain steady at least until year-end. This is because while inflation is predicted to be higher than last year, it will remain at acceptable levels, while competition in the credit market is getting fierce and banks will find it hard to increase lending rates. Seminar promotes Vietnam – Argentina trade Lanus district in Argentina's Buenos Aires province wants to boost trade and economic ties with Viet Nam, the district's Secretary of Economic Development Oscar Jofre said at a local seminar on August 5.  The event, jointly organised by the Embassy of Viet Nam in Argentina and the Argentina - Viet Nam Cultural Institute (ICAV), attracted a crowd of Argentinean businesses. Oscar Jofre said Lanus wants to import consumer goods, such as electronics and garments from Viet Nam while it can sell leather and leather products and automobile spare parts to the Southeast Asian country. Meanwhile, Nguyen Thi Thanh Van, Vietnamese Commercial Attaché in Argentina updated the local business community on Viet Nam's economic development and potential for trade exchange. According to Argentinean Customs, in the first five months this year, the trade value between the two nations reached US$1.27 billion, a 32 percent year-on-year increase. Viet Nam's exports to Argentina were valued at $355 million, doubling the same period last year, while Argentina's exports to Viet Nam stood at $918 million, up 8 percent. ICAV Director Poldi Sosa noted the opportunities in tourism co-operation between the two countries, adding that around 10,000 Argentinean tourists visit Viet Nam each year. Numerous documents featuring Viet Nam's landscapes and tourism were delivered to participants during the event.  VietinBank to divest from Saigon Port The Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) will fully divest from Saigon Port and Hai Phong Port. VietinBank currently owns more than 19.6 million shares (9.07 per cent) of Saigon Port and nearly seven million shares of Hai Phong Port. The 2016 annual general meeting of Saigon Port has approved full divestment of two strategic shareholders, VietinBank and VPBank, from Saigon Port. VPBank owns 16.09 million shares (7.44 per cent) of Saigon Port. VietinBank's divestment is aimed at meeting the State Bank of Vietnam's requirement of retrieving the investment capital. The HCM City-based Saigon Port, which has a total asset value of roughly VND3.95 trillion (US$176 million), operates important ports in the country's southern region, such as Nha Rong, Khanh Hoi, Tan Thuan I and Tan Thuan II, besides Phu My Steel Port. Hai Phong Port, located in the northern city of Hai Phong, is one of the largest ports in that region.  Mitsubishi launches new Outlander in Viet Nam Mitsubishi Motors Viet Nam has launched the all-new Outlander, the first model to use the new Dynamic Shield design concept. This is considered to be the first step taken by Mitsubishi to reaffirm their long-term commitment to the Vietnamese market, after renaming Vina Star Motors as Mitsubishi Motors Vietnam (MMV) and increasing the shareholding from 50 per cent to 82 per cent. In Viet Nam, the all-new Outlander is the first CUV in the segment to fully be imported from Japan. Manufactured in Okazaki, one of the main factories of MMC and from there, exported to markets across the world, the vehicle is of high quality, thanks to MMC's automated production lines that follow Japan's strict standards. With an impressive look, spacious compartments, comfortable interiors and convenient and superior performance, the new Outlander is expected to be the leader in this segment in Viet Nam.  Chinese car-hailing app to rival Grab, Uber in Vietnam Didi Chuxing Technology, a homegrown car-hailing app from China, is expected to expand to Vietnam soon after receiving more than US$7 billion in its latest fundraising round, said VnExpress. Didi Chuxing Technology Vietnam JSC, which was only established a month ago, is in the process of seeking approval for a car-hailing app similar to Uber and Grab in the Southeast Asian nation. The app is expected to start a pilot program in September once local authorities give the nod, the source said. Car owners will not be charged any registration fee when they sign up with Didi Chuxing Technology Vietnam JSC. Similar to Grab and Uber, there will be no metering, radios or company name on Didi’s cars, and no set hours for drivers, a senior official from the company said, adding that the company will also connect with customers through Zalo, Wechat and Facebook. Didi said in June it raised US$7.3 billion in its latest round of funding, including US$1 billion from Apple, as it battles to fend off Uber's march into China, Reuters reported. After a bruising two-year battle, ride-hailing firm Uber is giving up its China operations to bigger local rival Didi Chuxing in an exchange that will give Uber a one-fifth stake in Didi, Reuters reported on August 1. The merged entity is worth around US$35 billion - combining Didi's most recent US$28 billion valuation and Uber China's US$7 billion, Reuters quoted a source familiar with the matter who did not want to be named before the deal was made public. Car-booking apps-Grab and Uber have been operational in Vietnam since 2014 and are both increasingly favored by local passengers, providing fierce competitors for Vietnam’s traditional taxis. While Grab was licensed by Vietnam’s Ministry of Transport in March this year, Uber is still not legally recognized due to several unsettled issues, including taxes. Reviewing the Enterprise Law and Investment Law after one year Nearly 106,000 enterprises have been established and some 3,500 ineffective business regulations have been eliminated since the revised enterprise and investment laws went into force on July 1 last year. But there remain obstacles to implementing these laws. The government, ministries, and concerned agencies are finding ways to resolve the problems.  Statistics released by the Business Registration Management Agency of the Ministry of Planning and Investment reveal that since the revised enterprise and investment laws took effect, nearly 106,000 enterprises have been established with a total registered capital of more than US$34 billion, up from the previous year.   The exchange of information between the national business registration portal and the tax information system has reduced the time needed to register a new business from five working days to three. With no requirement to declare business lines on the business registration certificate, enterprises now have the right to do business in any line not prohibited by law.  Eliminating the investment registration certificate for domestic businesses has reduced registration costs, increased flexibility for businesses, and made it easier for foreign investors to invest in Vietnam. Do Nhat Hoang, Director of the Foreign Investment Department, said, “The entire political system has made a joint effort to improve the business and investment environment by streamlining the legal system and offering more open policies to encourage investment and trading. Vietnam has also shown a determination to enforce the law in a way more favorable and inviting to investors.” Thanks to big improvements in the business environment and amendments to enterprise and investment laws, Vietnam moved up 3 places last year in the World Bank’s global rankings for ease of doing business. The Vietnam Provincial Competitiveness Index 2015 report recorded the biggest breakthrough in the past 11 years in the number of newly registered businesses. Despite the achievements so far, implementing the two laws has met with several problems, according to Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry. He explained, “After reviewing the two laws and collecting opinions from enterprises, we find a number of problems. Some of the list of 267 conditional business lines can be removed. We’ll ask the government and the National Assembly to amend several laws including the enterprise and investment laws to ensure legal consistency, an optimal business environment, and the right of citizens and enterprises to freely conduct any business activity.” Phan Duc Hieu, Deputy Director of the Central Economic Study and Management Institute, said, “In this review, the government has directed the Ministry of Planning and Investment to revise existing laws while keeping the same positive changes in the two newly revised laws to reduce overlaps." "The two newly revised laws should be implemented and all inappropriate rules and regulations that are contrary to the Law on Investment or the Law on Enterprises should be eliminated or revised to create a more favorable business environment. In this tenure the National Assembly should review all 267 conditional business lines and remove any unnecessary lines,” he said. Developing a key economic region in central Vietnam Leaders of Thua Thien-Hue, Quang Nam, Quang Ngai, Binh Dinh province, and Danang city have met to discuss regional development for the first time following the government’s decision in 2015 to set up the Central Vietnam Key Economic Regional Council. The leaders discussed ways to promote regional links and mechanisms to spur economic growth in central Vietnam. The Central Vietnam Key Economic Region, which was set up in 2008, covers Thua Thien-Hue, Quang Nam, Quang Ngai, and Binh Dinh province, and Danang city.  The region has 4 nuclear economic zones including Chan May-Lang Co, Chu Lai, Dung Quat, and Nhon Hoi, and 7 major urban areas - Hue, Danang, Hoi An, Tam ky, Van Tuong, Quang Ngai, and Quy Nhon.  After 8 years, the average GDP growth of the region has reached 9.4%, higher than the national growth of 5.9%.  The region is focusing on developing industries, services, and construction. Its competitiveness has improved remarkably. In the Central Vietnam Economic Region, Danang city and Quang Nam province have the highest competitiveness. The economic growth of localities in the region has not matched with their potential.  Tran Du Lich, Head of the Consultant Group for the region, said the region needs an economic space zoning program. The government has put in place a number of specific policies to help the region mobilize more resources. Doctor Tran Du Lich said, “We need to prioritize the whole region’s interests. For example, if we want to introduce the region’s tourist potential, we need to introduce the whole region, not just one location. We should do the same in attracting investment. It’s also important to increase links between localities in human resource training to create a common labor market for the region. With 4 economic zones and a series of industrial clusters and a location in the West-East Economic Corridor, the region enjoys strong advantages in investment attraction.  Localities in the region are urged to increase links to improve their competitiveness. Phan Cao Thang, Vice Chairman of the Binh Dinh Provincial People’s Committee, said, “We need to increase links, especially in infrastructure development, to build an express way from Hue to Qui Nhon. All localities have sea ports, coastal roads, and air ports. We need to connect them. The government also needs to put in place more specific policies for the region”. By 2020, the region plans to achieve an annual GDP growth rate of 9% and contribute 7.5% of the national GDP.  Localities in the region have implemented a number of measures to promote the development of high-tech industries and services with high added values. Huynh Duc Tho, Chairman of the Danang Municipal People’s Committee and Head of the Council for Central Vietnam Key Economic Region, said, “Our provinces need to focus on developing a unified economic development space. We need to set up an organization that connects central coastal provinces, and increase cooperation in infrastructure, socio-economic, and tourism development, marine exploitation, and human resource training”. The Central Vietnam Key Economic Region plays an important role in national socio-economic development. Over the past few years, this economic region has proved its dynamism and effectiveness. Ninh Thuan calling for investment The Ninh Thuan Provincial People’s Committee has recently approved a range of projects that are seeking to attract investment during the 2016-2020 period. Provincial authorities will hold an investment promotion conference on August 14 in coordination with the Ministry of Planning and Investment and the Ministry of Foreign Affairs and will release the official list of projects. Ms. Le Thi Kim Phuong, Head of Development Assistance at the Ninh Thuan Economic Development Office (EDO), sent the list of 57 projects to VET. It includes 13 projects in the tourism sector, with a luxury resort project along the south coastal road (Mui Dinh - Ca Na) being the most prominent. The project requires capital of VND1 trillion ($45.4 million) and covers an area of 214.5 ha. The second most notable project is the Nam Cuong sports resort, which features a resort combined with sporting and entertainment activities and requires capital of $31.8 million. Other projects on the list are in principle economic fields and advantageous sectors, including services, hospitality, real estate, agriculture, industrial engineering, and energy. Some are large, such as the Ninh Chu Seaport with total investment capital of $120 million and the Phuoc Dan wind power plant with $59 million. Ninh Thuan has a total area of 3,360 sq km and a population of 588,000 and is 350 km from Ho Chi Minh City, 60 km from Cam Ranh International Airport, 105 km from the beach city of Nha Trang, and 110 km from Da Lat. As at the end of 2015 Ninh Thuan had 34 registered FDI projects with total investment capital of about $950 million, while FDI stood at $1 billion in 37 projects as at the end of July 2016, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment (MPI). It has also completed calling for investment in other tourism projects, including the Dinh Cape ecological - adventure tourism area, with capital of $227 million, the Nam Cuong sand hill tourism area with estimated capital of $136.3 million, and the Sat River cultural and eco-tourism resort, with capital of $20.4 million. TPBank to increase charter capital by 5.2% TPBank has received approval from the State Bank of Vietnam (SBV) to increase its charter capital to VND5.84 trillion ($261.86 million) from VND5.55 trillion ($248.86 million). The 5.2 per cent increase was approved at the bank’s 2016 annual general meeting (AGM) in April. While a representative from the bank preferred not to elaborate on what the bank will do with the additional capital the statement from its AGM noted that “TPBank will issue shares to the International Finance Corporation (IFC).” According to a resolution from the AGM, some 29.2 million additional shares, with a dividend of 8.5 per cent per annum, will be issued to the IFC, the World Bank’s private arm. These additional shares can be convertible to normal shares after five years and returnable in three years. In mid-April the IFC increased its credit line to TPBank from $10 million to $30 million for financial support to small and medium-sized enterprises (SMEs). TPBank aims to have total assets of VND91 trillion ($4.08 billion) this year, an increase of 20 per cent from 2015’s VND76.2 trillion ($3.41 billion). It also targets increasing its total mobilized capital by 23 per cent to VND84.5 trillion ($3.78 billion), against VND68.9 trillion ($3.08 billion) last year. Total deposits are to rise by 62 per cent to VND63.8 trillion ($2.86 billion), from VND39.5 trillion ($1.77 billion) in 2015. In the first quarter TPBank’s total assets were reported at VND73.59 trillion ($3.29 billion), down 3 per cent since December 31, 2015. Pre-tax profit was VND93.03 billion ($4.17 million), 30 per cent less year-on-year. Operational costs in the first quarter were VND239.30 billion ($10.73 million), 37 per cent higher year-on-year. Its risk provision was also higher, at VND73.73 billion ($3.3 million), a three-fold increase year-on-year. The bank’s website lists five shareholders: DOJI Gold and Gems Group, FPT Corporation, MobiFone, Vietnam National Reinsurance Corporation (Vinare), and Singapore’s SBI Ven Holding Pte. Ltd. Mr. Do Minh Phu, Chairman of DOJI Gold and Gems Group, is currently the Chairman of TPBank. Hoa Binh to become national tourism zone by 2020 The Hoa Binh tourism zone in northern mountainous Hoa Binh province will have basically met the criteria to become a national tourism zone by 2020 according to plan to develop the province into a national tourism zone by 2030, which was recently approved by the Prime Minister. Hoa Binh tourism zone is expected to become the largest tourism zone in Hoa Binh province and one of 12 key national tourism zones in northern mountainous areas, with special tourism products including experiencing the culture of the ethnic Muong minority and sightseeing around Hoa Binh Lake. The zone straddles four districts: Da Bac, Cao Phong, Tan Lac, and Mai Chau. The core area, excluding water areas and focused on developing tourism, is 1,200 ha. The zone is expected to welcome 630,000 visitors, including 30,000 international visitors, by 2020. By 2030 it will welcome around 1.6 million visitors, of which 90,000 are international visitors. Total revenue from tourism by 2020 is to be VND200 billion ($8.9 million) and VND1.8 trillion ($80.6 million) by 2030. The province will concentrate on domestic visitors from Hanoi and cities and provinces in the Red River Delta, especially weekend holidaymakers. Internationally, its priority is traditional markets for Vietnam such as France, South Korea, Japan, and Australia. It will then bolster promotions to attract tourists from other western European countries, the US, and Southeast Asia. Tourism products include sightseeing on the lake, experiencing the history and culture of local ethnic minorities, and visiting the Hoa Binh hydropower plant. The province also grows agricultural products and local specialties such as Tan Lac jackfruit, Cao Phong oranges, Mai Chau sweet potatoes, and rice and bamboo. The tourism zone is estimated to have 800 rooms by 2030, including 160 in hotels. Homestays in villages are being prioritized. Luxury hotels and resorts are also planned in Ngoi Hoa commune, Tan Lac district. Culinary tourism, including traditional dishes of local ethnic minorities, will not only be found in high-class restaurants but also at food markets and street eateries. The gross regional domestic product (GRDP) of Hoa Binh province records the slowest growth among cities and provinces nearby Hanoi, ranking 38th out of the country’s 63 cities and provinces. Its GRDP ranks 40th out of 63 cities and provinces, and it is ranked eleventh in the number of poor households. In the 2016-2020 period Hoa Binh targets to record economic growth of 8.5 to 9 per cent. The capital needed for socioeconomic development is equal to 35 per cent of its GRDP. By 2020 average annual incomes will be from VND60 million ($2,689) to VND65 million ($2,913). The province is also trying to improve its business environment and ranking in the provincial competitive index (PCI) from 46th out of 63 cities and provinces in 2015 to between 30th and 40th by 2020.   Ports intent on logistics The southern province of Ba Ria-Vung Tau is striving to become an international logistics hub - manned by world-class logistics services centres. Seated on international marine routes, Ba Ria-Vung Tau has favourable conditions to develop seaports, port services, and a logistics sector that can handle increased shipping traffic. In light of expansion in trade and logistics services, Ba Ria-Vung Tau considers logistics to be a key industry for the years to come. The province currently has 57 planned seaports - including 28 ports in use - with the registered investment capital totalled $2 billion, and an annual capacity of 98.9 million tonnes. In the Cai Mep-Thi Vai port complex, there are 35 port projects, of which 17 are operational, with a total annual capacity of 93 million tonnes, according to the provincial people’s committee. In the last five years, the Cai Mep-Thi Vai port complex has attracted a higher number of large container vessels. Goods exported from Cai Mep-Thi Vai ports are shipped directly to the United States, Europe and to other countries and territories around the world via transit ports. The complex handles 20 turn-arounds of 80,000 deadweight tonnes (DWT) vessels weekly, including an average of two vessels with loading capacities of 160,000DWT. Most of the container terminals at Cai Mep-Thi Vai have the investment capital of over VND27 trillion ($1.21 billion) each, with annual loading capacities of 6.8 million twenty-foot equivalent units (TEU). Despite modern seaport systems, the cargo volume through the provincial ports has increased 16 per cent annually over the past five years. The local authorities said that they had not made the most efficient use of Cai Mep-Thi Vai mainly because of insufficient roads inside the port complex. Road 965 is the only route that connects to National Highway 51, and to roads leading to industrial parks near the complex. To spur infrastructure development, Ba Ria-Vung Tau is seeking capital resources to construct Phuoc Hoa-Cai Mep road, new 991B road, as well as inter-port roads leading to Ben Luc-Long Thanh expressway and Nhon Trach industrial park of the neighbouring Dong Nai province. Construction of other routes, such as railways and Bien Hoa-Vung Tau expressway, are being fast-tracked to connect Cai Mep-Thi Vai with several neighbouring provinces. In a recent meeting with the province’s leaders, Deputy Prime Minister Trinh Dinh Dung emphasised the significance of Cai Mep-Thi Vai to Vietnam’s socio-economic development. He urged the Ministry of Transport and Ba Ria-Vung Tau to boost activities in Cai Mep-Thi Vai, by overcoming limitations of zoning, connectivity, and transport infrastructure. “Cai Mep-Thi Vai now handles vessels of up to 160,000DWT, so it has great potential to become a competitive international freight transit centre. To reach the target, the province needs to rev up efforts to enhance logistics services without delays at the port,” Dung stressed. Since the effectiveness of the port remains low, Ba Ria-Vung Tau is mobilising all necessary resources to stimulate the logistics hub’s development. The province is calling for investment in logistics and warehouse planning, completing infrastructural development, and improving customs procedures at Cai Mep-Thi Vai. In addition, Ba Ria-Vung Tau is proritising the development of the 800 hectare Cai Mep Ha logistics service centre, which boasts a deep seaport with an area of about 100 hectares and a berth length of 1,800 metres. The specialised logistics centre will receive vessels of above 100,000DWT. The province is holding a contest to find ideas for a 1/200-scale zoning plan for the Cai Mep Ha logistics centre. As outlined in a master zoning plan for south-east seaport development through 2020 with a vision towards 2030, Ba Ria-Vung Tau will be home to the national seaport complex and international gateway port. The output of cargo through the local ports is expected to reach around 101.6 million tonnes per year by 2020, and hit 133.2 million tonnes per year by 2025. Con Dao set to be tourism hotspot The Con Dao island, off the southern province of Ba Ria-Vung Tau, is poised to become a magnet for tourists and investors since being listed among Lonely Planet’s Top 10 places to visit in Asia in 2016. The island is situated off the south-east coast of Vietnam, comprised of 16 islets. It has a total land area of about 75 square kilometres. Con Dao has great potential for tourism development, with 200 kilometres of coastline and dozens of beautiful beaches, pure blue water, and colourful coral reefs. “The island’s appeal encompasses coral gardens that offer Vietnam’s best diving, rewarding hikes in wildlife-rich tropical forests, and a coastline studded with gorgeous white-sand coves,” Lonely Planet has written. In addition, Con Dao is rife with historical and cultural sites. The island used to house a notorious prison under the French colonial rule. The island is now home to the site of the historic prison, thousands of graves of revolutionary soldiers, a national park, festivals, and other cultural heritage sites. Nguyen Thanh Chinh, Chairman of the Con Dao People’s Committee, said that Con Dao welcomed over 440,000 tourists between 2010 and 2015, of whom 87,000 were foreigners, with an average increase of 21.1 per cent per annum. Tourism turnover reached VND1.37 trillion ($61.44 million), an average rise of 45 per cent per year. To serve the rising tourist number, many resorts have been developed on the island, such as Six Senses Con Dao, Con Dao Residences, Con Dao Resort, Viet Nga Resort, and Saigon-Con Dao Hotel. Under the master plan to develop Con Dao into a tourism hotspot by 2030, the island will become an ecological, cultural, and historical tourist destination of regional and international stature. By 2030, the plan aims to attract more than 300,000 tourists annually, of whom international tourists should account for 20 per cent. To fulfil this target, the local authorities will focus on attracting domestic tourists from big cities, and foreign tourists from Japan, China, Korea, Canada, Australia, and New Zealand. The tourism sector in Con Dao has so far only focused on ocean trips, prison visits, shopping at local markets, and cycling around the islets. The local leaders intend to diversify these offerings with more ecotourism, beach resorts, and natural and cultural heritage sites. They are also planning to organise tours connecting the main island to nearby sites, in conjunction with tours linking Con Dao to other cities and provinces nationwide. Con Dao is now striving to develop its infrastructure, reservoirs, drainage systems, and electricity networks. To attract more investment capital, in 2013 the government approved preferential measures for Con Dao. The corporate income tax rate  for businesses on the island was reduced to 10 per cent, while the personal income tax rate was slashed by 50 per cent, and value added tax was completely cut for basic investment and construction. Chinh told VIR that Con Dao was pushing the progress of implementing the tourism sector development master plan. The island is seeking more capital to build the road in the northern island centre, proposing to resume flights from Vung Tau city to Con Dao and vice versa, and increase the number of flights from Ho Chi Minh City to Con Dao. Vietnam-EU trade turnover increases ten times after 15 years Trade turnover between Vietnam and the EU has increased over ten times since 2000 to reach US$41.4 billion last year, reported the Trade Promotion Agency under the Ministry of Industry and Trade. Total export turnover from Vietnam to the EU hit $17.3 billion for the first five months of 2016, a year on year increase of 10 percent. The EU is estimated by businesses and experts to be one of the key export markets of Vietnam accounting for 20 percent of the country’s cargo export volume. Free trade agreements are expected to bring many incentives for Vietnamese businesses in the upcoming time. However businesses will have to overcome challenges including strict standards on environment and food safety to enjoy these incentives. HBC reports surge in profits in Q2 Hoa Binh Construction and Real Estate Corporation reported 89 per cent net sales' increase year-on-year in Q2, reaching VND2.45 trillion (US$109.7 million), and a four-fold gross profit increase, touching VND263 billion. Thus, in the first six months, HBC earned VND4 trillion in net revenue, a 74 per cent year-on-year increase, and VND140 billion in after-tax profit, a 213 per cent year-on-year increase. Profit to shareholders of the parent company was VND138 billion. Established in 1987 in HCM City, BHC is involved in constructing civil and industrial works, bridges and roads, transportation works and water supply and drainage systems, as also in construction in the local market. Its largest shareholder, with a 19 per cent stake, is Lucerne Enterprise Ltd, a United Kingdom-based private firm that operates as a real estate developer. HBC Chairman Le Viet Hai, with more than a 15 per cent stake, and PYN Elite Fund (Nom-Ucits), with more than a 14 per cent stake, are the other two major shareholders. On August 2, HBC shares ended at VN23,900 each on the HCM Stock Exchange. Wood pellets move toward more sustainable future Exports of wood pellets and chips from Vietnam used for fuel have seen dramatic growth over the past 15 years skyrocketing from 400,000 metric tons in 2001 to more than 1.2 million metric tons in 2015. The rapid growth, said speakers at a recent business forum in Hanoi, can be attributed to an increasing world demand for inexpensive renewable energy, especially from China and the low levels of capital, technology and labour needed to form and operate a wood pellet factory. In addition, the industry has benefited from government policies amenable to growth such as convenient licensing procedures and exemption from export taxes, said representatives of the Ministry of Agriculture and Rural Development (MARD). The fact that the rate of past growth experienced is not sustainable has been the subject of much debate and discussion over the past five years, said Deputy Minister Ha Cong Tuan of MARD. It is generally understood by those in government and the industry that wood pellet factories are in competition not only with one another but with other segments of the economy such as furniture and paper for raw materials, said Deputy Minister Tuan. In line with the Vietnam Forest Sector Development Strategy through 2020, he said, the government has been giving effect to policies to not just cap but reduce the export of raw wood pellets and guide it towards more sustainable development. To cut back on the proportion of wood pellets in the export structure one of the steps taken has been to levy a tariff at a rate of 2% per metric ton on exports. The 2% calculates out to roughly US$2.5 per metric ton. Dang Viet Quang, a representative of Forest Trends, an international non-profit organization promoting sustainable forest management practices, in turn pointed out that the government’s policies are having some positive effect in cutting back on the number of domestic factories. According to the latest available figures, there are now 64 domestic word pellet manufacturers whereas last year at this time there were 101, which is a step in the right direction to developing a more stable industry, said Mr Quang. Exports of wood pellets in the five months leading up to June of 2016 dropped 58% compared to the same five-month period in 2015, tallying in at US$248 million, according to the Vietnam Timber and Forest Product Association. This puts the industry on track for exports of right at seven million metric tons with US$600 million of revenue for the year, down 60% in volume and 50% in value compared to last year. These reduced levels of timber harvesting, says the Association, in tandem with enhanced forest management practices and continued comprehensive legislative reforms have the wood pellet industry moving briskly towards a more sustainable future. Nghe An breaks ground for wastewater plant expansion On August 2, the Vietnam-Singapore Industrial Park (VSIP) located in Nghe An Province held a ground breaking ceremony for upgrades to the waste treatment plant to address current capacity issues. Edwin Chee, deputy general director of the VSIP, said it’s been a long time coming. “We are excited to finally get this project under way,” he said. “This is the largest project ever implemented by the industrial park.” The first phase of the expansion will significantly increase the plant’s capacity from 22,000 cubic metres per day by 6,000 cubic metres per day and give it adequate treatment capacity to support the park’s economic growth and future needs. He said the first phase scheduled for completion in August 2017 also will help reduce noise and odour problems in the surrounding community. The plant expansion is part of the industrial park’s larger capital improvement program that is repairing its aging water and sewer system as well as constructing a new fire station and emergency rescue facilities. Supermarkets, bookstores launch school-year promotions As the new school year approaches, supermarkets and bookstores in HCM City have launched major promotions for stationery and school supplies. Co.opMart and Co.opXtra supermarkets nationwide are offering sharp discounts on more than 1,000 items, including student uniforms, school bags, notebooks, pens and other school supplies until August 7. School student uniforms like white shirts, blue trousers and skirts have an average discount of 35 per cent. While notebooks, school bags, shoes and many kinds of school supplies of familiar brands like Sanding, Viettien, Novelty, SGC, Biti's, Bita's. Miti, Thien Long and others have prices discounted up to 50 per cent. Big C is also running a discount programme called "Hanh trang den truong" until August 8, with discounts of 15-42 per cent on more than 880 items, including student uniforms, footwear, notebooks, school bags and desk lamps, of which many are new models. In addition to discounts on prices, the programme will also apply "buy 2 get 1 free" to certain items such as notebooks and notebook covers. Lotte Mart supermarkets has also launched attractive discounts, including 15 per cent reduction on school uniforms, and 30 per cent discounts on pens, rulers, backpacks, notebooks, pencils and other items. Many bookstores in HCM City, including Thang Long, Nguyen Van Cu and Fahasa, are offering 10-15 per cent discounts on textbooks, notebooks, pens and other items. As in previous years, HCM City is offering goods as part of the city's price stabilisation programme, including school equipment, which will continue until March next year. School equipment suppliers have been told to increase supply by 15-30 per cent and meet 35-50 per cent of market demand. Fifteen enterprises have registered to offer stable prices for 28 million notebooks, 1.369 million schoolbags and backpacks, and 320,000 pairs of shoes. Tran Ba Dung, deputy director of Huong Mi Handbags Co., Ltd, told Biz Hub  that his company was assigned to offer stable prices on 600,000 backpacks and schoolbags. The company has created many new models this year, including terrain backpacks (which are easy to pull up stairways) and backpacks that prevent back deformities, he said. Besides providing products under the city's price stabilisation programme, the company has also supplied products to other provinces and cities nationwide. Its wholesale volume sold to Co.opmart supermarket chain, Fahasa and PNC bookstores and first-level agents rose by 15 per cent over the same period last year, he said. Tran Van Tac, director of Tuan Viet Shoes Co., Ltd, said the company expected to sell 60,000 products in the 2016-17 school year. Duong Chi Thanh, general director of Vinh Tien Joint Stock Company, one of the largest manufacturers of high-quality student's notebooks and paper stationeries in Viet Nam, said the company had produced at least 20 per cent additional number of notebooks for this school year. Forty per cent are part of the price stabilisation programme.  Viet Nam exports mangoes to Australia Viet Nam will export close to 18 tonnes of mangoes to Australia on a daily basis in the coming time as part of the agreements reached between the Suoi Lon Mango Cooperative in the southern province of Dong Nai and Australian partners. Director of the cooperative Nguyen The Bao said the negotiations with Australian importers were conducted from May 2016, and so far the sides have agreed on material areas, production stages, and prices. Australia will transfer preservation technology to the cooperative on a trial basis. This aims to ensure the fruits are free from toxic substances. Australia is buying mangoes from Thailand and Mexico. However, it will purchase more mangoes from the Vietnamese co-operative to meet the local increasing demand during the period from mid-March to late-May annually, he noted. Prices of export mangoes will be higher than that of domestic market. The shipment will be carried out via air and sea routes. The Suoi Lon Mango Cooperative has 150 hectares of mangoes, including nearly 25 hectares meeting the Vietnam Good Agricultural Practice (VietGAP) and Global Good Agricultural Practice (GlobalGAP) standards. Each season could harvest over 4,500 tonnes of fruits. In the coming time, the growing area will be expanded to 270 hectares, he said, adding that the cooperative has limited the use of plant protection products while increasing the use of micro-organic fertiliser to create clean and safe products. Apart from Australia , the cooperative is exporting around 2,000 tonnes of mangoes to Japan. New real estate app unveiled Propzy Viet Nam on July 28 unveiled phone application Propzy SAM (Sales - Agent Management) for professional real estate agents. It will update and display new property listings by brokers. Propzy.vn, a portal launched in 2015, is a real estate transaction platform for buying and selling and leasing housing. John Le, CEO of Propzy, a US company that has expanded into Viet Nam, said the app had been called "the Uber of Real Estate." HCM City unveils plans for Int’l Tourism Expo The Ho Chi Minh City largest annual International Tourism Expo – ITE HCMC – is just around the corner, and this year’s exhibitors promise to be more interactive and diverse than ever, say the organizers. The expo authority announced on July 28 at a press conference that exhibitors from 30 countries have signed up to showcase their products and services in roughly 270 pavilions. The organizers hope that more than 30,000 visitors will attend the three-day event running September 8-10 at the Saigon Exhibition and Convention Centre, or roughly 5,000 more than attended last year. The annual ITE HCMC is an effective trade platform for both domestic and international companies to share, discuss and compete for both inbound and outbound travel business in Vietnam and the Mekong region. It provides, they said, exhibitors an excellent platform to launch and better understand the tourism market in this region. The expo is both a trade and public event focusing on both inbound and outbound tourism and this year will focus on six travel segments namely – leisure tourism, luxury tourism, education tourism, medical tourism, business tourism, and spa and wellness. VNA/VNS/VOV/SGT/SGGP/TT/TN/Dantri/VNE