BUSINESS IN BRIEF 17/8 SVEAM works to boost export of Vietnamese agricultural machinery The Southern Vietnam Engine and Agricultural Machinery Co. Ltd (SVEAM) said it will invest efforts in improving product quality so as to export more Vietnam-branded agricultural machinery. SVEAM said it has spent 120 billion VND (5.28 million USD) in phase I and 40 billion VND (1.76 million USD) in phase II on promoting the quality of diesel-powered machines and small-sized tractors. The company currently owns more than 60 precision machining centres, 400 specialised equipment, and modern measurement and testing devices, to ensure high and stable quality of its products. Vikyno and Vinappro are SVEAM’s two brands that have the rate of locally-made components of up to 100 percent, the firm noted, adding that the brands have become popular in foreign markets, especially in Southeast Asia and South Asia. Export revenues of these brands are about 10-12 million USD each year, accounting for 40 percent of SVEAM’s total overseas shipments. Bac Ninh attracts almost 3 billion USD in investment   The northern province of Bac Ninh has drawn nearly 3 billion USD in investment capital since the start of the year, reported the provincial Management Board of Industrial Parks. Of the sum, the investment flow from foreign direct investment (FDI) projects exceeded 2.8 billion USD, while the rest came from domestic projects. In July alone, the province licensed 10 new projects with a total registered capital of 29.44 million USD, of which 21.28 million USD from FDI projects. Bac Ninh province has given priority to the hi-tech, supporting and manufacturing industries. Besides, local authorities have held frequent meetings with businesses to address their difficulties, fostered production and raised the efficiency of local industrial parks and clusters. In addition, the province has reviewed and further improved its investment climate while simplifying administrative procedures, especially in the fields related to land, construction, labour and customs. The Bac Ninh Management Board of Industrial Park has to date granted 1,138 investment certificates to 401 domestic and 737 foreign firms, with a combined registered capital of over 16.1 billion USD. Railway sector asked to improve competitiveness Prime Minister Nguyen Xuan Phuc’s working group has called for the railway sector to raise its competitiveness in comparison with other modes of transport. Working with leaders of the Vietnam Railway Corporation in Hanoi on inspections among other matters, Mai Tien Dung, Minister - Chairman of the Government Office, said such inspections were carried out to check the implementation of measures to ensure hitting this year’s GDP growth target. The working day with the railway sector aimed to examine the implementation of measures to promote business, to increase transport revenue and passenger and cargo transport. It also hoped to detect difficulties and obstacles in order to find measures to tackle these difficulties. In the first six months of the year, the railway corporation achieved revenue of 3.5 trillion VND (155 million USD), an increase of 3.8 percent compared to last year’s same period, and only 45 percent of the year’s goal. The working group, on behalf of the Prime Minister, said the corporation needed to explain several matters. The first issue is a 12 percent drop of the sector’s revenue in 2016, which was 6.5 trillion VND (289 million USD), compared to 2015. “When compared to other transport types, railway transport is less attractive – in terms of safety and quality. The facility is outdated. For goods transport, storage and loading ports, connections with air and sea transport are not convenient,” said Dung, who is also head of the working group. “The Prime Minister said that leaders of the corporation should think about how to improve all of these elements to raise competitiveness,” Dung said. Another issue was safety and skills of the sector’s staff. The working group cited recent incidents including accidents at Yen Vien station and an incident when two trains travelled on the same track at Suoi Van station in Binh Thuan province. Investment in the railway sector was also important. “It’s good that the sector has already called on investment in storage, loading means and connecting railways with industrial zones, airports and sea ports,” Dung said. In response to Dung’s comments, Vu Ta Tung, Director of the Vietnam Railway Corporation, admitted that the railway sector faces fierce competition on price with air, road and waterway transport. The price depended much on the railway sector’s infrastructure, he said. "Many officials of the railway sector still have backward thinking," Tung said. However, to change the backward thinking and develop the sector, it would be a long road, not a short one, he said. The Prime Minister asked the sector to pay attention to managing and improving railway crossings. The final matter was the issue of equitisation. The working group said the corporation had proceeded with this in good time but capital withdrawal has not met requirements. Deputy PM calls on AIA to expand investment in Vietnam Deputy Prime Minister Vuong Dinh Hue has stressed opportunities for AIA Group Limited to invest in Vietnam’s potential life insurance market.  Hue told Ng Keng Hooi, Chief Executive and President of AIA Group Limited, in Hanoi on August 15 that the Vietnamese Government will work harder to raise public awareness of life insurance and issue more relevant policies to make it easier for businesses, including AIA, to participate in the local insurance market.  The Deputy PM also called on AIA and other life insurance companies to diversify their products in order to meet demands of Vietnamese customers.  He suggested the group join Vietnam’s derivatives market, saying AIA will have more changes to expand their financial investment in the country as the Vietnamese Government will employ an array of measures to restructure the financial and banking sectors and equitise State-owned enterprises. Appreciating AIA’s engagement in Vietnam’swith tenures ranging from 20-30 years, Hue noted his hope that the group will pour more capital resources into the market.  For his part, Ng Keng Hooi applauded the Vietnamese Government’s efforts to improve local investment and business climate over the past years and described Vietnam as a promising market for financial investors.  AIA will continue to invest in Vietnam’s long-term G-bonds and pay attention to life insurance in the country, he said. AIA is the largest independent publicly listed pan-Asian life insurance group – with a presence in 18 markets across the Asia-Pacific region. The group’s vision is to be the world’s pre-eminent life insurance provider and its purpose is to play a leadership role in driving economic and social development across the region. Seven-month FDI nears 794 million USD in Dong Nai Foreign direct investment (FDI) inflow to the southern province of Dong Nai in the first seven months reached nearly 974 million USD, representing 79.4 percent of the yearly plan, according the provincial Industrial Zone Authorities.  Of the figure, 284 million USD was registered to 45 new projects and the remaining 509.6 million USD went to 66 existing projects as registered additional capital.   FDI projects mostly went to Bau Xeo Industrial Zone (IZ) with two projects worth of 115 million USD, said the authorities, adding at Nhon Trach IZ attracted 12 projects valued at 42.7 million USD, among others.  To date, 32 industrial zones in the locality has welcomed 1,548 projects worth 21.6 billion USD from 42 countries and territories.  In the reviewed time, Dong Nai province also drew over 2.8 trillion VND (126 million USD) of domestic investment. The sum came from 10 newly-licensed projects worth of 2.57 trillion VND (113.3 million USD) and three existing projects with additional capital valued at 290 billion VND (12.7 million USD).  To date, total investment of domestic projects in Dong Nai has reached 50.5 trillion VND.  The projects licensed in the last seven months are in high technology, supporting industry and green technology, said the Authorities, adding that they are in line with the province’s policy to prioritise hi-tech projects.  The projects in the province’s industrial zones have created jobs for 539,754 employees, including 6,424 foreigners. Top Thai brands exhibition to open in Hanoi An exhibition featuring “Top Thai Brands” is scheduled to take place in Hanoi from August 17-20, according to the Vietnam National Trade Fair & Advertising Company (Vinexad).  Co-hosted by the Thai Ministry of Commerce’s Department of International Trade Promotion, the Trade Office of the embassy of Thailand in Hanoi and Vinexad, the event will feature trade among exhibitors from August 17-18 and free public entry from August 19-20.  During the first two days, 113 Thai companies and business associations will directly meet Vietnamese importers to seek partners and business opportunities.  Later, 192 stalls by Thai merchants and Vietnamese agents of Thai products will showcase food and beverages, household appliances, apparel and accessories, household electrical appliances, health care products, and several other services.  Thai food cooking demonstration and dance performances by Thai experts and troupes are also planned for.  The event is expected to raise mutual understanding and boost trade between the two countries. Tra Vinh province launches e-commerce website      The southern province of Tra Vinh on Tuesday launched an e-commerce website at http://travinhtrade.vn. Nguyen Trung Hoang, vice chairman of the provincial People’s Committee, said that the website aimed at improving the efficiency of trade promotion activities, and providing, as well as updating information, about Tra Vinh’s specialties. The local enterprises would be able to advertise products and seek partners, while consumers would have a trustworthy place to choose high-quality goods, Hoang said. So far, 15 firms have registered to do business on the website to promote 50 specialities. Enterprises can apply to be the website’s member for free. Director of the provincial Department of Industry and Trade Tran Quoc Tuan said that local firms had not been interested in e-commerce, which is seen by the fact that only 250 among 1,900 enterprises in the province have their own websites. The department would step-by-step complete, upgrade and integrate more supporting functions to facilitate purchasing processes in a safe, convenient and time-saving manner, Tuan added.  Indonesia told to invest in Viet Nam to boost trade      Trade Minister Enggartiasto "Enggar" Lukita has urged Indonesian businesspeople to cooperate with Viet Nam to boost trade and investment, instead of competing with the country. The cooperation includes investing in Viet Nam to sell more products to countries that Vietnam has free trade agreements (FTA) with, said the ministry at the sixth Indonesia-Viet Nam Joint Commission on Economics, Scientific and Technological Cooperation (JC-ESTC) in Ha Noi over the weekend. “We need to invest in Viet Nam not only because it has 93.3 million people [third biggest country in terms of population in ASEAN], but also because of the other countries that have bilateral FTAs with Viet Nam,” he said in a press release. Some Indonesian firms run businesses in Viet Nam’s property, cement and coal sectors while Vietnamese firms are interested in Indonesia’s coal industry. Indonesia has seen a trade deficit with Viet Nam from 2012 to 2016 with the deepest deficit of US$966.5 million in 2014 before easing to $182.6 million, last year. Total trade reached $6.2 billion last year, with Indonesia exporting $3 billion, dominated by copper, pepper, ground fruits, coconuts, coal, palm oil and its products. In the first five months this year, nevertheless, Indonesia has managed to book a trade surplus of $5.1 million. Co Chien IZ to be built for $53m      The People’s Committee of the southern province of Tra Vinh has granted a licence to the Dong Do Southern Construction and Investment Joint Stock Company to build the Co Chien Industrial Zone. Located in Cang Long District’s Dai Phuoc Commune, the zone covers an area of 200ha and will be constructed at the cost of VND1.2 trillion (US$53 million). It is expected to create jobs for locals, attract more foreign investment and contribute to the province’s socio-economic development when it comes into operation by 2019. Naticorp signs condotel project agreement with Thai firm      Nam Tien Lao Cai Corporation (Naticorp) and Thailand’s InVision Hospitality signed a management agreement for the Scenia Bay condotel project in Nha Trang City on Tuesday. The Thai company will be responsible for all the operations of the project when it becomes operational in 2020. Located on Pham Van Dong Street in Nha Trang Beach City, the five-star condotel is built on a total area of 7,666sq.m. It has 40 floors with 700 condos for sale and some 270 hotel rooms. The project is on prime location with the main side adjacent to Nha Trang beach, besides having easy access to the city’s beautiful landscapes, such as Hon Mun, Hon Tam, Ninh Van Bay, Po Nagar Cham Tower, Hon Chong, Dam Market and Turtle Island. “Scenia Bay is the first project marking the company’s foray into the hospitality sector, after a chain of residential projects in Lao Cai,” Cao Thi Thu Hien, CEO of Nam Tien Lao Cai Corp, said. Hien expects Scenia Bay to become an attractive resort property in the Nha Trang market. Headquartered in northern Lao Cai City, and with over 20 years of operation, Nam Tien Lao Cai Corp has expanded its businesses from infrastructure construction and hydro-power plants to chemicals and real estate sectors with an annual turnover of VND1.2 trillion (US$53 million). With a portfolio of 13 properties under management in Thailand, Malaysia and Viet Nam, InVision Hospitality provides strategy and management for new or existing hospitality projects throughout Southeast Asia. It is managing five properties in Viet Nam, including Mai House Saigon, Mai House Hoi An Beach, GLOW Ma Belle Da Nang, GLOW Premier Nha Trang and Montgomerie Links Da Nang.  Minh Phú Seafood sees profit up 34 times Minh Phú Seafood Corporation (MPC) recorded a post-tax profit of VNĐ101.4 billion (US$4.54 million) in the second quarter of this year, 34 times higher than the same period last year and the highest level in the last eight quarters, online newspaper Infonet.vn reported. During the reviewed period, MPC’s net revenue reached VNĐ3.6 trillion, up 37.3 per cent year-on-year. The company’s cost of goods sold (COGS) on net revenue dropped sharply from nearly 93 per cent to 89 per cent, bringing gross profit to VNĐ398.2 billion, double the same period last year. Thanks to a 26.4 per cent decrease in loan interest, financial expenses were lower than the same period last year. Corporate governance cost also declined sharply by 41 per cent to over VNĐ40 billion. Sales costs increased by 29 per cent to nearly VNĐ182 billion, resulting in a pre-tax profit of VNĐ134.4 billion. Earning per share (EPS) reached VNĐ1,480, much higher than last year’s figure of VNĐ469. In the first six months of 2017, MPC’s net revenue reached VNĐ6.34 billion, up 34.5 per cent year-on-year while its post-tax profit totalled VNĐ144 billion, seven times higher than the same period last year. EPS reached VNĐ2,104. In 2017, MPC targets consolidated net profit of VNĐ841.28 billion. With the results achieved in the second quarter, the company has just completed about 17 per cent of the target. At the end of Q2, MPC’s total assets reached VNĐ8.3 trillion, of which inventories accounted for nearly VNĐ4.4 trillion. The company’s liabilities at the end of Q2 amounted to VNĐ5.9 trillion, accounting for 71 per cent of total capital. Of the estimated amount, short-term loans touched VNĐ3.3 trillion, up nearly two times compared to the beginning of this year, while long-term loans were over VNĐ2 trillion, down 41.3 per cent from the beginning of this year. MPC recently approved the plan of its subsidiary Minh Phú Import and Export of Food Co Ltd to reduce its charter capital from a registered VNĐ40.8 billion down to the actual capital of VNĐ2 billion. In addition, the Board of Directors approved additional investment into two shrimp farming areas for MPC’s shrimp farming development strategy. Accordingly, it will add some VNĐ70 billion to increase charter capital of Minh Phú - KG Seafood Co Ltd to VNĐ220 billion, investing more VNĐ30 billion in Minh Phú–Lộc An Aquaculture Co to raise its chartered capital to VNĐ180 billion. US beef exports to Vietnam double in first half of 2017 US beef exports to ASEAN capped off a very strong first half of the year, according to statistics released by the US Department of Agriculture and compiled by the US Meat Export Federation. For the six months January through June 2017, US global beef exports were up 12% in volume to 606,876 metric tons and 15% in value to US$3.35 billion compared to the first half of 2016. Led by a doubling of exports to Vietnam and Indonesia and strong demand in the Philippines, US beef exports to the ASEAN region increased 85% in volume to 20,532 metric tons and 61% in value to US$99 million. Cashew nut exports rise high in value Cashew nut exports hit 188,034 tons with a value of US$1.85 billion in the first seven months of this year, down 1% in volume but up 25.2% in value against the same period last year, according to the General Department of Vietnam Customs. Vietnam businesses shipped 36,804 tons of cashew nut to get US$380.4 million in July, up 6.6% in volume and 7.4% in value compared to June. The average export price in seven months rose 27% to US$9,842 per ton.  The US was the largest importer of Vietnam cashew nut with US$679.67 million, accounting for 36.7% of Vietnam’s total export value (up 37.7%), followed by the Netherlands with US$288.02 million, making up 15.6% (up 43,9%). Cashew exports to almost all markets saw a growth in seven months, such as Belgium (up 95.3% to US$11.66 million), Russia (up 65.8% to US$30.18 million) and India (up 39.8% to US$22.19 million). However, exports to Pakistan and Greece suffered a deep decline of 54% and 53% respectively. Although the export price hit a record high and tends to rise in the coming time, the cashew nut industry of Vietnam still depends on imported raw materials. In 7 months, cashew nut imports jumped 56.9% in volume to 891,977 tons and 101.7% in value to US$1.72 billion. On the domestic market, the price of raw cashew nut also hit a record high of VND50,000 per kilo. Southern lottery companies bow down to Vietlott Giving in to the dominance of Vietnam Lottery Company (Vietlott), traditional lottery companies in Ha Nam and Thua Thien-Hue provinces decided to co-operate with Vietlott instead of seeking a confrontation. Nguyen Thanh Dam, deputy general director of Vietlott, told Vnexpress that they have signed contracts with lottery companies in Ha Nam and Thua Thien-Hue provinces. Accordingly, along with traditional lottery business, these companies will become Vietlott’s agents to take the bonus. According to rumours, Capital Lottery Company also intends to co-operate with Vietlott to improve its business results. Capital Lottery Company lost its shine since Vietlott’s Mega 6/45 has appeared. The company also launched a computerised lottery to compete with Vietlott, but failed because Vietlott has been offering much higher jackpot prizes. Besides, the company also saw a decrease in profit. Notably, in 2016, Capital Lottery earned VND728 billion ($32.04 million) in revenue, however its profit was only over VND3 billion ($132,045), equalling a quarter of 2014. In 2017, the company expected to earn VND3.6 billion ($158,454) in profit only. In its report related to its development strategy by 2020, Capital Lottery set the target to prevent decrease in revenue and profit. In the race to gain market share, traditional lottery companies in the South were forced to raise their maximum prize to VND2 billion ($88,260) since January 1 from the previous VND1.5 billion ($66,195) in an effort to compete with Vietlott. In early December, Vietlott officially expanded to Hanoi with 150 agents, hoping to replicate its success of the past few months in the south. In January 2016, Vietlott signed an exclusive 18-year contract with Malaysian conglomerate Berjaya to launch computerised lottery games. The Mega 6/45 is the company's first foray into the market. Players select six numbers from 1 to 45 and win a jackpot that starts at VND12 billion ($538,000) by matching all six numbers from the draw. Each ticket costs VND10,000 ($0.40). The prize will keep growing until there is a winner. The odds of winning have been estimated at around one to 8.14 million, lower than the odds of being struck by lightning. In 2016, Vietlott reported a revenue of VND1.6 trillion ($70.6 million). This is the highest annual revenue since the company’s establishment in 2011. Marketing forum proffers online action for SMEs With the aim of strengthening awareness of online marketing channels and enhancing the global market share of Vietnamese enterprises, Marketing Forum 2017 (VOMF 2017), organised by the Vietnam E-commerce Association (VECOM), are taking place in both Hanoi and Ho Chi Minh City, the country’s two e-commerce centres. The event was held in Ho Chi Minh today and will take place in Hanoi on August 17, with the main topic of “Outstanding marketing trends.” The forum will focus on affiliate marketing trends and search engine-, programmatic-, multichannel-, mobile-, social-, and content marketing. The forum is organised to support domestic enterprises by promoting their capacities and products via effective online marketing channels. The event has drawn the participation of over 1,000 enterprises and organisations nationwide. Many recognised spokespersons from leading organisations and businesses in the industry have participated in the forum to share their expertise and guidelines in this field. Vietnam e-Business Index 2017 reported by VECOM indicated that social networks surpassed search engines to become the most popular online advertising medium in 2016, as they were used by 47 per cent of businesses, while search engines and emails were used by 41 and 36 per cent, respectively. In general, social networks were not only the most used channel but were also considered the most effective one. In addition, 46 per cent of businesses said social network advertising is highly effective, while 44 per cent are confident in search engines.  Nguyen Thanh Hung, chairman of VECOM, said at the event in Ho Chi Minh City, “The most effective way to do online business is to have a website and social media presence that work together to spread your message and foster relationships with the broadest range of target customers. Once your website and social media pages run together, you can leverage benefits across both. Your website can be the epicentre of all your brand communication, while your social media page can be used to engage and redirect customers back to your website.” According to a business survey released by market research company RedShift Research and GoDaddy, the world’s largest domain name registrar, 59 per cent of businesses that own a website said their business grew since appearing online. Another survey on online consumers also showed that 67 per cent of consumers shopped online on websites or mobile applications after checking reviews and comments from social media. Unlike a social media page, a website reflects a brand in its design, user interface, and messaging. Thus, small and medium-sized enterprises (SMEs) can use a combination of both to connect with their target audience in order to stand out amidst the increasingly competitive environment. Hoc Nguyen, director of P.A Vietnam, the largest domain provider in Vietnam, revealed, “Choosing the right domain name is the first step towards building a successful and credible online presence. There is a level of credibility awarded to the businesses using trusted domain extensions. For this reason, we advise businesses to choose .com for their websites because it is the trusted global standard for doing business online.” Founded on June 25, 2007, VECOM is a non-governmental and non-profit organisation. VECOM’s members include corporations, organisations, and individuals who directly work in the e-commerce industry. VECOM operates all over Vietnam on a voluntary basis, for the purpose of gathering, uniting, cooperating, supporting, and protecting all members to develop e-commerce in Vietnam.  Tech Expo 2017 matches IT talent and recruiters Tech Expo 2017, a technology recruitment event held by VietnamWorks, a division of Navigos Group Vietnam, was held last week in Hanoi, attracting nearly 1,000 information technology (IT) specialists and 14 leading IT recruiters in Vietnam. The organizers have designed a special mobile application, allowing candidates to instantly apply for the best jobs displayed on the Hot Job Board and at the same time discover the company’s culture through integrated technological channels. At recruiter booths, IT candidates were interviewed directly by recruiters then discussed the job description and the development orientation of the company. They also had the chance to experience the company’s corporate culture. To attract talent to their booths, companies organized games with interesting gifts or showed off their latest technologies. Moreover, IT candidates received helpful advice from experienced recruitment experts at the Navigos Group on how to impress employers with their CVs. One of the recruitment experts said: “When we met candidates at the Tech Expo this year, we saw that many have not highlighted their career objectives. They don’t know how to express their strengths regarding skills and achievements.” Concerns about IT human resources in Industry 4.0 For IT staff, the fourth industrial revolution (Industry 4.0) offers a host of career opportunities in new fields. Demand for positions relating to Artificial Intelligence, Data Science, and Embedded Programming will constantly increase. Regarding the quality of Vietnamese IT candidates, speakers at Tech Expo agreed that Vietnam has an advantage in large numbers of IT staff, most of whom are young, hardworking, and eager to explore new things. In particular, Vietnamese IT staff are good at mathematical thinking, which is advantageous for Data Science. However, to quickly adapt to Industry 4.0, Vietnamese IT candidates first need to improve their English skills to remain up to date with the latest technology from around the world. In addition, as the IT job market is constantly changing and training programs struggle to stay relevant, IT candidates are required to be proactive in developing their own capacity. Mr. Le Hoang Dung, CEO of 5S Vietnam, one of the speakers, said: “In my opinion, Industry 4.0 and the Internet of Things (IoT) are very good opportunities for startup ideas. You should take advantage of this trend to bring success for yourself.” Another speaker, Mr. Le Ngoc Tuan, IoT Product Manager, Technology Division, at FPT Corporation, told IT graduates: “To succeed, you need to learn new knowledge such as IoT and Data Science and should practice with Open Source System as well as participate in technology events to gain new knowledge.” Mr. Gaku Echizenya, Chairman and CEO of the Navigos Group, said: “At the tech expo, participants had the chance to explore a company’s culture before applying for a position. Moreover, when attending tech seminars, they learn new knowledge and skills, which will be helpful in future development. This demonstrates Navigos Group’s long-term vision of ‘success after joining’, in which we help candidates become successful and engaged and committed to their new company.” Hi-tech agriculture enterprises face difficulties in borrowing Although the Government approved a credit package worth VND100 trillion (US$4.4 billion) early this year to develop high-tech agriculture, farmers and agricultural enterprises without consumption markets for their products have found it difficult to take out loans from banks, said the State Bank of Vietnam (SBV). Nguyen Thi Hong, deputy governor of the central bank, said at a regular meeting of the Government early this month that banks would face risks when offering loans to individuals and enterprises involved in high-tech agriculture if outlets for farm produce are not secured. The reason is that households producing and trading in hi-tech agricultural products have little information about local and export markets. Hi-tech agriculture development loans from banks have not been supported by the State budget. Thus, only individuals and enterprises with feasible business projects and stable consumption markets can borrow money. To help enterprises sell their products, the Ministries of Industry-Trade and Agriculture-Rural Development have to assess and forecast the market demand for hi-tech farm produce, said the SBV. Besides, the two ministries should implement trade promotion programs and help enterprises penetrate potential overseas markets. The State Bank pledged to direct commercial banks to offer loans appropriately and provide additional capital to meet the demand of enterprises. The Ministry of Agriculture and Rural Development on August 14 organized a hi-tech agriculture development conference in Lam Dong Province, one of the most effective hi-tech agriculture provinces in Vietnam. Each year, the province fetches VND500 million from a hectare of vegetables and VND1.2 billion from a hectare of flowers. Long Thanh airport project gets VND5 trillion for site clearance The Government has agreed to allocate in advance VND5 trillion (about US$220 million) as approved by the National Assembly for site clearance, compensation and resettlement in the Long Thanh International Airport project in the southern province of Dong Nai. According to Document No. 1165 signed last Thursday by Deputy Prime Minister Trinh Dinh Dung, the central Government assigned Dong Nai authorities to work with the Ministry of Transport and related agencies to conduct feasibility studies for resettlement and site clearance compensation of the Long Thanh airport project. The Ministry of Planning and Investment was asked to coordinate with related ministries and agencies to appraise these feasibility studies and submit the results to the Prime Minister to report to the 14th National Assembly at its fourth meeting. The Government has agreed to allocate VND5 trillion from the medium-term public investment plan for the 2016-2020 period approved earlier by the National Assembly for these components, and assigned the People’s Committee of Dong Nai Province to manage and use this amount of capital in accordance with current regulations. The Ministry of Natural Resources and Environment was assigned to appraise policies and a legal framework for the project’s resettlement and site clearance compensation and report to the Prime Minister before August 15, 2017. According to Dong Nai government, 5,000 hectares of land needs to be cleared to make room for the project, with 4,730 households and 26 organizations to be relocated. About 70% of 15,000 affected people are farmers and the rest are rubber workers and those working for other sectors. Total resettlement and site clearance cost for the project is estimated at VND23 trillion (over US$1 billion). The NA has allowed the project investor to use VND5 trillion from G-bond sales in the 2017-2020 period for these components, while it is still unknown where to secure the remaining VND18 trillion. In a report sent to the NA, the Ministry of Planning and Investment said it will work with the Ministry of Finance and the Ministry of Transport to consider using backup funds for medium-term public investment to finance the project. However, according to the ministry, it would be hard to mobilize VND18 trillion. In related news, the Prime Minister has agreed to hire foreign consultants to conduct surveys and evaluate possibilities of expanding the Tan Son Nhat International Airport in HCMC towards both north and south. As the project’s investor, the Ministry of Transport will select consultants and submit expansion options to the Prime Minister in December 2017. Sales of nutritional products for elderly citizens may fare well The number of people over 50 years old is forecast to account for around 22% of the nation’s population by 2020. This age group is regarded as a potential niche market for the local nutrition sector. Market research firm Kantar Worldpanel Vietnam says in its report on the potential for the nutritional market released on August 14 that data of the General Statistics Office of Vietnam and the United States Census Bureau shows the number of residents over 50 years old in Vietnam is predicted to reach 22 million by 2020, a rise of four million over 2015. The situation opens ample opportunity for local companies to produce food and beverages that can address the nutritional needs of customers in this age group. Kantar Worldpanel says nutritious drinks for people aged 50 or higher account for about 18% of all non-alcoholic beverages for this age group. The figure is significantly lower than that for the age groups of 4-6 at 80.6%, 7-13 at 59.7% and 14-19 at 30.1%. According to the report, manufacturers of products for children aged under 13 are faced with tough competition among brands and new product models, as the number of children in this age group is forecast to see a slight decrease by 0.4 million to 22.3 million by 2020 compared to 2015. More importantly, there has been a gradual improvement in the intake of nutritious food among children. Households, especially those from rural areas, have shown more concerns over the health of their kids, thereby spending more money on dairy products and nutritional beverages for them. Therefore, Kantar Worldpanel notes in its report that producers should pay special attention to the development of products which suit individual needs. In addition, they should notice a series of other issues. Firstly, consumers suspect information on news, advertising, promotion and word-of-mouth channels. Hence, this inclines them to seek product information by themselves before purchasing. Besides, consumers have strong reactions over food scandals in both urban and rural areas, as they update news more frequently. Second, consumers are willing to pay more money on natural products that are good for their health. Third, the demand for nutritional balance is to control height and weight. That kids in rural areas are provided with more dairy products will help increase their sales of pre-made powdered milk, barley water, and soft cakes. Meanwhile, adults in urban areas give the priority over products with little or no sugar and fat like sugar-free yogurt and sugar-free milk. Finally, consumers look for products which provide more nutrients such as milk with calcium supplement, and ginseng. Kantar Worldpanel says the nutritional market which has grown by double-digit rates in the past five years is forecast to reach US$6 billion by 2020 from US$4.1 billion in 2016. Startup Exchange 2017 to be launched next week The Startup Exchange 2017 will be held at the Riverside Palace in HCMC’s District 4 on August 26 with the participation of nearly 120 local and foreign startups. As part of the Startup Day, an annual event held by the Business Startup Support Center (BSSC), there will be a playground for startups to introduce their products to customers, present their ideas to convince investors to pour money in their businesses and sell their stories to the media.  While the previous Startup Exchanges featured mostly contestants of the Startup Wheel contests, this year’s event has lured a variety of entrepreneurs. Nguyen Thi Dieu Hang, deputy director of BSSC, said beside 60 semi-finalists of the Startup Wheel 2017, the event will be attended by nearly 60 other startups nationwide and three foreign startups, with one from the Philippines and two from South Korea. Startup Exchange 2017 will be held simultaneously with the semi-final and final rounds of the Startup Wheel 2017 contest. In the morning, 60 semi-finalists will present their products and ideas to the jury, and top 10 contestants will go to the final in the afternoon. The first, second and third prize winners will receive VND200 million (US$8,800), VND70 million and VND40 million respectively. Online marketing forum expected to feature new solutions Vietnam Online Marketing Forum (VOMF) 2017 scheduled to commence today will provide effective marketing solutions for enterprises doing online business given the forum’s tight agenda on such a topic. The forum held by the Vietnam E-Commerce Association (VECOM) in HCMC today and in Hanoi City on August 17 is aimed at introducing new online marketing trends in Vietnam as well as in the world. The event will be attended by experts in online marketing, e-commerce and market research. Experts will present their experiences in online marketing and introduce marketing support services. The forum will also offer opportunities for enterprises to introduce their products through promotion programs and seek cooperation with potential partners. VECOM Chairman Nguyen Thanh Hung said VOMF 2017 will help e-commerce enterprises to adopt appropriate marketing solutions and enhance the effectiveness of marketing activities. Market research and marketing experts will also speak about market data and discuss trends of customers’ online demand, automatic marketing solutions and solutions for optimization of online orders. The event will feature five forums in which experts will discuss directly with online traders about customers’ demand, marketing solutions, online brand building, advertising activities and connection of online partners for market expansion. VOMF 2017 is expected to attract 2,000 e-commerce enterprises and more than 50 online marketing service suppliers. A survey of VECOM shows that 67% of individual consumers use mobile apps for online shopping after reading comments on social media. The second factor affecting online consumers’ purchases is the introduction of friends and relatives (47%) while advertisements on media channels rank third with 33% having impacts on consumers’ decisions. VOMF 2017 will be held from 8:00 a.m. to 17:00 p.m. at Capella Parkview on Dang Van Sam Street, Phu Nhuan District, HCMC. Visitors can access the websites http://hcm.vomf.vn/ (HCMC) and http://vomf.vn (Hanoi) for more information. HSBC: Equitization not a solution for fiscal deficit The equitization of State-owned enterprises (SOEs) alone is not a short-term solution to reduce the Government’s fiscal deficit but could be a reliable source of funding through continued reforms, said HSBC Bank. According to a report released on August 14, HSBC said the Government has shown a renewed focus on equitizing SOEs following the leadership transition in April 2016. This heightened urgency is partly driven by the country’s rising public debt level, which is now close to reaching the State-mandated limit of 65% of gross domestic product (GDP). Vietnam’s policymakers, in recent statements, have framed the sale of SOEs as a means to both increase fiscal revenues and reduce government expenditures. This, in itself, is a positive direction and deserves full recognition. However, this is not an easy task given the remaining challenges for SOE reforms and accelerating government expenditures, it commented. The challenges to SOE reform include increasing share allocations to private investors and incentivizing regional municipalities and SOEs to speed up participation in the equitization process. HSBC believed that SOE equitization alone is not a short-term solution to reducing the Government’s fiscal deficit but could be a reliable source of funding through continued reforms. Meeting the Government’s 3.5% deficit target for 2017, however, would have to come on the back of reduced government expenditures. “The fiscal deficit has been growing consistently in recent years. According to our estimates and assuming the country meets its 6.7% GDP growth target for 2017 (we forecast 6%), Vietnam’s deficit would have to be below its 2012 levels in nominal terms to achieve the Government’s target,” it said in the report. Besides, HSBC believed additional reform measures remain crucial to fully realizing the Government’s equitization agenda. For instance, SOE reforms have primarily focused on targeting the sale of minority stakes, while the Government retains majority control. This has left strategic investors with limited ability to reshape Vietnamese companies, improve corporate governance, and make the companies globally competitive, thereby deterring private investors from fully participating in the process. According to Deputy Prime Minister Vuong Dinh Hue, around 97% of SOEs have already gone public to date, but only 8% of the equitized stocks have been sold to private investors. Moreover, SOEs and municipalities themselves have been slow to participate in the equitization process. Slow equitzation has also meant that Vietnam’s earnings from SOE divestments have been lower than expected. Media reports suggest that equitization and divestments netted nearly US$3.4 billion for the state budget from 2011 to 2015, which is low for a five-year period, especially when compared to total SOE assets of roughly US$130 billion. Things seem to be turning around slightly, however. As of the second quarter of 2017, Vietnam earned VND11.6 trillion (US$504 million) from divestments, which is an increase of 314% from the previous year. “Lastly, meeting the 3.5% fiscal deficit target would have to be part and parcel with drastically reduced government expenditures. The budget deficit has grown consistently in recent years and, from our estimates, would have to decline to around VND168 trillion to meet the target,” HSBC added. Questions abound over BOT projects’ cash flows A report delivered on August 14 by a supervision team of the National Assembly shows the capital costs borne by owners of many build-operate-transfer (BOT) and build-transfer (BT) projects are much higher than their earnings, but droves of investors have still rushed for such projects. Questions hence abound over the transparency in the operations of these projects. According to the report delivered at the NA Standing Committee in Hanoi on August 14, bank loans taken out by these investors carry interest sums exceeding the reported revenues from these projects, but investors are still happy.  Loans used to finance build-operate-transfer (BOT) road projects actually carry higher interest rates than the profits their investors earn a year, the supervision team said in its report. The report has been conducted to look into legal compliance in the investment in and operation of traffic infrastructure in the BOT format. In particular, some regulations on interest rates, for example, are not in line with the actual situation which may cause losses for investors. The interest rates for BOT and BT investors are checked at a suitable level to help them avoid an excessive financial burden, but in reality, many investors have taken out loans at preventively high interest rates. However, the number of investors who sign up for BOT projects has been on the rise. Specially, investors borrowed at an average interest rate of 15% a year in the 2011-2013 period, much higher than the prescribed ceiling. The actual capital cost amounted to 18.2% a year in 2011, some 15.4% in 2012, and 12% in 2013, all exceeding the ceiling rates allowed for such projects as prescribed by authorities with an aim to secure reasonable profit for investors. However, the rates of return in some projects in fact are even lower than their annual loan rates. For instance, the profit ratio of investors at the Phuoc Tuong and Phu Gia tunnels on National Highway 1 in Thua Thien-Hue Province, and Co Chien Bridge is 11.5% per year. Such a conflict points to the fact that revenues and profits earned by investors have not been reported in a transparent manner. Earlier inspections by authorities have pointed out that real revenues and profits at BOT projects were far higher than reported. Such a situation has prompted authorities to force many BOT investors to cut short the periods of toll collection earlier approved for them to recoup their investments. Profits of investors that are stated in the feasibility studies for their projects are generally much lower than the inspected results announced by competent State agencies. As inspections into investors’ toll collections are not duly conducted, control procedures for their revenues are not effective. Also according to the report, many investors who have signed up for BOT projects have yet to meet the requirements for equity ratios. Regulations specify that a BOT investor must have equity equivalent to 15% of a project’s cost, and 10% for large-scale projects worth more than VND1,500 billion, but many investors failing these thresholds have still been given the green light to carry out these projects. Meanwhile, for BT projects wherein the investors are allocated areas of land in exchange for the infrastructure works they develop, transparency has also not been guaranteed. Notably, according to Decree 15/2015, the Government will create conditions for BT investors to implement other profit-generating projects or offer them plots of land under their build-transfer (BT) agreements. Such investors can occupy good plots of land without having to go through land auctions, while the land price in most cases is lower than the market level, giving the investors good profit margins. VNA/VNS/VOV/SGT/SGGP/TT/TN/Dantri/VNEVET