BUSINESS IN BRIEF 3/1 Tan Cang JSC wants to join aviation market         Tan Cang Offshore Travel JSC has registered to participate in the country’s aviation market. In a message sent to the Ministry of Transport, the Civil Aviation Authority of Vietnam asked the ministry to propose that the prime minister grant an aviation business licence to Tan Cang JSC, which is qualified to enter this market. Tan Cang JSC was established in HCM City in March 2016. If it receives the licence, it can begin operating two helicopters for tourism purposes in the central-southern region in 2018. The firm’s long-term plan is to provide an aviation service for tourists, conduct geological survey, take map photos and provide emergency medical care. The four licensed aviation firms currently operating in Viet Nam are Hai Au Aviation, Globaltransair, Hanh tinh Xanh Technology Solution Corporation and Vietnam Helicopter Corporation. They all have five small planes and 31 helicopters.  More than 600 power works put into operation in the south The Electricity of Vietnam’s Southern Power Corporation (EVN SPC) put into operation 619 power works at a total investment of over VND6.5 trillion in 2016. Among them, there were 326km of 110kV lines, 1,766km of medium-voltage lines and 2,924km of low-voltage lines.  Notably, a project connecting southern Kien Giang province’s Lai Son island district with the national power grid was completed on November 26. Another 110kV power line connecting An Bien and Lai Son, costing VND467 billion (US$20.3 million), has also provided electricity for nearly 2,000 island households.  SPC Chairman and General Director Nguyen Van Hop said a number of projects will continue to be carried out, including power supply for 12 rural and island provinces, the World Bank-funded third stage of a project on providing incentives for power sector reform, the upgrade of power transmission lines in Phu Quy district, the central province of Binh Thuan, slated for completion next year.  In 2017, the SPC plans to operate 570 power works with a total investment of nearly VND8.3 trillion, including three 220kV grids, 134 110kV grids and 433 power distribution grids. Ben Tre targets 2 percent growth in agro-forestry-fishery in 2017 The agro-forestry-fishery sector of the Mekong Delta province of Ben Tre should aim for an increase of two percent in 2017, said Vice Chairman of the provincial People’s Committee Nguyen Huu Lap, citing forecast that drought and saline intrusion will become more severe. In 2016, Ben Tre province suffered from prolonged droughts and saline intrusion, with huge losses for agriculture. Therefore, the agro-forestry-fishery sector only registered a growth of 0.9 percent, far below the target of 4.3 percent. Currently, agriculture production of the province has gradually recovered, with 80 percent of damaged fruit growing areas have been restored. According to the provincial Department of Agriculture and Rural Development, as of now, the area of cultivated rice is estimated at 58,246ha, a decrease of 7.5 percent year-on-year. Meanwhile, the area of grass for animal husbandry was expanded by 15.8 percent to 3,035ha. The acreage of coconut trees, a specialty of the province, also went up 1.1 percent to 69,330ha. As a result, the cattle herd in the province saw an 11.7 percent increase to more than 197,000 head. To counter droughts and saline intrusion, local people have switched to new kinds of plants and animals to increase provincial economic value and adapt to climate change. Around 852ha of rice fields has been switched to other plants such as fruit trees, vegetable or grass for animal husbandry. Reference exchange rate drops 1 VND on year’s first working day The reference exchange rate for VND/USD on the first working day of 2017 (January 3) was set at 22,158 VND, down 1 VND from the last working day of 2016 (December 30). With the current trading band of /- 3 percent, the ceiling rate for commercial banks during the day is 22,823 VND and the floor rate, 21,493 VND per USD.   The opening hour rates listed at commercial banks saw slight reductions.  Vietcombank reduced both the buying and selling rates by 10 VND, to 22,720 VND (buying) and 22,790 VND (selling) one USD.   The rates listed at BIDV dropped by 20 VND both ways, standing at 22,720 VND (buying) and 22,790 VND (selling) for one USD.   Eximbank listed the buying rate at 22,700 VND and the selling rate at 22,800 VND, both down 10 VND. FDI in HCM City IZs expected to hit 500 mln USD in 2017 Industrial zones in Ho Chi Minh City hope to attract investments worth 500 million USD in 2017, according to the HCM City Export Processing and Industrial Zones Authority (HEPZA). Exports by companies situated in industrial zones (IZs) and export processing zones (EPZs) are expected to top 6 billion USD this year, Tran Cong Khanh, head of the HEPZA office, told a press meeting on December 30, 2016. HEPZA continues to encourage investment in four key industries, including mechanical engineering, electronics and IT, chemicals and food processing, and supporting industries, he said. To achieve the target, it plans to expand Le Minh Xuan IZ and complete the third phase of Hiep Phuoc IZ. It will develop areas set aside for supporting industries in Hiep Phuoc, Le Minh Xuan No.3 and Automotive-Mechanical IZs. Tran Viet Ha, head of the investment management department, said foreign direct investment halved in 2016 to 255.61 million USD. Investments by domestic enterprises were worth 5.2 trillion VND (237.71 million USD), a year-on-year decrease of 14 percent, he said. He attributed the decline to a shift in investment towards high-tech industries instead of labour-intensive sectors, meaning there was a fall in investment in sectors like textiles and footwear.  Exports by enterprises in IZs and EPZs were estimated at 5.86 billion USD. A total of 1,385 projects with a combined investment of 9.22 billion USD, including 535 FDI projects worth 5.41 billion USD, are operating in IZs and EPZs. They employ more than 285,700 workers, including 2,346 foreign nationals. Doosan Vina brings made-in-Vietnam products to the world The Doosan Heavy Industries Vietnam Co., Ltd (Doosan Vina) had exported its products worth more than 1.21 billion USD to 28 countries and territories around the world by the end of 2016. The company’s export value in 2016 alone was 200 million USD, said its General Director Yeon In Jung. Last year, Doosan Vina exported 22,000 tonnes of made-in-Vietnam equipment, bringing its total export volume so far to 349,584 tonnes. Covering an area of 110 hectares in the Dung Quat Economic Zone in the central province of Quang Ngai, the factory has total investment of 300 million USD. Doosan Vina is currently manufacturing hi-tech boilers used in power plants which will contribute 4,200MW of electricity to the national grid and 11,180MW to the world grid.  It is also producing 65 cranes and seawater filtering systems which will create 1 billion litres of clean water for daily use in the Middle East. Central Da Nang City targets world status The central city of Da Nang should aspire to become a top destination and hub for tourism, finance, logistics and hi-tech investors, Director of the Vietnam Institute of Economics Tran Dinh Thien has said at the Science Workshop on Da Nang’s 20-year Development and Future Outlook. “Da Nang is a young city with positive policies on boosting economic development and foreign investment. But the city has yet to take full advantage of its central coastal position and a rendezvous point of north and south Vietnam,” Thien said in his presentation to the workshop held last week. “The city has not developed a link between beach and mountain tourism and tourism to other destinations in the central region,” he said. Thien suggested that the city’s leadership consider how to develop Da Nang as a regular world centre of exhibitions and fairs to attract tourism, trade and investors – as places like Dubai and Bali did. He said Da Nang lacks a world standard entertainment and shopping centre to boost luxury tourism and spending.     Vice Chairman of the city’s People’s Committee, Dang Viet Dung, said the city had significant development achievements since it separated from Quang Nam Province and came under the direct control of the central government 20 years ago, along with the main cities of Hanoi, HCM City, Hai Phong and Can Tho.    Dung said the city’s economic restructuring resulted in industry and service accounting for 97 per cent, and agriculture for only two per cent. He said the city’s Gross Domestic Product (GDP) brought in nearly 50 trillion VND (2.2 billion USD) in 1997-15, with a stable growth of 10.47 per cent annually. Dung, however, admitted that the city’s economy was small scale, with 95 per cent being small and medium-sized businesses and with investment capital under 500 million VND (22,000 USD), each. “The city will aim to develop high-tech agriculture and industry, tourism and services, logistics with good connections among the airport, deep sea port, north-south expressway and railway system in 2037,” Dung said. Deputy Secretary of the city’s Party Committee, Vo Cong Tri, said the city had turned from being a slum in the Son Tra Peninsula to being a beach tourism destination in just 20 years. “The city will eye tourism as a major source of revenue for its budget, That’s the reason the People’s Council decided to build Da Nang as a livable city in terms of four criteria – social security, traffic safety, food safety and social welfare – in the 2016-20 period,” Tri said. Last month, the city submitted an adjustment to its master urban plan for 2030-2050 to the Government, with an aim of developing Da Nang as a green city by 2025, and an economic hub of the central region and a driving force for boosting development of the central and Central Highlands regions. The Government issued special regulations concerning investment, budgetary status and decentralisation for Da Nang. Da Nang also plans to build an underground traffic system with road tunnels and a metro system in the coming years. As planned, the city will include six inner districts and two suburban districts of Hoa Vang and Hoang Sa Island, with an expected population of 2.5 million. The city will be developed on 128,543ha, of which the Hoang Sa (Paracel) islands cover 30,500ha. Da Nang, situated at the end of the East-West Economic Corridor linking Laos, Thailand, Myanmar and Vietnam, will reserve a 130ha centre for finance, banking, trade and services, and a 3,700ha coastal service area. HCM City: People flock to trading centres during New Year holiday Trading centres across HCM City have seen a surge of customers during the three-day calendar New Year 2017 holiday with the purchasing power 20 percent higher than the same period last year. At major trading centres such as Vincom, Parkson, Aeon, Crescent Mall, SC VivoCity, the number of customers has doubled or tripled the normal days thanks to promotion programmes dedicated to consumer goods, catering services and entertainment. Fast food restaurants like MacDonald, Lotteria and Jollibee, and coffee shops are also full of people. Meanwhile, the purchasing power at supermarkets like Big C, CoopMart, CoopFood, Aeon Mall and Lotte Mart increased up to 20 percent from the same period last year. The purchasing power in HCM City will continue rising until the end of the lunar New Year (Tet) holiday. According to the Ministry of Industry and Trade, the country’s purchasing power during Tet is expected to increase 10-15 percent compared to normal months and 8-10 percent compared to the last holiday. Southern hub eyes 8.4 - 8.7 percent economic growth in 2017 The southern hub of Ho Chi Minh City aims to achieve 19 socio-economic targets in 2017, especially economic growth of 8.4 – 8.7 percent. To realise its targets, the city will focus its spending on key construction works and seven breakthrough programmes like relocating people living along slums in canals and building new apartments replacing old, dilapidated ones, heard a conference last week. Chairman of the municipal People’s Committee Nguyen Thanh Phong said the city must soon complete all necessary procedures to start the work to reduce traffic congestion around Tan Son Nhat International Airport, Cat Lai port and chronically flooded streets. In 2017, construction of the Kenh Lo Bridge, Ba Bo Canal, Children’s Hospital Number 1, the first phase of the Binh Chanh District Hospital, and Go Vap District Hospital must be completed, he added. Other measures include attracting more investment from multinational companies together with fostering domestic companies and support industries, promoting strong private companies that use modern technologies, encouraging small and medium-sized enterprises and improving the competitiveness of domestic companies against foreign rivals, and linking local firms with foreign ones. Phong instructed all related departments and localities to implement projects to promote incubation, start-ups and innovative companies and create favourable conditions for venture capital funds that invest in new business ideas and high–tech firms. “All these activities will contribute to developing an eco-system for innovation and start-ups. Next year the city will have 50,000 new companies, many of them strong enough to compete internationally.” The city would focus on simplifying administrative procedures and streamlining online business registration to reduce the cost and time businesses spend, he said. It will earmark 1 trillion VND (45 million USD) from its coffers to support start-ups and households who would like to set up small businesses, he said. Another 2 trillion VND (90 million) will be used for stimulating investment and encouraging enterprises to upgrade their technologies, he said, adding that the city will help manufacturing companies switch from labour-intensive to tech-driven and green sectors. “Authorities will earmark more of their time for resolving financial, land-related and technological problems faced by domestic enterprises,” he stated.  According to a report from the municipal People’s Committee, in 2016, the city’s economy grew by 8.05 percent to 1 quadrillion VND (45 billion USD), compared to a target of 8 – 8.5 percent. The services sector grew by 8.07 percent, industry and construction expanded by 7.88 percent and agriculture by 5.81 percent. Industrial output rose 7.33 percent and tax revenues, 12.43 per cent. Non-crude exports fetched 29.2 billion USD, an increase of 10 percent from the previous year, while gross capital formation was worth 310 trillion VND (14 billion USD). Some 111 public works were completed at a cost of nearly 20 trillion VND (900 million USD). The city also worked with private investors for 20 public-private-partnership (PPP) projects in transport and environmental protection at a cost of 67 trillion VND (3 billion USD). More than 36,000 enterprises with total registered capital of 496.6 trillion VND (22.2 billion USD) were newly registered for an increase of 35.8 percent from the previous year. The city attracted 3.7 billion USD in foreign investment. Da Nang Port handles first tonne of cargo of 2017 The Da Nang Port – the biggest of its kind in the central region – handled the first tonne of cargo in 2017, which was part of the load on the Panama-flagged Bindi Ipsa. Speaking at a ceremony on January 1, General Director of the port Nguyen Huu Sia said Da Nang Port handled 7.25 million tonnes of cargo in 2016, a year-on-year increase of 13 percent. The port aims to raise its throughput in 2017 to 7.5 million tonnes.  It also welcomed 73 cruise ships carrying 135,000 passengers and crew members onboard. The port looks to become a leading international commercial gateway in the Association of Southeast Asian Nations (ASEAN) and Asia between 2016 and 2020. It aims to receive 10 million tonnes of cargo by 2020, including 510,000 TEUs of containers. Over the past five years, the Da Nang Port recorded annual average growth of 13 percent in cargo handling, 60 percent of which is container. Currently, Da Nang Port serves about 24 container ships on a weekly basis. Vietsovpetro revenue drops 28 percent Russia and Vietnam’s oil and gas exploration joint venture Vietsovpetro has exploited five million tonnes of crude oil in 2016. This generated yearly revenue of more than 1.7 billion USD, a slump of 28 percent year-on-year. The company contributed over 680 million USD to the State Budget, some 300 million USD less than last year. The Russian partner posted profit of 121 million USD, while the Vietnam side made profit of nearly 126 million USD, a year-on-year decrease of 71 percent for both sides against last year. According to Vietsovpetro, the main reason for this year’s decline in production was due to the lower oil price. The average oil price this year stands at 45 USD per barrel, 9 USD less than in 2015. In addition, the oil reserve in existing mines also continues to decline gradually. In 2016, Vietsopetro pumped ashore some 1.68 billion cu.m. of gas, representing 130 percent of the yearly plan, bringing the total amount of gas shipped ashore, so far, to over 30.9 billion cu.m. HCM City’s farms enjoy solid growth       Despite many difficulties, the production value of HCM City’s agro-forestry and fishery sectors increased by 5.8 per cent last year, reaching VND19.59 trillion (US$859.5 million), according to the city Department of Agriculture and Rural Development. The increase was much higher than the country’s average growth of 1.44 per cent, it said. Speaking at a meeting in HCM City last week to review the city’s agricultural sector performance last year and set tasks for this year, department director Nguyen Phuoc Trung said the production value of the cultivation sector grew by 3.9 per cent, the animal husbandry sector by 4.5 per cent and the seafood sector by 7.7 per cent. This was a result of following an urban agricultural model, reducing rice-growing areas of low productivity, and increasing the area for cultivating high-value ornamental trees and safe vegetables as well as dairy farming, he said. Vegetable cultivation last year reached 15,370 ha, up 9.5 per cent over 2015, yielding more than 419,100 tonnes of vegetables, a year-on-year increase of 18 per cent. The city had around 2,300 ha under flower and ornamental tree cultivation last year, up 2.2 per cent over 2015, he said. Trung said the city had a total of 152,744 cows, a year-on-year decrease of 0.7 per cent, with the number of milk cows down but the number of meat cows up. The city also has 360,000 pigs, equalling the figure of 2015, he said, adding that total aquaculture and seafood output went up by 4.6 per cent over the previous year. The number of ornamental fish reached 135 million, up by 35 per cent over the preceding year, of which, 16 million were exported for a value of $16.53 million, a year-on-year increase of 17.8 per cent of volume and 35.8 per cent of value, he said. In addition, the city exported seeds and seedlings, ornamental trees, fruits and vegetables and crocodiles to many countries and territories, he said. For this year, the agricultural sector will strive to achieve 6 per cent growth in agro-forestry and fishery production, Trung said. To achieve the target set for this year, he said the city would continue its agricultural restructuring programme towards urban agriculture, especially enhancing the application of hi-tech methods including biotechnology in production to provide safe and high quality products. The city will also support agricultural producers and traders in building brands and trade promotion programmes to promote exports of their products, he said, adding that it will work to encourage more businesses to invest in the agricultural sector and improve human resources, he said. Truong Van Bao, director of Veeteq Farm, said investing in fruit and vegetable farms with high technology as well as preliminary processing facilities and distribution systems for these products requires a large amount of investment capital. But firms still encountered difficulties in accessing preferential capital sources and policies, he said. He suggested the authorities should offer incentives to enterprises involved in hi-tech agricultural production in terms of investment capital as well as support them for costs for testing product quality. Le Dinh Duc, deputy chairman of the Cu Chi People’s Committee, suggested the city should have policies that encourage businesses that have succeeded in applying hi-tech in their agricultural production to link and transfer technologies to farmers and buy products from farmers. He also suggested establishing a system of forecasting supply and demand and prices of agricultural products to prevent the problem of a bumper crop leading to falling prices.  Buon Ma Thuot fest to highlight coffee, indigenous culture      The sixth Buon Ma Thuot Coffee and Central Highlands Gong Festival, held March 8-13, will further promote Vietnamese coffee as a brand and celebrate the region’s indigenous culture. The biennial festival, held in Buon Ma Thuot City, Dak Lak Province, also aims to honour coffee growers, popularise the coffee culture, and promote tourism in the nation’s largest coffee producing area. “It is also intended to increase coffee export value and confirm the important position of Vietnamese coffee industry in the world,” Deputy Chairman of the Dak Lak People’s Committee, Nguyen Hai Ninh, said at a press conference in HCM City on Sunday. He said the event would be a venue for coffee growers, businesses and consumers to forge links via a wide range of activities including a coffee exhibition and workshop, and an investment promotion conference for Central Highlands provinces. Particularly noteworthy is that festival will be held alongside the 42th Dak Lak Liberation Day (March 10, 1975) Coffee plays an important role in the social-economic development of the Central Highlands, helping reduce poverty in areas inhabited by ethnic minorities. In 2015, Viet Nam produced over 1.2 million tonnes of coffee, to which Dak Lak contributed over 410,000 tonnes. The coffee export value was estimated at US$2.6 billion. The Central Highlands Gong Festival intends to raise awareness of the importance of preserving the special cultural features of ethnic minority communities in the region. The cultural space of the gongs was recognized by the UNESCO as an Intangible Cultural Heritage of Humanity in 2008.  Coffee exports regain growth momentum Vietnam shipped around 1.79 million tonnes of coffee abroad in 2016, raking in revenue of US$3.36 billion, up 33.6% in the volume and 25.6% in value compared to the previous year, according to the Ministry of Agriculture and Rural Development.   Coffee export values increase in most of Vietnam’s key markets in 2016. These positive figures indicate that Vietnam’s coffee exports have regained strong growth momentum after year-on-year declines in both volume (20.63%) and value (24.82%) in 2015. The total area for coffee cultivation in 2016 increased slightly by 0.3% against 2015 to 645,400 hectares, while coffee output was estimated at 1.47 million tonnes, up 1% year on year. Germany and the United States remained the two largest consumers of Vietnam’s coffee, with respective market shares of 15.2% and 13.1%. Coffee export values have reported increases in most of Vietnam’s key markets, growing 83.5% year on year in the Philippine market, 67.7% in Algeria, 49.7% in China, 49% in the US, 16.8% in Japan and 16.1% in Russia. According to Luong Van Tu, President of the Vietnam Coffee-Cacao Association, a talking point in 2016 was the increasing contribution of processed coffee products to the total export value of Vietnam’s coffee. Vietnam’s processed coffee exports are expected to hike considerably in the years ahead as many businesses, both at home and abroad, have been accelerating investment in this field. For example, Nestlé has put into operation a US$300 million instant coffee plant in the southern province of Dong Nai, while domestic companies, including Trung Nguyen and Vinacafe, are also eyeing expansion of production. The signing of free trade agreements with the European Union, the Eurasian Economic Union and the Republic of Korea is also expected to boost Vietnam’s processed coffee exports. GSO proposes six measures to manage prices The General Statistics Office (GSO) has proposed six measures for managing prices in order to curb inflation in 2017 in line with the National Assembly’s goal of the CPI being 4 per cent.  GSO proposes six measures to manage prices Mr. Nguyen Bich Lam, Director General of the GSO, said that 2016 was a successful year for policies from government and ministries for controlling inflation at less than 5 per cent and adjusting the prices of some public services closer to market prices. Firstly, the Ministry of Finance (MoF), the Ministry of Industry and Trade (MoIT), the Ministry of Planning and Investment and the State Bank of Vietnam (SBV) need to actively cooperate to evaluate prices and set up pricing methods, including in medical and education services and electricity and water prices, as well as interest rates and exchange rates. Before adjusting the price of goods and services, relevant agencies need to calculate and agree upon them and then report to the government. Secondly, ministries and departments and the people’s committees of cities and provinces need to monitor the price of necessary goods to adopt measures and actively prepare at the beginning and end of holiday periods to restrict price increases. Thirdly, in terms of petroleum and electricity, MoF and MoIT need to monitor changes to global crude oil prices and use the petrol price stabilization fund consistently to limit any increase in prices. MoIT must also actively set methods for electricity price increases to calculate the effects on the CPI, the industrial price index, and GDP growth. Fourthly, in terms of medical and education services, the GSO proposes the Ministry of Health and the Ministry of Education and Training cooperate with relevant ministries and departments to forecast factors affecting the CPI in 2017 that may adjust prices under the roadmap for cities and provinces to minimize any ripple effect on the CPI. Fifthly, the SBV needs to stabilize interest rates and exchange rates and keep core inflation around 2 per cent. Sixthly, adjustments to the prices of medical and education services in 2017 need to coincide with adjustments in 2016 to limit high increases in the average annual index. In 2017 the government has set a goal of curbing inflation at 4 per cent but this is calculated under a new method, of average annual CPI, instead of comparisons with the previous December. When compared to last December, 2016’s inflation rate was 4.74 per cent but on average it was 2.66 per cent. The GSO has forecast that changes to prices in 2017 will be more regular and higher than in 2016. VIB to trade 564.4 million shares on UPCoM  Việt Nam International Joint Stock Bank (VIB) will trade 564.4 million shares on the Unlisted Public Company Market (UPCoM) on January 9, the Hà Nội Stock Exchange announced. The bank’s shares will be traded with code VIB at a starting price of VNĐ17,000 (US$0.75) per share, making the bank’s capitalisation VNĐ9.6 trillion. The bank’s shares were registered at the Vietnam Securities Depository on December 12 with total chartered capital of VNĐ5.64 trillion. VIB has become more attractive to investors and shareholders as it has been paying high dividend in recent years. VIB paid 23.5 per cent dividend for 2014’s performance and 25 per cent dividend for 2015’s. The dividends were paid in both cash and bonus shares. At the end of November 2016, VIB recorded pre-provision profit of VNĐ1.15 trillion, a year-on-year increase of 32.6 per cent. The bank’s total revenue rose a quarter compared with the same period in 2015 and its capital adequacy ratio (CAR) was 15.6 per cent. The bank is projected to reach a target of total assets worth VNĐ100 trillion at the end of 2016. Hàn Ngọc Vũ, VIB General Director, said foreign investors are highly confident about Việt Nam’s securities market as the country has been able to maintain a positive economic growth rate, a low level of lending rates and inflation and keep the Vietnamese dong stable and competitive. VIB is also attractive to investors as there is 10 per cent room for foreign investors in the bank’s capital, he said. The Commonwealth Bank of Australia currently holds 20 per cent stake in the Vietnamese bank. Ba Thuoc 1 Hydropower Plant starts idle run After three years of construction, Ba Thuoc 1 Hydropower Plant, situated on the Ma River in the central province of Thanh Hoa, started idle run of the first generator on December 29, 2016 before being ready for power generation on national grid in January. Ba Thuoc 1 Hydropower Plant has the total investment of nearly $100 million, with four generators of 60 megawatts each. After four generators are operational, the plant will generate approximately 216.04 million kWh of electricity annually to the national grid. Phone, spare part export set on declining trend The growth rate of the export of phones and spare parts fell by more than half in 2016. The General Statistics Office of Vietnam has estimated 2016 exports of phones and spare parts at $34.5 billion, up 14.4 per cent. This number is significantly lower than the recent peak of 29.9 per cent in 2015. In September, Samsung recalled and discontinued the production and retail of its Galaxy Note 7 phones due to battery issues that caused the phones to explode. Though some of these phones, as well as parts, were produced in the company’s plants in Vietnam, the country’s exports of phones and spare parts in October, November, and December did not decrease. On-year growth was 6.4 per cent, 17.7 per cent, and 6.79 per cent for the three months, respectively. The General Department of Statistics said that the Note 7 debacle did affect the operation of Samsung Vietnam, bringing down the company’s profit, but the impact on exports is not significant. The reason, according to the department, is that a big part of the Galaxy Note 7 devices produced in Vietnam were sold domestically. Also, Samsung Vietnam pushed the export of other products to make up for the decreasing export of the Note 7. “Still, we forecast that phone and spare part export is going to see slowing growth in the next years,” the office said on its website. In 2016, Vietnam’s total exports stood at $175.9 billion. Phones and spare parts contributed 19.6 per cent of this total. Ben Thanh shopping center to get green light Deputy Prime Minister Pham Binh Minh has recently agreed on the need to develop the Ben Thanh underground shopping center in the heart of Ho Chi Minh City, a representative from the city’s Management Board of Urban Railways (MBUR) confirmed with VET. The project will cost more than $300 million to build, according to a study by the Japan International Cooperation Agency (JICA). But according to calculations from Japan’s Toshin Development JSC, which was reported to the Prime Minister in May by city leaders, $370 million will be needed to build the 45,000 sq m shopping center. The city will contribute around $220 million, or 59 per cent, from ODA loans for the public area and investors will contribute the remainder in a public-private partnership (PPP). Deputy Prime Minister Minh assigned the city’s People’s Committee to study all borrowing options from ODA loans to implement the project. The city will need to work with the Ministry of Planning and Investment, the Ministry of Construction, and the Ministry of Finance to prepare an appropriate plan and then report to the government for a decision. Under the proposal, the shopping center will be located at the Metro Line No. 1 (Ben Thanh - Suoi Tien) station at Ben Thanh Market, underneath Quach Thi Trang Square and along Le Loi Street, running from the market to the Opera House area. The 45,000 sq m will have a shopping area on 18,100 sq m and an underground square on 21,500 sq m. A few months ago the Ho Chi Minh City People’s Committee proposed the government permit a Japanese consortium that includes the Toshin Development JSC, JOIN, Nikken Sekkei Civil Engineering Limited, and Osaka Chikagai to build the shopping center. The joint venture was designated by the city as the developer of the shops and trade area The city also proposed the government approve the use of ODA to carry out construction of walkways, squares and other underground works in the area by increasing funding for the Ben Thanh - Suoi Tien line. In the latest news, the MBUR last month confirmed that South Korean consultants have completed a pre-feasibility study on the Metro Line No. 4B-1 (a branch line to Tan Son Nhat International Airport), which will be submitted to the government in the first quarter of the new year, with a full feasibility study to be conducted during the year and approval sought from the government. Vietnam Airlines profits surge 140% in 2016 The national flag carrier Vietnam Airlines (VNA) has reported pre-tax earnings of nearly VND2.5 trillion (US$110 million) in 2016, a year-on-year surge of 140%, the company said on January 2. According to the consolidated financial statement, revenues of Vietnam Airlines and its subsidiaries rose 10% last year to more than VND76 trillion (US$3.34 billion). VNA alone generated revenues of nearly VND59.1 trillion (US$2.6 billion) and earned profits of VND1.6 trillion (US$70.4 million), nearly six times the figure reported in 2015. The company contributed nearly VND4.9 trillion (US$215.6 million) to the State budget. Last year VNA operated more than 133,000 flights, carrying 20.6 million passengers, up 18.7%, and 264,000 tonnes of cargo, exceeding the yearly target by 10%. In 2016 Vietnam Airlines signed a deal with Japan’s All Nippon Airways under which the Japanese carrier became an official strategic shareholder of Vietnam Airlines with 8.77% of its stakes. The company also received ten Boeing 787-9 Dreamliners and six Airbus A350-900 XWB aircraft to serve key domestic routes and long-haul international flights. In 2017 the carrier aims to ensure safety and security for all of its flights and maintain its four-star quality as rated by the UK consultancy firm Skytrax. Experts predict growth for real estate market The Ho Chi Minh City Real Estate Association (HoRea) has forecast growth for the commercial real estate market in 2017 in its ten predictions after analyzing 2016 situation.  According to HoRea, the real estate market in 2017 will continue grow yet it will slow down compared to 2016. Low-income consumers will prefer cheap condos. Cooperation between enterprises is an unavoidable trend. Additionally, merger and accquisition of enterprises will strongly develop. The government will issue more policies on taxation and credit, land registration, planning, administrative regulation to tie developers’ duty and protect consumers’ right. Flow of capital from foreign and Vietnamese people in overseas countries is important for property investment in five next years. Enterprises must show its responsibilities to society and clients if they want to win customers’ trust. Apartment developers must satisfy consumers’ demand of green space, friendly environmental premise and facilities. Despite of risks  in the markets such as demand-supply imbalance, strong competition with more participation of investors, it is unlikely to have property bubble. More disputes between consumers and developers are predicted for 2017 on firefighting safety, maintenance fee, parking fee. Fresh investment approvals soar at SHTP The Saigon Hi-Tech Park (SHTP) in HCMC has beaten the year’s target for new investment approvals, said Le Hoai Quoc, head of the SHTP authority.  SHTP has issued investment certificates for 17 projects with total investment capital of US$666.43 million, US$331.45 million of it committed to 11 domestic projects and the rest to six foreign direct investment projects. In addition, five operational projects have pledged an extra US$95 million.  SHTP now has 107 valid projects with combined capital amounting to US$6.09 billion. According to the SHTP authority, enterprises at the park have reported total export revenue of US$7.2 billion and import spending of US$7.06 billion this year. SHTP is expected to attract US$600 million in new investments and generate US$9 billion in export revenue in 2017. The park would give priority to incubating small hi-tech foreign enterprises committed to Vietnam. HCMC customs unlikely to meet tariff collection target The full-year target for import-export tax revenue, VND102.5 trillion (US$4.5 billion), has proven to be an impossible mission for the HCMC Department of Customs as it had collected only VND99.7 trillion as of on December 29. The figure is expected to reach VND100.7 trillion by 4:30 p.m. on December 30, said Nguyen Quoc Toan, deputy head of the department’s import-export tax division. The Ministry of Finance and the department have made efforts to boost tax collections such as requesting customs officers to work on weekends and encouraging enterprises to pay taxes earlier than due dates. Realizing this year’s tax collection target is now a tall order for the department as the goal is much higher than the objective and result of last year, which were VND90 trillion and VND93.93 trillion respectively. Tax collections have become unpredictable over the past year due to choppy export and import activities. Import-export tax revenue stayed at VND29.45 trillion by late April, less than 30% of the year’s target, before it grew strongly to VND74 trillion by end-September, 72.2% of the target for 2016, and fell significantly the next month. Bumpy road ahead for fish exporters to EU Although tra fish exports in 2017 are expected to rise by 4% compared to this year, industry insiders are concerned that growth in exports to the European Union (EU) market would cool for a fourth consecutive year. According to a report of the Vietnam Association of Seafood Exporters and Producers (VASEP), Vietnam’s tra fish exports to the market have been slowing after sharp increases in the 2005-2008 period. The nation’s exports to the market totaled over US$139 million in 2005 and rose to nearly US$580 million in 2008 with the number of exporters surging from 67 in 2005 to 148 in 2009. But export revenue declined steadily in 2014 and 2015. This year, local exporters expect to fetch around US$283 million from the EU market, accounting for 17% of the nation’s total tra fish exports, down by US$2 million against the previous year and marking the third straight year of fall. VASEP general secretary Truong Dinh Hoe said that the EU used to make up 40% of the total export value of the tra fish sector but the ratio has dropped to 17% now as the market has become choosier and shifted to using higher-quality products. Therefore, the EU market will be more difficult to access in 2017 if Vietnamese exporters keep focusing on the low-quality segment, Hoe said. Next year, the nation targets to raise the ratio of the EU market to 20% of total exports, up by three percentage points compared to 2016. To obtain the goal, enterprises must speed up marketing and apply regulations on fish fillet moisture content and ice-to-fist ratio, he added. Expansion of Cam Ranh and Cat Bi airports urged Khanh Hoa Province and Haiphong City have urged relevant authorities to support them to expand their airports to meeting growing demand for air travel. Khanh Hoa has proposed the Government, and relevant ministries assist it to build the second runway at Cam Ranh International Airport. Meanwhile, Haiphong has suggested developing the second terminal at Cat Bi International Airport. Chairman of Khanh Hoa Province Le Duc Vinh said the province had got the nod from the Government to develop the second runway given strong air transport needs. The airport is capable of handling 1.5 million passengers but last year it served 2.3 million passengers last year. The number is forecast to rise to 4.1 million this year. Therefore, the second runway, plus a new terminal, is extremely needed, and the total cost is estimated at around VND1.9 trillion. The province could manage 50% of the required capital, so it has proposed the central Government cover the remainder. However, whether or not the Government will provide funding is unknown, leading to three months of delay. For Haiphong’s proposal, Prime Minister Nguyen Xuan Phuc said the Government had agreed in principle on the second terminal at Cat Bi airport but private investors should be invited to get involved in the project. Carriers Vietnam Airlines, Vietjet Air and Jetstar Pacific currently operate flights to Cat Bi airport, linking Haiphong with HCMC, Danang, Buon Ma Thuot, Cam Ranh and Pleiku. The airport also has air links with some Chinese provinces. The airport has seen a sharp spike in passengers and cargo in recent years. The number of passengers going through the airport grew 20% per year on average in the 2010-2015 period. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR