BUSINESS IN BRIEF 15/12 Vietnam Food Association proposes rice export volume cut   The Vietnam Food Association (VFA) suggested exporting 2-3 million tonnes of rice per year through 2020 instead of 7-8 million tonnes at present. At a workshop in Ho Chi Minh City on December 13, the VFA said nearly 70 percent of Vietnamese rice is sold in Asia each year with China the biggest importer, followed by the Philippines, Indonesia and Malaysia. However, Vietnam’s rice exports to these markets are sluggish. VFA Chairman Huynh The Nang said in previous years, the three ASEAN nations imported around 2-3 million tonnes of rice from Vietnam. However, currently, rice export volume to the markets has reduced due to their governments’ policies of balancing domestic food and reducing dependence on rice imports. Meanwhile, China has put forth new quarantine regulations, and signed a protocol with Vietnam setting stricter sterilisation inspections on Vietnamese rice and rice bran imports. Nang said it is necessary to improve quality and ensure food safety by building safe material areas which trace the origin of products. He advised making use of potential rice production regions, including Dong Thap Muoi (the Plain of Reeds) and Tu Giac Long Xuyen (Long Xuyen Quadrangle) and the rice-shrimp rotational crops region between the Tien and Hau rivers in the Mekong Delta. Luong Hoang Thai, head of the Ministry of Industry and Trade’s Multilateral Trade Policy Department, said 90 percent of Vietnamese rice exports come from the Mekong Delta. Over 1 million tonne of rice was lost due to drought and saltwater intrusion in the 2015-2016 winter-spring crops, he said, adding that rice production in the delta will face more difficulties from climate change and rising sea levels. This requires the country to build large-scale paddy fields and stable material areas to create high-quality and competitive products, the panel suggested. Can Tho strives to become Mekong Delta’s startup hub The Mekong Delta city of Can Tho, an economic hub of the Mekong Delta, is expected to become a startup valley in the Mekong Delta region by 2020. The goal was made at a workshop on “Vietnam Startup Index 2015/2016” held on December 13 by the Vietnam Chamber of Commerce andIndustry (VCCI) Can Tho branch and the municipal of Department of Planning and Investment in the city. The workshop focused on measures for startup development in Can Tho based on the startup situation in Vietnam in 2015 - 2016. Can Tho had 67,000 enterprises and business households as well as 221 cooperatives in 2016, contributing 4 trillion VND to the local budget and providing over 125,000 jobs, said Nguyen Thanh Dung, Vice Chairman of the municipal People’s Committee, adding that the city’s economy steadily grew at 5.88 percent per year, ranking 14th among 63 cities and provinces in competitiveness. However, a lack of a comprehensive legal framework and stable government investment has posed challenges to local startups. They also lack confidence, experience and creativity. To tackle these problems, the city is advised to create a creative environment while promoting training programmes for startups and businessmen, said Truong Quoc Trang, Deputy Director of the municipal Department of Planning and Investment. He added that a training course themed “Your startups” will be held by the department and the VCCI Can Tho chapter in 2017. The course is expected to provide basic skills and knowledge on startups for youths. Meanwhile, the municipal Department of Science and Technology will coordinate with the city’s VCCI to create and expand a working space network and suggest business directions for startups, said Tran Hoai Phuong, the department’s Deputy Director. Startup competitions will be held to encourage enterprises to exchange their experience, he added. A support foundation will be founded by the VCCI with a targeted budget of 10 billion VND in 2017 – 2020 to support infrastructure construction and training programmes, according to Vo Hung Dung, Director of VCCI Can Tho chapter. The foundation will call for government financial support and investment of big businesses to professionalise startups. Russian food businesses seek market entry in Vietnam Representatives of more than 20 Russian food and drink businesses joined an exchange with leading Vietnam distributors and importers on December 14 in Ho Chi Minh City. Robert Kurilo of the Russian Export Centre in Hanoi said the Centre hopes that diverse trade promotion activities in Vietnam will help Russian products gain market entry and get fast grocery store shelf space. Russian businesses have introduced a variety of food and drink products to local business partners including instant cereals, confectionary, fruit juices and processed meat products. Klimova Elena, general director of the Znamensky Company, said Russian products are of high quality because they are made on hi-tech production lines. Besides, local customers are interested in discovering new flavours, which bodes well for Russian food to find a niche in the market. Doan Thi My Linh from SATRA noted the company currently needs to import foreign food to diversify their goods at its supermarkets. She hopes that high quality Russian products will be chosen by local customers. At the exchange, businesses from two countries identified some difficulties in transporting products to Vietnam, noting in particular the vast geographic distance results in high freight charges. Russian autos gain free access to ASEAN via Vietnam Vietnam-Russia commercial trade remains relatively insignificant, said Hoang Quang Phong, vice chair of the Vietnam Chamber of Commerce and Industry at a recent business forum in Hanoi. Official statistics for 2015, said Mr Phong, showed that the combined exports and imports of Vietnam to and from Russia was roughly US$4 billion, which is only a small fraction of the trade figure of other trade partners. For comparison purposes, the country’s commercial trade with its five largest trading partners for 2015 was – China (US$66 billion), ASEAN (US$42.1 billion), the US ($41.5 billion), the EU ($41.2 billion) and the Republic of Korea ($36.7 billion). With total foreign direct investment estimated at just US$2 billion, Russia ranks No. 17 among other economies currently doing business in Vietnam, noted Mr Phong. While on the reverses side, he added, that Vietnamese companies have foreign investment of approximately US$3 billion in Russia, substantially all of which is in the oil and gas segment. However, despite the relatively weak economic ties, the two countries have strong cultural and political links dating back to the Soviet Union era, Mr Phong observed. Notably, a study by the Pew Research Centre, a think tank based in Washington DC, the US, conducted in 2015 showed that 75% of Vietnamese people viewed Russia positively. Of all the people surveyed in some 40 countries, only 30% saw Russia favourably. Russia became Vietnam’s first strategic partner in 2001 even before its major Asian neighbours like Japan (2006), India (2007) and China (2008). Alongside China, Russia is currently one of the two countries with which Vietnam has established a comprehensive strategic partnership. In May 2015, following six years and eight rounds of negotiations, Vietnam signed a free trade agreement with the Russia-led Eurasian Union (EAEU), comprised of Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. That Agreement and the new free trade region it created came into force this past October 2016, noted Mr Phong, adding that it holds great promise for eliminating both tariff (previously at 5.63%) and non-tariff barriers to trade of Vietnam with the EAEU. Pursuant to the Agreement, the EAEU eliminates import duties on 88% of goods imported from Vietnam either immediately when the Agreement came into force or with a phase-out transit period of five to 10 years. Thus, Vietnamese producers have already gotten significant preferential access to many consumer goods markets of the EAEU including clothes, shoes, fish, rice, fruits, vegetables and consumer electronics. In return, the average level of Vietnam duties imposed on EAEU goods will drop from 10 to 1%. Vietnam has agreed to eliminate its import duties on 91% of its goods' nomenclature, which means that zero duties will apply to EAEU beef, dairy products, tinned fish, flour, cereals as well as to rolled steel, pipes, asbestos, ships, petroleum products and many other categories of goods. The duty on petrol will be reduced from 19 to 0% with a transition period; on cables, from 20 to 0% over a period of 10 years; for large goods vehicles, from 17 to 0%. Vietnam has also agreed to partially liberalize access to its market for EAEU tobacco products, while the EAEU automobile industry companies will be given exclusive access to the Vietnamese market. Vietnam has signed an investment agreement for the industrial assembly of cars and trucks with companies from Russia and Belarus. Assembled vehicles will be considered as manufactured in Vietnam and will thus have free access to the markets of ASEAN member states. We hope that the growth in trade resulting from the newly created free trade EAEU region will increase to US$10 billion by 2020 as agreed upon by the two governments, noted Mr Phong. However, the challenges such as high shipping costs due to the geographical distances, along with differences in business culture and languages may prove to be too formidable obstacles for Vietnamese companies. HCMC begins forcing business offices out of condo buildings The HCMC Department of Planning and Investment has urged those businesses having offices in condo buildings in the city to move out within 15 days. They will have to stop operation inside condo buildings and register for new office addresses. If they fail to do so, the department will coordinate with the Construction Department and district authorities to deal with them in accordance with law. According to Government Decree 99/2015, which guides the implementation of the Housing Law, business offices are disallowed inside condo buildings. Those having business registration licenses and using apartments as transaction offices are required to move to other places within six months starting from December 10 last year, which means the June 10 deadline is over. But many businesses are still operating in many condo buildings around the city. Data of the Department of Planning and Investment shows the city now has around 2,000 enterprises whose head offices are based in such residential buildings. More than 30 condo units at 42 Nguyen Hue Boulevard in District 1 are used for doing business. Seven to eight households still live at this place while the rest have moved to other places and leased their homes to others, said Tran Quoc Thang, member of the condo’s management board. “We cannot manage those doing business in these condo units. It is the right of the owners to lease their properties to anybody as wished. It is the responsibility of authorities to order those businesses to move out or stop operation,” he said. A representative of a business at this condo said it is a difficult for enterprises to relocate their offices within 15 days. “It will take a lot of time looking for a new location with a reasonable rental. When relocating elsewhere, enterprises will have to inform banks, tax authorities, partners and customers of their new addresses.” Cu Thanh Duc, deputy head of the business registration office at the Department of Planning and Investment, said many enterprises are using condo units as their offices as the business registration rules do not require them to declare where they are headquartered. Lawyer Tran Duc Phuong, member of the HCMC Bar Association, said Decree 99 bans enterprises from using condos as business locations but the decree does not clearly define “business location.” “The Enterprise Law describes a business location as a place where enterprises carry out specific business activities. In line with the law, Decree 99 only prohibits enterprises from using condo units as transaction locations, but not head, branch, or representative offices,” said Phuong. However, authorities can still order enterprises operating in condo buildings to move out based on the regulation that specifies condos must be used for the right purpose, which is living. The lawyer suggested authorities provide specific sanctions against those violating the rule, instead of simply banning. Each province to sue 10-50 businesses in premium debts this month   Each province in Vietnam will file lawsuits against 10-50 businesses for not paying social, health and unemployment insurances more than six months and big debtor names will be publicized on the media by December 31. The announcement was made by Mr. Nguyen Tri Dai, head of Premium Collection Division under the Vietnam Social Insurance Agency, at a conference in Hanoi on December 13. According to Mr. Dai, the agency has implemented many measures to collect premium arrears including coordination with provincial and municipal labor unions to sue the debtors. They are now preparing documents to start proceedings by the end of the month. The agency has set target to reduce the ratio of businesses’ social and health insurance debts to 2.9 percent this year. Last month, the arrears were down 1.25 percent against the previous month but still accounted for 5.6 percent of the total premium, he said. Social, health and unemployment insurance arrears hit VND13,135 billion (US$578 million) in the country. Deputy director of the Vietnam Social Insurance Agency Tran Dinh Lieu said that the agency would work with provinces and cities natiowide to unexpectedly inspect businesses over their insurance payment in December. Each province will inspect 15 businesses in premium arrears for more than three months and issue fines. The agency will transfer documents to police agencies for investigation to those deliberate not to pay the fines. Rice industry should reduce output, increase quality: deputy minister Deputy Minister of Industry and Trade Tran Quoc Khanh said that four million ton rice export a year with high prices would be better than low price export of 6-7 million tons, at a workshop in HCMC on December 13. He said that rice production thought need be changed by improving quality instead of running after quantity. Farmers just cultivate two instead of 3-4 crops a year. Formerly, chairman of the Vietnam Food Association Huynh The Nang said that the world market has been on the trend of high quality rice and competitive prices as the number of supply countries has been increasing. Meantime, import countries such as the Philippines, Malaysia and China have trended towards developing domestic production and cutting import output. Vietnam’s rice export value has reduced for five years in a row since 2012 although volume saw year on year increase in 2012 and 2015. Therefore, output should reduce to 3-4 million tons a year by 2020 and 2-3 million tons after 2020. VinaCapital changes Hoi An South resort brand Vietnam-based asset management firm VinaCapital along with its Hong Kong and Macau joint venture partners, have re-branded its long-stalled $4 billion integrated leisure project Hoi An South into HOIANA Integrated Resort in the central Quang Nam province. “We have already set the timeline to launch the first phase of the project by Quarter 1 of 2019,” a representative from VinaCapital told VET. HOIANA Integrated Casino Resort held the groundbreaking ceremony in late April this year on an area of 985 hectares that spans the Duy Xuyen and Thang Binh districts in central Quang Nam province. The Vietnam-focused asset management company VinaCapital, Hong Kong-based Gold Yield Enterprises Limited and Macau’s Sun City are the investors of the project. The complex has seven phases and is expected to be fully completed by 2035. Construction of the first phase will be implemented on an area of 163 hectares with a capital of $500 million and is expected to be finished by the first quarter of 2019. It will include an 18-hole golf course, which was recently approved by the Prime Minister as part of the government’s golf course development plan. Once operational, HOIANA will be the second largest casino in Vietnam, after the Ho Tram Strip resort and casino complex in the southern province of Ba Ria Vung Tau. It is poised to become “one of Asia’s most renowned resort destinationsa and a new benchmark for high-end tourism in Vietnam,” according to Mr. Don Lam, CEO of VinaCapital. Last year VinaLand Limited, VinaCapital’s London Stock Exchange’s Alternative Investment Market-listed fund, announced plans to become a strategic shareholder (instead of being the project’s largest shareholder) by divesting its stake to Gold Yield Enterprises, a unit of the Chow Tai Fook Group. The first phase of HOIANA will feature a resort and casino complex which will include a 445-room hotel, 200 apartment-suites for sale on a buy-to-let basis operated by Hong Kong’s New World Hotels, a ultra-luxury Rosewood spa resort incorporating 75 guest villas and 25 exclusive residences, and a golf course. The developers also plan further investment for the $4 billion township in the next construction phases, which are due to be completed over the course of 10 to 15 years. Licensed in 2010, the project was initially supposed to be developed by VinaCapital and Genting Malaysia Berhad. It would have been comprised of five-star hotels, villas, and an electronic gaming facility primarily targeting foreign tourists. In September 2012, however, Genting announced its withdrawal in the middle of site clearance, forcing VinaCapital to find another partner. Chow Tai Fook Enterprises Limited, a Hong Kong property and jewelry conglomerate, already has a presence in the country through its New World Development unit in Vietnam with two large hotels in Ho Chi Minh City - the New World and the Renaissance Riverside. The company is run by Hong Kong’s fourth richest person, Cheng Yu Tung. Founded in 2007 and based in the world’s busiest gambling hub of Macau, Sun City is a hotel and entertainment group that also deals in casinos. It provides gaming, travel, dining, media, and amusement services. The company, through its subsidiaries, operates property development, natural resource development, equine trade, film production, food and beverage, luxury products businesses, among others. In a bid to fortify its casino business, Hong Kong billionaire Cheng Yu Tung acquired 70 per cent of Sun City for $948 million. HSC gains 50 per cent in third quarter Ho Chi Minh Stock Company (HSC) announced that the date of closing shareholder list for dividends payout at a rate of five per cent is December 28. The dividends payout date is expected to be on January 12, 2017, according to HSC. There are three major shareholders, Dragon Capital Markets Limited, Ho Chi Minh City Finance and Investment State-owned Company (HFIC), and PXP Vietnam Emerging Equity Fund with capital of 30 per cent, 29 per cent and 7 per cent respectively. Dragon Capital will receive VND 19.6 trillion ($864,947), HFIC VND18.7 trillion ($825,230) and PXP Vietnam Emerging Equity Fund VND4.2 trillion ($185,345) in the first dividend payment. The total money that the three major shareholders will receive is over VND42 trillion ($1.85 million). According to the third quarter financial report of 2016, the revenue of HSC significantly gained 50 per cent, equivalent to VND 219 trillion ($9.66 million). Stockbroker revenue reached VND102.36 trillion ($4.52 million), up 37 per cent; loan interests reached VND92.85 trillion ($4.1 million), up 65 per cent. After-tax- profit of HSC was VND81.8 trillion, up 80 per cent compared to the same period in 2015. Its HCM shares are trading at around VND 25,000 ($1.1) per share at the moment. In the first 9 months of 2016, after-tax- profit of HSC reached over VND228.7 trillion ($10.1 million), up 59 per cent compared to the same period in 2015. HSC had completed 76 per cent of the 2016 plan. In the third quarter financial report of 2016, the total action fee of HSC was VND104.08 trillion ($4.6 million). This figure, in the same period of time in 2015, was VND74.93 trillion ($3.3 million). In the first 9 months of 2016, the total action fee of HSC was VND 237.42 trillion ($10.45 million), which is higher compared to the same period in 2015. HSC was listed on HOSE in May 2009 with the stock code of HCM. It is the best stock company in Vietnam. The main business sector of HSC includes  stockbrokerage and consulting, investment, market analysis and company management under a sustainable development program. HSC also supplies various financial services to customers. Tax incentives provide few benefits Oxfam tax research reports the world's worst tax havens and how the laws adversely affect developing economies like Vietnam. Despite Vietnam's widespread use of tax incentives, "there is little evidence that incentives have contributed to increased investment or economic growth", the Oxfam tax report remarked. The largest incentives, particularly tax holidays, according to Oxfam, go to large investments in manufacturing and real estate. "These investments would likely have occurred regardless, leading to significant revenue losses without corresponding economic benefits," the report stated. "The complexity of Vietnam’s incentive regulations and the overall lack of information and data make it difficult for both researchers and investors to accurately analyze the costs and effectiveness of tax incentives." Citing specific examples of high-profile tax competition within South-East Asia are also covered in other studies, the Oxfam report took the case of South Korea's Samsung investment in Vietnam as an example. "In 2014, in competition for Samsung’s investment, Indonesia offered a corporate income tax exemption for 10 years, while Vietnam offered 15 years," it noted. A separate report from the Vietnam Chamber of Commerce and Industry (VCCI) also said that the real effectiveness of tax incentives given to foreign-invested enterprises (FIEs) in Vietnam has not yet been made clear. Vietnam has offered FIEs in prioritized sectors a reduced corporate income tax (CIT), lowering the standard rate from 25 per cent to 10-20 per cent for up to 30 years, according to VCCI. In addition, these FIEs can have their land rental fees waived for up to 15 years. At least 62 per cent of FIEs reported receiving investment incentives. But "it is difficult to tell whether the incentives truly lead to more benefits or drawbacks for FIEs and domestic firms,” the VCCI report delivered at Vietnam Business Forum (VBF) on December 5 noted. The Oxfam report also reveals how tax havens are leading a global race to the bottom on corporate tax that is starving countries out of billions of dollars needed to tackle poverty and inequality. Significantly, foreign direct investment (FDI) to Vietnam from tax havens increased 47 per cent compared to last year.   Some tax havens listed on Oxfam’s report include Singapore, the British Virgin Islands, Jersey, Luxembourg, the Cayman Islands and Bermuda. Oxfam warned that if Vietnam continues to accept FDI from tax havens, they would lose a lot of money. The full list of the world’s worst tax havens according to Oxfam, in order of significance is: Bermuda, the Cayman Islands, the Netherlands, Switzerland, Singapore, Ireland, Luxembourg, Curaçao, Hong Kong, Cyprus, Bahamas, Jersey, Barbados, Mauritius and the British Virgin Islands. Oxfam report cited World Bank research in 2015 that stated "tax competition in East Asia and the Pacific is an issue that needs to be addressed in regional forums, rather than being left to individual countries." Otherwise, a race to the bottom could develop, with competing tax breaks leading to the long-term loss of tax revenue with few offsetting benefits. Oxfam researchers compiled the world’s worst list by assessing the extent to which countries employ the most damaging tax policies, such as zero corporate tax rates, the provision of unfair and unproductive tax incentives, and a lack of cooperation with international processes against tax avoidance, including measures to increase financial transparency. Handicraft products exports to US rise in first 10 months Vietnam’s rattan, bamboo and sedge products export value to the United States reached US$212.1 million in the first 10 months of 2016, a year-on-year rise of 1%, according to data from the General Department of Vietnam Customs. Rattan, bamboo and sedge products of Vietnam have been shipped to 19 countries and territories, with the US the biggest importer with US$51.2 million, accounting for 27 percent of Vietnam’s exports of those items, followed by Japan and Germany. Overall, rattan, bamboo and sedge products exports to other countries increased in the first 10 months of the year. Exports of the products to China grew sharply, by 36.49 percent, along with other markets including Taiwan, Spain and Denmark High-tech agricultural production is the need: experts     A conference on building high-tech agriculture in Viet Nam, organised by the Digital Agriculture Association (DAA), will be held in HCM City on Sunday. At the conference, delegates will be hearing about successful experiences in high-tech applications in agriculture and build the value chain through the presentations of businesses, such as Seafood Co., Central Seafood Company, Hung Nhon JSC and Huy Long An-My Binh limited company. These companies are pioneers in the application of advanced technology with production and management by shifting from traditional farming methods to agricultural enterprises to obtain high efficiency in poultry breeding and fruit growing for export purposes. Central Seafood Company, in particular, has met the standard for high-tech business. At present, the company has six shrimps breeding farms equipped with US technology, capable of breeding10-12 billion shrimps per year. The company can sell 1,000 tonnes of shrimp annually. The event will also be an opportunity for the government, ministries and relevant agencies to hear opinions and proposals from businesses to implement timely support policies by working towards a new model of agriculture production. Based on the foundation of high-tech applications in manufacturing and integration of value chain, DAA has proposed high-tech complexes. The complexes will consist of large-scale agricultural production, where businesses will closely work together to achieve production targets with high-yield and high-quality products, which are competitive both in domestic and international markets. Nguyen Thi Lan Huong, vice president and general secretary of DAA Vietnam, said one of the most important tasks in the process of industrialisation and modernisation was to industrialise and modernise rural agriculture. Application of advanced technology should be promoted to meet standards of national and international activities in agricultural production. In addition, promoting people and businesses to create a high-tech agricultural production value chain was aimed at ensuring a healthy and prosperous life for the people and providing safe and clean food. World Bank’s Vietnam Development Report 2016, “Transforming Vietnamese Agriculture: Gaining More from Less,” launched in September, details the challenges and opportunities facing the sector. To remain competitive in the international market, the report said Viet Nam needed to improve supply, quality and food safety with added value. It outlines an agenda of short and longer-term strengthening of public and market institutions which will be needed to achieve the ambitious goals for Viet Nam’s agriculture and overall food system. Ousmane Dione, World Bank country director for Viet Nam, said, “’Business as usual’ is no longer an option for the sector. Growth has slowed down; it is vulnerable to climate hazards and leaves a large environment footprint. Change will help overcome these challenges, ensure the future of agricultural growth and better meet the expectations and aspirations of the people of Viet Nam.” The report offers various policy recommendations to address the challenges. The government can deploy an effective combination of improved regulations, better incentives and streamlined services to stimulate and push for greener agriculture and a more effective food safety and consumer protection system. It can help with policy instruments to better manage agriculture-related risks, as well as create and maintain a favourable enabling environment for agribusiness. In a more flexible, market-driven and knowledge-based agriculture system, reducing direct state involvement will make modernisation of the Vietnamese agro-food system smoother. Large scale fields developed in northern region Northern provinces have built 895 large scale fields on more than 42,300ha for the Summer-Autumn crop, an increase of about 2,700ha year-on-year, according to the Department of Cultivation under the Ministry of Agriculture and Rural Development. Head of the Department Nguyen Hong Son said that after years of work, localities have gained experience to generate the best results. Along with rice, the model has also been applied for corn and vegetables. Businesses also participated in the production chain in localities such as Thanh Hoa, Thai Binh, Hanoi and Hai Duong, raising the efficiency of cultivation and rice production. The model has enhanced links between farmers and businesses and showed its sustainability. Many cities and provinces have set up Steering Committees and devised policies to support the model, including Thai Binh, Nam Dinh, Nghe An, Ha Tinh and Hanoi. Aside from applying advanced technology and research in agriculture, the provinces have also looked to mechanisation to lower production costs and increase productivity. Vietsovpetro taps 5.04 million tonnes of crude oil this year The Vietnam-Russia joint venture Vietsovpetro expects to tap 5.04 million tonnes of crude oil as targeted this year, heard the 47th meeting of Vietsovpetro’s Council recently held in the southern province of Ba Ria – Vung Tau. Vietsovpetro has achieved a majority of goals and set a new record of 2,547m/month/machine in commercial drill speed, just above the target, said General Director Tu Thanh Nghia. For the whole year, the joint venture plans to drill 91,400m, complete the construction of 28 wells and repair 18 drilling wells. It will also bring ashore more than 1.6 billion cu.m of gas, or 127 percent of the target. Since it began operation in 1981, Vietsovpetro has tapped over 223 million tonnes of crude oil and supplied more than 30.8 billion cu.m of gas. At the meeting, participants adopted production and trading plans for next year and tasks for 2017-2021. Gelex initiates plan to take over STG Vietnam Electrical Equipment Joint Stock Corporation (Gelex) has announced its plan to purchase 21.3 million shares of South Logistics Joint Stock Company (Sotrans). The shares are equal to 24.93 per cent of Sotrans’s charter capital. The purchase is due from December 15, 2016 to January 14, 2017. Previously, in its annual general meeting this August, Gelex declared it was expanding its manufacturing operations into the field of logistics business by acquiring stake in Sotran. Besides, Gelex is also expected to further invest VNĐ812 billion into logistics. To implement this investment plan, Gelex is scheduled to release 77.25 million shares at VNĐ18,000 per share to mobilise over VNĐ1.39 trillion and increase charter capital from VNĐ1.55 trillion to VNĐ2.322 trillion. Gelex was originally established in 1995 with initial charter capital of VNĐ177 billion. The company operates in the electrical engineering industry. Its main products are electrical equipment, electrical cables and power metres. The Nam Hai joins Four Seasons The luxurious resort Nam Hai Hoi An will be part of the Four Seasons family starting on December 20, 2016. Four Seasons Resort The Nam Hai will introduce guests to a unique contemporary experience combining the classic Nam Hai style with the flair of Four Seasons. All 60 hotel villas have been renovated and now feature outdoor showers, terraces, and more expansive indoor and outdoor living spaces. To celebrate this exciting new phase in The Nam Hai’s life, the resort plans to offer complimentary round trip airport transfers, two-rounds of cocktails and tapas at its brand new Beach Bar for villa bookings from January 7 to June 30, 2017. Guests will also get to experience one complimentary Fire Breath & Sound treatment at The Heart of the Earth Spa. Shining a light on Vietnam’s cultural heartland, Four Seasons Resort The Nam Hai, Hoi An, Vietnam, offers an illuminating connection to three extraordinary UNESCO sites from a private kilometer-long stretch of one of Forbes’ “best beaches in the world.” Four Seasons Resort The Nam Hai, Hoi An, Vietnam, rests on a tranquil 1-kilometer (half mile) stretch of Ha My Beach, just 11 kilometers (7 miles) north of the UNESCO city of Hoi An in Quang Nam province on Vietnam’s central coast. An ancient trading port, Hoi An had the largest harbor in Southeast Asia in the 1st century. It even opened its own stoneware kilns in the 15th century to support the growing popularity of the Japanese tea ritual. Both Christianity and Buddhism found their way to Vietnam’s shores via Hoi An in the 17th century, and today its eclectic collection of some 87 pagodas, temples and communal houses, and 82 ancient tube-shaped houses – many located on original streets – stand as a testament to its vibrant ancient personality. Since opening in December 2006 The Nam Hai has set the benchmark by which all other resorts in Vietnam are measured. The resort’s first major award came in 2008 when Travel + Leisure’s Design Awards panel dubbed it “World’s Best Resort.” It has also received praise from Condé Nast Traveler, CNN Travel, Luxury Travel, Cigar Aficionado and many other esteemed overseas media outlets. Four Seasons Hotels and Resorts, opened its first hotel in 1961, is a tale of continual innovation, remarkable expansion and a single-minded dedication to the highest of standards. The Canadian-based company has, for nearly 50 years, transformed the hospitality industry by combining friendliness and efficiency with the finest traditions of international hotel keeping. In the process, Four Seasons has redefined luxury for the modern traveler. Khanh Hoa export fetches over one billion USD in fifth consecutive year Export value of the south central province of Khanh Hoa is expected to reach 1.21 billion USD in 2016, an eight-percent increase against last year. This is the fifth consecutive year Khanh Hoa’s export value has surpassed one billion USD. Khanh Hoa’s main export commodities include new vessels, processed seafood, coffee, salanganes, garment and textile, and sand. The province’s import value is estimated at 720 million USD, producing a surplus of nearly 500 million USD. According to the Khanh Hoa statistics office, from 2014-2016, import value was over 700 million USD with machinery, raw seafood, fibre, silk for industrial production being key import goods. In 2017, Khanh Hoa aims to fetch 1.32 billion USD from exports. The shipping industry plans to build eight vessels, four less than in 2015 when the ship-building industry’s export value hit 390 million USD. Vietnam cement export estimated at 15 million tonnes   Vietnam’s cement and clinker export volume in 2016 is estimated at about 15 million tonnes, according to the Vietnam National Cement Association. The figure represents a seven percent decrease from 2015. By the end of November, the country exported 13.97 million tonnes, down six percent year-on-year. The country consumed 54.52 million tonnes of cement, up seven percent from 2015. At present, Vietnam has 78 rotary kiln cement production lines with a combined capacity of 86.16 million tonnes. Ministry announces list of prestigious exporters The Ministry of Industry and Trade has officially announced a list of 310 Vietnamese prestigious exporters for 2015, aimed at supporting local firms in promoting exports and expanding markets. The ministry last week promulgated a decision to approve the list of local prestigious exporters for 2015. The vote was held in co-ordination with the provincial departments of industry and trade, other ministries, sectors, associations and relevant agencies after publishing the list of exporters on the ministry’s website for selection. The list of exporters was chosen based on the proposals of relevant agencies, along with the ministry’s criteria of maximum export turnover, prestige with foreign partners and duties to the tax and customs sector. Notably, the ministry has given priority in choosing sectors in which the country has encouraged exports as well as those facing difficulties in finding export markets. The ministry’s Import-Export Department said the vote aimed to recognise exporters’ positive contributions to the country’s export growth while giving them support in seeking markets. It also aimed to encourage Vietnamese exporters to further improve their image towards international integration with the world economy. The chosen exporters will be permitted to advertise their products for free on the ministry’s website moit.gov.vn and its newspapers and magazines. They will be given priority in participating in national trade promotion programmes and receive free training courses on e-commerce. The ministry will also directly introduce the list to foreign partners. The exporters were chosen from 22 sectors, including seafood, rice, rubber and coffee, as well as garment and textile. Some of the names on the list are Intimex Group, Viet Phu Thinh Rubber Joint Stock Company, Tan Phong and Nha Be Corporation, as wel as Viet Tien Garment and Textile Company, and B.Braun Vietnam. Cambodia’s rice, dried tobacco to enjoy zero percent import tariff Rice and dried tobacco leaves imported from Cambodia will enjoy a import tariffs of zero percent from January 1 – December 31, 2017. The decision was made in a circular recently issued by the Ministry of Industry and Trade. It states that the imported goods must have certificates of origin licensed by the Cambodian Ministry of Commerce or concerned agencies and go through customs clearances at border gates listed in the circular’s Appendix 02. Merchants who import dried tobacco leaves must also have licenses. The circular will be effective from January 18 – December 31, 2017. Vietjet launches two new international routes Vietjet launched two new international routes -- Hải Phòng-Seoul and HCM City-Kaohsiung -- on Monday. The new routes are expected to meet the increasing travel demand of travellers, aimed at boosting regional trade and integration, the airline said. Flights on the Hải Phòng-Seoul route will operate every Monday, Wednesday, Thursday and Sunday, with a flying time of some five hours per leg. The route’s flight frequency will be increased to daily operations from January 19, 2017 to February 13, 2017. “Conveniently located in northeast Việt Nam as the centre for economic and social growth for the region, Hải Phòng has great potential for tourism development with a series of local specialties and services for international tourists to experience,” Vietjet said, adding that it has so far operated 10,000 flights, carrying nearly two million passengers on the nine routes to and from Hải Phòng. Meanwhile, South Korea is a favourite tourist destination for travellers thanks to a developed entertainment industry, the culture and the shopping malls. With the new route, Vietjet has a total of three services connecting Việt Nam and South Korea, targeted at facilitating travel of individuals at an affordable cost. The second route, HCM City-Kaohsiung, will have five return flights per week on Monday, Tuesday, Thursday, Friday and Sunday. The flight duration is three hours 30 minutes per leg. Vietnam weighs doubling overtime limit following calls from foreign firms The Ministry of Labor, Invalids and Social Affairs has proposed an amendment to the Labor Code that would sharply increase the country's overtime limit. Under the proposal, an employee may work a maximum of 600 extra hours per year, doubling the overtime limit currently imposed on some specific areas, the government portal said in a statement on December 10. Vietnam’s Labor Code stipulates that an employee can work a maximum of 200 extra hours per year. In some specific areas like textiles and garments, leather, aquaculture processing, telecommunications, water and power supplies, overtime is capped at 300 hours per year. The move comes after Prime Minister Nguyen Xuan Phuc asked relevant ministries and agencies to consider adjusting the overtime limit following recommendations from foreign firms. Several Korean and Japanese firms have complained that the current limit in Vietnam is too low, and have suggested the government should double or triple the figure. These thresholds are holding back the development of IT companies as engineers need to work overtime if any technical problems arise, the Japan Business Association in Vietnam said at the annual Vietnam Business Forum last week. Han Dong Hee, chairman of the Korea Business Association, echoed the same opinion, adding that the rule has raised labor costs and delayed production schedules. The maximum number of overtime hours allowed in Vietnam is currently less than other Southeast Asian countries. While Vietnamese workers can’t work for more than 300 extra hours per year, it’s 1,800 hours in Thailand, 1,250 in Malaysia, 860 in Singapore and 540 in Laos. This restriction is taking its toll on both enterprises and their workers. A recent survey conducted by national television broadcaster VTV at the Thang Long Industrial Zone in Hanoi revealed that 97% of manual workers want to work overtime as the money from those extra hours accounts for a third of their monthly incomes. El Nino hits Vietnam's coffee output; exports run out of steam Aging crops, flooding and drought: not the ideal blend for the world’s second largest coffee exporter. Vietnam’s coffee exports are likely to be hit this year due to changes in the weather, with output forecast to fall by 20%. Vietnam’s Association of Coffee and Cacao (Vicofa) said that coffee output will hit 1.3 million tons for the 2016-2017 season (from the start of October 2015 till the end of September 2016) following the worst El Nino in the last 20 years. October is traditionally the start of the coffee harvest, but this year many plantations in the Central Highlands province of Dak Lak, one of the biggest producers in the country, are still in blossom due to the lack of water. According to incomplete statistics from Vicofa, 115,000 hectares (284,000 acres) of coffee, equivalent to nearly a fifth of Vietnam’s total plantations, have been damaged by water shortages. Rain and flooding that hit the Central Highlands in November also made it difficult to harvest and dry the beans. Apart from the weather, farmers have also been cutting down their coffee plants to make room for other industrial crops, and a large area of coffee is entering an "aging" period with reduced output. To increase the value of coffee exports, Vicofa has called on businesses to step into the processing industry rather than focusing on exporting raw materials. The association has set a target of increasing the proportion of processed coffee exports to 30% of the total by 2020 from the current rate of 10%. Data from Vicofa revealed that Vietnam’s coffee exports jumped by 34.8% on-year to 1.75 million tons during the 2015-2016 season. Export value also surged by 17.2% to reach US$3.16 billion. However, this growth has been attributed to a large inventory of around 300,000 tons carried over from the previous season. Can Tho, RoK association cooperate in rice production  Representatives from the Can Tho city People’s Committee and the Korean Food and Rice Association met in the Mekong Delta locality on December 12 to discuss ways to expand cooperation in rice processing and export. The meeting took place ahead of the inauguration of the association’s representative office in the Vietnam-Korea Incubator Park in the Tra Noc 2 Industrial Park on December 13. According to Vice Chairman of the municipal People’s Committee Truong Quang Hoai Nam, Can Tho has become a potential destination for enterprises from the Republic of Korea (RoK) and many firms decided to pour investment into the locality. Notably, Tae Kwang Industrial Co., Ltd constructed a 171.48 million USD plant to produce semi-finished sport shoes in the Hung Phu 2B Industrial Park in Cai Rang district. The RoK Government also invested in many big projects in Can Tho like the Vietnam-Korea Incubator Park in the Tra Noc 2 Industrial Park, and a water supply plant in Vinh Thanh district, Nam said. For his part, Chairman of the Korean Food and Rice Association Kim Nam Doo said the establishment of the association’s representative office in Can Tho is a strategic decision as the city is a food and rice centre in the Mekong Delta region. The office will serve as a bridge promoting partnership between Vietnamese food firms and member enterprises of the association in the time ahead, he affirmed. Can Tho boasts 115,000 ha of agricultural land and 90,000 ha of which is for rice cultivation.  Can Tho produces 1.4 million tonnes of rice, with over 1 million tonnes being shipped abroad every year through 26 rice export enterprises. The city’s export turnover to the RoK is estimated to hit 30.3 million USD in 2016, while import value will be 4.2 million USD. PM adopts adjustments to ODA-funded economic restructuring project The Prime Minister has approved adjustments to an investment plan for the project “The Restructuring for a More Competitive Vietnam” using non-refundable official development assistance (ODA) from the Australian Government. Accordingly, the project will focus on studying impacts of economic restructuring on gender equality; examining policy on competitiveness and revising the Law on Competition; supervising the enforcement of the enteprise and investment laws, and the implementation of commitments to the European Union (EU) and the ASEAN Economic Community (AEC). The implementation of the project will be extended to June 30, 2017. Additional capital for the project will value at 522,000 AUD (around 391,233 USD), including 500,000 AUD (360,000 USD) in non-refundable ODA sourced from the Australian Government, and 490 million VND (21,662 USD) in counterpart capital of the Vietnamese Government. The Prime Minister asked the Ministry of Planning and Investment to coordinate with the Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development to carry out the adjustments in accordance with the project’s targets and regulations on the management and use of ODA capital. No zero-interest loans for Tết     The capital city has followed HCM City in stopping zero-interest loans to enterprises participating in the price stabilisation programme for the Tet (Lunar New Year) season. Despite this, markets in both cities will have sufficient food items in stock, authorities say. Nguyen Duc Chung, Chairman of the Ha Noi People’s Committee, said his administration would facilitate enterprises’ access to bank loans for purchasing goods to stock for the festival season, the Giao thong (Transportation) newspaper reported. This is the most efficient way to ensure enough goods for Tet and will create good conditions for the enterprises to step up their production and business efficiency, Chung said. The report also quoted Le Ngoc Dao, deputy director of HCM City Department of Industry and Trade, as saying that the municipal administration had not been giving out the zero-interest loans since 2013. Instead, the city has encouraged commercial banks to give loans at preferential interest rates so that the enterprises can access funds for production, trading and stocking, ensuring stability in demand and supply, Dao said. This has seen the number of enterprises joining the price stabilisation programme increase every year, he added. Nguyen Ngoc An, deputy director of Vissan, a major food company in HCM City, said that over the past three or four years, his company had not obtained the zero-interest loans from the State budget. The company has joined the price stabilisation programme to get loans at preferential interest rates from commercial banks that are also part of it, he said. After joining the programme, Vissan has restructured its production process to compete in terms of price and quality of goods, An said. So far, ten commercial banks have joined HCM City’s Tet goods price stabilisation programme to provide loans worth VND12 trillion (US$530,750) this year, VND1.1 trillion higher than last year, said Nguyen Hoang Minh, deputy director of the State Bank’s branch in HCM City. The loans carry interest rates of between 4.15 per cent and 6.5 per cent per year. An said Vissan has prepared 3,200 tonnes of processed food and 3,000 tonnes of fresh food for the Tet season. He said demand for food for Tet 2017 will not increase strongly in the HCM City with many people leaving their homes or on tours. Lotte Mart has increased supply by 30-40 per cent for confectionery and beverages and 25 per cent for fashion products; while Coop Mart has said it will cooperate with suppliers to offer discounts of 10-50 per cent on thousands of products. Nguyen Xuan Duong, deputy director of the Ministry of Agriculture and Rural Development’s Livestock Department, said the domestic livestock industry would supply enough food to the local market for the Tet season because of increased output, the Vietnam News Agency reported. According to the General Statistics Office (GSO), output in November increased by 5.5-6 per cent for poultry meat, 6-6.3 per cent for eggs, 1.8 per cent for beef, 10 per cent for milk and 5 per cent for pork year-on-year. Pork prices fell to VND35,000-37,000 per kilo in southern Dong Nai Province, but was more stable in the Cuu Long (Mekong) Delta provinces at between VND38,000-43,000 per kilo. Chicken prices have also been stable in the southern provinces because there has been no sudden spike in demand, a GSO report said. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR