BUSINESS IN BRIEF 23/9 Nipro supplies local demand After investing $150 million in the first plant in Vietnam for export only, Nipro Pharma Corporation – Japan’s biggest prescription drug contract manufacturer – is planning to expand its operations in the country to serve a growing domestic demand. Ken-Ichiro Kuninobu, general manager of Nipro’s Administration Department, told VIR, “After [operations went well at] our first plant in the northern port city of Haiphong last year, we are planning to enlarge our production activities in the locality in the near future to contribute to the Ministry of Health’s (MoH) policy to increase domestic manufacturing.”    “The site of Nipro Pharma Vietnam has an area of approximately 150,000 square metres, equivalent to 18 football fields. We have so far used just 30,000sq.m. The production lines will be further expanded to enable the production of orally administered drugs and external preparations, in accordance with the needs of pharmaceutical companies,” he added. Vietnam, which is home to 92 million people, is potentially a very strong market for the firm, as Vietnamese people are spending an increasing amount on health. According to Kuninobu, the Haiphong plant is one of the best facilities of its kind in Vietnam. Its products are injectable medicines, all currently for export to Japan. “We decided to select Haiphong, as the city is home to a big seaport which facilitates the imports and exports that serve our operations,” he said. Kuninobu also said that, like other foreign pharmaceutical firms, his firm has met with some challenges in operating in Vietnam. “As our business is currently for export only, some current rules in Vietnam do not match with our business operations. In addition, the regulation that does not allow foreign pharmaceutical firms to directly distribute their products in Vietnam is another difficulty,” he said. Nipro and other Japanese pharmaceutical firms – including Aliment Industry, Taisho  Pharmaceutical, Okuda, Fukuchi, and Disho – recently proposed that MoH allow them to directly distribute pharmaceuticals in Vietnam. But MoH was still reluctant. Kuninobu said, “In the Vietnam-Japan Joint Initiative, supported by the Ministry of Planning and Investment, Japanese members agreed with the MoH on August 23, 2016 to discuss establishing a working team for advising on medicine trading by the end of October. Japanese firms have great experience in medicine distribution with high-quality products. If they are allowed to directly distribute drugs to Vietnamese companies in Vietnam, local people will benefit.” Taisho Pharmaceutical is another Japanese firm that recently took a bold step into the Vietnamese pharmaceutical market. In July, the firm purchased a 24.4 per cent stake in local drug company Hau Giang Pharmaceutical JSC. Currently, about 800 foreign firms are allowed to provide but not directly distribute pharmaceuticals in Vietnam. 20 Japanese firms are included in this number, with 73 types of registered drugs. According to BIDV Securities Research, by the end of May 2016, the total import value of pharmaceutical products was $1.02 billion, up 25 per cent year-on-year. Imports of drugs accounted for $145.1 million, up 6.9 per cent on year, in a continued trend of high growth. Meanwhile, growth in market share among foreign firms still overpowered that of domestic ones. Hai Phong holds Conference on Investment Promotion Hai Phong City is committed to providing the best investment environment possible to investors by improving its infrastructure and adopting clearer administrative procedures, city leaders told the Conference on Investment Promotion in Hai Phong on September 19. City to improve infrastructure and administration procedures to attract more investment, leaders tell gathering on September 19.  Hai Phong’s transport infrastructure will be updated and finished soon, according to Mr. Nguyen Van Tung, Chairman of the City People’s Committee. The Ha Long - Hai Phong Highway will be finished in mid-2017, cutting travel time between the two destinations to 25 minutes. The bridge and road to Cat Hai Island and the international port on the island will be finished at the beginning of 2018, with the latter capable of berthing large vessels. At the end of this year Hai Phong will begin building a coastal road connecting Quang Ninh, Thai Binh, Nam Dinh, Ninh Binh and Thanh Hoa provinces. In order to attract more flights to Cat Bi International Airport, Hai Phong provides support of VND10 billion ($448,000) to airlines opening international routes and VND5 billion ($224,000) to those opening domestic routes. There will be two more direct international flights from Hai Phong to South Korea and Thailand by the end of the year and in the beginning of 2017 flights from Hai Phong to China and Japan will be opened, according to Mr. Tung.   In order to improve administrative procedures, the Hai Phong City People’s Committee announced a decision at the conference to set up an investment, trade and service promotion center, which will serve as a bridge connecting local authorities and enterprises with a one-door policy. The center will create a convenient and transparent investment climate for investors, promote administrative reform, and deal with difficulties facing enterprises in the city. Hai Phong possesses many advantages for economic development, such as ports, airports, an ample workforce, and nearly complete transport infrastructure, Prime Minister Nguyen Xuan Phuc said. Representatives from the People’s Committee presented investment licenses to LG Innotek from South Korea at the conference, which will build a $550 million project at the Trang Due Industrial Park manufacturing electronics and camera modules, and to the Flat Group from Hong Kong, which will invest $200 million in a solar energy glass project at the Dinh Vu Industrial Park. The total value of memoranda of understanding and credit contracts signed at the conference was $12.85 billion.   “The government and Hai Phong authorities consider a win for investors as a win for ourselves,” the Prime Minster told the gathering. FLC Do Son to get underway in Hai Phong The FLC Group and the Hai Phong People’s Committee have signed a Memorandum of Understanding (MoU) over the construction of the FLC Do Son complex, which includes a golf course, a resort, villas and high class entertainment areas on a total area of 500 ha with VND5.3 trillion ($237.44 million) in investment.   The MoU was signed at the Conference on Investment Promotion held on September 19 in the northern port city. “The FLC Do Son Complex is not only evidence of the attractiveness of Hai Phong but is also the result of the various investment support policies offered by the city,” said Ms. Huong Tran Kieu Dung, CEO of the FLC Group. “These support policies create favorable conditions for all investors and help FLC to implement the project. FLC has committed to focus its resources and quickly bring the project into being to contribute to Hai Phong’s socioeconomic development.” FLC Do Son is the sixth complex project to be implemented by FLC, joining FLC Sam Son in north-central Thanh Hoa province, FLC Quy Nhon in south central Binh Dinh province, FLC Vinh Phuc in northern Vinh Phuc province, FLC Quang Binh in central Quang Binh province, and FLC Ha Long in northern Quang Ninh province. The Group projects are built quickly, sometimes within a year, with the golf course in Binh Dinh being built in just five months. According to FLC’s latest financial report, it had total assets of VND10.87 trillion ($486.97 million) as at the end of the first half of this year, an increase of 24 per cent against January 1. After-tax profit also rose significantly, by 45 per cent to VND594 billion ($26.61 million). The Hai Phong People’s Committee also presented licenses to four foreign investors in high-tech sectors at the conference and 27 MoUs were signed between the People’s Committee and investors. Vincom opens second shopping mall in Can Tho Vincom Retail JSC under Vingroup on September 20 inaugurated Vincom Plaza Xuan Khanh, its second shopping centre, in Mekong Delta city of Can Tho. The shopping mall is part of a 30-storey building of the Shophouse complex, the highest in the Mekong Delta region to date. It includes five department stores taking up about 25,000 square metres and three basements. The centre gathers domestic and international prestigious trademarks first present in Can Tho city. It is also considered an entertainment and food paradise with a five-star fitness centre, recreational areas for children, an international-standard cinema, and well-known restaurants. Founded in Ukraine in 1993 under the name of Technocom, Vingroup has become Vietnam’s leading private real estate company. It comprises such subsidiaries as Vincom for high-end shopping centres, Vinhomes for residential properties, Vinpearl for tourism and recreational facilities and Vimec for hospitals. The firm was twice named the winner of the “Best Developer Vietnam” category at the annual South East Asia Property Awards in 2013 and 2014. Recently, together with Vinamilk, Vietcombank, FPT Corporation and Petrovietnam Gas Joint Stock Corporation, the group made it into the Nikkei Asian Review’s Asia 300 list, which names Asia’s most dynamic companies. Last year, Vingroup opened 10 shopping malls across the country and the ambitious company plans to make nearly 50 trading centres operational in 2016, aiming to nudge international-standard products and services, as well as modern consumption ever closer to Vietnamese people. Da Nang focuses on boosting tourism The central city of Da Nang aims to make the tourism sector, especially maritime leisure tourism, an economic spearhead at national and international levels. The city aims to welcome 8.85 million visitors by 2020, including 2.45 million foreigners, earning 31.5 trillion VND (1.41 billion USD) from the industry. Apart from increasing the number of hotel rooms to 23,000 by 2020, 5,000 rooms more than that of 2015, Da Nang will encourage homestay services to meet increasing demand during peak travel seasons. The city will develop competitive tourism products while enhancing its connectivity with the neighbouring provinces of Quang Nam and Thua Thien Hue, the south central region and other localities. Da Nang will also build a continent of tourism workers that can satisfy standards set by the Association of Southeast Asian Nations (ASEAN). Tran Chi Cuong, Deputy Director of the municipal Tourism Department, said the locality is making every effort to complete policies supporting the sector and build a travel fund to garner more resources for tourism promotion. It also offers incentives to investors in tourist sites like the Son Tra Peninsula, the Ngu Hanh Son cultural and historical park and the Hai Van Pass, waterway tourism and night entertainment centres, he said. The official noted that the city encourages units and localities to improve tourism quality through ranking businesses and destinations. Local authorities and enterprises will coordinate in organising cultural and art activities for tourists, Cuong added. Other jobs focus on infrastructure development and State management to create a healthy, safe and friendly tourism climate. While maintaining traditional markets like Southeast Asia, Western Europe and Northern America, the city will pay more heed to Northeast Asia and expand its market to the Middle East, India, Russia and Eastern Europe. So far, 83 tourism projects worth more than 7.3 billion USD have been implemented in Da Nang, of which 20 are foreign invested with total capital of 1.28 billion USD. Da Nang has received a number of international and domestic awards for its efforts, including the ASEAN Environmentally Sustainable City in 2011, the Asia Pacific Economic Cooperation Law-Carbon Emission City in 2012 and one of APEC 20 Green-Clean-Beautiful Cities in 2013, and membership of the Rockefeller 100 Resilient Cities Programme in 2014. Entrepreneurship, capital surge Viet Nam has seen a sharp surge in the number of newly established enterprises since two new laws on investment and enterprises took effect on July 1, 2015. At a meeting to review the first year of the Law on Investment and the Law on Enterprises, held in Ha Noi on September 20, Bui Anh Tuan, deputy director of the Ministry of Planning and Investment's Business Registration Management Agency, reported that more than 105,975 newly established enterprises with a total registered capital of VND767.9 trillion (US$34.28 billion) were set up in one year from July 1, 2015 to July 1, 2016. The number of newly established enterprises rose 27.8 per cent against the previous year while the registered capital surged more than 42 per cent, Tuấn reported. The registered capital of newly established enterprises also averaged VND7.25 billion, a year-on-year increase of 11 per cent, he said. As for foreign direct investment (FDI) enterprises, the ministry reported that 1,660 FDI firms were set up in the period, with a total registered capital of VND62.205 trillion. Besides the surge in the number of newly established enterprises, the new laws also contributed to enhancing the freedom of enterprises to do business in all industries and sectors that are not prohibited. The laws have also helped enterprises save time and money by shifting the attitudes of State management agencies. The ministry reported that the most significant change is in the time it now takes to register firms nationwide - an average of 2.9 days. The greatest change was recorded in Ha Tinh province, reducing the process of licensing newly established enterprises to one day. The southern provinces of Tien Giang and Hau Giang followed with 1.3 and 1.32 days, respectively. Working hours at municipal and provincial departments of planning and investment nationwide allso grew 40 per cent to 10-15 hours per day, according to the ministry. First tenants of VSIP Nghe An granted licences The Viet Nam Singapore Industrial Park joint venture (VSIP JV) kicked off the construction of an office building on September 20. On the same day, the Nghe An authorities handed over the first three investments certificates to the park's tenants. The construction is spread over 2,500sq.m. and operations are expected to begin in 2017. The industrial park will serve as an office for tenants and will be a one-stop-shop for officials of VSIP Nghe An. The industrial park was granted exclusive rights by the provincial people's committee to develop a 750ha integrated township and industrial park along with an investment licence for phase one of the project with US$15.2 million in funding. In addition, Nghe An officials granted investment licences to TDV Group, NAVOCO Vinh and Viet Nam Post with total investment of VND253 billion ($11.3 million). VSIP Nghe An is the seventh VSIP in Viet Nam after industrial parks in Binh Duong, Quang Ngai, Bac Ninh, Hai Phong and Hai Duong. The network of industrial parks has, so far, attracted 616 investors from 30 countries and territories with total investment capital of $8.5 billion, creating 160,000 jobs. Hanil Feed to acquire stake in Vietnamese firm Hanil Feed (005860), a feed manufacturer, has decided to acquire 8,000,000 shares of GTNfoods Joint Stock Company in Viet Nam for 5.6 billion won (US$5 million) through third-party allotment, it said on September 19.  This amounts to 10.85 percent of the firm's equity capital and it will own 3.2 percent stake in the Vietnam-based firm, following the purchase.  South Korea and Viet Nam will hold a joint committee meeting this week to discuss economic cooperation, the Korean Foreign Ministry said on September 20. The 15th Joint Economic Committee will be held in Hanoi on September 22 with the talks to be led by Lee Tae-ho, deputy foreign minister for economic affairs and his Vietnamese counterpart Nguyen The Phuong, according to the ministry. The committee has been held since 1993 and aims at providing a platform for both sides to exchange views and ideas on economic cooperation in a wide range of areas. At the upcoming meeting, both will discuss follow-up measures to what was agreed upon in a summit held during the ASEM gathering in July, the ministry said. Viet Nam international motorshow set to return   Eighteen leading automobile brands will take part in the biggest ever motor show in Viet Nam – the 2016 Viet Nam International Motorshow – to be held in HCM City next month. The show follows the first ever event in 2015, which was very successful with the participation of nine automobile importers and attracting more than 70,000 visitors. One hundred and fifty models from 18 brands -- Audi, Bentley, BMW, Motorrad, Infiniti, Jaguar, Lamborghini, Land Rover, Maserati, Mercedes-Benz, Mini, Nissan, Porsch, Renault, Subaru, Suzuki, UD Trucks, and Volkswagen -- would be on display, Laurent Genet, general director of Audi Vietnam and a spokesperson for the organisers, said. He added that passenger cars, which account for 60 per cent of the Vietnamese market, would be the focus of the show. The exhibition this year will see the return to Viet Nam of popular Russian brand Ulyanovsky Avtomobilny Zavod (UAZ). The show, from October 26 to 30, is expected to welcome 120,000 visitors. To attract more visitors, it will remain open until 8pm daily. The 2016 Viet Nam International Motorshow comes amid impressive growth in the country's automobile market. In the first eight months of the year over 183,000 new imported and locally assembled cars were sold, an increase of over 30 per cent year-on-year. The expo will be held at the Sai Gon Exhibition and Convention Centre in District 7 of HCM City. Petrol price increased for the third consecutive time The Ministry of Industry and Trade increased the retail price of fuel on September 20. According to a decision sent to wholesale petrol businesses, the selling prices of RON 92 and E5 bio-fuel increased by VND156 and VND145 to close at VNĐ16,232 (US 72 cents) and VND15,981 per litre, respectively. The price of diesel oil and kerosene went down VND133 and VNĐ99 to become VND12,255 and VND10,886 per litre, respectively. The price of mazut rose 4 dong to reach VND 9,343 per kilogram. This has been third consecutive increase of a total amount of VND1,600 per litre after four decreases so far this year. The ministry also decided to keep the price of the petrol price stabilisation fund unchanged at VND300 per litre. It said that the average petrol price on the world market over the past 15 days was over $55.5 a barrel, increasing $0.80 a barrel over the previous fortnight. Previously, a petrol trader in HCM City said that the retail price was VND300 per litre higher than the base price. He said that retail fuel prices in the country had been on the upward trend since August. He added that the special consumption tax on petrol has made considerable changes since August 19 after Decree 100/2016/ND-CP took effect. Accordingly, the tax would be calculated on selling prices instead of import prices. The calculation has added to the petrol price by VND100-200 per litre. According to statistics from the General Department of Customs, in the first eight months of the year, the country imported around 7.96 million tonnes of petroleum for a total of $3.1 billion, increasing 23 per cent in terms of quantity and reducing 16 per cent in terms of value from the same period last year. Notably, Viet Nam's petrol traders have imported mainly from countries with preferential tariffs such as Singapore (3.05 million tonnes, increasing 12.3 per cent), South Korea (1.06 million tonnes, increasing 670 per cent) and Malaysia (2.23 million tonnes, increasing 500 per cent) from the corresponding period last year. The petrol imports from China and Thailand have seen a sharp decline.  Effective animal husbandry policies needed Lack of effective policies hinders the development of the animal husbandry industry in Việt Nam, experts said. Over the past few years, a lot of preferential policies have been issued by the Government to encourage investors to pour money into agriculture. But some ot these policies, including the credit policy, have not improved efficiency. Tống Xuân Chinh, deputy head of the Department of Livestock Production under the Ministry of Agriculture and Rural Development (MARD), said that despite Government incentives providing loans for large scale farms, agencies faced a lot of difficulties in implementation. Decree No 55/2015/NĐ-CP, prescribing credit policies for agriculture and rural development, was considered a breakthough for restructuring agriculture and the economy. Under the decree which took effect on July 25 last year, credit institutions may consider the provision of loans to customers with or without asset mortgages. The decree allows credit institutions to raise the level of lending without collaterals by a factor of 1.5-2 times higher than before. An individual, business household, co-operatives or farm owners can take loans ranging from VNĐ50 million (US$2,240) to VNĐ3 billion ($134,520), depending on location and production. Farmers’ demand for accessing loans to develop production was high, but the number of households receiving loans with interest rate of less than 11 per cent per year remains low, Chinh  said. Although borrowers without collaterals can seek credit, they must submit their land use rights certificates or written certifications from commune-level People’s Committees to lenders, documenting that they have not yet been granted land use rights certificates and that their land is dispute-free. This requirement is hard for borrowers to satisfy since most households and co-operatives rent land, Chinh said. In addition, breeders have difficulties regarding collaterals because banks do not accept the use of property, such as livestock and facilities, as collateral for loans, Chinh said. Another hindrance preventing the agriculture sector’s development is the Government’s policy on land aggregation, experts said. Many big enterprises have expressed their desire for adequate land to apply new technology. But the issue remains unresolved because under the current Land Law, land aggregation is prohibited. Tà Văn Tường, director of Hà Nội’s Livestock Development Centre, said at present the areas for livestock breeding are either households or are leased for only five to10 years, so households hesitate to invest in production for fear of losing their money. Planning is also an issue for the livestock breeding industry. According to Lê Bá Lịch, chairman of the Việt Nam Feed Association, the MARD has not created a plan for the industry yet. The planning was decided by each locality and not many incentives were provided for households and enterprises engaged in livestock breeding. Đồng Nai province, the country’s biggest livestock farming province, is one example, Lịch said. The province has set up a plan for the establishment of 11 concentrated livestock farming zones with over 1,400ha in a number of districts by 2020. But it remains just a plan, so no preferential policies for investors were mentioned. This was unfair, in comparision with those who invested in industrial zones, who enjoy Government support in accessing electricity and water, as well as roads. Investment in livestock breeding, without central or local authority assistance, occur not only in Đồng Nai but also in other provinces, Lịch said. To attract big investors to the animal husbandry industry, Trần Duy Khánh, vice chairman and general secretary of Việt Nam Poultry Association, said the country should compile a master plan on the development of livestock breeding zones which promote links between local breeders and corporate buyers. This would help set up supply chains for big cities like Hà Nội, HCM City and Đà Nẵng, he said. The Government should also revise polices in accordance with investor demand, with priority given to high risk areas such as creating animal breeds and tackling environmental issues relating to carbon credits for greenhouse gas emissions in the agricultural sector, Khánh said. It must adopt policies to attract investors to the industry, as well as to ensure financial resources for it, he said.  Value of shares auctioned increases by 84% The value of shares auctioned through the Ha Noi Stock Exchange (HNX) up till September 15 increased by 84 per cent against the same period last year, the bourse said. The northern bourse held 43 auctions, including the equitisation of 26 state-owned enterprises and 16 firms divesting state stake to raise capital, with a total of 561.5 million shares offered. Compared with last year, the number of auctions reduced by more than 20 per cent, but the volume of shares sold increased by 2.5 times. More than 476 million shares, or 84.8 per cent of the shares offered, were sold at the auctions. The total value of shares sold reached VND6.4 trillion (US$286 million), a surplus of VND361 billion compared with the starting price. The bourse said the reason for the increase was because some large corporations executed their business equitisation or divestment plan in September. In addition, the auctions of shares in batches also helped increase the volume of shares sold. Noi Bai Cargo to pay 40% of cash dividend Noi Bai Cargo Terminal Service Joint Stock Company (NCT) has announced it will pay 40 per cent of cash dividend on October 3. Shareholders will receive VND4,000 (US$0.18) per share, while the cargo firm will pay a total of VND105 billion as dividend. The firm made VND142 billion as after-tax profit in the first half of the year, down 21 per cent year-on-year, but still achieved 53 per cent of its profit target for the whole year.  The firm listed on the HCM Stock Exchange last year with charter capital of VND249.2 billion. Currently, it has more than 26 million shares on the exchange. At present, national flag carrier Vietnam Airlines owns more than 55 per cent stake in Noi Bai Cargo. Another large shareholder is Noi Bai Airport Services with a 6.98 per cent stake. According to a local investor, Noibai Cargo is one of the businesses with the highest annual dividend in the market. Last year, it paid a total dividend of 110 per cent.  Earlier, at the 2016 annual shareholders meeting, the company said it expected difficulties this year, setting revenue and profit targets lower than 2015, with a projected annual dividend of 106 per cent. In 2011, Noi Bai Cargo paid dividend at 138 per cent, raising it to 160 per cent in 2012 and 163 per cent in 2013. On September 19, each NTC share rose more than 1 per cent to reach VND100,000 on the HCM Stock Exchange Eco-friendly products get tax cuts on export In a bid to encourage green production and highlight its commitment to environmental protection, Vietnam will extend export tax exemptions and reductions to certain types of environmentally-friendly goods. Outlined by the Ministry of Finance, under Circular No.128/2016/TT-BTC on export tariff exemption for environmentally-friendly products, incentives are set to come into effect on September 23, 2016. Under the new regulations, goods that have achieved compliance with standards set out under Vietnam’s green label programme will be eligible for a complete exemption from all export taxation. Vietnam has recently released an optional environmental certification for enterprises, to emphasize its commitment to environmental protection, and as a means of incentivising investors to comply with a more stringent set of standards. In addition to exemptions offered to goods with Vietnam’s green label, goods relating to recycling activities and waste treatment and disposal will also be eligible for 50% reduction on applicable export tariffs. A list of goods eligible for reductions is outlined in the government’s Decree No.19/2015 ND-CP, detailing a number of articles of the Law on Environmental Protection issued in 2014. The key areas include treatment of concentrated domestic wastewater, collection, transport, and treatment of solid waste, treatment of hazardous waste, treatment and renovation of polluted areas, rescue and handling of oil spills, chemical incidents, and other environmental incidents, and the production and export of environmentally-friendly products. Vietnam currently applies export tariffs on a variety of products used in the extractive industry, and other exports that are deemed to have a significant impact on Vietnam’s environment. Depending on the impact that a given industry or export is deemed to have, taxes can range from 0-45%. Commenting on these new incentives, Asia Briefing Ltd., a subsidiary of legal, tax, and operational advisory firm Dezan Shira & Associates, stated that “For investors currently considering use of the green label certification or working in industries related to waste treatment and recycling, the introduction of incentives could provide a significant boost to operations.” Nguyen The Dung, deputy director of locally-owned Green Solutions Co. Ltd, said his firm sees the new incentives in Circular 128 as “a golden opportunity to boost exportation of products made from recycled plastics.” “We are planning to cooperate with a Japanese firm to establish a joint venture in Vietnam to produce and exports these products to ASEAN markets,” Dung said. “Currently, an average high export tax rate of 8-15% is imposed on our products. If this rate is removed, we will be able to increase our profit by about 10% annually.” Like Dung’s firm, the Republic of Korea (RoK)-based Kanden Renewable Energy Company is also optimistic about Circular 128. “We will come to Vietnam in October to work with the local authorities about a possibility of building a lighting equipment facility with recycled materials used. We will export the products,” said Kanden Renewable Energy Company’s director Choi Sung Guk.  “However, under Circular 128, products eligible for a complete exemption from all export taxation must meet standards of Vietnam’s green label programme. But we wonder that if our products can meet the RoK’s green standards, whether that means they can satisfy the programme’s standards or not.” According to Asia Briefing Ltd., the programme conforms with the International Standards Organization and is administered at the national level by the Ministry of Natural Resources and Environment. To obtain green label certification, specific procedures and protocols must be followed dependent on the good in question. The structure of the application process is broadly outlined in Circular No.41/2013/TT-BTNMT on ecobiotic labelling for environmentally friendly products, which took effect on January 15, 2014.  Philippines extends safeguard duties on Vietnam test-liner board paper The Philippines Department of Trade and Industry (DTI) has decided to extend safeguard measures against test-liner board importer from Vietnam for another four years. The Competition Management Authority under the Ministry of Industry and Trade said under the official announcement from the DTI, safeguard duties will be imposed on a number of test-liner board products and will become effective after the Philippines Customs issues a related decision or 15 days following the DTI’s decision to be widely made public. Earlier on September 16, 2010, the DTI Secretariat issued a decision imposing safeguard duties on Vietnamese products and then on November 29, 2013, the first three-year extension of the duty was made. According to the DTI, it is imperative to apply safeguard measures aimed at reducing losses caused by paper imports of the domestic industry that needs more time to make proper adjustments to raise its competitiveness against imported products. Despite concerns JA Solar raises investment in solar cell project Despite concerns about the feasibility of Chinese JA Solar’s solar cell production project in the northern province of Bac Giang, the investor has committed to increasing the investment capital to $450 million, $130 million higher than the initially sum. According to information published on Kinh Bac City Development Holding Corporation (HoSE: KBC)’s website, on September 14, KBC and JA Solar signed an agreement to jointly develop the solar cell plant. The agreement was made during the visit of Prime Minister Nguyen Xuan Phuc and a Vietnamese business delegation to China. Earlier in July, the two parties signed a land lease contract handing over an 88-hectare land area in Bac Giang province’s Quang Chau Industrial Park to JA Solar to implement the project with a total investment of over $1 billion. According to the latest agreement, the construction will be divided into numerous phases. The first phase will cover an area of 40 hectares with a total investment capital of $450 million. Established in 2005, JA Solar is the fourth largest solar cell producer in the world. It currently has eight plants in Europe, the Latin America, and Japan. In 2015, the group earned $2.15 billion in revenue. JA Solar’s project has a large-scale, however, it has raised concerns over its feasibility in the context of numerous foreign investors’ empty promises in this sector. In January 2011, Ho Chi Minh City Industrial and Export Processing Zones Management Authority (Hepza) granted an investment certificate to First Solar Vietnam Manufacturing Co., Ltd., a subsidiary of US-based First Solar Technology Group, to develop a factory producing thin-film solar power panels and semi-finished products. The 44.2-hectare factory has a total investment capital of $1.2 billion, with a designed capacity of up to 1,080MW per year. The operational time of the whole project is 50 years. The first phase’s construction was kicked off in March 2011 and is expected to be completed within 19 months. However, the construction was suspended after a mere eight months due to the supply-demand imbalance on the world solar market. In July 2012, First Solar Group announced plans to sell its factory and leave Vietnam. Earlier in February 2012, the American company completed the evaluation and approved a set of initiatives to increase manufacturing capacity, among others, primarily intended to adjust its previously planned expansions and global manufacturing footprint. In April, a representative of Hepza said that a new investor may put forward at least $500 million to the project. However, the name of the new investor and the project’s date have yet to be disclosed. Along with First Solar’s project, in January 2013, Global Sphere and WorldTech Transfer Investment held the ground-breaking ceremony of their $300-million solar cell production plant in Phong Dien Industrial Park in the central province of Thua Thien-Hue province. The construction was be divided into two phases. It was scheduled to start in late 2013 and to start production in May 2015. However, in October 2015, Global Sphere announced to withdraw from the project. Another example of a failed solar cell project is the $390 million investment of IC Energy in Chu Lai Open Economic Zone in the central province of Quang Nam. The construction, which was kicked off in May 2011, was expected to go live with its first 30MW manufacturing line in late 2011. The project would then become fully operational by the end of 2015. In 2012, the investor proposed the authorities to extend the deadline due to difficulties in product consumption. As of now, the construction has yet to be resumed. PVI Sun Life stake sale retrospective Three weeks after PVI Holdings’ complete divestment from the life insurance business, the deal’s effects on both parties are becoming clearer. At the start of a series of transactions that has seen Sun Life Assurance Company of Canada become sole shareholder in the joint venture PVI Sun Life, local partner PVI Holdings owned 51 per cent of stock in the joint venture while Sun Life Assurance had 49 per cent.  Sun Life Assurance Company of Canada is a subsidiary of Sun Life Financial Inc., a leading Canada-based international financial services company. Nine months ago, the foreign partner acquired 26 percent of PVI Holdings’ once commanding stake; in late-August Sun Life Assurance acquired PVI Holdings’ remaining 25 percent. PVI Holdings, a unit under direct control of state-owned oil and gas conglomerate PetroVietnam, manages three insurance businesses: PVI Sun Life, PVI, and PVI Re. In addition to insurance, financial services are within its scope.     PVI Holdings chairman Nguyen Anh Tuan said that the capital divestment from life insurance was a strategic step, coinciding with the company’s business restructuring commitment. The move frees up PVI Holdings to concentrate on its two core insurance segments – non-life insurance and reinsurance – as well as its financial investments.  Life insurance services like those offered by PVI Sun Life are a long-term investment. They may take over five years to begin generating profits, which could affect the business efficiency of the whole PVI system.  Tuan said, “Since its launch in 2013, PVI Sun Life has established itself as the country’s sixth-largest life insurance provider and a market leader and industry pioneer in pensions. That explains why Sun Life has willingly paid 2.5 times more than the original investment.  “For PVI, the proceeds from the stake sale [about $46 million from both deals] will help the whole PVI system, particularly our member units currently operating in the insurance business – PVI and PVI Re – become healthier.”      According to Tuan, as a latecomer in the life insurance market, it wasn’t easy for PVI Sun Life to compete head-on with established brands like Prudential Vietnam, Bao Viet Life Insurance, and Manulife. Due to this crowded field, profitability may have come later than expected.  “However, we did not pull out from life insurance operation due to these difficulties. In contrast, this capital divestment is a win-win for both sides’ development,” Tuan said.  About the stake acquisition, Kevin Strain, president of Sun Life Financial Asia, said, “We have enjoyed a successful partnership with PVI since establishing the business together and look forward to continuing a close working relationship with them as our distribution partner. We have great momentum in Vietnam and remain committed to helping our Vietnamese clients achieve lifetime financial security, by offering a strong suite of insurance and wealth management products.” In the eyes of Sun Life, Vietnam has been one of the fastest growing economies in Asia in recent years. The life insurance and pensions industry is expected to continue experiencing strong growth in the years to come. HCM City, “magnet” to attract investment from RoK’s conglomerates A dynamic investment climate has made the southern city of Ho Chi Minh a magnet to conglomerates from the Republic of Korea (RoK) like Samsung, Lotte and CJ.  Many big RoK businesses have made commitments to pour more investment into the city during a visit this month to the RoK by a Vietnamese delegation led by Secretary of the Ho Chi Minh City People’s Committee Dinh La Thang, the Sai gon Giai phong newspaper reported.  The newspaper quoted Vice Chairman of the municipal People’s Committee Le Van Khoa, the RoK is at present the city’s fourth foreign biggest investor with 1,252 projects with total investment of 4.3 billion USD. Bilateral trade in the first eight months of this year was more than 2.6 billion USD. The city also welcomed about 240,000 tourists from the northeast Asian country. During meetings with the Vietnamese delegation, Hyosung’s Vice President Yoo Sun Hyung revealed that the group plans to pour 1.12 billion USD into Vietnam from 2016-2020. The group is eying five potential fields in the city, which are petrochemical technology, LPG (liquefied petroleum gas) harbour and storage, electricity, environment and construction. On the occasion, the RoK’s biggest low-price retailer, Emart signed a memorandum of understanding (MoU) to invest in the city to 2020 with total estimated capital of about 200 million USD. The company is looking for suitable local partners to expand its business. An MoU on importing and exporting food between the city and the CJ CheilJadang Group, a RoK food company, was also signed. President of Lotte Group, Shin Dong Bin said the group made a phase 1 deposit of 5.5 million USD for its Thu Thiem Eco Smart City project in the city. The group is also interested in the Ben Thanh- Thu Thiem metro route while continuing to expand its existing businesses such as Lotte Mart, fast-food, cinema chains, and home shopping. According to a recent survey of the RoK Institute for Industrial Economics, and Trade, Vietnam’s capital city of Hanoi and Ho Chi Minh City were ranked first and second in the list of most favourable investment environments in Asia, followed by India’s Delhi, Mumbai, and Chennai; China’s Shanghai, Chengdu and Qingdao; Yangon (Myanmar); and Jakarta (Indonesia).  Hoping for a new wave of investment from the RoK, Khoa affirmed Vietnam is applying open- door policies, and the city has created favourable condition for foreign investors. The newspaper also quoted RoK Prime Minister Hwang Kyo-Ahn as saying in his meeting with the HCM City delegation that Ho Chi Minh City is a model locality for dynamic development and creativity in the region. He also encouraged RoK enterprises and localities to bolster investment in the city and Vietnam as a whole. RoK group to pour 550 mln USD into Hai Phong The Republic of Korea (RoK)’s LG Innotech Co. Ltd under the LG Group will invest 550 million USD into a project in the northern city of Hai Phong. The RoK firm will build a 10-hectare factory producing module cameras at the Trang Due Industrial Zone, according to the Hai Phong Industrial Zone Management Board. The project is the third invested by LG in the city, bringing the group’s total investment in Hai Phong to about 3.35 billion USD. The first one is a 1.5 billion USD facility producing electronic home appliances, which was put into operation in March 2015, and the second one, also worth 1.5 billion USD, was licensed in early April this year to make OLED displays. Both of them are in Trang Due IZ. Hai Phong is one of the country's top performers in foreign direct investment attraction alongside with Hanoi, and southern Binh Duong and Dong Nai provinces, and Ho Chi Minh City. As of August, the city attracted more than 11 billion USD in foreign direct investment in 2016. Viet Nam's coffee exports exceed expectations Viet Nam's coffee exports in August reached 2.54 million bags (152,678 tonnes), a growth of 9.2 per cent from July, according to the General Department of Customs' statistics. This number is significantly higher than the market's expectation of 100,000 to 120,000 tonnes, as well as the government's estimated 140,000 tonnes. Viet Nam's coffee exports from the beginning of the 2015-2016 crop has yielded 1.61 billion tones, as of today, an increase of 33 per cent compared with the same period last year. Experts said Viet Nam's increase in coffee exports in August has contributed to balancing the market in the context of decreasing supply from Brazil, one of the largest coffee producers in the world. According to the August 2016 monthly exports report by the Brazilian Coffee Exporters Council (Cecafe), the country's export of Robusta coffee in August had declined by 90 per cent compared with the same period last year to a mere 39,327 60kg bags. Brazil's yield of Robusta coffee was severely affected by the drought in the state of Espirito Santo -- Brazil's main Robusta-producing region. Its coffee exports (both Arabica and Robusta) in August reached 2.4 million bags, down by 7.4 per cent from the same period last year. Nonetheless, compared with July, coffee exports still increased by 46 per cent -- the smallest amount in a year. Nelson Carvalhaes, president of Cecafe, predicted a gradual and sustainable growth recovery for Brazil's coffee exports. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR