BUSINESS NEWS IN BRIEF Ministry scraps conditions on rice export   Minister of Industry and Trade Tran Tuan Anh on January 4 issued a decision revoking Decision 6139/QD-BCT on a master plan for rice exporters which has made life difficult for domestic enterprises. The decision sets out criteria and conditions to become a rice exporter, including requirements for warehousing and milling facilities, and the applicant’s rice export performance in the preceding year. The abolition of the rule will partly remove difficulties for enterprises, boosting rice exports at a time of rising rice export woes and fiercer competition. In Official Letter 8768/BCT-XNK, the ministry proposed the Government consider cancelling the plan last September, on the basis of the review of its implementation in the past time. Vietnam’s rice sector has secured sustainable growth since the late 1980s. The steady increase has helped the country not only ensure food security, but also become one of the three largest rice exporters in the world. However, incomes of farmers have yet to rise correspondingly. Thailand, India, Pakistan and Vietnam are major rice exporting countries, accounting for 71.8% of global rice exports, while China, Nigeria, Iran and Indonesia are main rice importers. Each rice exporting nation often has its own key export markets and competes in other markets. However, by focusing too much on output expansion, the sector has compromised on rice quality, which has in turn affected prices. Falling rice prices have hurt many stakeholders, especially farmers. Vietnam did not fully achieve its targets for rice exports last year, falling sharply in both volume and value year-on-year. Early in 2016, the Vietnam Food Association (VFA) predicted that the nation’s total rice exports would amount to 6.5 million tons, equivalent to the export performance of 2015. However, the objective was unattainable. Figures of the General Statistics Office (GSO) showed as of December 15, rice export shipments reached 4.68 million tons, with turnover of US$2.1 billion. Both volume and value tumbled by with 1.62 million tons and US$600 million respectively over the same period of 2015. Before 2010, the country shipped around 6.3-7 million tons a year, with revenues of some US$2.7-3.3 billion. In Vietnam’s agriculture, rice export turnover always comes third after seafood and coffee. Vietnam exported 7 million tons of rice in 2012, earning US$3.6 billion. The following year saw signs of decline, with 6.5 million tons and US$2.9 billion. The figure fell to 6.3 million tons in 2014 before inching up to 6.5 million tons last year. Many policies have been introduced over the years, having direct and indirect impacts on market players. However, some policies have revealed many inadequacies and have not gained desired results, such as the decision setting rice export as a conditional business field. The removal of such criteria and conditions is aimed to eliminate inappropriate business conditions following the introduction of the 2014 Investment Law. This would partly improve the transparency of the business environment, and create favorable conditions for firms to invest in the sector with a peace of mind, contributing to an increase in rice exports, and rice consumption for farmers. PVN oil production cost goes down Vietnam Oil and Gas Group (PVN) said in a report on its 2016 performance that its oil exploitation costs dropped by US$3.2 per barrel against the estimate to US$23.8 last year. According to the report released on January 5, the group managed to cut exploitation costs, thus sending them down to US$23.8 a barrel compared to the estimate of US$27 a barrel. Costs of electricity, urea fertilizer and fuel products fell by 15-20% compared to the plan. PVN exported crude oil at an average price of US$45 a barrel in 2016, much lower than US$60 per barrel projected in the State budget plan approved by the National Assembly. Last year, the State-owned firm pumped 17.23 million tons of crude oil, 1.19 million tons higher than targeted. It generated revenue of VND452.5 trillion (US$19.9 billion) and paid VND90.2 trillion in taxes. The company did not announce its 2016 profit or losses. PVN would be profitable if the oil price exceeds US$45 per barrel, the firm said in a report.     PVN’s exploitation costs and payments to the State budget are estimated at US$43.5 a barrel so its profit, if any, is small. Notably, PVN’s exploitation costs at Song Doc oil field amount to US$58 per barrel.   The company has to increase output over the past two years to offset the global oil price plunge. According to PVN’s financial plan for 2017, the oil price is projected to stand at US$50 a barrel. Central bank to take over one more lender The State Bank of Vietnam (SBV) plans to acquire one more ailing bank at zero dong as part of the banking restructuring scheme this year, a leader of the central bank told the Daily on January 5. The SBV will only acquire the bank if it fails to find strategic investors. The lender, whose name is not yet disclosed, has reported negative equity and been under special control while law enforcement officers have taken legal action against its former leaders. The acquisition of 100% shares of loss-making banks at zero dong each aims to avoid causing negative impact on the banking system. The move would be made if their existing shareholders fail to inject additional capital and if banks cannot find new investors. No organizations have offered to buy shares of the troubled bank, prompting the central bank to mull the acquisition. The agency is considering a suitable acquisition scheme to secure its normal operations, the official said. In 2015, the central bank took over Construction Bank, Ocean Bank and GPBank at zero dong. The three lenders had negative equity and huge bad debts while some of their leaders were arrested. According to the SBV leader, the lenders have made positive changes in recent times. Their liquidity has improved and they have not made bad impact on the banking system any more. However, it takes a long time for the banks to get back to the good old days. Besides, the central bank has ordered all banks to consolidate operations and fix shortcomings to obtain sustainable development in the coming years. In 2017, the central bank will gather resources to deploy measures of the bank restructuring plan and handle bad debts for the 2016-2020 period. The official also rejected rumors that the SBV would acquire Sacombank at zero dong because the bank is not in the troubled group. Currently, Sacombank maintains normal operations with total assets as of November 2016 rising 12.03% against the end of 2015 and the bad debt ratio curbed at 2.22%. Speaking to the Daily, Sacombank vice chairman Nguyen Mien Tuan said Sacombank is concentrating on systematic restructuring after Southern Bank was merged into it. The merger has impacted on its operation, so it will need time to adjust. A foreign organization has offered to become Sacombank’s strategic partner but both sides have yet to reach agreement. At present, a domestic business group has offered to buy a 20% stake at Sacombank at VND15,000 a share. However, the bank is still waiting for approval from the central bank to carry out the deal. Starbucks launches loyalty programme     US beverage chain Starbucks has launched a loyalty programme called Starbucks rewards for its customers. Customers who register for the programme will earn a star for every VNĐ40,000 they spend in its stores. There are two tiers of membership offering increasingly greater rewards. Green and gold offer more surprises and personalisation with each tier. Gold, for instance, offers a buy-one-get-one offer when reaching gold and a free beverage for every 25 stars earned. Members will also receive many exclusive offers during the year. The company has launched a new flavour for the winter, golden sesame caramel crunch latte, and brought back chestnut white chocolate truffle. VIB: 2016 results positive; shares listed on UPCoM     More than 564.4 million shares of Vietnam International Bank (VIB) made their debut on the Unlisted Public Company Market (UPCoM) on Monday. The reference price on the first trading day was VND17,000 per share. At this rate, VIB’s market capitalisation is nearly VND9.6 trillion (US$423 million). “VIB’s listing is aimed at creating transparency in our activities, share price, market capitalisation and share liquidity so as to make it easier for investors to make investment decisions,” the bank said in its statement. Last year, VIB maintained a stable growth momentum, as per the bank’s unaudited business results. The bank made VND1.3 trillion in profit before provision and VND702 billion profit before tax, which is 4 per cent higher than the target set by the General Council of Shareholders early in 2016, and 7 per cent higher than in 2015. Its total lending balance was around VND68 trillion, a 25 per cent growth against 2015, while its total assets amounted to approximately VND105 trillion. According to the latest data, the bank’s non-performing loan (NPL) rate continues to be under control at under 3 per cent while its loan-to-deposit ratio (LDR) was 66 per cent, much lower than the maximum limit of 80 per cent set by the State Bank of Viet Nam (SBV). At the end of 2016, VIB shareholders’ equity was more than VND8.7 trillion, while the bank’s charter capital increased to around VND5.64 trillion, based on the General Council of Shareholders’ plan, which was approved by SBV. Among the 10 local banks selected by the central bank for pilot implementation of Basel II, VIB has the highest readiness level and a high CAR of 10 per cent, based on Basel II standards. In the past two years, VIB continued to have high dividend payment rates – it was 23.5 per cent and 25 per cent in 2014 and 2015, respectively, including payment in cash and by bonus share. This year, VIB has set a profit target that is 10 per cent higher than the 2016 target. “VIB will continue to develop its core bank activities, focusing on personal customers, SME customers and foreign-invested enterprises,” it said, adding that that the focus is on developing innovative solutions and using more technology to maximise its productivity, increase revenue and save costs. Siemens Healthineers brings new ultrasound systems to VN     Siemens Healthineers held a launch ceremony to introduce its new ultrasound system ACUSON NX2 TM to the Vietnamese market late last week. The ceremony took place during the National Conference on Ultrasound organised for the first time in Hue City’s Hue Central Hospital on January 7. According to a representative of Siemens Healthineers, ACUSON NX2™ ultrasound system is a smart-inspired solution, providing premium imaging performance across clinical applications. The system utilises largest-in-class hardware, supporting enhanced operator workflow functionality to improve system uptime and user comfort, bringing efficient and reliable diagnostic information. ACUSON NX2 TM presents an intuitive control panel design combined with up to four front-facing transducer ports to optimize workflow efficiency and reduce the need for repeat examinations. The system is engineered to ensure clients get the most out of their investment. Compatible transducers provide access to a wide range of imaging capabilities across clinical segments. The intuitive design promotes ease of use and technical proficiency. It can also be easily upgraded as clients’ needs evolve towards advanced applications and value-performance platforms available within the ACUSON NX™ Series portfolio. During the launch ceremony, Siemens Healthineers also celebrated a contract-signing ceremony with the HCM City-based Medical Center Medic Hoa Hao to supply its Vietnamese partner 10 ACUSON NX2 TM ultrasound systems. Siemens Healthineers, part of global industrial conglomerate Siemens AG, is a medical technology company and is headquartered in Erlangen, Germany. The company began in 1847 as a small family business in Berlin, co-founded by Ernst Werner von Siemens. It has 45,000 employees worldwide who are passionate about empowering healthcare providers to optimally serve their patients. At Co.opmart, buy gift hamper in Ca Mau, get it delivered free to Ha Noi     Customers can visit any Co.opmart or Co.opXtra store around the country,choose readymade Tet gift hampers and ask them to be delivered to relatives, friends or business partners in any province or city where they have outlets. This is a unique service that Co.opmart and Co.opXtra supermarkets are offering. For instance, customers can go to Co.opmart Phu Lam in HCM City's District 6 to choose from 42 varieties of Tet gift hampers and request the supermarket to send it together with a greeting card to Ha Noi, Nha Trang, Can Tho, Ca Mau or any other locality. The service is completely free if the recipient lives within 5km of the supermarket if the giftis worth more than VND200,000 (US$8.8), 10km if above VND500,000 ($22), and 20km if above VND2 million ($88). Customers can place orders from now until January 17, and the gifts will be delivered by January 23. Customers can refer and order Tet gift baskets at http://gioquatet.co-opmart.com.vn , 1900.5555.68 or any Co.opmart and Co.opXtra outlet. 70% of Vinhome Skylake apartments sold on launch day     VinGroup launched its world-class lakeside mansion project, Vinhomes Skylake, on Sunday. It received tremendous response, with an impressive 700 apartments - 70 per cent of the total flats - being sold on the launch day. The project, which integrates leisure facilities such as skypool, four-season swimming pool, sky bar, multifunctional sports ground, a plaza and a school, attracted 1,500 visitors on Sunday. Located at the junction between Pham Hung and Duong Dinh Nghe streets, in front of a beautiful park and lake in Cau Giay District, the project will be built on 2.3 hectares. Especially, it can benefiy from 32 hectares of greenery, including a lake whose water surface measures 19 hectares, which is 1.5 times larger than the famous Hoan Kiem lake. Inspired by Blue Lifestyle, an emerging trend in architecture, Vinhomes Skylake’s design aims to bring in the harmony of the sky and the water into the living space. The project will have a skypool, and the apartments will have long glass windows and balconies with lake views. On Sunday, VinGroup launched S1 and S2 towers. While S2 is located at the centre of the project and will have great internal facilities and a view the skypool, S1 will have an ideal density of only 12 apartments per floor, with three sides offering park and lake views. On the occasion of the New Year, VinGroup introduced an attractive promotional package for first-home buyers, including a three-year free management service (applicable to first 200 buyers), interest rate subsidy for loans of up to 65 per cent of the apartment value – zero interest rate is applied from the time of disbursement to the date of delivery, but not later than July 31, 2019. People looking to buy a second apartment onwards will be offered a discount rate of 1 per cent of the unit value. Apartments are between 49m2 to 171m2 and will have furniture and products from famous brands such as Teka, Kohler, Duravit and Hansgrohe. Vinhomes Skylake is expected to be completed in the second quarter of 2019, after the Cau Giay park and lake project are ready, which are scheduled for completion in the third quarter of 2018. Central Highlands province launches Krông Nô 2 hydro-power plant The Krông Nô Joint Stock Company of the Trung Nam Group started operations of its Krông Nô 2 hydro-power plant in the Central Highlands province of Lâm Đồng on Saturday, supplying 105.87 million kilowatts per hour to the national grid. The two-turbine 30 Megawatts (MW) plant was built with a total investment of VNĐ1.4 trillion (US$70 million). The company said the Krông Nô 2 and Krông Nô 3 plant inaugurated last year on the Krông Nô River will contribute to socio-economic development of Đắk Lắk and Lâm Đồng provinces, and provide power for the national grid system in the Central Highlands. The two hydro-power plants are expected to supply a total 170 million kwh for the national power network per year. Last year, the company also started construction of Đắk Kegui hydro-power plant in Lâm Đồng Province, with a total investment of VNĐ119 billion ($5.3 million). In  2015, Trung Nam Group started operations of the 70MW Đồng Nai 2 Hydropower Plant in the province, supplying 263.8 million kwh to the national grid. The Group has developed 19 projects of wind power and hydro-power. Yen Bai looks to diversify crops The northern mountainous province of Yen Bai is taking steps to diversify crops under its plan on agricultural restructuring, encouraging local farmers to adopt high-yield food crop varieties and high-value industrial plants new to the locality. Besides hybrid rice and maize, farmers began to cultivate wheat, soya bean, potato or rubber trees for the first time, while expanding the area under local specialties such as tea, cinnamon and hawthorn trees. Several projects to develop the cultivation of hawthorn, cinnamon, maize and citrus trees have surpassed the targets set for 2016. The area of hawthorn reached 1,080ha, nearly double the target of 550ha, and that of cinnamon was expanded to 4,759ha while the goal was 2,642ha. Mu Cang Chai District has led the way in restructuring the local crops. Due to a severe climate which is cold and dry in winter, local farmers used to leave more than 4,000 ha of wet rice uncultivated in winter. But in the 2015-2016 winter-spring crop, the district authorities experimented with new cold-and drought-resistant plants, cultivating 12ha of wheat, 700sq.m of potato and 2ha of rapeseed (Brassica napus). The good harvest of the new plants prompted the district to plant 20ha of wheat, 15ha of potato and 500ha of rapeseed in the 2016-2017 winter-spring season. According to Luong Van Thu, deputy head of the district’s division for agriculture and rural development, the district has coordinated with enterprises in supplying farmers with seeds and fertilizers and in buying all harvested produce. Thu said wheat, potato and rapeseed produce the same or much higher economic value than wet rice, which is the reason why the district decided to expand the farming of those plants. In this winter-spring crop, Pung Luong Commune has the largest area cultivated with wheat, with 8ha. Ho Thi Sung in De Cho Chua B hamlet said her family grew wheat in dry fields, and after harvesting wheat, it is the right time to start the spring-summer wet rice crop. Along with introducing high-value plants, Mu Cang Chai has stepped up the application of scientific and technological advances in farming by building demonstration models for new farming techniques. As a result, several large-scale farming areas of certain crops including maize, tea, cinnamon and hawthorn have formed in Yen Bai, a step forward in the province’s orientation of developing sustainable agriculture based on local farm produce with competitive edge. Timber industry starts off New Year with major milestone   A landmark event occurred in the last few weeks of 2016 between the EU and Vietnam government that promises to have far-reaching favourable implications for the development of sustainable timber industry trade. In November, following nearly six years of negotiations, the two sides agreed in principle on the terms of a Voluntary Partnership Agreement (VPA) to improve forest governance, address illegal logging and promote trade in verified legal timber products from Vietnam to the EU. The two sides are expected to ratify the agreement in early 2017. "Vietnam and the EU today celebrate a milestone in their cooperation in the global fight to end illegal logging," said EU Commissioner for Environment, Maritime Affairs and Fisheries Karmenu Vella, at the signing ceremony for the new VPA last November. "Now we must focus on implementation to ensure that the VPA delivers on its social, environmental and economic goals.” To implement the VPA, Vietnam has agreed to put a timber legality assurance system in place among other reforms— including the passage of legislation to ensure the legality of timber Vietnam imports from other countries for processing and re-export. The European Commission has published a memo describing the VPA and timber legality assurance system. When this system is operating as described, it will ensure that exports from Vietnam of timber and timber products to the EU will be entirely from verified legal sources. “A key commitment is to establish a credible and robust system, which involves all stakeholders and includes effective mechanisms to detect violations and ensure law enforcement,” said Vella. The EU would continue to support the efforts of the Vietnam government in this regard and would be monitoring closely how the country works to implement the agreement, he noted. The VPA is expected to boost confidence in the legality of timber products exported by Vietnam, as well as deliver wider social and environmental benefits. An EU-Vietnam Joint Implementation Committee would oversee implementation of the VPA once it enters force. Until then, key elements of the interim arrangements have been agreed that would help transition to the implementation phase. The decision by the parties to sign the agreement, which would eventually lead to a requirement for licensing by the Forest Law Enforcement, Governance and Trade facility of the EU of all timber products imported into the EU from Vietnam, was jointly announced by Vella and Vietnam Minister of Agriculture and Rural Development Nguyen Xuan Cuong following a meeting on November 17. The range of timber products included in the scope of the agreement encompasses all major products exported by Vietnam to the EU – particularly logs, sawn timber, railway sleepers, plywood and veneer. In addition, it includes many ancillary timber products such as wood chips or particles, parquet flooring, particle board and wooden furniture. Innovation is critical to competitiveness, was the message of Mr Hans- Joachim Danzer, Chief Executive Officer of Danzer Holding AG, at the ECE Committee on Forests and the Forest Industry in Geneva, Switzerland. There are significant opportunities for Vietnam and other countries to increase yield and reduce material costs in the international hardwood industry, he continued, but these are being squandered due to a widespread lack of capacity and willingness to innovate. There’s also a need to work with Vietnam and others towards a smarter regulatory environment, driven more by sound scientific data and less by the concerns of narrow lobby groups, to encourage innovation, improve competitiveness and stimulate trade in the industry. Mr Danzer offered these views from the perspective of a company that is the largest producer of decorative sliced wood worldwide and amongst the largest producers of sawn hardwood in Africa and North America. Vietnam maintains a stable economic growth in 2016 Although Vietnam’s economy had no major breakthroughs in 2016, it managed to maintain a stable growth thanks to careful government management. Vietnam’s GDP grew 6.21% for the year, short of the 6.7% target set by the National Assembly, mainly due to natural disasters, drought, and saline intrusion in the Mekong River Delta crippling agricultural production. Another reason was falling exports and falling prices of crude oil in the global market. In that context, service, industry, processing, manufacturing, and construction posted relatively high growth. The highlight was the processing and manufacturing industry, according to Pham Dinh Thuy, Head of the Industrial Statistics Department of the General Statistics Office. “The industrial production index of the processing and manufacturing sector has set records in recent years. The industry’s steady production contributed significantly to this year’s economic growth,” Thuy added. In 2016 Vietnam signed a number of milestone free trade agreements. Last year saw a boom in the amount of registered and expansion capital, and capital disbursement for FDI companies, who contributed 70% of Vietnam’s export growth. Vegetable and fruit processing also saw significant growth last year, thanks to the application of advanced preservation techniques and safe production standards. Economist Nguyen Minh Phong said “Our success was due to changes in our strategy in the direction of national integration to create appropriate institutions. Vietnam has signed many bilateral agreements on investment protectionism and trade encouragement and 11 FTAs to create a fairer environment in our trade with more than half the countries in the world.” Coffee export rebounds in 2016 Coffee export last year rebounded back from the previous year reduction, reaching 1.79 million tons with the total turnover of US$3.36 billion, reported the Ministry of Agriculture and Rural Development. The numbers were up 33.6 percent in volume and 25.6 percent in value over 2015, when the country saw a year on year fall of 20.63 percent in volume and 24.82 percent in value. Last year, Germany and the U.S. continued to be the largest markets of Vietnam with the market share of 15.2 percent and 13.1 percent respectively. Coffee area was up 0.3 percent over 2015 to 645,400 hectares. Output was estimated to increase 1 percent to hit 1.47 million tons but productivity dropped 0.4 percent because of drought in the Central Highlands early 2016. The contribution of processed products to the total coffee export value of the country was on the rise. CBRE: Affordable housing to play key role in 2017 Property service provider CB Richard Ellis Vietnam (CBRE Vietnam) has estimated that over 43,800 apartments will be sold this year, with around 40% of them in the medium segment. The figure last year was 37,419 apartments. In particular, there will be more than 13,000 high-end apartments and 1,627 luxury ones to be offered this year. The remainder will belong to the budget and medium segments, with around 40% of new apartments to be sold at US$800 per square meter. Domestic investors and joint ventures are making adjustments in order to adapt their projects to the market trend. Last year saw gradual adjustments making the market more balanced. As a result, the respective proportions of mid- and high-end apartments sold accounted for 48% and 30%, respectively. The mid-end segment achieved positive results, with more 15,000 units sold, 40% of the total. Earlier, the HCMC Real Estate Association (HoREA), in its final report of 2016, estimated 30,000 homes had been launched in the city. Of which, low-cost and mid-end housing accounted for 79.7% and was the key segment of the real estate market. HoREA chairman Le Hoang Chau said the property market this year may witness a major shift to the affordable housing segment, meeting the real need of the majority of average-income earners. In addition, there might be a big adjustment to address the supply-demand mismatch that is currently skewed towards the premium segment. Duong Thuy Dung, head of CBRE’s Research and Consulting Department, predicted the market would see high consumption in the 2017-2019 period, with the medium-cost segment rising from the 40-50% proportion in previous years to 60% this year, followed by the luxury segment with over 50%. “Limited available land in the central areas for residential projects is a key factor that helps lure potential customers in the luxury segment. The prices of high-class housing projects in HCMC are still lower than those of other cities in the region. Therefore, the segment is still attractive to local wealthy people, and overseas customers,” she added. Unemployment grows strongly The number of workers in HCMC who got unemployment benefits last year amounted to 122,204, an increase of 13,822 compared to 2015, Tran Xuan Hai, director of the HCMC Centre for Employment Service (CES), said at a conference here in the city on January 4. The conference was held by the HCMC Department of Labor, Invalids and Social Affairs to review the employment situation in 2016 and discussed plans for 2017. Last year, the number of laborers who claimed jobless benefits reached 122,771, the highest since 2012, Hai added. However, a few hundreds were ineligible for unemployment allowances. He ascribed the sudden increase last year to the increased awareness among workers on jobless benefits. In addition, the deadline for laborers to register their unemployment was extended, giving the unemployed more time to claim benefits. However, the number of people coming to the center to look for jobs was 330,425, down 25,812 compared to a year earlier. Nguyen Van Lam, deputy director of the department, said 311,135 people found jobs and 130,109 new jobs were created in 2016, which helped to cut the jobless rate in the city to 4.4%. SBV puts bad debt at 2.46% The bad debt ratio was estimated at 2.46% at the end of November 2016 and kept steady at less than 3% last year, says the State Bank of Vietnam (SBV). By the end of last November, Vietnam Asset Management Company (VAMC) had acquired 839 non-performing loans worth VND23.28 trillion in principal at the price of some VND22.48 trillion. In a statement issued on January 4, the SBV attributes this result to coping solutions, inspections, supervision, restructuring and settlement of bad debt. Inspection and supervision of banking activities were further strengthened last year, actively assisting the implementation of monetary policy as well as bad debt restructuring and settlement. Thanks to this, the operations of credit institutions underwent many positive changes, helping them achieve growth in deposits, assets and credits. Notably, the safety and stability of the system were maintained, with improved financial capability. Weak banks were strictly controlled, restructured and monitored, while shortcomings were radically tackled. The SBV believes money supply was reasonably regulated last year, enabling credit institutions to stabilize their deposit rates and cut lending rates, and helping the State successfully issue large amounts of G-bonds at low interest rates. Also, this helped keep the exchange rate stable and ensure effective control of inflation. Therefore, the monetary indicators went up according to the targets set at the beginning of the year. By December 29, money supply had increased by 17.88% and deposits had risen 18.38% against the end of 2015. The banking system’s liquidity was ample and the interbank market was running smoothly. Besides, interest rates were stabilized. A number of credit institutions brought down their lending rates to support production and business thanks to the solutions offered by the central bank. One of the solutions is to flexibly use the tools to keep liquidity in the system ample and interbank interest rates at low levels. In addition, credit institutions are directed to take measures to balance their capital, maintain stable deposit rates, reduce costs, improve business efficiency, and gradually adjust down the ratio of short-term funds used for making middle- and long-term loans. The SBV said the exchange rate and the foreign exchange market were relatively stable last year despite the pressure from unexpected global market movements. VAT no longer refundable for boats of over 400 HP The Government has decided to stop refunding value added tax (VAT) for fishing boats which have capacity of more than 400 HP. The decision was provided for in Decree 172 issued late last year to amend Decree 67, which was issued in 2014 to provide incentives for the seafood sector. Decree 172 abolishes a provision of Decree 67 that gives value added tax (VAT) refunds to owners of newly-built and upgraded boats with capacity of 400 HP or above. According to the new decree, the removal will be effective from February 15. However, for boats that have been completed and transferred to their owners before January 1, 2015, their owners can still get VAT refunds based on the time of contract signing. In case the boats were built or upgraded before January 1 last year without contracts, the VAT will be refunded based on invoices for goods and services related to works to build or upgrade the boats. For boats which were completed and transferred to owners after January 1 or contracts signed after that, owners will not be allowed to get VAT refunds. Can Tho takes third position in retail sales Can Tho City’s total retail sales of goods and services last year totaled an estimated VND95.6 trillion (some US$4.2 billion), ranking third in the country behind HCMC and Hanoi, Can Tho’s Department of Industry and Trade said at a conference on January 4. In the Mekong Delta region, An Giang Province took the second position after Can Tho City, with total retail revenue amounting to nearly VND84.6 trillion. Meanwhile, retail sales in Tra Vinh Province stood at around VND21 trillion, the lowest in the delta. Among five cities under the central Government, HCMC took the lead with its retail revenue climbing to VND682.7 trillion while Hanoi ranked second with nearly VND505 trillion. In addition, the northern city of Haiphong and the central coastal city of Danang reported total retail sales of around VND91 trillion and VND77 trillion respectively. At the 2016 review conference, Huynh Trung Tru, deputy director of Can Tho Department of Industry and Trade, said 2016 was a busy year for the retail sector of the city as many businesses strongly expanded investment, contributing to the city’s rising retail revenue. Last year, four new supermarkets and commercial centers were put into operation in the city, raising the total to 18. Nguyen Minh Toai, director of the department, said Saigon Trading Corporation, or Satra, will open Satrafoods convenience food stores and develop Centre Mall centers and Satramart supermarkets citywide, mostly in Ninh Kieu District. This year’s target of the city is to obtain VND105 trillion in retail revenue, up 9.87% compared to 2016, Tru added. The city’s export turnover last year exceeded US$1.5 billion, an increase of 3.4% compared to a year earlier. Meanwhile, import expenditures totaled US$293 million, down 26%, and representing just 58.4% of the full-year target. Railway sector asked to develop sustainably in 2017 Deputy Minister of Transport Nguyen Ngoc Dong urged the Vietnam Railway Corporation (VNR) to enhance transport quality and use technology in management for sustainable development in 2017. During a conference on VNR’s production and business plan in 2017 in Hanoi on January 5, the Deputy Minister underlined efforts the railway sector made in 2016 to maintain growth. According to Doan Duy Hoach, VNR Deputy Director General, the company’s output and revenue hit 7.97 trillion VND (350.9 million USD), and 8.34 trillion VND (366.87 million USD), respectively, equivalent to 87.7 percent and 88.8 percent of the figures in 2015. The company earned post-tax profits of 137 billion VND (6.03 million USD). Hoach attributed the fall in output and revenue to the reduction of its joint stock companies and networking due to divestment and equitisation. The collapse of the Ghenh Bridge in Dong Nai, storms and floods in the central region, uncompetitive transport prices, and newly-restructured subsidiaries also explained the corporation’s poor performance, Hoach said. To improve the sector’s competitiveness and efficiency in 2017, VNR aims to submit a proposal to the ministry to enhance the performance of the railway network nationwide, with focus on the Hanoi – Vinh route. VNR will also mobilise social resources, investing in means of transport and support facilities. Additionally, the corporation will accelerate the implementation of key projects, particularly on infrastructure and train building. Efforts will also be made to better business management and reform administrative procedures. Rice producers, exporters aim to increase consumption An Giang Import Export Company (Angimex), one of the large rice export companies in Vietnam, plans to focus on improving its rice quality and better controlling plant-protection residues to promote rice exports, especially to the US and EU markets. Vo Truong Giang, director of Angimex’s raw material development centre, said that Angimex exported about 120,000 tonnes of rice last year to many markets, including Asia, Australia, Japan and the US. Exports fell by 20 percent over 2015 due to drastic competition with Thai rice and an increase in rice production in Vietnam’s traditional rice-importing countries, he said. “It will be hard to compete with Thailand in exporting white rice. Therefore, our orientation for this year is to focus on controlling residues and expand production of specialty fragrant rice to boost export to the US and EU.” “The US has a huge demand for fragrant rice. But to export to the market, our rice must meet hygiene and food safety standards.” The company has decided to rent 100ha of land to cultivate rice for export to the US, he said. Giang said the company has more than 3,000ha of rice material zones in which it has developed close linkages with farmers and cooperatives in An Giang, Kien Giang and Dong Thap to grow Japonica (a Japanese rice variety) and Jasmine fragrant rice, he said. “Asian countries, especially China, have high demand for Japonica rice,” he said. With a forecast that rice export would continue to face difficulties this year, not only Angimex but also other rice exporters and producers have mapped out measures to boost consumption of their products this year. Duong Van Hung, director of Tan Cuong Agricultural Services Cooperative in Dong Thap province, which has more than 1,200ha under rice cultivation, mainly fragrant rice, said the co-operative would focus on improving quality to ensure that its rice meets hygiene and food safety standards set by importing countries. “Currently, we have 200ha for growing organic rice and 100ha for safe rice,” he said. “We collaborated with a rice export company to market our organic rice in the US market and to be accepted by the market.” Rice productivity following organic cultivation is in general 20-30 percent lower than traditionally planted rice, but selling prices are 30-40 percent higher than traditionally planted rice, he said. “We will expand the area to cultivate safe rice in the coming time. I think if our products meet hygiene and food safety standards, there will be nothing to worry about in terms of consumption,” he said. According to the Ministry of Agriculture and Rural Development, Vietnam exported an estimated 4.88 million tonnes of rice last year, earning 2.2 billion USD, a year-on-year decrease of 25.8 percent in volume and 21.2 percent in value. Deputy Minister Tran Thanh Nam said free trade agreements would open opportunities for Vietnam to enter markets like the US, the EU and Japan, but it would bring challenges due to lack of competitiveness, especially in terms of quality and branding positioning, compared to competitors. Nam said that rice exports last year did not meet expectations, especially because of market difficulties. “But I think it was a lesson for enterprises. Previously, we mainly focused on quantity. This should be changed now. Enterprises must establish their own material zones and focus on improving quality of their rice to international standards,” he said. Pham Thai Binh, director of Can Tho-based Trung An Hi-Tech Farming JSC, a large rice exporter, said consumers both at home and abroad are becoming more and more aware of what they eat and are willing to pay more for safe products. To improve the competitiveness of Vietnamese rice, farmers and businesses must join hands to create large-scale rice fields, apply modern farming techniques and mechanise production, he said. “Businesses must play a main role in the connection chain, providing farmers with input materials and strictly supervise the production process of farmers as well as ensure outlets for their products,” he said. The company has established a close link with farmers to grow fragrant Jasmine rice, Japonica and other rice following GlobalGap and organic standards, he said. Its rice products are available in many countries, including the US, the EU and Southeast Asia, with exports accounting for 65 percent of its total production output, he said. According to experts, the variety of rice is an important factor to improve rice quality. Huynh The Nang, chairman of the Vietnam Food Association, said there are hundreds of rice varieties but many have similar quality. Researches to create new high-quality rice varieties that are fragrant, soft and different from other varieties should be encouraged, he said, adding that this would improve Vietnam’s rice quality and competitiveness. Le Van Banh, head of the ministry’s Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production, said that developing brands for rice products was important to help raise the competitiveness of Vietnamese rice at home and abroad. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR