BUSINESS IN BRIEF 15/8 SBIC expects to earn $341 million in 2017 The Việt Nam Ship Building Industry Corporation (SBIC) plans to earn nearly VND7.63 trillion (US$341.5 million) in revenue in 2017, 3 per cent to 4 per cent higher than 2016. In a financial report sent to the transport and finance ministries recently, SBIC said the corporation showed only a slight increase in revenue for next year because it was still faced with numerous difficulties and challenges during the restructuring of the organisation, which included financial restructuring. At that time, it was really difficult for the corporation members to access loans from commercial banks to build new ships. In addition, the corporation said it was confronting many domestic competitors such as shipbuilding companies from the Ministry of National Defence, Ministry of Agriculture and Rural Development, corporations and private shipbuilding companies. The domestic shipbuilding market is being narrowed down with high competition among businesses, the corporation said in the report. At present, the corporation's new products for export are mainly for its traditional customers such as Damen Group or passenger ships for Australian owners. In the report, SBIC proposed to the government and relevant ministries and sectors to let it join shipbuilding projects which used the State's budget. The projects are to build fisheries surveillance vessels, rescue ship, patrol boats, and vessels that supply repair and maintenance services. Over 50 Vietnamese firms showcase goods in Thailand More than 50 Vietnamese enterprises are showcasing their products at the Viet Nam Goods Fair 2016 in Thailand, which kicked off at the Central Word Plaza in Bangkok on Thursday. Sanan Angubolkul, president of the Thailand-Viet Nam Business Council, described the four-day event as a good opportunity for Vietnamese firms to foster their understanding of Thai consumers' preferences to develop suitable products and services for the market. In his speech at the event's opening ceremony, Deputy Minister of Industry and Trade Nguyen Cam Tu spoke highly of bilateral trade relations between the two countries, which have developed significantly over the past few years. With bilateral trade reaching earnings of US$11.5 billion in 2015, Thailand became Viet Nam's leading commercial partner in the ASEAN, while Viet Nam was considered Thailand's fourth largest partner in the bloc, Tu said. The formation of the ASEAN Economic Community has opened up opportunities for the two sides to boost ties through fully combining supply and value chains in the region and globally, thus expanding their market to signatory parties of free trade agreements (FTAs), who are member nations of the ASEAN. He added that both Viet Nam and Thailand were parties to several FTAs between the bloc and its partners, such as China, Japan, South Korea and India, as well as Australia and New Zealand, so the two countries' enterprises need to fully tap opportunities created by these trade deals to make inroads into more markets and reinforce their links. Apart from trade, investment relations between the two nations have also been fruitful. The latest report from the Foreign Investment Agency revealed that as of June 2016, Thai investments in Viet Nam had totalled more than $9 billion, placing the country 10th among the 116 countries and territories investing in Viet Nam. According to the Bangkok Post newspaper, the Thailand-Vietnam Business Council and the Joint Foreign Chambers of Commerce in Thailand (JFCCT) have teamed up to help Thai investors in Viet Nam, Indonesia and Myanmar.   The team will gather representatives from both the government and the private sector to support Thai investors and help them navigate Vietnamese laws and regulations, the online newspaper quoted the council president Sanan Angubolkul as saying. Stanley Kang, chairman of the JFCCT, said the Thailand Plus team in Viet Nam will start operations next month. Australia is potential market for VN's seafood exports   Australia is a potential market for Vietnamese seafood exports if the Australians remove their quarantine barrier for seafood products to the country. Viet Nam's seafood exports, including shrimp, would increase strongly in the future if that is done, according to Consulate General of Viet Nam in Sydney, Australia. Australia's total output of seafood products from catching and production is between 220,000 tonnes and 280,000 tonnes each year, and a half of that total has been exported. Meanwhile, the country's total demand for seafood products is one million per year. However, the domestic supply of seafood products has reduced because Australia has had a policy on reducing exploitation of seafood on the seas to protect the environment. Therefore, Australia's demand for imported seafood has increased sharply. The import value of seafood to Australia rose from US$868 million in 2011 to $1.9 billion in 2014. In 2015, the value dropped sharply to $1.6 billion, mainly due to reduction of global prices and difficulties in business on the world market as against 2014. Now, Viet Nam is ranked fourth among seafood exporting countries to Australia, after Thailand, China and New Zealand. In 2015, the export value of Vietnamese seafood products to Australia reached $117 million, accounting for 11.2 per cent of Australia's import value of seafood. According to the Consulate General of Viet Nam in Sydney, export prices of Vietnamese seafood products are half that of Thai seafood products, so Viet Nam has the chance to promote its seafood exports to Australia, Nong nghiep Viet Nam newspaper reported.  Nguyen Thi Hoang Thuy, vice consul general, said that if seafood exports have to increase, Australia has to abolish inspection of white spot disease and yellow head virus for prawns and shrimps from Viet Nam. Australian customers like back prawn which is a key product of Viet Nam's shrimp industry. But Vietnamese prawn exported to Australia face stricter quarantine barriers than seafood exported to other strict markets such as the United States (US) and the European Union (EU), because they have white spot disease and yellow head virus. Due to the fact that its shrimp and prawn exports had white spot disease and yellow head virus, Viet Nam was not on the list of countries cleared by Australia. So, Vietnamese seafood exporters send processed prawn and shrimp to Australia but are not permitted to ship fresh products to the market, and are, therefore, unable to expand their market share in Australia. To overcome the quarantine barrier, local seafood enterprises should ensure quality of exported prawn and shrimp, Thuy said. Viet Nam should hold negotiations with Australia to abolish inspection of white spot disease and yellow head virus. Meanwhile, the Viet Nam Association of Seafood Exporters and Producers (VASEP) said Australia has small scale production in shrimp so those diseases would not have much effect on the domestic seafood production. Thus, Viet Nam could propose to Australia to abolish inspection of the two diseases or have a bilateral agreement on the methods of inspection for products with the two diseases. The association reported in the first half of this year, Viet Nam's seafood export value gained a year-on-year increase of 2.4 per cent to $80.9 million to Australia. Australia was the seventh largest market for Vietnamese export seafood products, after the US, the EU, Japan, and China, in addition to South Korea and ASEAN. Shrimp accounts for 31 per cent of Viet Nam's seafood export value to Australia. PM agrees to support policy for Binh Son Refining & Petrochemical Prime Minister Nguyen Xuan Phuc has agreed to support a request by Binh Son Refining & Petrochemical Co Ltd (BSR) to adopt a more favorable policy to help its Dung Quat oil refinery compete with imported petroleum products. At a meeting, in Quang Ngai Province on Wednesday with heads of the company, the Prime Minister said he would support BSR's proposal at next week's regular meeting of the Government with the aim of ensuring the effective implementation of market principles and equality among businesses. Nguyen Hoai Giang, chairman of BSR, explained that volatility in the global oil market and changeable foreign exchange rates have been putting pressure on the performance of Dung Quat oil refinery. Giang said the first seven months of this year were a difficult time for oil producers with prices running wild. Specificallly, unfavorable tax policies on petroleum products have reduced the competitiveness of Dung Quat Refinery vis-a-vis imported goods, which enjoy preferential tariff rates offered by free trade agreements, he said. He called on the Government to adopt a more favorable policy enabling a fair competition environment and helping to stabilise production at the Dung Quat Refinery and make it more appealing to investors. This is not the first time BSR has sought approval for a tax reduction due to low competitiveness. Last April, the Ministry of Finance cut import tariffs on petrol from 35 per cent to 20 per cent and 30 per cent to 20 per cent for diesel. Since the start of its commercial operation in February 2009, Dung Quat Refinery has produced 41.37 tonnes of petrol products. It has earned a total of VND764.63 trillion (US$34.3 billion) in revenues and VND6.17 trillion in net profits. In the last seven years, it has contributed nearly VND130.2 trillion to the State budget. This year, between January and July, the refinery produced nearly 4 million tonnes of petrol products, taking VND40 trillion in revenues and nearly VND1.1 trillion in net profits. However, the Prime Minister stressed the importance of the safe operation of the oil refinery and encouraged the company to improve its corporate governance to reduce cost and enhance the value of petrol and petrochemical products. In December 2014, the Government approved an $1.8-billion plan to upgrade and expand Dung Quat refinery's capacity from the current 6.5 million tonnes per year to 8.5 million tonnes per year by 2022. Work is scheduled to be completed by 2021. Laws must be unified: experts Viet Nam should change regulations in the Investment Law and Business Law as soon as possible to remove barriers in trading and investments, attendants at a conference held in Ha Noi yesterday were told. The conference, entitled "Amending and supplementing laws on investment and business" aimed to collect ideas from organisations and enterprises on the conflict and overlaps between the Investment Law and Business Law 2014 and other special laws. These ideas are expected to help improve the business environment and the country's competitiveness. Phan Duc Hieu, deputy director of the Central Institute for Economic Management (CIEM) said management agencies should review the laws such as the Public Investment Law, the Investment Law and the Land Law to remove shortcomings when implementing investment projects. Hieu said the administrative procedure relating to investment projects focused on three agencies including the Department of Natural Resources and Environment, the Department of Construction and the Department of Planning and Investment. Provincial people's committees often collected ideas from three departments when granting investment licences to a project. This is the reason that it often costs investors a lot of time and money to ask for opinion from all three agencies, he said. Nguyen Dinh Cung, CIEM's director said the target of an investment project played an extremely important role. At the provincial level, if the chairman of the People's Committee agreed the target of a project, leaders of departments should follow. "Our investment processes have been contrary to the world. The Government should have made land clearance before calling for investors. However, currently investors have asked for the  projects' approval then the State will help clear land for them," Cung said. Former minister of Natural Resources and Environment, Nguyen Manh Hien said investment projects had to go through 24 steps at several agencies, causing overlaps. Hien said the Government should be transparent, reducing administrative procedures in finding investors with capable financial ability. Nguyen Van Duc, deputy director of Dat Lanh Real Estate Company in HCM City said administrative procedures at the provincial level should be concentrated on departments or districts instead of both. Currently, businesses had to ask for procedures at both agencies, negatively impacting the situation. Duc said that in three periods of before 2006, 2006-10 and after 2010, each period had seen the addition of some procedures. A business often took one year for a project or the addition of five per cent to their selling prices for management and interest rate costs. He also proposed to promote online administrative procedures as the country moves toward smart cities. Gov't aims to lift agricultural exports The Ministry of Agriculture and Rural Development is seeking to create measures to tackle falling exports of major farm products, to assure it reaches its goal of US$30 billion in export revenues of the agro-forestry-fishery sector for 2016. The Agro-Forestry, Seafood Processing and Salt Industry Department said early this week that prices of agricultural products from the beginning of this year were generally lower than in 2015, amid a slow recovery of the world economy. Droughts, coupled with salt intrusion, also severely impacted agricultural harvests. Further, the heavy reliance on China for exports of agricultural products continues to be a threat, experts said. Duong Phuong Thao, deputy director of the Import-Export Department under the Ministry of Industry and Trade (MIT), said that customs figures revealed that exports to China accounted for up to 30 per cent of total revenues. "Any changes in the purchase policies of China will significantly impact agricultural production of Viet Nam," Thao said. "It is important that the quality of agro-forestry-fishery products be improved," noted Thao. In addition, farmers must be regularly updated with market information. Regard seafood exports, Truong Dinh Hoe, general secretary of the Viet Nam Association of Seafood Exporters and Producers, said that exports of tra fish encountered significant difficulties due to weak market forecasts, resulting in oversupply, which pushed down prices. Hoe said that the development of a national database about tra fish must be completed by the year end, together with enhancing the quality to ensure sustainable exports. Deputy Minister of Agriculture and Rural Development (MARD) Tran Thanh Nam urged expanding trade promotions to expand export markets for the country's agricultural products. Agro-forestry-fishery exports in the first seven months of this year touched US$17.8 billion, rising by 5.1 per cent over the same period last year. Rice was among the major farm products that saw significant declines in exports starting at the beginning of this year. The MARD's statistics showed that in the first seven months of 2016, rice exports totaled 2.93 million tonnes, worth $1.32 billion, dropping by 18 per cent in volume and 14 per cent in value over the same period in 2015. Experts said that Viet Nam was at risk of losing its position as the world's third largest rice exporter. Bui Thi Thanh Tam, general director of the Viet Nam Northern Food Corporation, said that the drop in rice exports was largely due to China's tightened management of small trade and Viet Nam's difficulties in finding large contracts with traditional markets, such as the Philippines and Indonesia, coupled with competition from Thai and Cambodian rice. Tam added that the Government's support in removing technical barriers and liberalising trade was needed to boost rice exports. The largest existing problem was the failure in controlling quality, resulting in declines in rice exports, as several highly demanding markets reduced imports of Vietnamese rice, said Huynh The Nang, president of the Viet Nam Food Association. Experts said that building the brand name of Vietnamese rice and enhancing quality had become pressing issues. Nam said that the development of standards for Vietnamese rice must be completed as early as November. The MIT was developing a strategy on rice markets for the 2016-20 period, with a vision to 2030, which would aim to bring the value of rice exports to $3 billion by 2017 and $3.5 billion by 2020, with average export volumes of some seven million tonnes per year. The ministry will focus on expanding quality rice exports to markets which generated high added values, including Taiwan, Hong Kong, Malaysia, Singapore, United Arab Emirates, the US and Australia.  Deputy PM urges City airport expansion Deputy Prime Minister Trinh Dinh Dung has called for immediate plans to expand HCM City's Tan Son Nhat Airport after inspecting its international terminal yesterday, saying it is too congested. He called for building an additional terminal, saying that when the first phase of the Long Thanh International Airport opens in 2025, Tan Son Nhat will be handling 50 million passengers, double its current capacity, meaning ensuring smooth operations will be a massive challenge. "Aeroplanes often have to wait between 15 minutes and half an hour for landing." To ease the congestion, additional terminals and wider roads outside are needed, he said, and assigned the ministries of transport and defence to draw up plans for them. He instructed the ministries to look for investors to carry out the project under public-private partnership or build-own-operate mode. He promised to closely oversee the task, and urged the city administration to upgrade the streets leading to the airport. He instructed the ministries of planning and investment and finance to make financial plans for the work. Lai Xuan Thanh, head of the Civil Aviation Authourity of Viet Nam, told Dung at a meeting yesterday that Tan Son Nhat has only 51 parking bays while the need is for 80. There are two runways, but only one can handle both take-offs and landings, meaning aircraft often have to wait to land or take off, he said. Sometimes there is no room for parking, and aircraft have to park right on the tarmac, forcing incoming aircraft to keep circling, he said. "Yesterday I came here from Ha Noi, and my aircraft had to wait for 35 minutes to land." The Ministry of Transport is working with Ministry of Defence to obtain 21 hectares of land to build an additional 50 parking bays and a runway, he said. He too called for building a multi-function terminal and a road linking the airport with Cong Hoa Street, which will ease the burden on Truong Son, the only street leading to the airport. All this will increase Tan Son Nhat's annual capacity to 40 million passengers, he added. According to a survey by airport authorities, more than 50 per cent of cars and 90 per cent of motorbikes that take Truong Son are not headed for Tan Son Nhat. Thanh said the airport handled roughly 16 million passengers in the first half, a 23 per cent increase year-on-year. "It is estimated that the airport will receive roughly 32 million passengers this year while it is designed for only 25 million. The number will increase by 15 per cent annually, he said. "The congestion occurs in the air, terminals and street [outside]." Bui Xuan Cuong, director of the HCM City Department of Transport, said a flyover will be built near the airport to help reduce congestion on Truong Son Street. After visiting Tan Son Nhat, Dung inspected the progress of a metro station being built beneath the Opera House on the Ben Thanh - Suoi Tien line. He also visited Cat Lai Port in District 2.  Conference seeks measures for better foreign aid management The coordination and management of foreign assistance poured into science and technology projects should be improved to ensure the effectiveness of the aid, heard a conference held by the Vietnam Union of Science and Technology Associations (VUSTA) on August 11.  According to VUSTA Vice President Nghiem Vu Khai, since early this year, the union received 52 non-governmental aid projects totalling 5 million USD, together with three official development assistance projects worth over 6 million USD.  However, many union’s agencies are facing difficulties in implementing the projects, including obstacles in document processing, verification, reporting, supervision and financial balancing.  Representatives from the associations pointed out that there remain limitations in the legal framework, policy system and administrative procedures relating to the implementation of the projects, together with the slow issuance of legal documents guiding the enforcement of laws.  At the same time, there is lack of a standard guideline on the procedure of building the programmes and projects, they said, adding that the engagement of Vietnam’s authorised agencies in the designing of the programmes has been poor.  A number of regulations guiding the management of foreign assistance are not uniform and specific, leading to low responsibility of agencies, while the supervision and evaluation of the projects have not received adequate attention due to lack of evaluation tools and indications, they held.  Meanwhile, management officials at both State agencies and international organisations are not fully aware of the important legal regulations relating to Vietnam’s foreign aid management.  State management agencies and sponsors need to share information more regularly, they said.  According to Khai, recommendations from participants will be forwarded to authorised agencies for the completion of legal documents and policies related to the coordination, management and using of foreign assistance.  He also highlighted the need for the science and technology associations to become more active and enhance their capacity in attracting, negotiating and signing foreign assistance agreements. Hi-tech agriculture project developed in Thua Thien-Hue The central province of Thua Thien-Hue has licenced a hi-tech agriculture production project in Huong Tra town and coastal areas in Hue city with an investment of 525 billion VND (23.5 million USD).  The project, invested in by the Vineco Company, uses Israeli technology with a production process that meets VietGAP and GlobalGAP standards.  Covering about 213 hectares, it comprises a greenhouse and a massive field of vegetables for domestic sale and export, a vegetable varieties production area, centres for management, training and technology transfer, a storage area and an irrigation system.  According to provincial People’s Committee Chairman Nguyen Van Cao, the project aims to produce safe vegetables for both domestic and foreign markets through the development of large-scale agriculture production with the application of advanced technology, an area that the province is focusing on.  It also helps attract domestic and foreign investment and human resources in high technology, contributing to creating jobs and increasing incomes for labourers, thus boosting local economic growth, he said.  As committed to by the investor, the main components of the project, including the greenhouse, infrastructure system and irrigation system, will be completed in December this year, while the management centre will be operational in the fourth quarter of 2017 and the centre for technology transfer will be finished in the fourth quarter of 2018. Public-private partnership applied flexibly in Vietnam: official A number of legal documents on public-private partnerships (PPP) were issued in Vietnam , and this form of cooperation has been applied flexibly in various fields.  Deputy Minister Ho Thi Kim Thoa made the remark at a workshop on PPP enhancement in Ho Chi Minh City on August 11.  As many PPP related policies have been promulgated to capitalise on businesses’ potential, the Ministry of Industry and Trade and its provincial agencies have carried out different programmes to support enterprises, especially small- and medium-sized ones, she said.  The Government’s Resolution 35/NQ-CP, issued on May 16, 2016, stresses the State’s viewpoint on facilitating businesses. It stated that companies have the freedom to conduct a business, and the State treats all businesses equally and works to serve, instead of manage them.  Many countries have successfully applied PPP to augment resources for State projects amid their public sector reforms.  Stephen Berlinguette, chief of the US Agency for International Development’s HCM City section, said PPP is now a global trend, adding that the private sector is a new and effective measure to help address problems pertaining to capital mobilisation, technology, management capacity and economic growth promotion.  Cao Thi Ngoc Dung, chairwoman of the HCM City Association of Women Entrepreneurs said, Vietnam is strongly integrating into international markets through free trade agreements. Meanwhile, 25 percent of Vietnamese businesses are owned by female entrepreneurs, numbering 91,000 in 2015, but they are facing an array of challenges.  PPP support policies will create favourable conditions for businesswomen’s companies to effectively engage in socio-economic development, she said. Hanoitourist, South Korean firm to build five-star complex Hanoitourist Corporation and South Korea's Global Consultant Network Co. Ltd, signed an agreement on building a five-star complex of hotels, trade centre and racecourse in Ha Noi on August 9. The 235ha complex will require an estimated investment of US$500 million, of which 85 per cent will come from the South Korean company and the rest from Hanoitourist. The two companies will send a document to the Ha Noi People's Committee for its approval of the project. It is hoped the new complex will become a destination for domestic and foreign visitors in the capital city in the future. VIB launches new promotion campaign Vietnam International Bank (VIB) is implementing a new promotional campaign which offers a competitive lending rate of 6.99 per cent from now to October 5 in a move to celebrate its 20th anniversary. Under the "Enjoy beautiful life with VIB" campaign, customers who make a loan term of over 12 months will enjoy the above-mentioned rate in the first six months. Besides providing thousands of gifts, such as suitcases and travel bags for customers, the bank also offers one year annual fee waiver for new VIB Classic and Gold credit card cardholders with at least one proper transaction within 30 days of the issuance date. During the first half of this year, VIB earned before-tax profit of VND303 billion (US$13.5 million), up 7 per cent year-on-year and comprises 45 per cent of the before-tax profit target for 2016. According to the bank's H1 unaudited financial result, the lending balance reached more than VND51.319 billion, equivalent to a 7.4 per cent growth rate. During the reviewed period, the bank's deposits saw a yearly rise of 7.4 per cent to reach VND57.248 billion, while fee and commission incomes increased by 41 per cent year-on-year. Its total assets topped VND86.755 billion, up nearly 3 per cent in comparison with the end of 2015.  Nearly 545 billion VND invested in My An hot spring resort Multi-industry group Bitexco will splash out nearly 545 billion VND (24.4 million USD) on building the My An hot spring resort in My An village, Phu Duong commune, Phu Vang district, in the central province of Thua Thien-Hue. Covering an area of 36,762 square metres, the project will include a conventional hall which can serve up to 300 people, a Japanese traditional Onsen bathing and spa, a floating restaurant, villas, and a five-storey hotel and a parking lot. The resort will feature a special swimming pool and soaking system, which is divided into different sections with various temperatures. The project will begin in September this year and is expected to become operational in August 2017. According to initial research from the Hue University of Medicine and Pharmacy, My An hot spring contains essential microelements for health, which can be compared with the world’s famous mineral springs like Koundour in Russia and Paven Banis in Bulgaria. Spa bathing will do good for people’s health, especially those with rheumatism, hypertension and arteriosclerosis. The My An hot spring resort is one of the projects to be implemented under the cooperation agreement between the provincial People’s Committee and Bitexco Group. According to Nguyen Van Cao, Chairman of the local People’s Committee, as a strategic investor, Bitexco will develop projects in tourism infrastructure in line with international standards and branch out top-notch tourism products to attract visitors to the locality. They include a 8.5 million USD luxurious hotel and resort under the group’s brand of Aman Resort in Hue city. The group also upgraded the Sai Gon Morin hotel to meet the five-star standard with an investment of 10 million USD, while establishing a group of international standard hotels and resorts with a total capital of 30-50 million USD to promote Meetings, Incentives, Conferences and Events (MICE) tourism in the locality. Earlier, it built two hydropower plants in the province, which generate a combined 200 million kilowatts and contribute 30 billion VND (1.34 million USD) to the local budget every year. Export of many items to China drops China reduced imports of many products from Vietnam, particularly rice, cassava and wood chips, in the first half of this year. The Ministry of Agriculture and Rural Development told a review meeting in Hanoi on August 9 that rice shipments to China fell as the market tightened controls on cross-border rice trade to prevent smuggling. Huynh The Nang, chairman of the Vietnam Food Association (VFA), said the protocol on quarantine against rice and rice bran exported to China was expected to create a legal corridor for such products of Vietnam to enter the northern neighboring market. However, China has postponed the date of validity from September until November. Besides, China has yet to recognize any Vietnamese firms as eligible to sterilize rice to be exported to the neighboring market following the protocol. Exports of wooden and forestry products in the January-June period picked up slightly but are unlikely to reach average annual growth of 10% this year, said Nguyen Ton Quyen, general secretary of the Vietnam Timber and Forest Products Association (Vifores). Wood chip exports declined 60% in January-June against the same period a year earlier, triggered by weak demand in China and falling prices. A ton of dry wood chip was priced at about US$144 last year but the price has slid to US$132-136. In addition, Vietnam’s wood chips have faced fiercer competition from Australia, Brazil and New Zealand. Meanwhile, export turnover from cassava in the six-month period dipped nearly 45% year-on-year, caused by a fall in imports from China. Cassava exports to China via unofficial channels have stalled as China has closed almost all border gates in the past two months, according to Nghiem Minh Tien, vice chairman of the Vietnam Cassava Association. Shipments of pig and pork have come to a halt in the past three months, pushing down the domestic price of live pigs. Pigs are now sold at VND46,000 per kilogram, well below VND56,000 earlier this year. Duong Phuong Thao, deputy head of the Export-Import Department at the Ministry of Industry and Trade, said China made up a third of Vietnam’s exports of agro-aqua-forestry products in the first seven months of this year. Thao noted exports to China via unofficial channels were not included in official statistics of the General Department of Customs. She said when working with the Ministry of Industry and Trade recently, the Chinese side said it would facilitate purchases of Vietnamese goods but still tighten cross-border trade, citing anti-smuggling and quality control as reasons. Wood chip firms grapple with export slide A number of wood chip processing and exporting firms have been struggling with tumbling outbound sales this year. Industry watchers said enterprises in the sector are grappling with mounting inventories as wood chip exports plunged by at least 20% in the first half of this year and that the situation would continue into the rest of the year. Data of the General Department of Customs showed Vietnam shipped abroad 1.8 million tons of wood chips worth US$248 million in the first five months, down 39% and 42% year-on-year, respectively. Experts projected Vietnam could earn some US$600 million from exporting the product this year, half of the 2015 figure. Firms said weak demand and high inventories have forced them to cut wood material purchases from households. In 2012, Vietnam overtook Australia as the world’s biggest wood chip exporter. Other major exporters are Thailand, Indonesia and Chile. China, Japan and South Korea are Vietnam’s leading wood chip importers, accounting for a combined 90% of the total. China imports up to 60% of Vietnam’s total wood chip shipments. According to Forest Trends and the Vietnam Timber and Forest Products Association (Vifores), Vietnam has seen wood chip exports sliding this year as China has stepped up imports from Australia and Thailand. Furthermore, Vietnamese wood chips cannot compete with other countries in terms of quality. Data of Vifores showed Vietnam had 47 wood chip factories and exported around 2.3 million tons in 2009 but the respective figures surged to 130 and seven million tons in 2014. More conditions planned for strategic investors of equitized SOEs A draft Government decree prepared by the Ministry of Finance has set out more conditions for firms which want to hold strategic stakes in State-owned enterprises (SOEs) when the latter go public.  Article 6 of the draft decree on conversion of SOEs into joint stock companies stipulates that strategic investors must be active in the same sectors of the equitized SOEs where they want to buy shares and be profitable for two consecutive years. Besides, their equity in the latest year before the share acquisition as shown in audited financial reports must be enough to buy shares.  The current Decree 59/2011/ND-CP says that strategic investors must be financially strong and have written pledges to invest and support equitized SOEs in the long run, transfer modern technology and train employees for the latter. They have to support equitized SOEs to enhance financial capability, governance and material supply, and expand markets.     The draft decree requires strategic investors to join auctions for State stakes on the stock exchanges. Notably, the number of strategic investors at SOEs can exceed three.  In case just one investor registers to buy the State stake, SOEs will not sell the stake via a put-through deal but have to organize an auction for strategic and other investors.  The finance ministry has written to the Government explaining that put-through deals on share acquisition between strategic investors and SOEs before initial public offerings do not ensure transparency and have caused losses of State capital.     The ministry said new regulations are to match the Government’s Decree 116/2015/ND-CP which does not set a limit on State stakes sold to strategic investors as seen in Decree 59 that sets the cap at 50%. Investors can bid for stakes in SOEs without making pledges to become strategic shareholders. The ministry was assigned to prepare the draft decree to replace decrees 59 and 116 and Decree 189/2013/ND-CP on equitization of SOEs. According to the Ministry of Finance, these decrees aim to help do away with hindrances to SOE equitization and boost the restructuring of State corporations. In the 2011-2015 period, 478 SOEs went public. However, State shares in equitized SOEs have remained high. Meanwhile, the equitization process at many SOEs has been progressing at a snail’s pace as seen in special business sectors. Strategic investors have to support equitized SOEs but are not allowed to sell stakes in five years. There are no measures against strategic investors failing to make commitments to back SOEs. The ministry said those hindrances must be lifted to step up SOE equitization in 2016-2020. Equitization regulations must be made compatible with the 2014 Enterprise Law, the 2014 Investment Law and the law on management and use of State capital to invest in businesses. Stringent lending rate rule applies to PPP projects The Ministry of Finance has issue a new tight rule on lending rates for those projects implemented in the public-private partnership (PPP) format to better manage costs. Under the Ministry of Finance’s Circular 55 with amendments on financial management and costs, the lending rates for PPP projects must not be 1.3 times higher than the average rate for ten-year government bonds sold at auction within three months before contract negotiations.  In particular, if the current rate of ten-year G-bonds stays at 7% per year, the rate applied to investors of build-operate-transfer (BOT) projects will be no higher than 9.1% per year. Investors have bemoaned the regulation, saying the interest rates applied by banks are always higher than the ceiling rates set by the Ministry of Finance. So, it will prevent investors from finding capital for PPP projects. But from the perspective of a management agency, the Ministry of Transport said in a report presented to the Government in late June that long-term loans account for a high proportion of total outstanding loans at many banks. Some banks have not adequately assessed risks when evaluating and signing loan contracts with investors of PPP projects. Therefore, the Ministry of Finance wanted to adopt the new lending rate rule to better manage costs. Women entrepreneurs call for more public-private partnerships The Vietnamese Government is encouraging public-private partnerships, a mode of investment that has been successfully tried in many countries. "It is an opportunity to tighten the connection between State management agencies and business associations, especially the Việt Nam Association for Women Entrepreneurs (VAWE)," Deputy Minister of Industry and Trade Ho Thi Kim Thoa, who is also chairwoman of the VAWE, said in her opening speech at the "Enhancement of the public – private partnership between MOIT and VAWE" workshop in HCM City on Thursday. The Government offers incentives for forming stronger public-private partnerships (PPPs): A prime ministerial decision, for instance, promulgates PPPs as a tool to mobilise capital and improve technology, management and operational efficiency, thus contributing to national development. "Today's workshop helped women-owned and -led enterprises, which comprise 25 per cent of all Vietnamese enterprises, to better understand how to benefit from these government incentives and programmes and promote their participation in the supply chain," Thoa added. The workshop also informed enterprises about market opportunities and new distribution channels resulting from free trade agreements Viet Nam has signed, like the Trans-Pacific Partnership. Besides, participants connected and exchanged ideas with potential partners. In 2010 there were 65,000 women business leaders, and the figure was up to 91,000 by 2015. Sixty per cent of women managers and leaders are in agriculture and rural businesses and the rest in services, Thoa said, adding woman entrepreneurs make up a key part of the country's key human resources. The Government has set a target of increasing the rate of women entrepreneurs to 35 per cent or more by 2020, with at least 350,000 enterprises headed by them. Nearly 200 businesswomen from central and southern provinces and cities took part in the workshop. Japan's Forval group plans City projects Japan's Forval Corporation wants to expand investment in Viet Nam, especially in HCM City, in tourism, education and health care, Vietnamplus.vn reports. The plan was unveilved by Chairman and CEO of the group Hideo Okubo at a meeting with Vice chairman of the municipal People's Committee, Tran Vinh Tuyen, late last week. Okubo said the group was willing to help the city with training for tour guides and staff at restaurants and hotels, adding that specific co-operation projects would be drafted soon. Most of Forval's partners are small- and medium-sized enterprises operating in the consultation field to support Japanese firms in making investments abroad, particularly within the Association of Southeast Asian Nations (ASEAN), according to the CEO. The corporation had advised many Japanese companies to invest in Viet Nam, he said, adding that it opened representative offices in Ha Noi and HCM City and co-operated with Vietnamese businesses in other cities and provinces. Tuyen hailed Forval's desire to invest in personnel training in tourism, education and health care, which matches the city's demand. HCM City's current tourism staff have yet to become fully professional, hence the city hoped to partner with the Japanese group to improve the quality of human resources in this field, he added. The southern metropolis also hoped to introduce modern technological equipment and smart management processes to improve public health, he noted. He proposed that the corporation persuade more Japanese businesses to invest in HCM City, promising that local authorities would create the optimal conditions for entrepreneurs to do business efficiently.  DIV must get larger role: Deputy PM The Law on Deposit Insurance should be amended to give the Deposit Insurance of Việt Nam (DIV), a non-profit state financial organisation, more independence in managing risk at credit institutions, according to Deputy Prime Minister Vuong Dinh Hue.  By the end of May, the DIV had monitored more than VND3,000 trillion (US$134.5 billion) worth of deposits at 1,252 deposit service providers, comprising 92 commercial and co-operative banks, 1,156 people's credit funds, and three micro-financial organisations, Chairman of the DIV board of directors Nguyen Quang Huy said.  The DIV's total capital was VND30.68 trillion, including VND5 trillion of charter capital. More than 99 per cent of the idle capital was invested in government bonds.  The DIV has so far compensated 1,793 people who had saved money in 39 dissolved credit funds.  Deputy Finance Minister Tran Van Hiwu said the DIV was initially tasked with dealing with bankrupt credit funds. Its total asset value now exceeds VND30 trillion, so the DIV should take on more responsibilities.  Deputy PM Hue said the DIV was an important institution, but it had not engaged in the restructuring of the banking and credit systems. At present, it is only able to pay compensation to small credit organisations that go bankrupt.  He told the DIV to clarify its role in bank restructuring and bad debt settlement in the development strategy.  Within the next two months, international organisations would submit an official consultation plan to the Vietnamese government, in which they would suggest revisions to the Law on Deposit Insurance so that the DIV could actively take part in bank restructuring, he said. Project boosts traditional goods After three years of implementing the One Commune One Product (OCOP) programme, patterned after similar efforts in Japan and Thailand, the northern province of Quang Ninh has improved the quality and commercial potential of more than 280 traditional products. Speaking at a seminar on "Commercial Finance and Product Development: Measures to Support Businesses" on Thursday, Ngo Tat Thang, deputy head of the management board of the OCOP programme, said that competitive products of each village and commune had been identified with the goal of creating development and commercial strategies. Under the programme, producers of traditional products have received training on how to improve quality, packaging and design of products, he said, adding that the OCOP brand was covered by intellectual property protection in Viet Nam. In addition, the programme has offered producers support in interest rates and packaging design, among other areas. It has also set up OCOP sales points, organised trade fairs and built e-commerce websites to market and enhance sales of OCOP products. The province plans to continue implementing the programme as one of its important economic development programmes in the 2017-20 period. The aim is to enhance development of agricultural and non-agricultural production, especially in sectors with competitive advantages such as fishery, forestry and material medicine. It also targets to expand sales of OCOP products nationwide and gradually penetrate the world market, he said. Nguyen Kim Lang, deputy head of the Viet Nam Trade Promotion Agency, said Viet Nam's specialty products needed better designs and packaging. In addition, promotion activities were also weak, he said. Lang as well as many business executives at the seminar praised the OCOP programme in Quang Ninh and said they hoped it would expand to other localities. The seminar also discussed difficulties faced by enterprises in accessing bank loans and ways to remedy the problem. The event was part of a programme designed to improve export competiveness of small- and medium-sized enterprises through local trade promotions. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR