BUSINESS NEWS IN BRIEF Enabling domestic private sector investment in Vietnam   Vietnam has consistently rated poorly in global measures of domestic private sector development, a key to the country’s future economic success, said experts at a recent forum in Hanoi. A report last year by the World Bank, they noted, showed that Vietnam ranked 78th out of 189 countries in the ease of doing business index with poor-quality infrastructure and business environment cited as the two major constraints to growth. There is an infrastructure backlog, particularly in the remote and rural areas, and the investment needed to cure the problem is far beyond the Vietnam government’s resources, said the World Bank report. Thus, far too many Vietnamese still live in remote and rural areas that have severely restricted access to commercial markets and services that many people around the globe take for granted. Better infrastructure and continuing economic reform to build the domestic private sector are needed for the Government to reduce poverty and reach its ambitious goal of becoming an industrialized country by the year 2020. The fastest growing region in Vietnam is the Mekong Delta, which is bound to be the future agricultural and industrial hub of the country. But for that to happen, better infrastructure need be constructed. Most of the country is also plagued by critical supply-side constraints linking producers and consumers, whether that connectivity lie with connecting people to essential services such as hospitals and schools or to commercial services. One of the most direct and practical solutions is through the expansion of the domestic sector and finding innovative ways to encourage them to fund the construction of badly needed infrastructure, said Nguyen Duc Thanh at the forum. Mr Thanh, who is the director of the Vietnam Centre for Economic and Policy Research, said there has been for far too long an overreliance on the foreign sector for economic growth and too little evolution of the domestic sector. The foreign sector, said Mr Thanh, currently accounts for two-thirds of exports and one-quarter of the country’s employment. As a result, the domestic sector, once the major driver of the country’s economic growth, has been stymied— constrained by lack of competitiveness with foreigners, limited access to finances and a slackening of consumer demand by Vietnamese, who increasingly prefer to purchase foreign goods to those made locally. One practical solution, according to Mr Thanh is straightforward. He suggests that all state-owned companies be sold off to the domestic sector and let private sector ingenuity operate them profitably and use those earnings to invest in and solve the country’s infrastructure and connectivity problems. Mr Thanh believes state owned enterprises are bloated with bureaucracy and inefficiency and are a drain on the country’s limited resources rather than a contributor to them. The faster the Government enables and engages the domestic private sector to invest in infrastructure throughout the remote and rural areas of the country and build a national supply chain the better, said Mr Thanh. Truong Dinh Tuyen, the former minister of the Ministry of Industry and Trade agreed. There are many obstacles to overcome in development of the domestic private sector, however, transferring state owned enterprises to the private sector is a good first step to prosperity. In addition, domestic companies can benefit tremendously from identifying good examples of how foreign companies operate their businesses, and copy those policies and practices that are appropriate for Vietnam. If domestic companies work closely with their foreign counterparts to share experiences, they will reap tremendous benefits by increasing their competitiveness that will pay off over the long-term by improving productivity and in turn prosperity. Vietnam enjoys more than US$1 billion trade surplus with Philippines Vietnam’s exports to the Philippines rose by 9.94% to US$2.2 billion last year while imports dipped 47.5% to over US$1 billion, according to Vietnam Customs. Thus, last year Vietnam got more than US$1 billion trade surplus with the Philippines. Vietnam mainly exported industrial, manufacturing, agri-forestry and seafood products, of which machines, equipment and tools ranked first with US$221.2 million, up 8.09%, trailed by telephones and components with US$214.2 million, up 56.22% and computers, electronics and components with US$204.3 million, up 41.75%. Most export products obtained a growth and even impressive. They are pepper (up 188.26%), chemicals (up 105.9%) and cement and clinker (up 100.04%). Only 24.2% of export products saw a decrease and rice recorded the deepest decline of 64.17% to US$167.4 million. Korean multiplex chain leads booming movie market in Vietnam CJ-CGV has quickly emerged as the dominant cinema chain with more than half of the market share. Korean multiplex chain CJ-CGV, which currently has 38 cinemas and 247 screens in Vietnam, managed to triple its net profit last year to VND93.4 trillion (US$4 million). The chain has aggressively expanded in Vietnam since 2011 when it spent US$73.6 million to acquire an 80-percent stake in Megastar, one of the biggest local operators at the time. After the acquisition, CGV maintained an impressive growth rate with revenue hitting VND870 billion in 2012 and VND1.1 trillion in 2013, equivalent to year-on-year increases of 45% and 27%. The operator also reported substantial growth in net profit, generating on average VND120 billion per year; three times higher than the best achieved by Megastar. In the next two years, despite steady revenue growth, CGV recorded a significant decline in net profit due mainly to massive investments in new cinemas and foreign exchange fluctuations. Its 2014 revenue only matched 2013, and net profit tumbled by 40% to VND70 billion. In 2015, while revenue soared by 60% to VND1.76 trillion, net profit slumped by 55% to VND31.5 billion. CGV has established itself as the leading distributor in the country. It has won exclusive distribution rights to handle movie releases for giant film studios like Universal, Paramount, Disney and Warner Bros, and also topped the distribution rate for local movies. Trade is a two-way street: Vietnam has imported more from the US In fact, a lot more. Over the past decade shipments to Vietnam have quadrupled, with machinery and equipment topping the list. Last year Vietnam surpassed the Philippines to become the fourth biggest Southeast Asian market for American goods, according to latest data from the US Department of Commerce. Shipments from the US to Vietnam hit US$10.2 billion, up more than four times compared to 2007, approaching the number recorded by Thailand. Singapore and Malaysia remained at the top. Vietnam mostly imported machinery and crude materials for manufacturing last year. Besides, American agricultural products, especially soybean, also made major inroads. Vietnam has been one of the top suppliers of a wide range of goods for the US While trade relations between the two countries have mostly been discussed with a focus on exports from Vietnam, it should be noted that a large number of American businesses also view Vietnam as an increasingly important market. Bilateral trade has been expected to benefit from the Trans-Pacific Partnership (TPP), an ambitious trade pact connecting Vietnam, the US and other 10 countries. But what is going to happen now that the Trump administration has officially pulled the US out of the deal? Experts say the demise of the pact could hurt businesses in both Vietnam and the US. “The TPP would have lowered 18,000 tariffs for US companies to export their goods to those 11 markets,” said Karen Gerwitz, president of World Trade Center Denver, Colorado. Experts say without joining the TPP, the US will have to negotiate on new bilateral trade deals with Vietnam and some other Southeast Asian countries, a process that will require a lot of time and effort. As China and the European Union have been trying establish footholds in this fast-growing region, the clock is now ticking for the US. Banks under pressure to reduce lending interest rates Early this year, the Government asked credit institutions to cut costs to reduce lending interest rates and to help enterprises to reduce the cost of loans, which will require considerable effort from the whole banking system. It can be said that deposit interest rates at commercial banks are now stable without variation compared to the time before Tet. Some commercial banks increased their deposit rates slightly by 0.1-0.3% per year, which did not reflect the general trend of the market. A bank official said that with the flexible monetary policy of the State Bank of Vietnam (SBV), particularly the implementation of open market operations to ensure the liquidity of the credit institution system in late 2016, the monetary market and interest rates were kept stable. The deposit interest rates now stand around 0.8%-1% per year for non-term deposits and deposits with a term of less than one month; 4.5-5.4% per year for deposits with a term of one month to less than six months; 5.4-6.5% per year for deposits with a term of six months to less than 12 months; and 6.4%-7.2% per year for deposits with a term of over 12 months. Meanwhile, lending interest rates are hovering around 6.8-9% per year for short-term loans, 9.3-11% per year for long-term loans; and 6-7% per year for prioritised sectors. Deposit interest rates in Vietnamese dong are not as high as expected by most depositors, but this is considered a safe investment channel with clear profits and low risk. In the context of stable gold prices and stock markets but unpredictable real estate, savings are still a good investment channel. According to the State Bank, it will continue to carry out monetary policy in a synchronous manner to regulate liquidity and interest rates in accordance with developments in the macroeconomy. In addition, the State Bank asks credit institutions to balance their sources of capital, cut costs and enhance business efficiency to reduce lending interest rates in order to share difficulties with lenders. On top of the tasks of stabilising interest rates and lowering lending interest rates, commercial banks have been put under pressure to reduce costs and hasten restructuring along with settling non-performing loans. Economist Le Xuan Nghia said that there is room for lowering lending interest rates in 2017, which will largely depend on the credit policy of the State Bank and the settlement of non-performing loans by commercial banks. Vietcombank Deputy General Director Pham Thanh Ha said that stabilising interest rates in 2017 will require considerable effort from commercial banks amid inflation and the rise anticipated in interest rates in US dollars. Ha stated that there will be room for Vietcombank to stabilise and reduce interest rates, particularly short-term lending interest rates for prioritised sectors and start-up businesses as the bank has resolved, and controlled non-performing loans. Many economists have said that it is hard to lower lending interest rates in the condition of stable deposit interest rates in addition to objective factors from the domestic and world economy. As a result, maintaining stable interest rates as in 2017 will see a number of challenges including the possibility of inflation increasing in 2017, the anticipated rise in interest rates in US dollars and pressure from non-performing loans and restructuring from weak banks. Particularly, the SBV’s regulations on the ratio of short-term funds used for medium- and long-term loans effective from January 2017 will force commercial banks to boost deposits. In addition, non-performing loans have yet to be resolved completely, resulting in higher provision and operation costs for commercial banks which will affect the possibility of reducing lending interest rates. Along with the duties assigned by the Government, the State Bank also set the target for the banking system of decreasing lending interest rates by 0.5-1% in 2017, which is not easy to achieve amid enormous pressure from both subjective and objective factors. Garment exports to US, Japan hit 15 billion USD in 2016 The US and Japan imported 15 billion USD worth of garment and textile products from Vietnam in 2016, according to the Vietnam Textile and Apparel Association (Vitas). The figure accounted for 53.5 percent of the garment and textile sector’s export turnover of 28.3 billion USD last year. The association said that to fulfill the target of earning 30 billion USD from exports this year, the sector will continue boosting shipments to the US and Japan, with a view to maintaining an export growth of 6 percent in these markets.   In 2016, Vietnam’s apparel saw lower than expected results, with 28.3 billion USD in exports, meeting about 90 percent of the set target and up 5.7 percent year on year. Vitas attributed the low export turnover to a lack of export orders due to fierce competition from foreign textile and garment producers, while global demands declined. Car sales tumble almost 40 percent in January Car sales in Vietnam in January plunged 39 percent from the previous month to 20,232 units, following a 20-year record in 2016. The Vietnam Automobile Manufacturers’ Association (VAMA) reported on February 13 that the sales of passenger cars dropped 35 percent to 14,749 units. Commercial vehicles and special-purpose vehicles also experienced the same trend with 5,098 and 385 units sold, down 45 percent and 64 percent respectively. A 34-percent decline was recorded in the number of domestically assembled vehicles, at 15,504 units. Meanwhile, 4,728 imported completely built units (CBU) were sold, falling by 51 percent month on month. Compared to January 2016, car sales last month contracted 13 percent. Although those of commercial and special-purpose vehicles respectively decreased 38 percent and 56 percent, the sales of passenger cars climbed 5 percent. The sales of domestically assembled cars and imported CBUs sank 11 percent and 18 percent year on year, respectively, according to VAMA. Among VAMA members, Truong Hai Auto Corporation (THACO) continued to take the lead with 6,511 units sold in January, holding a 33.2-percent stake in the market. It was followed by Toyota Vietnam (5,318 units, 27 percent) and Ford Vietnam (2,544 units, 13 percent). Insiders partly attributed the sales decline to late January’s coincidence with the time prior to and the Lunar New Year holiday. Many people didn’t buy cars since they thought they might not receive new vehicles on the busy last days of the old lunar year. To prepare for the tariff on CBUs imported from other ASEAN countries to be cut from 40 percent to 30 percent on January 1, 2017, many businesses offered big discounts last November and December, attracting a large number of buyers in the last two months of 2016 and boosting the car sales last year to a 20-year record of more than 304,000 units. Other people who were not in an urgent need for a new car delayed the purchase as the import tariff on CBUs with the ASEAN origin will further go down from 30 percent in 2017 to zero percent next year, VAMA said. Certified coffee farming improves local income in Dak Lak The Central Highlands province of Dak Lak currently records 44,000 households producing certified coffee on a total coverage of 64,107ha with an output of 226,100 tonnes of coffee beans, said Director of the provincial Department of Agriculture and Rural Development Nguyen Hoai Duong. Their coffee cultivation meets UTZ (sustainable farming of coffee, cocoa and tea), 4C Code of Conduct for Coffee Sector standards. Several others meet Regional Forest Agreement (RFA) and Fairtrade Labelling Organisations International requirements. Cu M’gar district is home to 10,000 households with 15,000ha of UTZ and 4C certified coffee, accounting for 45 percent of the total coffee coverage in the district. Notably, all 10 units gaining Buon Me Thuot coffee geographical indication recognition involve in growing coffee meeting UTZ, 4C and RFA standards. However, Duong admitted that certified coffee farming in the district remains limited with only 64,107ha out of 203,356ha in the province. The province is encouraging businesses and farming households to expand certified coffee cultivation in order to improve their income and protect ecological environment in coffee-growing areas, he said. Mekong Delta province boosts economic restructuring The Mekong Delta province of Tra Vinh is pushing ahead with economic restructuring, towards increasing the proportion of industry, trade and services. It strives to record annual gross regional domestic product (GRDP) growth of 11-12 percent from now to 2020. The industrial production value is expected to reach 19-20 percent in the period while the ratio of industry, construction and services will make up 70 percent of the GRDP. Priorities will be put on seafood processing, farm produce, agricultural equipment, support industry, apparel, and wind power. The province also encourages the development of tourism, scientific research, education-training, logistics, information technology, and agro services in order to create a breakthrough in boosting industry, trade and services. Businesses are called to forge connectivity with farmers to create clean and safe products. Vice Secretary of the provincial Party Committee Ngo Chi Cuong said local authorities have improved administrative procedures, policies and created a favourable environment for businesses to quickly implement key infrastructure projects, especially at the Dinh An economic zone, while developing the seaports system and logistics activities. Through strengthening investment promotion at home and abroad, the province prioritise to appealing for capital from Japan, the European Union, the Republic of Korea, and Singapore under the public private partnership (PPP) form in major spheres at the Dinh An Economic Zone and Duyen Hai Power Station.- Vietjet to launch Da Nang-Seoul route The budget carrier Vietjet Air will launch daily flights from the central city of Da Nang to Seoul (the Republic of Korea) on May 31 in a bid to meet the increasing travel demand of tourists and businesspeople. Flight time between the two destinations will be four and a-half hours.The flight from Da Nang will depart at 23.45pm and arrive in Seoul at 6am (local time). The return flight will take off at 7am (local time) and land at 9.40am in Da Nang. In celebration of the new route and on the occasion of Valentine’s Day, the airline will run a three-day promotional offering of 500,000 air tickets priced from only 5,000 VND (15 US cents) starting from February 14 to February 16. The promotion applies to all international routes from HCM City, Ha Noi, Hai Phong and Da Nang to Seoul, Busan (RoK); Hong Kong, Kaohsiung, Taipei, Taichung, Tainan (China); Singapore, Bangkok (Thailand); Kuala Lumpur (Malaysia); Yangon (Myanmar); and Siem Reap (Cambodia) from March 1 to December 12. As for the Da Nang-Seoul route, the promotion is available for use from May 31 to December 31. Da Nang is the fourth Vietnamese city to be linked by air with Seoul, after HCM City, Hanoi and Hai Phong. Vietjet plans to expand its international network in 2017, looking to boost regional trade and integration. Cuttlefish, octopus export to grow Cuttlefish and octopus exports this year are expected to increase by 4% from last year to reach US$470 million, according to the Việt Nam Association of Seafood Producers and Exporters (VASEP). VASEP general secretary Truong Dinh Hoe said that Vietnam earned US$440 million from cuttlefish and octopus exports last year, a year-on-year increase of three per cent, with the Republic of Korea, Japan and the EU the largest import markets. Exports of frozen cuttlefish and octopus contributed 34 per cent and 32 per cent of the total exports, respectively, and dried and processed products the rest. Demand from Japan, the EU and other markets recovered significantly in the last few months of the year, but exports to the largest import market of ROK, which accounted for 38 per cent of total cuttlefish and octopus exports, fell strongly. In the last few years, a scarcity of raw materials was a hurdle for mollusc exporters, who had to depend on imported sources. The situation is expected to continue this year, with imports of raw materials forecast to increase strongly in the first quarter of the year. Global demand for this kind of mollusc will not be high, but there is drastic competition among export countries, he said. VASEP forecast cuttlefish and octopus exports just slightly higher than four per cent this year, Hoe said, adding that exports in the first quarter were estimated to reach $80 million, a year-on-year decrease of 1.93 per cent. While exports to ROK and Japan could fall slightly in the first quarter, exports to EU will rise but not by much. Ground-breaking tourism accelerators accepts projects in the Mekong region The Mekong Innovative Start-up Tourism (MIST) Initiative has announced two new accelerators designed to make it easier and faster for innovative tourism businesses to get established in Cambodia, Laos, Myanmar, and Vietnam. The MIST Start-up Accelerator will take entries from early stage companies with either travel technology or traditional tourism business plans. The MIST Market Access Accelerator welcomes applications from mature international tourism start-ups needing assistance entering the region. Both accelerators will close to applications 19 March. Applicants must demonstrate how they will create jobs, generate positive community impact and contribute to sustainable tourism growth in Cambodia, Laos, Myanmar, or Vietnam. “The MIST accelerator programmes give a leg up to tourism investments that create jobs, help local communities, and support entrepreneurship, especially for women,” explained Dominic Mellor, senior Asian Development Bank economist and head of the Mekong Business Initiative. Founders accepted into the MIST Start-up Accelerator will attend mini boot camps to further develop their business plans. The top business plans for each country market will win MIST Innovation Grants, with the best overall receiving USD10,000 and the three runners-up receiving USD7,000. MIST Market Access Accelerator participants will join familiarisation tours of relevant Mekong region markets. Through these tours, they will receive coaching, custom market insights, and introductions to supplier networks and relevant stakeholders. Participants in both MIST accelerators will pitch their plans to investors, global acceleration programs, and tourism leaders at the Mekong Tourism Forum in June (Luang Prabang, Lao) and APEC Summit in November (Danang, Vietnam). In-country teams will provide additional advisory services tailored to participants’ business needs. “The Greater Mekong Subregion is among the fastest growing tourism destinations on earth. Start-ups can disrupt traditional practices to adapt to changing consumer behaviour, but let’s also encourage responsible innovation that enhances the region’s appeal for future generations,” said Jens Thraenhart, Executive Director of the Mekong Tourism Co-ordinating Office. MIST is a joint venture of the Mekong Tourism Co-ordinating Office and the Mekong Business Initiative. It receives regional funding, advisory and technical support from the Asian Development Bank the Australian government, Amadeus Next, the Pacific Asia Travel Association, and Village Capital. It has been endorsed by young entrepreneurs associations and start-up groups in Cambodia, Lao, Myanmar, and Vietnam. Investor accused of cheating residents to use smaller entrance Residents at Home City Apartment Building in Cau Giay District, Hanoi are complaining about being cheated by the building's investor that is forcing them to use a longer route and smaller entrance to enter the building. Home City is a new project and the residents have moved in only 10 days ago. But most residents said they felt like they were tricked by the investor, Van Phu Invest JSC. In the contracts, it is stated that the official address is 117 Trung Kinh Street, Cau Giay District, Hanoi. However, the entrance on this street has been blocked ever since the residents moved in. They were asked to use the entrance on Nguyen Chanh Street that is about 1km away. Pham Dinh Tuan, a resident, said, "The entrance route on Nguyen Chanh Street is really small. We've worked with the investor several times but their explanation is not good enough." Bui Thi Hien, another resident, said she bought the apartment at the price of VND35m (USD1,500) per square metre because it is on Trung Kinh Street, which would be easier. "We have to go through another road to reach Nguyen Chanh Street and it's not worth the money," she said. The residents also complained about the lack of street lights, accidents and congestion on Nguyen Chanh Street. Deliverymen also face difficulties when finding routes to enter the building. In addition, the cable service, monthly parking fee and hygiene in the basements are also being criticised. In response, Van Phu Invest JSC said they didn't do anything wrong. Their project, which includes high-rise building and a primary school, were approved by Hanoi People's Committee and the Department of Planning and Architecture. In the approved project, the entrance to the primary school is on Trung Kinh Street and the entrance to the high-rise building is on Nguyen Chanh Street. Even in their model that was presented to potential buyers also showed the entrance. The company also complained that the residents as well as visitors often park vehicles along Nguyen Chanh Street to the building's gate and cause congestion. The company had to warn the residents that if they don't park in the basement, they will have to pay parking fees on the street. "Our monthly parking fees also follow the regulation. The maximum fee applied for nine-seat cars is VND3m (USD132)," the company's representative said. Alma Resort developer confuses customer with valueless “ownership certificate” Besides anomaly in representative offices and unreasonable clauses in the contract, the certificate that Paradise Bay Resort Co., Ltd., the developer of Alma Resort in the central province of Khanh Hoa, gives to customers also contains confusing information that raises the suspicion that the company is cheating the customers. Alma Resort developer confuses customer with valueless “ownership certificate” In a letter to VIR, a customer named S said that after signing the contract to own a vacation with Paradise Bay Resort Co., Ltd. and pay the deposit, he received a certificate of ownership issued by a company named Hutchinson Trustees based in the UK. S said that Alma told him this certificate ensured that he could join in an international club that allow him to exchange vacation weeks at Alma Resort for week at another hotel in another country. However, on the certificate there are a lot of opaque details. Specifically, the company certifying the ownership is “Hutchinson Trustees”, with address at “5 - 6 Priory Court, Tuscam Way, Camberley, Surrey, GU15 3YX, United Kingdom”, and phone number: “(+44) 1276 482000”. Searching “Hutchinson Trustees” on the company registry website of the UK government at https://beta.companieshouse.gov.uk/ returned three results of three companies, all at the same address, namely Hutchinson Trustees Limited; Hutchinson Trustees Secret Bay Residences Properties Limited and Hutchinson Trustees (Lithuania) Limited. These companies have one director in common named “RICKARD, Anna Kathryn”. Of the three companies, according to the link, https://beta.companieshouse.gov.uk/company/08206611/filing-history, Hutchinson Trustees Secret Bay Residences Properties Limited was dissolved in 2014. For the remaining two there is no information about their operation status. But whether they are still operating or not, on the certificate that S received, there is no information about whether Rickard represents which of these two companies. Judging by the stamp on the letter that is attached with the certificate, it may be Hutchinson Trustees Limited. However, the address “5 - 6 Priory Court” and phone number “(+44) 1276 482000” belong to yet another company with the website http://www.hutchtrust.co.uk and name “Hutchinson & Co Trust Company Ltd”, with email address at enquiries@hutchtrust.co.uk, instead of enquiries@hutchtrust.com as written on the certificate. This company also has many directors, one of whom is RICKARD, Anna Kathryn. Lawyer Tran Duc Phuong from the Ho Chi Minh City Lawyers’ Association said that this certificate does not have any legal value in Vietnam. According to Decree 111/2011/ND-CP issued by the government dated December 5, 2011, on certification and legalisation by the embassy, the certificate by UK company Hutchinson Trustee has to be legalised by the Embassy of UK in Vietnam before being used in Vietnam. As per Vietnamese laws, the certificate has no value because a certificate of a third party has no value to certify a contract of renting a room or a villa, no matter whether the third party is a Vietnamese or foreign company. In fact this certificate can be understood as a notice about setting up an account at a company that facilitates people exchanging and selling vacations. Eastin Duyen Ha Resort Cam Ranh to open The Eastin Duyen Hai Resort in Cam Ranh, Khanh Hoa province, will open during the second quarter of this year. The resort covers 17.4 ha and has a total of 651 rooms, suites and villas, including 372 superior rooms, three suites in a high-rise block, 148 deluxe garden rooms in a two-storey block, 32 deluxe rooms in a villa block without a pool, 24 family deluxe rooms in a villa block with a pool, 16 one-bedroom garden villas, nine one-bedroom pool villas, 30 two-bedroom lagoon villas, five two-bedroom pool villas, four three-bedroom garden villas, and eight three-bedroom pool villas. All rooms are decorated in a contemporary, internationally-influenced design and feature Eastin brand-standard deluxe facilities, providing the ultimate in comfort and convenience for both business and leisure travelers. The resort boasts a variety of enticing food and beverage options for guests to choose from, including an all-day dining restaurant with terrace, a beach restaurant, a lobby lounge, a shopping arcade and deli, a pool bar, a sports bar, a kids’ club, a dumpling depot and a Japanese sushi and teppanyaki restaurant. Other facilities include U Spa, with six double and four single treatment rooms, foot massage and separate Jacuzzis for men and women, a fitness center, a kids’ pool, a kids’ club, a games room, an outdoor swimming pool, and an expansive sports complex including tennis, volleyball and badminton courts as well as pétanque and croquet. It’s state-of-the-art conference and banquet facilities. with the latest audiovisual technology, can cater to any type of event, from large corporate meetings and seminars to dream weddings and private parties. Facilities include a large function room seating up to 800 guests and three boardrooms and two meeting rooms. Cam Ranh is renowned for its pristine beaches and wonderful scenery and is easily accessible, being both close to the airport and Nha Trang city. Eastin Grand Hotels in Asia feature luxury five-star accommodation, bespoke facilities and dining venues designed to please the local and international travelers. Every hotel is fitted with modern and contemporary amenities, attentive services and consistency to ensure a perfect stay. With the motto “Value For All Occasions”, Eastin Grand’s pledge is to offer the very best in comfort, service and facilities at the most attractive prices with maximum flexibility. No need to wait for ODA, Da Nang firm says     The main water supply company in Da Nang City, Dawaco, has proposed that it raises funds on its own to build the Hoa Lien Water Plant rather instead of using non-refundable Official Development Assistance (ODA) funds from Japan. The proposal was made by the company’s general director, Ho Huong, in a meeting with the city’s leadership this month. Huong said the company’s water plants with a total capacity of 210,000 cubic metres each day have been overworked in summer when it exceeded designed capacity to supply 260,000 cubic metres a day. He said the company will have to supply 660,000 cubic metres each day in 2025, and needs an early start to be able to do that. Using ODA funds would mean that the Hoa Lien Water Supply Plant can only begin operations by 2022, given the complicated procedures, management and operations associated with such funding. “We can raise funds ourselves fund for the first stage of the Hoa Lien water plant in the fourth quarter of 2017 and begin operations in late 2019, providing an additional 120,000 cubic metres of clean water each day,” Huong said. “The Hoa Lien Water plant would use VND4.8 trillion (US$212.3 million) for a 20-year construction and operation period, but we can reduce investment capital by using our funds with build the plant faster,” he said. While the ODA funding would be for a PPP (public-private partnership) project, Dawaco can raise funds from shareholders because it is a joint-stock company. Huynh Duc Tho, Chairman of the Da Nang People’s Committee, said the city will review Dawaco’s proposal soon. Tho asked the company to prepare a fundraising plan with a strict construction schedule. The city will decide the best way of investing later, he said. This is the second project in Da Nang that the investor has spurned ODA funds. The Da Nang Port Company raised funds from shareholders instead of using ODA from Japan. Da Nang authorities have said the city is set to face a water crisis in the coming years as water exploitation has equaled existing designed capacity with 200,000 cubic metres taken from the Vu Gia River. Meanwhile, the Cau Do water station, the city’s major supplier, is struggling often with highly saline water due to a lack of supply from the upstream rivers during the dry season. The city had called for Public-Private-Parnership (PPP) investment projects in waste water treatment and clean water supply and it seeks to become a ‘green’ city. It has estimated project costs at VND6 trillion (US$267 million), of which $218 million would be used for urban infrastructure, to reach the ‘green’ target (an environmentally friendly city) by 2025. In 2015, the city had listed 19 projects calling for investments of VND16.5 trillion (US$768 million) under the Public-Private-Partnership (PPP) model. The same year, it presented a US$115-million budget proposal for upgrading waste water treatment stations, waste water drainage systems and drainage channels in the city. The World Bank had agreed to loan US$100 million for this project. Nod for logistics centre at Da Nang Hi-tech Park     Da Nang High-tech Park’s management board has granted an investment certificate to the first logistics project in the central city with total registered capital of VND316 billion (US$14 million). The U&I Logistics Centre, funded by the U&I Logistics JSC in southern Binh Duong province, will cover more than 5ha in the Da Nang Hi-tech Park. The first phase of the project will be implemented in the third quarter of 2017 and the second phase will start in Q1 of 2021. Once completed, the project will provide logistics services such as delivery of import-export products, customs procedures and transport of goods by road and inland waterways for businesses in Da Nang Hi-tech Park. The project is expected to meet the demand for logistics services of enterprises operating in Da Nang High-tech Park. It is expected to facilitate and improve transport and trading activities in the park and help Da Nang turn Lien Chieu Port into the city’s logistics centre. Ford sells 2,544 units in January     Ford Vietnam reported January sales of 2,544 units with its EcoSport, Ranger and Transit models continuing to retain segment leadership. The Ranger led with sales rising 3 per cent year-over-year to 1,342 vehicles and accounting for almost half the pickup trucks sold in the country. The EcoSport SUV remained the leader of the compact SUV segment, selling 449 vehicles. The Transit maintained its leadership of the commercial bus and van segment with sales of 289 vehicles. The Everest SUV delivered sales of 116 vehicles while the Explorer premium SUV sold 137 units. Ford Vietnam recently began importing the latter from the US with a 2.3L EcoBoost engine. Focus saw sales of 110 units, while the sporty Fiesta saw sales rise 12 percent from a year ago to 94 units. Enterprises see opportunities in 2017 Trần Văn Mỹ, general director of Phong Điền Scavi Company, said that his company is building an industrial centre specialising in textile and garment at the Phong Điền Industrial Park Huế City. The first hub of its kind in Việt Nam was in fact run on a trial basis in 2015 and 2016. Mỹ said the facility is due to be put into operation in the second quarter of this year, bringing together various segments involved in textile production such as feedstock, fabric accessories, design, fashion illustration and finally production of large volumes of finished products for exports. This closed production chain is expected to help not only strengthen the brand appeal and prestige of Vietnamese garment and textile products in the global market, increasing exports, but also address the current scale in the sector. It is also expected to attract foreign investment since many foreign apparel manufacturers are keen to invest in the Vietnamese textile industry where there are specialised models. Elsewhere, the CEO of Việt Nam VP9 Company,  said his company has set itself a sales target of US$300 million from technological products, particularly internet-based television cameras. Explaining the company’s ambitious target, he told Tài Chính & Chứng Khoán that Việt Nam is the first country in the world to successfully develop smart cameras that run Android and instal millions of Android applications, ushering in a new era of the internet of things. Those smart products are now in demand around the world, and so are expected to be shipped to major markets such as the US, Europe and Japan, he said. Besides focusing on exports, many companies including State and private ones have also drawn up ambitious strategies to expand their shares in the domestic market this year by enlarging distribution networks and consolidating their brand strengths. They include Việt Tiến Garment Company, Sài Gòn Co.op, Thegioididong, FPT, Vingroup and Vinamilk. They plan to increase their investments by 50 per cent to expand their distribution systems. It is not only such big companies but also many small ones, including start-ups, who plan to step up investment in production and business and their distribution networks this year. Analysts said many companies hope to increase exports this year thanks to possible advantages created by positive changes expected in both the domestic and global economies, including free trade agreements, many of which effect this year. The International Monetary Fund (IMF) has predicted the global economy to grow by 3.5 per cent this year, while the World Bank believes 3.1 per cent growth is likely. The Vietnamese economy is expected to be steady with inflation remaining under control. In addition, the Government will continue to implement measures to improve the business and investment environment and support businesses. According to the Ministry of Trade and Industry, in 2017 Việt Nam’s economic integration will be further momentum. It will have to implement all commitments under the ASEAN Free Trade Agreement with China and with other ASEAN member countries, the ASEAN Economic Community (AEC), World Trade Organisation (WTO), and new generation free trade agreements. This is expected to create highly favourable conditions for the country’s economic development. But analysts also warn about the many challenges in both the domestic and overseas markets that Vietnamese enterprises might face and have to overcome if they want to seize the opportunities, particularly for exports. They said the growth quality as well as competitiveness of the Vietnamese economy remains low. Besides there is macroeconomic instability and infrastructure lack of adequate to meet the development needs. Recent global developments such as US President Donald Trump’s protectionist rhetoric and Britain’s vote to quit the EU show that some major economies are tending to protectionism and reduced trade liberalisation. This will change the structure of global commodity supply and demand, significantly affecting the global market and of course exports by Vietnamese businesses. The analysts said Vietnamese businesses should focus on exploiting their domestic market, adding it would be an important factor in survival and development. Analysts think banks can cut rates After Lunar New Year-Tết, liquidity at most banks is rather plentiful as people have again started putting their savings into them. Yet many of them have quietly raised their deposit interest rates by 0.1-0.3 percentage points. For instance, Eximbank raised the rate on three-month term deposits by 0.2 percentage points to 5.5 per cent. Small banks have had to increase interest rates on long-term deposits to 8 per cent. They also had to give “lucky money” to those who made short-term deposits. The chief of a bank with a chartered capital of VNĐ5 trillion  said though liquidity is good bank had to increase deposit interest rates in order not to lose market share to smaller banks. One of the reasons lenders are vying with each other to hike their deposit interest rates is that they have to have enough money since there is a possibility of strong credit growth of 18 per cent to even 30 per cent this year. But this rate hike in the new year has gone against the State Bank of Việt Nam’s desire to lower interest rates to support the economy. Some banking insiders also mentioned some other factors that are expected to impact the rates this year. The first is the imminent strengthening of the dollar after the US Federal Reserve increases interest rates an expected three times this year as economic growth and inflation pick up. They pointed out that đồng interest rates always have a close correlation with the value of the greenback. The second reason is that Circular No.06, which caps the ratio of short-term funds that can be used for medium- and long-term loans, will reduce it from 60 per cent to 50 per cent this year. This has forced banks to restructure their finances and increase interest rates on medium- and long-term deposits. The hike in wages this year is likely to bring inflationary pressure on the economy. However, some analysts said there remains a possibility of deposit interest rates falling this year in spite of many factors that seem like preventing such a likelihood. But this requires the central bank to effectively control credit growth, and mechanisms and policies for bad debt settlement to prove their efficacy. Nguyễn Thị Hồng, deputy governor of the SBV, said a series of new policies for settling bad debts would be announced this year. This might enable banks to steady and reduce first the deposit interest rates and then the lending interest rates. The SBV governor has also expressed determination to address the bad debts problem this year. The central bank will carry out many debt buying and selling market measures and set up a transparent debt trading market that will attract domestic and foreign investors. The central bank instructed credit institutions to seriously implement regulations and guidelines related on interest rates under its Directive No.01/CT-NHNN issued this year. Vietcombank chairman Nghiêm Xuân Thành said if bad debts are recovered by the Việt Nam Asset Management Company (VAMC) it would help banks have “more room” to lower interest rates. Lowering the interest rates will become even more feasible if banks can recover their bad debts by themselves. This year Vietcombank plans to buy all VNĐ4.3 trillion of NPLs that it sold to the VAMC, three years earlier than planned. It will then settle the bad debts using its provisioning, hoping that as and when the debts are actually recovered the bank’s financial capacity will improve. A Vietinbank official said this year the lender would focus on settling bad debts, and buy back all the bad debts it had sold to the VAMC. Amid the fierce competition between banks, Vietinbank plans to completely settle the bad debts year instead of in 2018 as it had planned earlier. No need to wait for ODA, Da Nang firm says      The main water supply company in Da Nang City, Dawaco, has proposed that it raises funds on its own to build the Hoa Lien Water Plant rather instead of using non-refundable Official Development Assistance (ODA) funds from Japan. The proposal was made by the company’s general director, Ho Huong, in a meeting with the city’s leadership this month. Huong said the company’s water plants with a total capacity of 210,000 cubic metres each day have been overworked in summer when it exceeded designed capacity to supply 260,000 cubic metres a day. He said the company will have to supply 660,000 cubic metres each day in 2025, and needs an early start to be able to do that. Using ODA funds would mean that the Hoa Lien Water Supply Plant can only begin operations by 2022, given the complicated procedures, management and operations associated with such funding. “We can raise funds ourselves fund for the first stage of the Hoa Lien water plant in the fourth quarter of 2017 and begin operations in late 2019, providing an additional 120,000 cubic metres of clean water each day,” Huong said. “The Hoa Lien Water plant would use VND4.8 trillion (US$212.3 million) for a 20-year construction and operation period, but we can reduce investment capital by using our funds with build the plant faster,” he said. While the ODA funding would be for a PPP (public-private partnership) project, Dawaco can raise funds from shareholders because it is a joint-stock company. Huynh Duc Tho, Chairman of the Da Nang People’s Committee, said the city will review Dawaco’s proposal soon. Tho asked the company to prepare a fundraising plan with a strict construction schedule. The city will decide the best way of investing later, he said. This is the second project in Da Nang that the investor has spurned ODA funds. The Da Nang Port Company raised funds from shareholders instead of using ODA from Japan. Da Nang authorities have said the city is set to face a water crisis in the coming years as water exploitation has equaled existing designed capacity with 200,000 cubic metres taken from the Vu Gia River. Meanwhile, the Cau Do water station, the city’s major supplier, is struggling often with highly saline water due to a lack of supply from the upstream rivers during the dry season. The city had called for Public-Private-Parnership (PPP) investment projects in waste water treatment and clean water supply and it seeks to become a ‘green’ city. It has estimated project costs at VND6 trillion (US$267 million), of which $218 million would be used for urban infrastructure, to reach the ‘green’ target (an environmentally friendly city) by 2025. In 2015, the city had listed 19 projects calling for investments of VND16.5 trillion (US$768 million) under the Public-Private-Partnership (PPP) model. The same year, it presented a US$115-million budget proposal for upgrading waste water treatment stations, waste water drainage systems and drainage channels in the city. The World Bank had agreed to loan US$100 million for this project. Enterprises see opportunities in 2017 Trần Văn Mỹ, general director of Phong Điền Scavi Company, said that his company is building an industrial centre specialising in textile and garment at the Phong Điền Industrial Park Huế City. The first hub of its kind in Việt Nam was in fact run on a trial basis in 2015 and 2016. Mỹ said the facility is due to be put into operation in the second quarter of this year, bringing together various segments involved in textile production such as feedstock, fabric accessories, design, fashion illustration and finally production of large volumes of finished products for exports. This closed production chain is expected to help not only strengthen the brand appeal and prestige of Vietnamese garment and textile products in the global market, increasing exports, but also address the current scale in the sector. It is also expected to attract foreign investment since many foreign apparel manufacturers are keen to invest in the Vietnamese textile industry where there are specialised models. Elsewhere, the CEO of Việt Nam VP9 Company,  said his company has set itself a sales target of US$300 million from technological products, particularly internet-based television cameras. Explaining the company’s ambitious target, he told Tài Chính & Chứng Khoán that Việt Nam is the first country in the world to successfully develop smart cameras that run Android and instal millions of Android applications, ushering in a new era of the internet of things. Those smart products are now in demand around the world, and so are expected to be shipped to major markets such as the US, Europe and Japan, he said. Besides focusing on exports, many companies including State and private ones have also drawn up ambitious strategies to expand their shares in the domestic market this year by enlarging distribution networks and consolidating their brand strengths. They include Việt Tiến Garment Company, Sài Gòn Co.op, Thegioididong, FPT, Vingroup and Vinamilk. They plan to increase their investments by 50 per cent to expand their distribution systems. It is not only such big companies but also many small ones, including start-ups, who plan to step up investment in production and business and their distribution networks this year. Analysts said many companies hope to increase exports this year thanks to possible advantages created by positive changes expected in both the domestic and global economies, including free trade agreements, many of which effect this year. The International Monetary Fund (IMF) has predicted the global economy to grow by 3.5 per cent this year, while the World Bank believes 3.1 per cent growth is likely. The Vietnamese economy is expected to be steady with inflation remaining under control. In addition, the Government will continue to implement measures to improve the business and investment environment and support businesses. According to the Ministry of Trade and Industry, in 2017 Việt Nam’s economic integration will be further momentum. It will have to implement all commitments under the ASEAN Free Trade Agreement with China and with other ASEAN member countries, the ASEAN Economic Community (AEC), World Trade Organisation (WTO), and new generation free trade agreements. This is expected to create highly favourable conditions for the country’s economic development. But analysts also warn about the many challenges in both the domestic and overseas markets that Vietnamese enterprises might face and have to overcome if they want to seize the opportunities, particularly for exports. They said the growth quality as well as competitiveness of the Vietnamese economy remains low. Besides there is macroeconomic instability and infrastructure lack of adequate to meet the development needs. Recent global developments such as US President Donald Trump’s protectionist rhetoric and Britain’s vote to quit the EU show that some major economies are tending to protectionism and reduced trade liberalisation. This will change the structure of global commodity supply and demand, significantly affecting the global market and of course exports by Vietnamese businesses. The analysts said Vietnamese businesses should focus on exploiting their domestic market, adding it would be an important factor in survival and development. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR