BUSINESS IN BRIEF 2/12 Interbank rates for Vietnam dong loans surge    Interest rates for Vietnam dong loans on the interbank market rose sharply in the first two days of the week, especially for short tenors. The overnight rate stood at 1.7% per annum last Thursday but nearly doubled to 3.2% on Tuesday. Meanwhile, the one-week rate climbed from 1.8% to 3.2%, the two-week rate from 2% to 3.5%, the three-week rate from 2.3% to 3.6% and the one-month rate from 2.6% to 3.8%. These interest rate spikes are seen as normal because banks are increasing their Vietnam dong liquidity ahead of their earnings releases at the end of the month. Banks said despite the rising rates, liquidity in the banking system has remained good. On open market operations (OMO), the State Bank of Vietnam (SBV) on Monday held auctions for 14-day and 28-day treasury bills with a respective value of VND3 trillion and VND5 trillion but found no buyers.  With VND150 billion of bills falling due, outstanding bills dropped to VND78.01 trillion. The rise of the U.S. dollar against the Vietnam dong was behind the SBV’s net withdrawals from OMO over the past few weeks. Banks attributed rising dong transactions and interest rates to a possible pickup in interest rates at the end of the year when borrowing demand is normally strong. Enterprises will need more cash ahead of the New Year holiday in late January, so banks are holding back on dong lending on the interbank market. Meanwhile, the annual overnight rate for U.S. dollar loans inched up to 0.6%, the one-week rate to 0.72%, the two-week rate to 0.83% and the one-month rate to 1.12%. Increasing interest rates for Vietnam dong loans have led the dollar to weaken against the domestic currency in recent days.  The central bank has said it would sell dollars to keep the foreign exchange market stable. However, it has not sold dollars over the past two weeks. The dong briefly dipped to record lows against the greenback recently.   A number of banks forecast treasury bills worth a combined VND14 trillion would fall due this week and that the dong-dollar exchange rate would remain volatile.  Tumbling dollar supply would lead interest rates for both dong and dollar loans to stay at current levels or inch up on the interbank market. SHB clinches credit deal with PV Power Saigon-Hanoi Bank (SHB) announced that it had signed a VND2 trillion credit line for PetroVietnam Power Corporation (PV Power). In the deal PV Power will use credit from the bank to fund its operations of Vung Ang 1 thermal power plant and the 500kV power distribution station of the Vung Ang Power Center in the central province of Ha Tinh. The credit line comes with a term of 12 years. Vung Ang 1, with total investment capital of over VND29.5 trillion (US$1.3 billion), is the largest thermal power station in central Vietnam. The 1,200MW facility can generate 7.2 billion kWh per year for the national grid, helping to ensure energy security for the country. PV Power, a unit of Vietnam National Oil and Gas Group (PVN), has total chartered capital of more than VND21,000 billion. As of end-June this year, PV Power had had total assets of over VND71.5 trillion, and reported total revenue of some VND11.7 trillion and pre-tax profit of VND1,220 billion. Stock market cap expected to rise 1.7-fold in next two years Vietnam’s equity market capitalization may increase nearly 1.7 times in the next two years, backed by the equitization of more State-owned enterprises (SOEs), State capital divestments and the listings of big groups and corporations on the stock exchange.  VNDIRECT Securities Corporation made this prediction in a report released on November 30. Stock market capitalization is forecast to climb from 38.5% of the country’s gross domestic product (GDP) in 2016 to 46.5% of GDP in 2017 and 56.3% of GDP in 2018. VNDIRECT analysts said in the report that the Government’s target to raise the stock market capitalization to 70% of GDP by 2020 is obtainable.    The Government has stepped up the initial public offering (IPO) process, State capital divestments from sectors that the State has no needs to hold controlling stakes and the listings of equitized firms. Besides, more groups and corporations have floated shares on the stock exchange, which will cause the equity market capitalization to surge. The brokerage said 19 big enterprises such as Saigon Beer-Alcohol-Beverage Corporation, Vietnam National Textile and Garment Group, and Novaland Group, which will list shares on the stock exchange in the coming time, have a combined market capitalization of over VND611.4 trillion (US$27.1 billion). The sum is equivalent to about 35% of Vietnam’s stock market capitalization at present.   By early November, the local equity market capitalization had reached VND1,770 trillion, or 38.5% of GDP. Since early this year, it has edged up nearly 18%. VNDIRECT said the home market is still small compared to other ASEAN markets. The Hochiminh Stock Exchange (HOSE) saw its market capitalization surpassing VND1,378 trillion, accounting for 78% of the country’s total. Companies on the market for unlisted public companies (UPCoM) have capitalization risen 74% over the previous month and 4.24 times since the beginning of the year. Airports Corporation of Vietnam and Hanoi Alcohol Beer and Beverage Company, whose market capitalization is huge, have floated shares on UPCoM, making it the second biggest stock exchange by market capitalization in Vietnam.     Given the Government’s stance that big SOEs must list on the stock exchange before the State divest capital from them, Vietnam’s stock market capitalization will rise strongly in the coming time, especially those on UPCoM and HOSE.    Under Decree 145/2016/ND-CP, all businesses, especially State-owned enterprises (SOEs) that have launched their IPOs but have not registered transactions and listed their shares on the stock market, will face an administrative fine of up to VND400 million. The decree came into force on December 15. The Ministry of Finance issued Circular 115/2016/TT-BTC to amend Circular 196/2011/TT-BTC to guide the IPO process and the use and management of the proceeds from State stake sales. From November 1, firms that have gone public must coordinate with the stock exchanges and Vietnam Securities Depository to register for depository and listings with specific timetables. SOEs must register their IPO auctions and listings on UPCoM at the same time. HCMC to ensure sufficient goods supply at Tet   Goods supply for the upcoming Lunar New Year holiday (Tet) in HCMC is forecast to abound but city authorities should closely coordinate to cope with any signs of goods scarcity and price rises, said Deputy Minister of Industry and Trade Ho Thi Kim Thoa. Preparations for stocking up on goods for Tet early next year are 80% complete, Pham Thanh Kien, director of the city’s Department of Industry and Trade, told a working meeting with Thoa on Tuesday. Local firms have more than VND17 trillion (US$749 million) worth of products ready for the holiday, up by VND860 billion over the same period last year, Kien said. The total value of products under the city’s price stabilization program is over VND6.8 trillion. They include many items in high demand such as meat, poultry, egg, sugar, cooking oil, rice and processed food. Particularly, local companies have stored goods worth VND9.7 trillion for the peak pre-Tet shopping period from December 29 to January 27, including more than VND3.76 trillion worth of products under the price stabilization program.     Kien said participating companies have promised to keep prices stable before and after Tet. They will offer discounts on essential goods such as pork, poultry and egg. Nguyen Nguyen Phuong, head of trade management at the HCMC Department of Industry and Trade, said district-level economic management divisions and authorities of traditional wet markets have asked vendors to ink price stabilization commitments. Deputy Minister Thoa said the department should work with manufacturers and distributors to take measures to ensure food safety and hygiene during the busiest holiday shopping season. The department should launch more inspections to keep substandard products from circulating on the market, she said. According to the department, consumers can trace the origin of pork thanks to a mobile phone app or a device available at more than 500 selling points from December 10. The pilot project is being implemented by the city’s Department of Industry and Trade.  HCMC proposes 36-hole golf course in Can Gio The government of HCMC has asked the Ministry of Planning and Investment to seek Prime Minister’s approval for a 36-hole golf course covering over 135 hectares in the city’s outlying coastal district of Can Gio. In a written petition sent to the ministry, the city proposed adding the golf course project in Long Hoa Commune and Can Thanh Town to the country’s golf course development plan until 2020. According to the proposal, Can Gio Tourism Urban Area Joint Stock Company (CTC), a unit of Vietnamese real estate giant Vingroup, would develop the project at a total cost of around VND900 billion (US$39.7 million), excluding site clearance cost and loan interest. The site where the golf course would go up would be reclaimed land in Long Hoa Commune, so the project would not encroach on agricultural land, protected forests and areas planned for industrial park development and special use, according to the city. The municipal government is pinning high hopes that the project would give an impetus to the development of the poor district of Can Gio. The golf course is expected to help fuel the city’s gross domestic product (GDP) growth, restructure the local economy, and create 300-400 jobs for locals. It would become a destination for domestic and international tourists. CTC has pledged to comply with the current regulations in the process of implementing the project, and employ local residents, especially those affected by the project. In addition, they would use advanced technical solutions to treat wastewater and take care of grass in a way that protects the environment. The company would complete work on the project in two years after it receives land from the city. The city came up with a major plan to develop a new urban area on reclaimed land around 15 years ago but the plan faced long delays. In mid-2015, the city took on Vingroup as a strategic partner and then permitted CTC to do a scale-1/200 zoning plan for the new urban area which would cover 1,080 hectares, up from the original 600 hectares. The additional space would house a golf course, a movie production studio and a helipad. Can Gio has over 70,000 hectares of mangrove forest, water coconut trees and canals. It is regarded as the green lung of HCMC, with half of its area recognized in 2000 by UNESCO as a biosphere reserve. Xiamen Airlines launches service from China to HCM City Xiamen Airlines has launched launched a new service between Xiamen City in China’s  Fujian Province and HCM City. The daily Boeing 737– 800 flights provide eight business class seats and 161 economy class ones. The flights leave Xiamen at 8pm and arrive in HCM City at midnight. CMC Telecom, HGC launch global cloud computing service      Hutchison Global Communications (HGC) and CMC Telecommunication Infrastructure Corporation (CMC Telecom) on Wednesday launched ibizCloud service, a one-stop global cloud computing service that includes infrastructure and bandwidth, in Ha Noi. HGC’s ibizCloud will simplify the management of transmission and storage of huge volumes of data and is aimed at multinationals and local corporations. HGC, the fixed-line operating division of Hutchison Telecommunications Hong Kong Holdings Limited, is responsible for the cloud design and instant and international network connectivity, while CMC Telecom provides local connectivity and branding for ibizCloud in Viet Nam. The service has been customised to suit the Vietnamese market and satisfy the demand for easy data exchange. Businesses in Viet Nam will benefit from a cloud computing approach to data management and storage without making hefty, upfront investments in infrastructure. Other advantages for customers include lower cost of ownership and shorter time to market. Andrew Kwok, president of international and carrier business at Hutchison Telecommunications Hong Kong Holdings Limited, said: “The cooperation offers a remarkable opportunity to provide local and international corporate customers with a highly secure global cloud service. Creation of a cloud site in Ha Noi has further strengthened our position in the Greater Mekong sub-region. It is another successful example of HGC’s niche market strategy.”  French tech Vietnam now part of int’l French tech hub      French Tech Vietnam has become a member of an international community of French entrepreneurs known as the French Tech Hub. On the occasion of a visit to Montreal in October, Manuel Valls, the prime minister of Rance, praised French technology companies in Viet Nam for their dynamism and their creativity and said they were now part of the French Tech Hub. French Tech Hub Vietnam joins an existing network composed of 22 other hubs, including Abidjan, Barcelona, Hong Kong, New York, Seoul and Tokyo. This is an opportunity for French-Vietnamese companies to enter the same network as companies that have achieve a global success such as BlaBlaCar, Critéo and Talend. The French tech community includes entrepreneurs, investors, engineers and leaders. French Tech Viet has more than 1,500 members and a dozen projects. Several French Tech Hub projects in Viet Nam were introduced at the launch event held on December 1 at the French Consulate in HCM City with more than 120 guests.  Forum calls for digitising VN banking      The banking sector has been developing rapidly but it needs to do more, especially to ensure sustainable development of digital banking, a conference heard in HCM City on December 1. Nguyen Toan Thang, the general secretary of the Viet Nam Banks Association, told the 2016 Viet Nam Retail Banking Forum: " is now affecting all aspects of life, and the Vietnamese banking sector must enhance digital banking and ensure security.” Ha Huy Tuan, the deputy chairman of the Viet Nam National Financial Supervisory Commission, said: “Nowadays, due to the IT boom, digital banking is becoming the new trend in retail banking, and [while] it offers commercial banks many opportunities, it also poses challenges to their managers. “Digital banking is inescapable but information safety is a huge challenge to ensure which requires the great effort from the banking sector,” said Tuan. The forum, titled “Building your bank and driving profitable customer engagement in the digital world”, discussed key issues the banking industry needs to focus on and analysed them to offer innovative solutions for IT applications to develop digital banking, improve service quality and acquire customers’ trust. Dr Can Van Luc from the Bank for Investment and Development of Việt Nam (BIDV) said in Viet Nam 44 per cent of bank customers used the internet and mobile banking. “Significant internet access and a remarkable growth in the number of mobile devices are two important factors promoting digital banking around the world. “In Viet Nam, more than 47 million people access the internet, there are 143 million mobile phone subscribers and 29 million members accessing social media on mobile devices.” He said people born after 1990 are especially cyber-savvy and are prospective customers for digital banking. There are three main factors that affect Vietnamese banking customers’ satisfaction – quality of the network, convenience and security, he said. “Vietnamese banks have to build a digital business strategy. “Digitising all connections with customers, digitisation their products and services and taking advantage of digital technologies to create new products and services are imperative to create a digital bank.” Maya Barkay from Amdocs Mobile Financial Service said six key forces are reshaping the banking and payments industries: a growing middle class, millennial disruption, need for financial inclusion, evolving technologies and market shifts, the ubiquity of mobile and regulatory shifts. “Banks must quickly shift from product-centric to customer-centric banking.” Matthew Martin, chief information officer at Asia Commercial Bank, spoke about omnichannel, a cross-channel business model that companies use to improve the customer experience. “Omnichannel provides a consistent and connected experience over each and every touch point whether self-directed or assisted. “It is about the way customers want to conduct their financial transactions.” The Viet Nam Retail Banking Forum (previously known as the ASEAN Banker Forum) is one of the most prestigious regional forums for bank executives, technology experts, finance specialists and those providing IT solutions for the banking industry. It seeks to discuss key issues in which banks are interested and come up with solutions to improve their operational performance. It is organised by the Viet Nam Banks Association and International Data Group (IDG Viet Nam).  Consumer spending soars as new year holiday nears         Consumer spending in November posted a significant year-on-year increase as the Tet (Lunar New Year) holiday neared. According to the General Statistics Office (GSO), total retail sales of goods and services in November totalled more than VND302.9 trillion (US$13.5 billion), representing a rise of 1.9 per cent over the previous month and a 10.4 per cent increase over November 2015. Retail sales of goods accounted for more than 76 per cent of the total value. Vu Manh Ha, GSO’s analyst on the domestic economy, said November witnessed strong purchasing power as the shopping season for Tet holiday would arrive earlier than normal. The holiday will fall in early February 2017; usually it is later in the month. Strong purchasing was seen in wedding, house repair and beauty care products. Total retail value for the 11 months of this year touched VND3.2 quadrillion, rising by 9.5 per cent over the same period last year. If inflation was excluded, the rate would be 7.6 per cent, lower than the 8.3 per cent rate for the same period of 2015, due to the higher consumer price index (CPI). Statistics showed that CPI grew at 4.5 per cent in the 11 months of this year compared with only 0.58 per cent in the same period of 2015. Purchasing power was strong in major cities such as Ha Noi, HCM City and Vung Tau, with increasing rates of more than 10 per cent.  SIMA ASEAN Thailand 2017 scheduled for September      The third annual SIMA ASEAN Thailand international agricultural trade show, to be held in Bangkok in September 2017, will attract 20,000 trade visitors and create business opportunities for all participants. The event is considered as a bridge that will enhance economic, trade and investment relations between Viet Nam, Thailand and the ASEAN Economic Community. More than 400 Thai and international agricultural companies are expected to take part in the trade show, which will be held at the Impact Exhibition Centre from September 8 to 10. It will have an indoor exhibition area of 13,500sqm and outdoor area of 10,000sqm, Tita Kanittanon, assistant marketing manager at Impact Exhibition Management Co. Ltd., one of the organisers, said. SIMA will offer a comprehensive range of products and services, such as tractors, spare parts and accessories, embedded electronics, tilling, sowing, planting, harvesting and post-harvest equipment, equipment for tropical and special crops, handling, transportation, storage and breeding equipment, renewable energy, consultancy, management and software. Kanittanon said the idea for SIMA came from an exhibition in France. It aims to connect businesses in the agricultural and food processing sectors in the ASEAN region. More than 20,000 professional trade visitors from agricultural cooperatives, machinery traders, marketing board, product distributors and supply shops are expected to visit across the three days, she added. On the sidelines, there will be a conference on sustainable farming by the Agricultural and Food Marketing Association for Asia and the Pacific (AFMA) & Food and Agriculture Organisation of the United Nations. The SIMA ASEAN Thailand 2016 opened on September 8 at the IMPACT Exhibition and Convention Centre and IMPACT Lakeside in Bangkok. On display was a comprehensive range of innovative agricultural technologies and equipment such as inputs, traction, soil working equipment, plant treatment, harvesting, irrigation, storage, breeding equipment and spare parts. With a combined indoor and outdoor exhibition space of 21,500sqm and more than 300 global brands participating, visitors were able to experience all the latest products and innovations. It attracted more than 13,000 trade visitors from 40 countries, such as Australia, Canada, China, France, Germany, India, Indonesia, Italy, Japan and Viet Nam. Around 100 VIP buyers from 12 countries generated around 700 business meetings during the event. The Vietnamese delegation of 22 business members of the French Chamber of Commerce and Industry in Viet Nam and 15 other firms initiated effective trade exchanges at the exhibition this year.  Location markers dire for branding      Geographical markers are going to be a crucial factor in the effective branding of Vietnamese products in a market economy on the verge of comprehensive global economic integration, a senior official said yesterday. Tran Thi Phuong Lan, Deputy Director of the Ha Noi Department of Industry and Trade, also told a conference held in Ha Noi that enterprises and localities were showing greater awareness of the issue. The conference on market and branding development using geographical markers was jointly organised by the Ministry of Industry and Trade (MoIT) and the Ha Noi People’s Committee. It sought to increase understanding of the issue and come up with policy orientations for promoting Vietnamese agricultural products as well as regional food specialties. Lan said businesses and traditional craft villages are paying more attention to advice from relevant institutions on geographical markers and branding registration. They recognise that consumers are moving towards higher quality products with assurance of their origins and recognised brand names, she said. Producers are more interested now in putting sustainably developed registered products on the market. Held on the sideline of the 2016 Regional Specialties Fair, the conference aimed at realistic evaluations of both domestic and foreign models to advise businesses on building their own geographical markers and adding value to their products. Experts at the conference instructed local businesses on legal procedures related to geographical markers so that the latter could better understand the branding concept and build a sound management platform for their regional specialty products. The conference was also aimed at increasing the contribution of Vietnamese small and medium businesses to the national export turnover through added efficiency in trade assistance services at regional and local levels. Building a concrete and reliable geographical marker for local brands and products is a realistic need and an efficient marketing and trade promotion tool, experts said. This requires long term investment as well as requires the commitment and effort from all stakeholders including producers, distributors and authorities from local to central. The conference was part of an official development assistance programme sponsored by the Swiss State Secretariat for Economic Affairs (SECO) from 2013 to 2017 to help small and medium businesses in Viet Nam increase their export competitiveness through local trade promotion frameworks. The programme is administrated by the Viet Nam Trade Promotion Agency and the MoIT. Geographical markers are a chief concern for local authorities and businesses, because they can elevate regional products to the national level and gain access to consumers across the country, before seeking international markets. They would boost the nation’s status on global commerce and garner international recognition for the country’s traditional products. Aside from the commercial significance, geographical markers and local brand name registration for regional products will also serve as efficient legal protection for domestic products, ensure the prestige of Vietnamese products, and limit infringements of intellectual property right. This, in turn, would effectively prevent consumers from being cheated and encourage farmers, regional producers and businesses to co-operate on developing local specialties, the conference heard.  Officials bolster fake goods fight      Deputy Prime Minister Truong Hoa Binh has ordered ministries to constantly review laws and regulations on trading to consolidate the legal framework for the fight against fake goods. Addressing a meeting on the Day against Counterfeit Goods in Ha Noi on Wednesday, the Deputy PM also urged customs and border guard forces to intensify efforts to prevent the import of such goods through both official and unofficial channels. Businesses should co-operate with relevant agencies in market management, improve their own distribution networks and get ready to provide information to law enforcement forces in order to assist with the detection and punishment of violations, he said. He requested the Viet Nam Association for Anti-counterfeiting and Trademark Protection (VATAP) to contribute feedback and recommendations to the process of building regulations in the field. However, smuggling, trade fraud and counterfeit goods are still rampant, causing great concern in society. Deputy Minister of Industry and Trade, Tran Quoc Khanh, also hailed the achievements of authorities and businesses in preventing and controlling trading of counterfeit and poor quality goods as well as their efforts in building and protecting brand names.  However, Khanh said the results had not met requirements and targets of the Government and consumers. The market in general and companies and consumers in particular still faced the threat of fake goods and intellectual property right violations, especially goods relating to food safety, health, environment and breeding in the agricultural sector. He asked relevant agencies to promote the fight against counterfeit goods and intellectual property right violations. Industry and trade should focus on key markets and products such as fertilisers, functional food and cosmetics to make clear changes in the future. In addition, the deputy minister asked for enhanced co-operation among authorities with associations, businesses, media and consumers to put up an effective fight against the issues. “Businesses should be more active in joining the fight, especially in market control, distribution systems and collecting information to support authorities discovering and resolving the violations,” he added. According to Dam Thanh The, Standing Office Chief of the National Steering Committee for Combating Against Smuggling, Commercial Frauds and Counterfeit Goods, the market management force has carried out 145,000 inspections so far this year and detected 88,000 cases of trading and transport of counterfeit goods.  Vietnam-RoK trade, cultural festival opens in HCM City   A culture and trade exchange festival between Vietnam and the Republic of Korea (RoK) officially opened in Ho Chi Minh City on December 1. The event features a trade fair of agricultural produce, cosmetics and medicine alongside a cultural festival. Organised by the Korean province of Gyeongsangbuk and the Vietnam Chamber of Commerce and Industry, the exchange programme saw the participation of businesses from both countries. Gyeongsangbuk’s deputy mayor Woo Byung Yoon said the event aims to boost mutual understanding, business partnerships and import-export between the RoK and Vietnam. Park Noh Wan, the RoK’s Consul General in HCM City, said the RoK considered Vietnam as a strategic partner in all fields for mutual growth and benefits.  Meanwhile, Le Thanh Liem, Vice Chairman of the HCM City People’s Committee, noted that the RoK organised the largest number of economic and cultural exchange festivals in Vietnam this year as compared to other countries.  Currently, there are about 4,500 Korean companies operating in Vietnam, with combined investment totaling 50 billion USD.  Bilateral trade revenue is expected to hit 40 billion USD in 2016, the highest figure ever recorded to date. Deputy PM hosts ExxonMobil Group’s Vice President Deputy Prime Minister Trinh Dinh Dung on December 1 greeted Vice President of ExxonMobil Group Paul Greenwood, who is in Vietnam to evaluate the development of the Ca Voi Xanh (Blue Whale) natural gas field in the central region.  At the meeting in Hanoi, Dung spoke highly of efforts made by the Ministry of Industry and Trade, the Vietnam National Oil and Gas Group (PetroVietnam) and ExxonMobil Group during the implementation of the project.  He stressed that the early production of gas from the field is significant as it will help meet the increasing demand for production and commercial consumption.  Therefore, the Deputy PM suggested the group coordinate with the Ministry of Industry and Trade and PetroVietnam to promptly conclude negotiations on the remaining contents, ensuring the pace of the project.  Paul Greenwood said his group is accelerating the negotiations with the Vietnamese side to reach the final consensus. He noted his wish that the Vietnamese Government will create favourable conditions for the early realisation of the agreements. ExxonMobil is a multinational oil company headquartered in Irving City, Texas. BIDV wins best retail bank award 2016 The Bank for Investment and Development of Vietnam (BIDV) has been the only bank to receive the Best Retail Bank title of the 2016 Vietnam Outstanding Banking Awards.  The honour was presented to the bank at a ceremony jointly held by the International Data Group (IDG) and the Vietnam Banks Association (VNBA) in Ho Chi Minh City on December 1.  Addressing the ceremony, a representative from BIDV, said the award acknowledges achievements the bank has recorded in the retail banking services over the past decade, stressing that the bank has conducted various reforms in this field.  Le Doan Hop, IDG President, said the award, first launched in 2012, aims to honour banks and banking service suppliers which have made outstanding contributions to the development of the banking sector and the financial sphere in general.  Winners of other titles such as the Best Online Bank, the Bank for Community, the Best Information Security Bank, and the Most Innovative Products and Services Award, among others, were also announced on this occasion. Last year, BIDV, which has 1,813 ATMs, was named the Best Online Bank. Food processing segment to blossom in coming years A positive business climate and an emerging middle class are propelling investors to look at Vietnam as a major destination for investments in the food processing industry, says the Ministry of Industry and Trade (MOIT). Speaking at a recent investment forum held on the margins of Vietnam Foodexpo 2016 in Ho Chi Minh City, Deputy Minister Ho Thi Kim Thoa of the MOIT said the segment is in a growing phase with the domestic sector struggling to keep pace. The food processing segment is super healthy, said Ms Thoa, adding that market analysts have forecast the industry will average growth rates ranging 5-6% every year in the foreseeable future. The key influencers for the bright outlook are related to the fact that agriculture is the main source of income for over half of the Vietnam total population and the government is doing a lot to improve working conditions, innovation and productivity in farming. In addition, the food processing industry in the country has access to an abundance of raw materials allowing the marketplace to offer a wide variety of products. Rising disposable incomes of households across the country are also a plus. Notably, she said, there is an increasingly health consciousness driving demand for nutritious products that shows no sign of abating. Many market analysts have projected the organic food industry will grow threefold by 2020. Bui Huy Son, director general of the Vietnam Trade Promotion Agency, in turn told the audience that food consumption has been projected to grow at an 18.6% clip annually through 2019. Additionally, he said the Vietnam government has picked up the pace of equitization of State-owned businesses, which directly impacts opportunities for the food processing segment. The State Capital Investment Corporation has stocks of more than 200 individual companies on the auction block, of which 50 are in the food industry. The Government getting out of the industry, presents a great opportunity for private businesses to jump in. For his part, Dang Xuan Quang, deputy director of the Foreign Investment Agency, said the segment has attracted US$7.6 billion of FDI, which has been concentrated in areas such as handling, packaging, processing, transporting and marketing of food and agricultural products. He noted the transnational companies that have invested in Vietnam have primarily been those based out of Thailand, Taiwan, Malaysia, Korea, and China with very little coming from companies in Japan, the US, Australia or the EU. Lastly, Claudio Dordi, the technical assistance team leader of the European Trade Policy and Investment Support Project, noted the Vietnam-EU free trade agreement signed last year is set to come into force in 2018. The new economic free trade region created by the agreement combined with the increasing demand for hygiene and food safety makes the segment a win-win for Vietnam and the EU. He expects the food processing segment to blossom over the coming years and believes there will be an influx of investment from the EU. FTA commitments open opportunity for Vietnam Joining the Trans-Pacific Partnership (TPP) and signing a Vietnam-EU Free Trade Agreement (EVFTA) will create an opportunity for Vietnam to bring its intellectual property rules in line with international standards. A Vietnam-EU Free Trade Agreement will have a significant impact on Vietnam’s economic and legal institutions, particularly regarding intellectual property. Director of the WTO and Integration Center of the Vietnam Chamber of Commerce and Industry Nguyen Thi Thu Trang said Vietnam needs to review the compatibility of its laws with TPP and EVFTA commitments on intellectual property. “We’ll have to carry out institutional reform, improve the business environment, and increase the competitiveness of businesses and the whole nation. Free trade agreement commitments will definitely boost Vietnam’s reform process”, Ms Trang said. Though most of Vietnam’s legal commitments on intellectual property are compatible with TPP and EVFTA principles and standards, Vietnam needs to do more on this issue, said Director of the SB law firm Pham Duy Khuong. Khuong noted that “Vietnam’s Law on Intellectual Property needs to cover some wider aspects including criminalizing violations of intellectual property rights, and the import or export of items infringing copyrights.” Fine-tuning intellectual property legislation will help Vietnam attract more investment, regardless of when free trade agreements it has signed take effect.      Vietnam forges ahead with free trade agreement with EU Vietnam has been actively preparing for the ratification and enforcement of the free trade agreement with the European Union (EU), Deputy Prime Minister Vuong Dinh Hue told Ambassador Bruno Angelet, Head of the EU Delegation to Vietnam, at a reception in Hanoi on November 30. The Deputy PM expressed his pleasure at the positive development in the bilateral cooperation in recent years, citing the Framework Agreement on Comprehensive Partnership and Cooperation (PCA) between Vietnam and the EU came into force on October 1, 2016, and the two sides are looking towards to the signing of the EU-Vietnam Free Trade Agreement (EVFTA). He said the Vietnamese Government is pushing ahead with economic reshuffle and growth model reform along with increasing productivity and competitiveness, restructuring budget collection and spending and public debts, improving the business climate, and supporting the startup ecosystem. Vietnam is revising and fine-tuning its legal system in line with development process and international commitments, he said, adding that he hopes the Ambassador will act as a bridge to help Vietnam push the signing, ratification and enforcement of the trade pact for mutual benefits. He called on the EU to boost investment in Vietnam and soon recognise its full market economy status. Ambassador Bruno Angelet said 2017 will be an eventful year for Vietnam and the EU, offering good chances for them to boost cooperation. The EU has a big ambition to implement the EVFTA as it is the first free trade pact that the union signed with a middle-income Asian country, he added, noting that Vietnam is leading Southeast Asia in export to the EU, while the union is the third biggest investor in Vietnam.  With the EVFTA, the EU will approve Vietnam’s proposal on the provision of technical assistance, he said, adding that 50 EU experts are willing to support Vietnam in this field. The union will spare no efforts to help Vietnam enforce this agreement, he affirmed. Funding a problem for PPP agri-projects The agriculture sector has benefited from public-private partnership (PPP) projects in terms of new technologies and stronger links between enterprises and farmers, but several challenges remain, an expert said yesterday. Nguyễn Đỗ Anh Tuấn, director of the Institute of Policy and Strategy for Agriculture and Rural Development, was speaking at an annual PPP taskforce meeting held in Hà Nội. The meeting focused on Partnership for Sustainable Agriculture in Việt Nam. Tuấn said the PPP projects have also made it easy for the Ministry of Agriculture and Rural Development (MARD) to detect obstacles in the agricultural production process and propose appropriate polices to remove them. However, connecting domestic and foreign enterprises for expanding this model has proved quite difficult, Tuấn said, noting that most on-going projects were being implemented on a trial basis. Limited capacity-building and experience in promoting the projects as well as the lack of an experts network were also obstacles, he said. Phạm Thị Hồng Hạnh of the International Co-operation Department under MARD said Việt Nam was among 11 countries carrying out PPP projects in the agricultural sector with the participation of 20 leading corporations and companies all over the world.   These projects have helped push up productivity of key products, she said, but it was necessary to attract more investment into the agricultural sector, particularly foreign direct investment. Several crop-based working groups have been set up since 2009, including those for coffee, tea, pepper, fisheries, fruit and vegetables, she noted. She said the PPP projects can attract investment from enterprises and fulfill the target of increasing productivity and jobs by 20 per cent while reducing greenhouse gas emissions by 20 per cent. Citing coffee as an example, Hạnh said the PPP projects have helped boost productivity by 17 per cent, increase farmers’ income by 14 per cent and considerably decrease greenhouse gas emissions. Besides offering training for farmers on sustainable production, the projects have contributed to the establishment of a national database that will help all provinces engaged in coffee cultivation in the country. But despite the increased connection between enterprises, projects and banks, investment in PPP projects was still modest, Hạnh said. She suggested that ministries work on joint circulars detailing guidelines for the implementation of Government Decree No 15/2015/NĐ-CP, which aims to improving and streamline the legal framework for PPP projects. Participants at the meeting agreed that the funding was a hinderance to the development of PPP projects as it currently relied mainly on State Budget. They said despite the advantages of PPP, low profits and the longer time taken to recoup investments reduced investor interest in agriculture and rural areas. FWD Vietnam opens head office in Ho Chi Minh City FWD Vietnam Life Insurance officially opened its head office in Ho Chi Minh City’s District 1 on November 29, making the first key milestone as FWD Vietnam aims to become a leading insurer in Vietnam with its vision to change the way people feel about insurance. FWD has also officially launched its brand in Vietnam with a brand promise to “Celebrate living”. Under the tagline ‘Get ready to live’, FWD plans to be a challenger brand in the market with the aim of changing the conventions of Vietnam’s insurance industry and helping customers to live their lives without hesitation.  “When we set out to build FWD, we wanted to create an insurance company in Asia that changes the way people feel about insurance. I have no doubt that we are going to deliver on our promise to provide a new and better insurance experience for the people of Vietnam,” Huynh Thanh Phong, FWD Group’s CEO said. FWD entered Vietnam's market in June 2016 through the acquisition of Great Eastern Life (Vietnam) Company Limited. This was the second of three new market entry announcements this year as FWD continues to expand across the region to realise its ambition to become a leading pan-Asian insurer. CSR Awards honour six Korean firms Six Korean firms operating in Vietnam were awarded the Corporate Social Responsibility (CSR) Award on November 30 due to their high business efficiency and positive contributions to the Vietnamese community, society, and labour force. These six enterprises are Nonghyup Bank, Chang Shin Vietnam, Doosan Vina, Everpia Company, CJ Vietnam Group, and Sung Bu Vina Company. This was the sixth CSR Award ceremony for Korean firms in Vietnam that the Ministry of Planning and Investment has organised in collaboration with the Korean Embassy in Vietnam and the Korea Trade-Investment Promotion Agency (KOTRA) since 2011. Speaking at the awards ceremony, Korean Ambassador to Vietnam Lee Hyuk said, “When the economic cooperation between the two countries is reaching the next level, the CSR activities of Korean investors in Vietnam start playing a more important role in strengthening the bilateral relation between the two nations.” South Korea is now the biggest foreign investor in Vietnam in terms of both quantity and total investment among 112 countries and territories, with 5,593 projects worth approximately $50 billion. Up to now, Korean enterprises have invested in 19 sectors, mainly in the fields of manufacturing ($35 billion), real estate ($8.2 billion), and construction ($2.7 billion). Korean businesses have invested in 52 cities and provinces in Vietnam, among these, Bac Ninh accounts for the largest investment volume (nearly $6.2 billion). Runners-up are Hanoi ($5.8 billion), Dong Nai ($5.5 billion), Haiphong ($5.4 billion), and Thai Nguyen ($5 billion). "In the past, Korean companies were mainly known for trade and investment in Vietnam, however, we believe that CSR is an integral mission of Korean businesses operating here. CSR is getting more and more attention from enterprises of all sizes and walks of life," said KOTRA chairman Kim Jeahong. The CSR Awards has become an annual highlight event since 2011 honouring Korean enterprises which are highly efficient and make positive contributions to the Vietnamese society and labour force, thereby enhancing the development of bilateral relation between the two countries. This year, the collection of registration documents from Korean enterprises with outstanding CSR activities entitled “Share Together” started in September and attracted the participation of nearly 100 Korean businesses operating in diversified fields, such as heavy industry, transportation, garments and textiles, and goods distribution. Nguyen Van Hieu, Deputy Minister of Planning and Investment stated, "Korean businesses in Vietnam play an important role in the development of not only the economy but of the country and society as a whole. We appreciate these efforts and expect a strong bilateral cooperation between the two countries." NongHyup Bank, formerly known as National Agricultural Cooperative Federation of Korea, co-operated with Vietnam Bank for Agriculture and Rural Development (Agribank) in many fields, such as letters of credit (L/C), trade finances, money transferring between the two nations, and other financial services. The two lenders exchanged experience and banking knowledge and organised common training programmes. Entering Vietnam in 1995, Chang Shin Vietnam is known as one of the largest foreign shoe makers in the southern province of Dong Nai. In 2013, the company announced a $12 million expansion of its existing facility and pushed up the factory’s labour force to almost over 26,000. Doosan Vina is a high-tech industrial complex in the central province of Quang Ngai’s Dung Quat Economic Zone. The company supplies mega infrastructure products that make modern life a reality. Since 2006, Doosan Vina has been manufacturing and providing products for more than 197 projects, with a total value of billions of US dollars and exported around 350,000 tonnes. Products with the label “Made in Vietnam” manufactured by Doosan Vina now appear in 28 countries and territories around the world.  Meanwhile, after 20 years of presence in Vietnam, Everpia Vietnam continues to invest in new technology, product design, and improving quality management to be a typical representative of the products in bedding and padding in Vietnam. It currently has three manufacturing factories located in Hanoi, Hung Yen, and Dong Nai with a total annual capacity of 10 million bedding products and 30 million yards of cotton sheets. CJ has been operating in Vietnam since 1998. In 1999, it established CJ Vina Agri Co., Ltd. in the southern province of Long An, specialising in the production and trading of animal feed. As of now, the group has opened three additional animal feed processing plants in Dong Nai, Vinh Long, and Hung Yen provinces and two subsidiary companies CJ IMC and CJ Korean Express, which supply logistics services. Earlier in August, CJ arrived to the central province of Binh Dinh to find investment opportunities in numerous sectors. Notably, the group wanted to develop an animal feed processing plant at Nhon Hoa Industrial Zone in An Nhon town, as well as a pig breeding farm and a seafood processing plant. Besides, it also studied the possibility of building cinemas to meet the entertainment demand of locals and tourists in Quy Nhon city. In addition, CJ is also famous for various popular brands, like Tous les Jours, CGV or SCJ TV Homeshopping. Sung Bu Vina is known as a private plastics products manufacturing company in the southern province of Binh Duong. The company currently has about 500 employees. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR