BUSINESS IN BRIEF 25/11 Gov’t aims for stable power tariff       The electricity sector in 2017 will strive to prevent the power tariff from stirring controversy, said Hoang Quoc Vuong, deputy minister of Industry and Trade. Vuong said the sector has not seen complaints about power tariffs this year, as the prices have been kept stable. The sector has ensured power supply to the production and consumption demand as well as national energy security in the year of 2016. A report from the Electricity of Viet Nam (EVN) showed that in 2016, the group planned to have power output of 175.9 billion kWh. Of which, the EVN’s power productivity would be 81.6 billion kWh, while that of purchasing power output was 94.27 billion kWh and the commercial power output was 19.1 billion kWh. As of October, total power capacity was 40,823 MW, including 15,368 MW of hydropower plants; 13,826 MW from thermal power plants; 2,209 MW from small hydropower plants and 395MW from imported power. The National Oil and Gas Group (PetroVietnam) – one of the two big groups providing fuel to thermal power plants said its gas supply next year was expected to be lower than this year’s. Therefore, PetroVietnam will continue to work with its members to adjust the gas supplies in 2017 to meet with power production demand. Nguyen Van Bien, deputy general director of Viet Nam National Coal and Minerals Group (Vinacomin), said the group and Dong Bac Corporation have been studying to design three new vessels to better serve coal transportation. Vinacomin has also worked with three transport companies to facilitate coal transport to thermal power plants. This year, Vinacomin supplied around 4.8 million tonnes of coal to EVN thermal power plants. The amount is expected to reach 5 million tonnes in 2017. Deputy minister Vuong asked all power companies to pay attention to power plant maintenance to ensure safety, as there were some incidents this year. He required PetroVietnam to ensure gas supplies for electricity production while asking Vinacomin and Dong Bac Corporation to supply coal for 22 power plants. In addition, Viet Nam will consider importing power from Laos if the tariff was lower than local production costs. Hanoi wants more high-tech farms     Ha Noi is seeking ways to promote investments in high-tech agricultural production. Experts at a conference held here on Tuesday said the shortage of land, infrastructure, planning and policies as well as human resources were barriers to investments in this specialised sector. Nguyen Thi Thoa, head of the plantation department of the municipal Department of Agriculture and Rural Development, said the capital city targeted raising the proportion of high-tech agricultural production from the current 25 per cent to 35 per cent of the sector’s total production value by 2020. Businesses are still not very keen on investing in this model due to difficulties in accessing land, credit and modern techniques, while incentives were still beyond reach, Thoa said. Addressing land as the greatest problem affecting investment in such production, Vo Viet Dung, chairman of Nam Ha Noi Food Processing Joint Stock Company, said the city should have a policy to develop land for this kind of agriculture. “Land is of great importance in encouraging firms to pour investment into agricultural production,” Dung said. Experts at the conference said that promoting the link between farmers and firms was critical. Dam Quang Thang, director of Agricare VN, said firms should coordinate with farmers to apply advanced technology to agricultural production. In addition, strong products should be selected to spearhead the project, Thang said. “Ha Noi should have policies to encourage the development of the agricultural value chain to produce high value-added and competitive products,” Bui Le Phong from Ha Noi Seed Joint Stock Company said, adding that a specialised zone for high-tech agricultural production should be developed to attract investments. Do Nang Vinh from the Agricultural Genetics Institute under the Ministry of Agriculture and Rural Development said renovating the production methods of the agricultural sector is now a necessity due to increasing demand for high-quality agricultural products in both the domestic and foreign markets. Vinh said Ha Noi should build a high-tech agricultural park and should plan for high-tech agricultural production, focusing on producing strong products. Agreeing with Vinh, Nguyen Tri Ngoc Nguyen, Director of the ministry’s Plantation Department, said developing a zone for this kind of agricultural production was now urgent. However, as public funds remain limited, the capital city should adopt policies to attract private investments, he added. Ha Noi has more than 157,000ha of agricultural land, accounting for 46.8 per cent of the city’s total area. The value of agricultural production reached VND32.9 trillion (US$1.46 billion) last year. Vietnam attends international trade fair in Algeria A Vietnamese company is attending the 14th International Trade Fair for Public Works and Construction Machinery - SITP 2016, which started in Algiers, Algeria on November 23. SAKI Corp, which specialises in industrial scale production and providing professional equipment, is representing Vietnam at the fair. Addressing the event, Vietnamese Ambassador to Algeria Pham Quoc Tru said that Algeria has high demand for public works construction and human resources for infrastructure development. He expressed hope that Vietnamese firms will actively seek opportunities and business partners in Algeria in various fields, particularly construction. The five-day fair, organised by Algeria’s Ministry of Public Works and Transport, has also drawn the participation of construction and transport companies from Germany, France, Italia, China, Indonesia and Algeria. Tra Vinh strives to attract 2.6 billion USD in five years  The Mekong Delta province of Tra Vinh has set to attract about 59 trillion VND (2.6 billion USD) of investment in the 2016-2020 period, said a provincial official. Tran Anh Dung, Vice Chairman of the provincial People’s Committee, said that the province expects 960 billion VND from State businesses, 49.56 trillion VND from private enterprises and 8.4 trillion VND from foreign direct investment (FDI) sector. To fulfill the target, the locality will apply a number of measures, including fostering connection between authorities and businesses in investment promotion and calling for investment in transport, economic and industrial zone infrastructure. Tra Vinh will review and build support and preferential policies for investors, while creating a smooth, transparent and competitive investment environment and speeding up the administrative reform, he said. At the same time, it will create all favourable conditions for businesses to access capital and land, while implementing support policies for both enterprises and individuals during their investment and ensuring social security and order in the locality. Tra Vinh will also make public its land fund, detail planning, and prioritised projects to encourage investment, said Dung. Meanwhile, the province will improve the quality of training for labourers, especially those in rural areas, in addition to enhancing local officials’ capacity, he added. So far, Tra Vinh has attracted 48 projects with a total registered capital of more than 151 trillion VND (6.6 billion USD), including 16 FDI projects worth over 2.88 billion USD. Investors in Tra Vinh are mostly from Malaysia, the Republic of Korea, Japan, Canada and Taiwan (China).- Can Tho fosters economic, cultural links with RoK’s Gimcheon province Chairman of the Can Tho city People’s Committee Vo Thanh Thong and Governor of Gimcheon province of the Republic of Korea (RoK) Park Bo Saeng discussed orientations for economic and cultural cooperation between the two localities. During their meeting in the Mekong Delta city of Can Tho on November 23, the Gimcheon Governor suggested the two localities sign a Memorandum of Understanding on bilateral partnership, focusing on the trading of their farm produce. He asked Can Tho authorities to help with the organisation of more workshops, fairs and exhibitions in order to connect Vietnamese and Korean businesses, particularly those from Can Tho and Gimcheon. The governor also informed his host that Korean enterprises hope to sell their agricultural machinery in Vietnam. Chairman Vo Thanh Thong affirmed Can Tho always regards the RoK as a strategic partner, a prestigious supplier and a promising export market. The city is accelerating its export of seafood, garments-textiles, fertilisers and chemicals to the RoK while importing pharmaceutical and garment-textile materials from the market, he said. Besides, Can Tho has also paid attention to promoting ties with the ROk in the fields of education and culture, the official said, adding that the RoK has conducted many educational cooperation projects with the city, such as the establishment of the King Sejong Institute and the Korean Studies Centre, among others. According to the Can Tho Department of External Affairs, the RoK is currently running nine investment projects in the city with accumulated capital of 247 million USD. Two others are funded by RoK’s official development assistance (ODA), including the Vietnam-RoK industrial incubator. RoK non-governmental organisations (NGO) have also sponsored four projects in Can Tho. International textile, garment exhibition kicks off in HCM City The 16th Vietnam International Textile and Garment Industry Exhibition opened in Ho Chi Minh City on November 23. The event draws the participation of more than 400 agencies and businesses from 17 countries and territories. They bring up-to-date machinery and equipment to the exhibition, such as sewing machines, power looms, automatic fabric cutting and printing machines, garment materials, apparel and accessories. Workshops on domestic firms’ competitiveness and the future of Vietnam’s textile and garment industry will also be held as part of the exhibition, which will last through November 26. Vietnam’s textile and garment exports increased 4.8 percent year on year in the first 10 months of 2016 to 23.3 billion USD, according to the National Garment and Textile Group (Vinatex). The country targets total overseas shipments worth 28-29 billion USD this year. The US is the top market for Vietnam’s textile and garment products with 10 billion USD, up 4.37 percent from a year earlier, followed by Europe with nearly 3 billion USD, up 2.46 percent. Vietnam, Norway look to optimise maritime economic cooperation Vietnam and Norway will forge stronger cooperation in maritime economy for the interest of residents in coastal localities, heard a conference on maritime economy held by the Norwegian Embassy in Ho Chi Minh City on November 23. According to Nguyen Hoang Ha from the Development Strategy Institute under the Ministry of Planning and Investment, with advantages of a long coastline spanning from north to south, Vietnam boasts high potential in sea-based industries, trade and services. However, the exploitation of maritime economy in Vietnam has been limited as the annual production value has stayed modest, he said. Ha also pointed to challenges facing Vietnam in effective developing sea-based economy and protecting the environment at the same time in the context of climate change, adding that Vietnam should make new policies and planning and widen its international cooperation for improving the situation. Meanwhile, Norwegian Ambassador to Vietnam Siren Gjerme Eriksen said that Norway and Vietnam share similar strength in sea-based economy, maritime navigation and oil and gas, which enabled them to cooperate in the areas over the past years. Since 1979, Norway has supported Vietnam in personnel training for the oil and gas sector, she said, adding that Norway has also worked with Vietnam in developing standards in environment and safety for the sector. In the future, if negotiations on the free trade agreement between Vietnam and the European Free Trade Area (which comprises of Switzerland, Norway, Iceland and Liechtenstein) succeed, the Vietnam-Norway trade and investment ties will thrive, she said. At the same time, Erik Hempel, Director of Communications at the Nor-Fishing Foundation, shared his opinion on the significance of science and technology in fisheries development. He also pointed to the need of a complete legal framework for sustainable development. Within the conference’s framework, a number of thematic discussions were held on maritime economic sectors of both country’s strength, technology in seaport operation and sustainable development of the shipbuilding industry. National brand award to honour 88 businesses Up to 88 businesses will be presented with the “Vietnam Value Award 2016” in recognition of their national strong brand names on November 30, officials have announced. Deputy Director of the Trade Promotion Agency Do Kim Lang said, out of the 88 businesses, 23 firms have won the awards for five consecutive times, including Viet Tien, An Phuoc, Saigon Beer-Alcohol-Beverage JSC (Sabeco), Vina Coffee; Commercial Bank for Foreign Trade of Vietnam JSC (Vietcombank); Biti’s; Vietnam Posts and Telecommunications Group (VNPT), and Saigon Jewelry JSC (SJC). Worthy of note, 26 enterprises reported annual revenues of at least 5 trillion VND (220 million USD) and 70 others earned at least one trillion (44 million USD) per year, Lang said, adding that some small-sized companies will be also honoured for their efforts to invest in new fields such as biotechnology and hi-tech. The organisers said this year’s award winners operates in various fields such as engineering, machinery and equipment; garment-textiles and footwear; electronics, information technology and telecommunications; agriculture, forestry and seafood; finance and banking; food and beverages; trade services; construction and real estate. In 2015, their combined revenues exceeded 662 trillion VND (29.1 billion USD), up nearly 20 percent from the figure in 2013. They exported over 2 billion USD worth of goods, contributed over 59 trillion VND (2.6 billion USD) to the State budget, and created jobs for nearly 500,000 labourers. The enterprises also donated over 2.3 trillion VND (102 million USD) to charity activities last year. Vietnam Medi Pharm Expo to open next week As many as 150 enterprises in the pharmaceutical and medical sectors from 18 countries and territories will display their products at the upcoming medical and pharmaceutical exhibition in Hanoi. The 23rd Medi and Pharm Expo will take place from December 1-3 with 250 booths displaying latest achievements, advanced technology and medical equipment. Twenty five companies from the Republic of Korea will participate in the event, along with those from Canada, the US, the UK, the Czech Republic, Germany, Italy, Russia, Japan, India, Singapore, Malaysia and Thailand, among others. Conferences, free-of-charge medical checkups, blood donation and gift presentations will take place during the expo. Exports to Myanmar dwindle in ten months Vietnam’s exports to Myanmar dipped 11.1% to US$275.2 million during the first ten months of this year, according to the General Department of Vietnam Customs. Vietnam businesses exported 13 kinds of products to Myanmar with means of transport and spare parts leading the pack with US$41 million, up 32.85% and accounting for 21% of total export value, trailed by machinery, equipment and tools (up 33.77% to US$33.8 million) and steel (down 24.25% to US$27.4 million). In the reviewed period, 61.5% of export products to Myanmar posted relatively high growth while 38.4% saw lower growth rates. Clinker and cement experienced a strong decline of 98.6%. Export items to Myanmar included means of transport and spare parts (making up 17%), steel (14%), plastic products (14%) and others (34%). Small firms in Vietnam lack access to bank credit Vietnam’s 600,000 small and medium-sized enterprises continue to grapple with limited access to credit even though they play an important role in the economy and account for 52% of total employment, the Vietnam Chamber of Commerce and Industry (VCCI) said. Only 30% of private businesses of small and medium sizes, better known as SMEs, have managed to secure bank loans, according to latest data from VCCI, an influential group that represents the business community in the country. Statistics also showed that the amount of credit provided to SMEs only accounted for 3% of all outstanding loans at local banks. There is not much readily available information to help banks gauge a small business’s creditworthiness, Rajeev Chalisgaonkar, the global head of business banking at Standard Chartered, told a workshop on November 23. Although there are some banks that focus on SMEs, they really are not able to offer financing to early-stage companies which often don’t have a track record of reliable annual revenues or a history of good credit, he said. Limited access to finance is a major constraint to the growth of private companies, besides other obstacles such as management or technological issues, said VCCI’s Vice President Vo Tan Thanh. There is a growing recognition of the importance of the private sector, particularly of SMEs. The government is expecting that, by 2020, private companies will contribute up to 49% of gross domestic product. In order to improve access to finance for small businesses, the Ministry of Planning and Investment has proposed a series of initiatives to support small businesses. If the country's lawmakers sign on, an estimated 550,000 SMEs will benefit. Vietnam to import power from Laos to ease shortage Vietnam is negotiating with Laos on electricity prices as it may need to import power from the neighbor for its fast growing economy, local media has reported, citing trade deputy minister Hoang Quoc Vuong. Demand for electricity is expected to grow 13%annually in the next four years. Meanwhile, the country’s total output in 2016 is forecast to increase by just 12% to 184 billion kWh from last year, Nguyen Hai Ha, an executive of state utility EVN told the Saigon Times. In the short term, the government has planned to bridge the supply-demand gap by importing electricity from Laos, which will build four more hydropower plants in 2017. Vietnam has upgraded transmission grids to accommodate the imports. EVN estimated the total output of locally produced and imported electricity this year will reach 175.9 billion kWh. Vietnam's economy has expanded by more than 5% a year on average since 1999 and growth is forecast to reach 6.5%-7% in the next four years. The country has mapped out a blueprint for the development of the power sector. The plan foresees VND3,207 trillion (US$142 billion) worth of investments in generation and distribution capacity through to 2030. Some US$40 billion will be invested between 2016 and 2020, of which about 75% will go to generation. It is estimated that Vietnam will need 330-362 billion kilowatt-hours (kWh) in 2020 and 695-834 billion kWh in 2030 to achieve the average annual economic growth rate of 7%. Measures strengthened to give a boost to agricultural exports Vietnam’s fruit and vegetable exports are on track to reach the target of US$2.5 billion for 2016, yet the standstill in rice exports has made the Ministry of Agriculture and Rural Development (MARD) more determined to carry out trade promotion activities on the Philippine market in the future. According to the MARD, as of the end of October, exports of fruit and vegetables were at approximately US$2 billion, up 30% compared to the same period of 2015. China is still Vietnam’s largest import market for such items, accounting for a market share of over 70%. MARD Minister Nguyen Xuan Cuong said that the potential for boosting fruit and vegetables exports is relatively large. It is expected that this year Vietnam could export a total value of US$2.5-2.6 billion in fruits and vegetables. Vietnam’s agro-fishery-forestry exports to China hit US$26.4 billion in the first ten months of 2016, a rise of 6.3% year on year. In general, exports of these products to China account for about 20% of the sector’s total export value, with the main products including rubber, cassava, cashews, fresh vegetables and seafood. As for fruits, Hoang Trung, Director of the MARD’s Department of Plant Protection, said that the department has developed additional records for other fruits to push open the door to the Chinese market. The department has closely worked with the Chinese side to complete relevant procedures to officially put these items on the neighbouring market soon, he noted. Regarding the US market, though it is the second-largest importer of Vietnamese agricultural products, it is a market with a complex legal system and technical and trade barriers, Trung added. According to Nguyen Nhu Tiep, Director of MARD’s Department of Agro-Forestry-Fishery Quality Management, Vietnam is seeking to get the US to allow Vietnamese mangoes and star apples onto its market soon. Most noteworthy is that, while exports of fruit and vegetables have been continuously growing in recent years, rice exports—among Vietnam’s most important agricultural exports—have recorded a significant decline. During the first ten months of this year, rice exports reached only 4.2 million tonnes at approximately US$1.9 billion, down by over 21% in volume and 16.9% in value compared to the same period of last year. In fact, as early as September of this year, the export turnover for fruits and vegetables exceeded that of rice. MARD Deputy Minister Tran Thanh Nam gave his assessment that rice exports would continue to face difficulties, which may last until 2017. The winter-spring crop has started and rice is expected to be harvested by January or February 2017, so it is necessary to seek measures to tackle problems and strengthen trade promotion for rice exports, he affirmed. Deputy Minister Nam also asked relevant departments of the MARD to send delegations to the Philippines to promote trade promotion to accelerate rice exports to this market. Can Tho, ROK agree to collaborate in hi-tech agriculture The Can Tho Municipal People’s Committee and their counterparts from Gimcheon Province in the Republic of Korea (ROK) agreed on November 23 to join forces to boost trade in hi-tech agriculture, among other things. At the meeting, Vo Thanh Thong, chair of the Committee said the ROK is also a potential market for increased collaboration in clothing and textiles, fruit and vegetables, and seafood. The parties noted they expect to soon sign memorandum of understanding to create a stronger and more durable long-term relationship in collaboration in high-tech agriculture, specifically as it relates to modernized machinery and equipment. Hindrances to HCMC's river tourism pinpointed Three years have elapsed since the HCMC government endorsed a program to buoy its river tourism, but the sector has barely developed due to two key bottlenecks: lack of infrastructure and waterway pollution, heard a seminar here on November 22. Growth of river tourism over the past three years has been minimal although the municipal government has been determined to make it a special tourism product of the city, said delegates at the seminar organized by Tuoi Tre newspaper on November 22 to work out solutions for the sector. From 2013 to the third quarter this year, the number of tourists buying river tourism services increased a mere 11.5% to roughly 257,700. In the January-September period this year, the number totaled only 68,000 tourists, almost the same as the year-ago figure. In 2014, there were 37 enterprises with 130 waterway transport means involved in river tourism, but the respective numbers have now plunged to 19 enterprises with some 100 boats. Bui Ta Hoang Vu, director of the HCMC Tourism Department, told the seminar on river tourism that the falling numbers were due to the closure of Bach Dang Wharf, which used to be a bustling docking place for tourism boats and floating restaurants. Some entrepreneurs attending the seminar “River Tourism – Special Services for HCMC Tourism” complained about the lack of wharfs and berths for tourist boats to dock, while many canals have become seriously polluted. If the city government has a concrete policy for developing berths and wharfs and invite investors to dredge and clean up canals, enterprises would be ready to step in without having to ask for support from the State budget. Phan Xuan Anh, board chairman of Saigon Boat Co. Ltd., said his company had to suspend the rowboat service on Nhieu Loc Canal due to heavy pollution. “Despite some positive signals from the rowboat service on Nhieu Loc Canal, we suspended it due to mass fish deaths in the canal. Waste discharged into canals is another problem, as we could not collect all such garbage disposed of by people,” he lamented. Pham Xuan Anh is among the first entrepreneurs in the city to develop river tourism, and now some others are ready to follow suit. Duong Thanh Thuy, chairwoman of Trung Thuy Group, said her company had incubated a plan to develop river tourism for years. The group wants to develop a river-borne tourism complex named Saigon Corner near Mong Bridge in District 1. If the city government supports the idea, Trung Thuy Group would invest some VND100 billion to execute the project, she said. HCMC chairman Nguyen Thanh Phong noted at the seminar that developing river tourism as well as diversifying tourism services are among priorities of the city. The city leader instructed the Tourism Department director to meet with Trung Thuy Group over the Saigon Corner project, and asked the Department of Zoning and Architecture to examine 54km of waterway from Binh Loi Bridge to Cu Chi District to find out suitable venues for building facilities to back river tourism. Bui Xuan Cuong, head of the city’s Transport Department, revealed at the seminar that an area stretching 1,800 meters along the Saigon River at Saigon Port will be set aside for constructing tourism facilities, mainly to accommodate small- and medium-sized boats. Payment method an obstacle for exports to Russia Russia is considered a sizeable market for Vietnamese enterprises as the free trade agreement (FTA) between Vietnam and the Eurasia Economic Union (EAEU) has taken effect, but payment in the Russian market is spelling trouble for local firms, heard a seminar in HCMC on November 22. Vietnam-Russia trade accounts for 80% of Vietnam’s total trade with the EAEU, which groups Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan, said Tran Viet Phuong, deputy head of the Division for Russia and CIS countries at the Ministry of Industry and Trade’s Europe Market Department. Russia has demand for various types of goods, including big export earners of Vietnam such as agricultural products, garment and footwear, he told the seminar on access to the Russian market after the FTA between Vietnam and the EAEU takes effect, held by the HCMC Institute for Development Studies and the HCMC Investment and Trade Promotion Center (ITPC). He said the FTA brings to zero tariffs on key export products of Vietnam to Russia, including apparel products, bag and seafood. Not only that, Russian light industrial product importers are switching from China to other countries, opening more opportunities for Vietnamese firms, he added. Despite its large potential, there remain difficulties for Vietnamese exporters due to shortcomings in its payment methods with Russian partners, Phuong said. Do Thi Thanh Huyen, deputy head of the corporate customer department under the Bank for Investment and Development of Vietnam (BIDV), said many Russian firms do not strictly adhere to international practices but choosing to make deferred payments when importing goods from Vietnam, and ask customers to make advance payments when exporting products to Vietnam. Those payment methods make it difficult for local firms to mobilize capital and expose them to risks. Meanwhile, the letter of credit, or L/C, which is currently the most popular payment method for enterprises doing business on global markets, is not preferred due to its high cost. Coming into force on October 5, the FTA between Vietnam and the EAEU is expected to boost bilateral trade between the two sides from US$4 billion currently to US$8-10 billion in the coming years. Last year, imports from Russia totaled US$824.4 million, making up 0.4% of Vietnam’s total import bill and increasing 28% against 2014, while exports to this country totaled more than US$2 billion, down 28% from 2014. FMCG market improves in Q3 The fast-moving consumer goods (FMCG) market showed improvement in terms of value between mid-July and October 9 this year against the second quarter, according to a report released on November 22 by market research firm Kantar Worldpanel. According to the report, the FMCG market expanded in value in four major cities –HCMC, Hanoi, Danang, and Can Tho, as well as rural areas. The growth in rural areas mostly resulted from the average purchase price increase rather than the rise in goods consumption. During the period, non-food items led the value growth in urban areas. Consumers in those areas spent more on personal care items, aside from milk and milk-related products, which has been the key sector for FMCG growth in the areas. Shower gel was one of the most-consumed products in the four cities and rural localities in the third quarter after consumers had reduced the use of personal care items including shower gel since last year due to economic difficulties. Kantar Worldpanel said consumers have spent more on beauty care products and the growing trend of using high-quality beauty care products with reasonable costs among people in the middle class has offered more opportunities for producers. Regarding retail channels, department stores, small supermarkets, convenience stores in urban areas and small grocery stores in rural areas have continued to gain more market shares while supermarkets and hypermarkets have showed signs of recovery. Three investors eye wastewater treatment project A consortium comprising Lotte Engineering and Construction, Huvis Water Corp., and Honor Shine Global is seeking approval from the HCMC government to develop sewers and a wastewater treatment plant in the west of the city. The investment cost of the two-phase project is estimated at US$350 million in phase one and US$132 million in phase two under the build-lease-transfer (BLT) format. The investors expect to complete and commission the first phase with a daily treatment capacity of 450,000 cubic meters by 2020 and 650,000 cubic meters after 2020. If the proposal is approved, the investors would combine three wastewater treatment plants, namely Tan Hoa-Lo Gom (300,000 cubic meters a day), West Saigon (120,000 cubic meters a day) and Binh Tan (180,000 cubic meters a day), into a single complex in the premises of the Binh Hung Hoa wastewater treatment plant, covering a total of around 35 hectares in Binh Tan District. They also want to construct West Saigon pumping station with a capacity of around 220,000 cubic meters a day, and a 7.6-kilometer sewer system from Ly Chieu Hoang pumping station in District 6, and another of 3.5 kilometers from the station in Tan Phu District to the facility. The combination of three plants would help save costs of site clearance, investment, operation and management, according to environmental experts. In a related development, two wastewater treatment plants of Nhieu Loc-Thi Nghe (500,000 cubic meters a day) and East Saigon (350,000 cubic meters a day) are being merged into one facility with an estimated capacity of 830,000 cubic meters. It is in preparation for the first phase with a daily capacity of 480,000 cubic meters in Thanh My Loi Ward, District 2. The basin areas of Tan Hoa-Lo Gom, West Saigon and Binh Tan canals are densely populated with fast-paced development but do not still have a central wastewater collection and treatment system, leading to serious pollution in nearby rivers and canals. The investors would recover their capital in around 30 years in the forms of water drainage service and wastewater treatment fees. The city government is mulling a roadmap to set prices of drainage services, which is to be introduced in the next few years. This is supposed to attract businesses to invest in water drainage and wastewater treatment systems, helping ease the burden on the city budget. The city needs to build seven more wastewater treatment plants by 2020, of which three plants, namely Nhieu Loc-Thi Nghe, Binh Hung and Tham Luong-Ben Cat are under construction. Draft decree: Transparency for pyramid schemes imperative The Ministry of Industry and Trade has just put forth draft amendments to a decree regulating pyramid schemes, demanding thorough transparency in this trade practice with an aim to protect consumers and distributors. In a report on the draft amendments sent to the Government, the ministry says new regulations on transparency are meant to safeguard the interests of consumers and distributors on the one hand, and facilitate management of State agencies towards this controversial practice on the other hand. If the draft decree gains Government approval, the playground for many companies conducting multi-level marketing schemes will be drastically narrowed down as consumers will be better informed whether they get fair prices when buying products, while disputes will be settled in a more convenient manner. In specifics, enterprises launching pyramid schemes are told to develop an information technology system governing their distributors, allowing the latter to browse for information related to their sales activities. The server for such an IT system must be placed in Vietnam. Such enterprises must also operate websites providing information on their organizations, products, and plans to pay bonuses, and training programs and the list of trainers. The enterprises must also announce and update prices of products, and clarify that such prices are determined by the enterprises, not by competent State agencies. Commissions and bonuses must be transferred via banks – cash prohibited – and when running ads on such monies for distributors, these enterprises must give all information on the beneficiaries including their names and addresses, their ranks or positions in the system, the network they run and the time length needed to obtain such award-giving revenues. In addition, relevant information about sales, the process of conducting transactions with participants, and measures to terminate contracts with participants must also be provided. The draft decree demands that multi-level marketing enterprises must maintain hotlines to respond to any complaints by consumers or participants in the scheme, and must issue invoices for customers to protect their interests in case they want to return the purchased items. Also with an aim to guarantee the interests of consumers and participants, the draft decree also raises the deposit for each multi-level marketing enterprise to VND10 billion against the current level of VND5 billion, and the deposits can be adjusted annually corresponding to the size of sales schemes. Recently, many people participating in multi-level marketing schemes have gone bust due to expectations of high returns promised by such enterprises. The settlement of disputes has also proven difficult due to vague provisions in their contracts. At the question-and-answer session at the National Assembly sitting in Hanoi last week, Minister of Industry and Trade Tran Tuan Anh admitted that there remained many shortcomings in State management over multi-level marketing practices in the country. The ministry has been slow in bringing out policies and sanctioning violations, the minister said. Seafood exports to China up sharply Vietnam’s seafood exports to China rose strongly in the first nine months of this year but the nation should adopt strict measures to maintain steady growth in its exports, said the Ministry of Agriculture and Rural Development. The ministry on November 22 held a meeting to review agri-aqua-forestry exports and discuss ways to boost outbound sales of these products. The ministry said China overtook South Korea as the fourth largest importer of Vietnamese seafood. Agri-aqua-forestry exports to the neighboring nation reached US$4.9 billion in January-September, making up 20% of Vietnam’s total export earnings in the sector. Major export earners included rubber, cassava, cashew nut, fresh vegetables, fruit and seafood. Nguyen Hoai Nam, deputy general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), told the meeting that shrimp exports to China increased significantly.   He noted Vietnam still has not imposed taxes on foreign traders that come to Vietnam to acquire agro-aqua-forestry products. He proposed relevant ministries and agencies consider this matter to avoid unhealthy competition with local traders. Nam said the country should tighten inspection on goods exported to China to ensure quality and fair competition among exporters. Nguyen Viet Manh of the Vietnam Fisheries Society suggested that Vietnam should boost sales to the Eurasian Economic Union (EAEU), the Middle East and North Africa, besides traditional markets like the U.S., the EU and China. Africa and Latin America are also potential markets for Pangasius fish and Vietnam can step up shrimp exports to Australia.   The U.S. is the second largest market for Vietnamese agro-aqua-forestry products. However, America’s regulations are complicated with many trade barriers. Regarding the new U.S. farm bill, Nguyen Nhu Tiep, head of the National Agro-Forestry-Fisheries Quality Assurance Department under the ministry, said the department is cooperating with the U.S. and conducting procedures to avoid a disruption in Pangasius exports to this market. Japan is checking all Vietnamese seafood shipments to see whether they are contaminated with antibiotic residues. This not only causes warehousing costs to surge but also affects the competitiveness of Vietnamese items. Notably, the Northeast Asian country also double-checks Vietnamese agro-aqua-forestry products. Le Van Banh, head of the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production under the agriculture ministry, said shrimp sold to Japan must meet high requirements on antibiotic Enrofloxacin. He said this hindrance should be removed to ensure Japan’s rules match those in other developed nations.   Besides, Vietnam should prepare documents to ask Japan to recognize test results by Vietnamese laboratories to create favorable conditions for Vietnamese firms to sell seafood and farm produce to Japan. Vietnammm.com expands to Nha Trang and Hoi An Vietnammm.com introduced its online food ordering service in Nha Trang and Hoi An on November 23. It becomes the first to provide the service in the two tourist destinations, and already has a presence in Ho Chi Minh City, Hanoi and Da Nang. “We are happy to penetrate into the markets of Hoi An and Nha Trang, two beautiful cities, to bring convenience to customers when ordering food,” said Mr. Jochem Lisser, CEO of Vietnammm.com. At the end of last year Vietnammm.com bought Foodpanda Vietnam, its major competitor in online food ordering in the country. All customers of Foodpanda.vn were passed on to Vietnammm.com, as was its list of 1,000 restaurants. At the time Mr. Lisser said that its deal with Foodpanda Vietnam would boost its leading position in food ordering services in Vietnam and would be a platform for subsequent investments. Last year it also announced it had achieved growth of over 300 per cent in the previous three years and targets accounting for 90 per cent of the market in online food ordering in the country. After buying Foodpanda Vietnam, Vietnammm.com now competes with eat.vn, which belongs to the Vietnam Communications Corporation (VCCorp). Established in 2011, Vietnammm.com was bought by Takeaway.com in 2013. Six years on Vietnammm.com covers Ho Chi Minh City, Hanoi, Da Nang, Nha Trang and Hoi An, offering over 1,500 restaurants and handling thousands of online food orders a day. Takeaway.com is found in the Netherlands, Belgium, Germany, Austria, Switzerland, France, the UK, Luxemburg, Poland and Vietnam. Every month it takes 4 million orders. It is listed on the Euronext Amsterdam Stock Exchange, with market capitalization of $1 billion. Foodpanda is a global online food ordering service that arrived in Vietnam in 2012 after establishing itself in over 40 countries worldwide. It was connected to more than 1,000 restaurants in Vietnam, including well-known brands such as Baskin Robbins, Burger King, Al Fresco’s, and KFC. In May 2015 it received an additional part of an investment package worth $110 million, including a sum from a new investor, Goldman Sachs. Existing investors, including Rocket Internet, also contributed to the package. Thuduc House to increase stake in Fideco The Thuduc Housing Development Corporation (Thuduc House, code: TDH) has agreed to finalize the list of shareholders to obtain approval for raising its ownership in the Foreign Trade Development and Investment Corporation of Ho Chi Minh City (Fideco, code: FDC) to 65 per cent without a public offering. The process of obtaining written opinions from shareholders is expected to be conducted in December. Thuduc House plans to buy more than 18.2 million FDC shares, increasing its holding to 25 million shares, or a 65 per cent stake. “The purpose of this move is to expand the company’s land reserves,” a representative from the Public Relations Department at Thuduc House confirmed with VET. The form of purchase is expected to be made by agreement between the two parties and will take six to nine months. Apart from 29 ha in Can Gio district, Ho Chi Minh City, FDC also owns more than 2,000 sq m in District 1’s Phung Khac Khoan Street, which are considered to be of high value. Thuduc House has planned to buy more FDC shares since the beginning of this year. After a range of transactions conducted before March, it announced it owned nearly 6.9 million FDC shares, corresponding to 24.89 per cent of charter capital. FDC is expected to earn a profit of about $1.33 million from issuing swap shares with the Dat Phuc Construction Design Company Limited and the Thien Y Import Export Trading Packaging Company Limited. Thuduc House is drawing up a specific business plan for key projects. This year it will focus on an open sale of S-Home apartments in the Phuoc Long project (168 apartments), the Binh Chieu project Phase 2 (145 plots of housing land) and the TDH-Tocontap project (40 plots of housing land). Other projects will be sold in 2017, including Binh Chieu Lot I (405 apartments), Binh Chieu Lot H (218 apartments), TDH-Tocontap (223 apartments), and TDH - Phuc Thinh Duc (935 apartments). On that basis, Thuduc House sets revenue plans for the 2016-2018 period that correspond to the time of deployment and delivery of each project. Revenues from condominiums are to be about $12 million, $34 million and $44 million in the three years while sales of housing land are expected to reach $16 million in 2016 and nearly $2 million in 2017. It estimates total revenue for 2016 to be more than $28 million, $36 million in 2017, and $44 million by 2018. Thuduc House so far has implemented more than 40 projects around the country, developing urban towns, row houses, and apartment blocks for both low and high-income earners. The company has also developed commercial centers, wholesale markets, hotels, resorts, and office buildings and launched affordable apartment projects in District 9 and Thu Duc district in Ho Chi Minh City. Masan announces 50% share bonus and 30% cash dividend Group now seeking approval from shareholders on plan to issue bonus shares and pay cash dividend. by Quynh Nguyen The Masan Group has sought approval from shareholders regarding its plan to pay a 50 per cent share bonus and a 30 per cent cash dividend of VND3,000 ($0.13) per share. The Board of Directors has already approved the share bonus and cash dividend as a result of the company achieving key strategic milestones across all business segments and outperforming its financial targets. This is the first time Masan has given a cash dividend to shareholders since listing on the Ho Chi Minh Stock Exchange in 2009. “During this period, Masan’s first wave of foreign investors have realized their returns,” said Mr. Nguyen Dang Quang, Chairman of the Masan Group. “With the company’s plans for a share bonus and cash dividend, shareholders who have demonstrated the most belief in our story and value can now share in the company’s success.” Masan is also seeking approval from its shareholders to issue 12 million shares via private placement at VND95,000 ($4.2) per share as well as, when markets are favorable, international bonds listed overseas. In terms of sequencing, the issuance of 12 million primary shares will occur first, followed by the share bonus and cash dividend simultaneously. The cash dividend of VND3,000 ($0.13) per share is applicable to the number of shares immediately prior to the bonus shares. The proposed cash dividend and share bonus are expected to close in the first quarter of 2017. Masan’s fundraising initiatives are subject to market conditions and their alignment with the company’s overall strategic investment plans. All are subject to customary regulatory and shareholder approvals. Masan is expected to record revenue of $2 billion this year, an increase of around 40 per cent against 2015. Net profits after tax and non-controlling interest are on track to reach the company’s revised target of VND2.4 trillion ($105.6 million), representing growth of more than 60 per cent over 2015. As a result, Masan’s 2016 EBITDA (earnings before interest, taxes, depreciation and amortization) is expected to reach VND9.5 trillion ($418 million). Its fast-moving consumer goods (FMCG) arm, Masan Consumer, is completing a final list of shareholders to prepare to trade on the Unlisted Public Company (UPCoM) market on the Hanoi Stock Exchange. Masan Consumer is one of the largest enterprises in Vietnam’s FMCG field, with revenue coming from fish sauce, soy sauce, and chili sauce branded Chin-su, Nam Ngu, and Tam Thai Tu, instant noodles such as Omachi and KoKomi, and non-alcoholic beverages such as Vinh Hao, Vinacafe Bien Hoa, and Quang Ninh mineral water. Revenue in the first nine months was VND9.1 trillion ($409.5 million), up 6 per cent year-on-year, while after-tax profit fell 4 per cent to VND1.68 trillion ($75.6 million). The Masan Group recently announced revenues in the third quarter of VND11 trillion ($495 million) and gross profit of VND3.2 trillion ($144 million), both up 26 per cent year-on-year. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR