BUSINESS IN BRIEF 7/11 Quang Ninh needs special administrative-economic unit   The north-eastern border province of Quang Ninh needs a special administrative-economic unit with specific preferential mechanism to make the best use of local advantages, and attract investment, high technology and new advanced management to build a high-growth region and speed up economic restructuring and development. Deputy head of the management board of Quang Ninh economic zone Hoang Trung Kien said the building of Van Don special administrative-economic unit is suitable with the global development trend. So far, Van Don has attracted 51 trillion VND (2.24 billion USD) from big investors in various fields such as transport infrastructure, tourism and services, he noted. Sun Group has been selected to be Quang Ninh’s strategic investor in socio-economic development and building Van Don into a “special economic region”, he said, adding that the group has poured investment in a number of major projects, including the Van Don international airport, which was constructed under the build-operation-transfer (BOT) form on an area of around 400 hectares in Doan Ket commune. The nearly two-billion-USD project is expected to be put into operation in mid-2018. The group has also been investing in building a hi-end resort complex in Van Don with a casino, a 2,000-room five-star hotel, a conference hall, and a trade centre. Other big investors, including Viglacera corporation, is investing in a hi-end resort area of Quan Lan island with 150 rooms, while CEO Group and FLC Group are nurturing ambitious plans in Van Don district. Vice Chairman of the provincial People’s Committee Nguyen Van Thanh said Quang Ninh is confident with the Van Don special administrative-economic unit project, adding that local preferential policies are drawing much attention from investors. Meanwhile, Vice Chairman of the People’s Committee of Van Don district To Van Hai said Van Don boasts favourable conditions to build a special administrative-economic unit, including its strategic political, economic and geographical position as lying along the strategic transit route from East Asia to Southeast Asia and ASEAN-China, a rapid growth area and one of the most dynamic development centers in the world. Additionally, the transport infrastructure is being improved, notably the Hanoi-Hai Phong-Ha Long-Van Don-Mong Cai expressway, the Van Don international airport, and the Hon Net-Con Ong seaport which is 21 meters deep and capable of receiving 150,000 DWT ships. The Government has decided to initially develop three special administrative-economic units - Van Don in northern Quang Ninh province, Bac Van Phong in central Khanh Hoa and Phu Quoc in southern Kien Giang. The Van Don special administrative-economic unit project defines key industries of tourism-service, industry and agriculture. In the first phrase (2018-2022), the project will focus on casino entertainment tourism, seaport, aviation, trade, international shopping centers, innovation technology, and start-up centers, while the second phrase (2023-2026) will feature parks, fisheries, aquatic processing, logistics services, education and training, financial services, and healthcare. The third phrase (2027-2030) will aim at biological technology, green technology, and hi-tech agriculture. Special administrative-economic units are magnet for investment, high technology and advanced management mode for the formation of a high growth area that generates more resources and accelerates local economic restructuring and development. Japanese firms expand investment in Vietnam Vietnam’s improving investment climate has made the country become an alluring destination for Japanese investors who commit to furthering investment in the Southeast Asian nation in the future. Some 3,600 Japanese investment projects landed in Vietnam by the end of September with total registered capital of 46.1 billion USD. Japanese investment alone accounted for 14 percent and 14.8 percent of the country’s total projects and registered capital, respectively. Giant investors include Honda, Toyota, Canon, Mitsubishi, Yamaha, Sumitomo and AEON. The groups have enjoyed robust operation and business results and they are increasingly expanding investment in Vietnam.   Honda Group is an example, from one factory in Vinh Phuc province, the group has set up three motorbike manufacturing factories and one automobile manufacturing plant. Meanwhile, Canon Group established two new plants at Que Vo and Tien Son industrial parks in Bac Ninh province following the first plant in Thang Long industrial zone. Despite attracting attention from Japanese enterprises, Vietnamese economic experts noted that the undeveloped support industry remains a bottleneck in the country’s business environment. They said that Canon Vietnam has to pay 40 million USD to import spare parts for production, resulting in time and money consuming of the enterprise. Along with promoting investment in support industry, the Foreign Investment Agency under the Ministry of Investment will join hands with Japan to carry out the industrialisation plan until 2020 with vision towards 2030 in the framework of the Vietnam-Japan Joint Initiative. Accordingly, they will work to put forth cooperation in six branches: electronics, agricultural machineries, agro-fishery processing, ship building, environment and energy saving, and automobile spare parts.- Dong Nai: 1.7 billion USD in trade surplus in ten months The southern province of Dong Nai enjoyed a trade surplus of 1.7 billion USD in the January-October period, according to the provincial statistic office. The country’s exports in the first ten months of this year totalled at over 13.8 billion USD, up 11.3 percent from the same time last year. Of the figure, 11.9 billion USD was contributed by the foreign-invested sector, over 1.7 billion USD by the non-State economic sector and 170 million USD by the State economic sector. Groups of products seeing high export values comprised footwear (262 million USD, up 25 percent), garment (164 million USD, up 8.2 percent), fiber (121 million USD, up 6.18 percent), wood products (115 million USD, up 8.8 percent) and machineries and spare parts (103 million USD, up 4.1 percent). Meanwhile, the province’s import turnover was over 12.1 billion USD, a year-on-year increase of 12.2 percent. The State economic sector contributed 87 million USD, while the non-State economic sector and the foreign-invested sector made up 1.56 billion USD and 10.4 billion USD, respectively. Items seeing high import turnover were chemicals (450 million USD, up 12.2 percent), plastic materials (981 million USD, up 17.4 percent) and computers and electronic equipment (over 456 million USD, up 25.3 percent). Deputy PM backs Belgian firms expanding investment in VN     Deputy Prime Minister Vuong Dinh Hue received Mayor of the Belgian city of Ostend Johan Vande Lanotte in Ha Noi on Thursday. At the meeting, the Deputy PM said the Vietnamese Government is committed to building a transparent and open business climate to facilitate investment. He stressed Viet Nam supports Belgian investors to operate in Viet Nam, carry out market research, and invest in local green energy projects. Viet Nam expects European and Belgian enterprises to help accelerate the signing and ratification of the Viet Nam–EU free trade agreement for mutual benefits, he added. For his part, Johan Vande Lanotte, former Belgian Deputy Prime Minister, said Belgian businesses want to expand their operations in Viet Nam and highlighted his support towards the ratification and implementation of the Viet Nam–EU FTA. Thua Thien-Hue attracts $96m investment     The central province of Thua Thien-Hue has attracted 11 more projects with total registered capital of over VND2.18 trillion (US$96 million) during the first ten months of this year. So far, industrial parks (IPs) and economic zones (EZs) in the province have attracted a total of 147 projects with total registered capital of VND65.75 trillion. This includes 34 foreign-invested projects with total registered capital of $1.37 billion. Notable licensed projects include the Suoi Voi ecological tourist project, invested in by Hoa Lu-Hue Investment, Trading and Service Co Ltd, with registered capital of VND218.2 billion, spanning an area of 51.1ha. The other is a granite tile factory, owned by Vitto Phu Loc Company, with a capacity of 7.2 million sq.m of tile per year and registered capital of VND610.9 billion, spanning an area of 10ha. Of the total registered capital poured into the province in the first ten months of this year, capital worth VND2 trillion was disbursed. This figure for the whole year is estimated to reach VND2.6 trillion, equivalent to 74.3 per cent of the yearly plan. In the last two months of this year, the Management Boards of Thua Thien-Hue IPs and EZs will give licences to four more projects with total registered capital of VND6.5 trillion. They comprise the Dang Kim Long Thua Thien - Hue tourism service complex invested by Dang Kim Long Co Ltd, with registered capital of VND3.7 trillion; the expansion project of the Mediterranean Legend Resort owned by Vicoland Development & Construction Group JSC, with registered capital of VND1.8 trillion; the urban area and tourism project backed by Vinaconex’s Infrastructure Development and Investment Construction JSC, with registered capital of VND908 billion; and a project producing textile raw materials financed by Song Thien Long Co Ltd, with registered capital of VND37 billion. The Chan May – Lang Co Economic Zone in Thua Thien – Hue province has so far attracted 43 projects with total investment of nearly VND40 trillion. Among them is the second phase of the Laguna eco-tourism site, worth some $1.1 billion, developed by Singapore’s Banyan Tree Group and a consortium of others run by the Saigon Investment Group and the Viet Nam National Oil and Gas Group. Another is Chan May Port’s Wharf No 2 project backed by Chan May Port Joint Stock Company with registered capital of VND849 billion, spanning an area of 14ha. Construction of the wharf will begin in February 2018. In September 2018, Chan May Port’s Wharf No 3 will be set up by the Hao Hung Hue One Member Limited Liability Company. It is expected that by 2020, Chan May Port will have a total of three wharfs, enabling it to serve large cruises and accommodate vessels of up to 50,000 DWT (deadweight tonnage). Chan May Port is located between the two largest cities in the central region – Hue and Da Nang. The port also lies on the main sea route linking Singapore, the Philippines, Hong Kong (China) and Viet Nam. It is among 46 seaports in Southeast Asia selected by the Asia Cruise Association as a stopover for cruise ships. The port can now accommodate vessel of up to 30,000 DWT and cruise ships carrying 3,000-4,000 passengers each. In 2018, the Management Board of Chan May - Lang Co Economic Zone will strive to lure investment into 18 new projects in the fields of industry, tourism, infrastructure of industrial parks, non-tariff areas and urban areas, with total estimated capital of VND5 trillion. Thua Thien – Hue Province will manage to increase the occupancy rate of Chan May - Lang Co EZ to 32 per cent in 2018. In order to support businesses in attracting investment, the Management Board of Chan May - Lang Co EZ has focused on creating favourable conditions and removing difficulties and obstacles for investors in order to make sure that the projects are implemented on schedule. For large projects, the board has set up working groups, in co-operation with the investor, local People’s Committee and related departments and agencies to quickly resolve issues arising in site clearance. In 2017, together with the promotion of investment attraction, the Management Boards of Thua Thien-Hue EZs and IPs have repeatedly reviewed delayed projects to timely and resolutely handle cases of projects that show signs of inability to be implemented, and withdrawing investment licences if needed to re-allocate them to other potential investors. SHB posts $59.1m pre-tax profit in 9 months     Sai Gon-Ha Noi Commercial Joint Stock Bank (SHB) on Wednesday posted pre-tax profit of over VND1.33 trillion (US$59.1 million) in the first nine months of the year. This was an increase of 69 per cent from the same period last year. The bank said the high profit was due to its strong growth in services, especially bancassurance. SHB’s financial report revealed that its other important financial criteria saw high growth rate from the corresponding period last year and were expected to surpass the set target for 2017. Its total assets reached more than VND265.3 trillion, while capital mobilisation was VND212 trillion, meeting with 97.55 per cent of the whole year’s target. The results have helped the bank ensure liquidity, stability and sustainable growth. Its total outstanding loans were VND191.7 trillion, up 18 per cent from the beginning of the year. Loans were focused on sectors with less risk and prioritised by the Government, such as agriculture, export, processing, manufacturing and hi-tech industries. The bank’s chartered capital reached nearly VND11.2 trillion. The State Bank of Viet Nam (SBV) allowed SHB to increase its chartered capital to over VND12 trillion, which was approved at this year’s SHB shareholder meeting. SHB said it had targeted safe and sustainable development as its first priority. Its safe indexes have always met the central bank’s standards. Its Capital Adequacy Ratio reached 12.15 per cent, which was higher than SBV’s stipulation. SHB expanded its network this year to Ha Nam, Ha Tinh, Dak Lak, Binh Dinh and Tay Ninh provinces. The bank will also open a new representative office in Myanmar to increase its presence in Southeast Asia. The bank currently has 7,000 employees and 500 transaction points in Viet Nam, Laos and Cambodia to serve some four million customers. State treasury raises $133.3 million from bond auction     The State Treasury of Viet Nam on Wednesday raised VND3 trillion (US$133.3 million) from Government bond auctions, raising the total value of bond issuance to VND156.2 trillion since the beginning of the year. Four tenures were offered for auction at the Ha Noi Stock Exchange - five-year and 10-year-term bonds valued at VND1 trillion each, and seven-year and 30-year-term bonds valued at VND500 billion each. Of the four types, the auction of seven-year bonds drew the attention of 12 market members. The bonds were sold at the average yield rate of 4.85 per cent per year, slightly higher than the rate during the previous auction on October 25. Auction of 10-year and 30-year bonds attracted nine and seven market members, respectively. The bonds were sold at average yield rates of 5.42 per cent and 6.1 per cent per year, respectively. The rates were the same as those on October 25. In October, the Ha Noi Stock Exchange held 15 Government bond auctions, raising total VNĐ7.51 trillion for the State treasury – a monthly increase of 45.5 per cent. The annual yield rates were 4.5-4.65 per cent for five-year bonds, 4.83 per cent for seven-year bonds, 5.42-5.9 per cent for 10-year bonds and 6.2 per cent for 15-year bonds. Compared with September, five-year and seven-year bonds saw their yield rates down, while the figure for 10-year bonds was up. Also in October, the secondary Government bond market saw total outright trading volume reach over 952 million bonds, worth VND104.6 trillion – a monthly decrease of 10.9 per cent. Total bonds that were traded through repurchase agreement (repo) trading reached nearly 1.05 billion, worth VND106.1 trillion – an increase of 17.7 per cent month-on-month. Foreign investors purchased bonds worth a total of VND4.5 trillion through outright trading and bought none through repo trading. They sold more bonds worth more than VND4.8 trillion through outright trades and VND345 billion through repo trades. New regulation puts the squeeze on Vietnamese car importers While erecting technical barriers to hinder the flow of imported cars, Vietnam plans to cut taxes imposed on locally-made vehicles to boost its auto industry. Nguyen Dinh Thanh, the owner of a car dealership in Hanoi’s Long Bien District, is in danger of going out of business when a new decree regulating automobile imports takes effect next year. The decree stipulates that traders will only be permitted to import automobiles if they can provide valid vehicle registration certificates issued by authorities from the countries of origin. Original quality control certificates for each vehicle and letters of authorization regarding recalls of defective vehicles from the manufacturers will also be required, along with copies of quality assurance certificates provided by the countries of origin. “The requirements are too strict for car dealerships to meet,” Thanh said, worrying that the dealership that has fed his family and dozens of workers over the last 10 years will have to close. “We will import 40 more units before the decree takes effect (January 1, 2018). When they are sold out, maybe in two months, we will have to shut down the business.” Thanh is not the only car dealer concerned about the new regulations. Nguyen Tuan, director of auto dealership Thien Phuc An, said: “It is very difficult to get copies of quality assurance certificates for imported cars from foreign authorities. Only official distributors and subsidiaries of manufacturers in Vietnam can get them.” “Small traders who import cars through sub-agents or a third country are unable to do this,” he added. Another requirement that requires enterprises to have one car from each batch of imports technically accredited in Vietnam will cost importers more time and money, he said. “Businesses may have to spend weeks and up to VND100 million (US$4,340) to complete the accreditation procedure.” Under current regulations, only one certificate is required for each model of car, regardless of how many batches are imported. Pham Anh Tuan, head of the strategic planning department at Toyota Vietnam, said foreign authorities only provide quality assurance certificates for cars sold in their own countries, not for those that are exported. This is the same in Vietnam. In some countries, authorities do not issue these certificates at all. In the United States, for example, car manufacturers are responsible for quality control, and government agencies only take over after the assembly line, he said. Thanh urged the government to change the policy so that car dealerships can survive. He said it would be a waste of money if car dealers had to shut down after making huge investments. Thousands of employees would also lose their jobs, he added.     Zara and H&M to discount all items at Hanoi debut On November 8, on the first day of opening in Hanoi, both Zara and H&M will offer customers to join a complementary discount for all items at their stores in the capital. The discount programmes aim to celebrate their first stores in Hanoi, which are the companies' second in Vietnam. To celebrate this momentous event, the two fashion stores invite customers to join the discounts of up to 25 per cent at the Zara store and 20 per cent at the H&M store. These stores will showcase the latest menswear, women’s clothing, footwear, undergarment, and accessories product lines, as well as products for kids. Zara has spent several months preparing for the opening of its store in Hanoi's Vincom Center Ba Trieu, including employee recruitment and site selection. By now, all preparation work has been completed. Zara came to Vietnam last September with the first store at Vincom Dong Khoi, Ho Chi Minh City, covering 2,400 square metres. The store reportedly achieved sales of VND5.5 billion ($246,000) on its first day. Vietnam promises great opportunities for Zara as the majority of the population is in the young-to middle-aged bracket. The rapid urbanisation and globalisation in Vietnam has seen the number of consumers who care about international high-street fashion increase dramatically. Zara made the decision to enter the market because of the potential brought by more and more young Vietnamese pursuing fashion that is not readily available in the country. Established in Spain in 1975, Zara now has 2,213 stores strategically located in leading cities across 93 countries. The brand is popular thanks to its diversified products and reasonable prices. Currently, Zara Vietnam is in the top 5 of Zara’s highest revenue stores across the world. This is seen as strong motivation for other fashion brands, such as Uniqlo and Forever21, to approach the Vietnamese fashion market. Regarding H&M, situated in Vincom Mega Mall Royal City in Hanoi, its second store in Vietnam is planned to target the same market segment of affordable fashion as the first one in Ho Chi Minh City. The brand’s spokesperson shared that H&M is searching for new locations for store openings, without disclosing any further leads on the business plan. To boot, the brand promises to launch new designs at reasonable prices, which is likely a business strategy to compete with Zara’s store. Fredrik Famm, H&M’s country manager for Southeast Asia, said that the fashion brand was off for a great start at the debut in Ho Chi Minh City and is counting down to the opening in the capital. Fredrik also noted that H&M planned to deliver unique shopping experiences to fashionistas in Hanoi as well as customers supporting the brand by purchasing H&M products from overseas. H&M’s first store was opened in on September 9, 2017, situated in Vincom Dong Khoi, District 1, Ho Chi Minh City, a two-storey 2,200-sq.m flagship. According to the brand’s representative, the debut witnessed a record number of 4,000 customers queuing up for the opening and a total of 10,000 customers visiting on the opening day. With two stores in the two metropolitan cities, Vietnam is H&M’s sixty-eighth market and the fourth in the Southeast Asia. Retail sales and services reach almost $143 billion The total revenue from retail sales and services topped US$142.9 billion during the first 10 months of 2017, surging 10.7 per cent year-on-year, according to the General Statistics Office (GSO). Excluding inflation, the increase would be 9.4 per cent, reaching the highest rate this year, GSO said. It was the second consecutive month with a growth rate of more than 9 per cent. The growth showed that people’s purchasing power is improving and it is likely to remain stable this year, the office said. Travel services, and sale of wooden products and building materials showed the highest growth rate at 15.2 per cent and 13.5 per cent, respectively, in the first 10 months of this year. This was followed by retail sales in accommodation, restaurant and catering services with a growth rate of 12.5 per cent, revenue from food and foodstuffs showed a growth of 10.5 per cent, and education and cultural products of 9.9 per cent. Other products that showed growth in revenue included textile and garments at 9.8 per cent, home appliances at 8.8 per cent, and transport services at 8.4 per cent. Some localities recorded an encouraging growth in retail revenue including Bình Dương, Bình Phước, Lào Cai, Hà Nam, Long An and Quảng Ninh provinces. Meanwhile, Thái Bình, Thanh Hóa, Hải Phòng and HCM City gained high revenue from tourism services. Fruit park construction to be stopped The Ministry of Natural Resources and Environment on Wednesday requested Tiền Giang People’s Committee to order a halt on the construction of a fruit park. Moreover, the provincial People’s Committee and other related agencies have been directed to reevaluate the project’s impact on the environment, especially on drainage and flood prevention. Simultaneously, it is essential for functional forces to consider carefully governmental regulations on land, environment and water resources. At present, the local authority has asked Cái Bè District People’s Committee to make a report on the project’s environmental impact before considering it for approval. However, the content has not received any comment from State agencies on water resources since Tiền is an inter-provincial river. With some parts located on Tiền River, Tiền Giang Fruit Park Project aims to turn Cái Bè District into an ecotourism spot. The project is invested by Cái Bè District People’s Committee. Until now, the constructor has finished piling concrete poles along the project’s length and made embankments, preparing to use sand to backfill Tiền River. The park’s construction will have an impact on the flow of Tiền River, leading to landslides in surrounding and downstream areas. Vietnam Airlines offers discounted tickets to regional nations The national flag carrier Vietnam Airlines on November 1 launched a special promotional programme for flights from Vietnam to three Southeast Asian countries, namely Thailand, Singapore and Malaysia. Under the discount programme which will be valid until March 31, 2018, passengers could buy economy tickets for the routes from just 799,000 VND (35.18 USD). A second and third ticket bought at the same time will have further discounts of 30 percent and 50 percent, respectively. The tickets must have the same passenger’s name and journey. Vietnam Airlines is providing daily flights from Vietnam to Thailand, Malaysia and Singapore with 1-2 flights to Malaysia, five to Singapore and six to Thailand. New board to boost private sector A board comprising senior executives of major national corporations and industry associations has been launched with the aim of understanding and removing hurdles to a greater private sector role in the national economy. Announcing the board’s establishment on Monday night, Minister and chairman of the Government Office Mai Tien Dung said the “IV board” will function under the Prime Minister’s Advisory Council for Administrative Procedure Reform (ACAPR). The board will be chaired by Truong Gia Binh, president of Viet Nam Software and IT Services Association and deputy chairman of ACAPR. Dung, who is also chairman of ACAPR, said the board would be tasked with researching, advising and proposing reforms in mechanisms, policies and administrative procedures relating to private sector development. "The Prime Minister has very high expectations of the private sector," Dung said, adding that the IV Board had been set up to identify and remove several barriers to fulfilling its potential. "The establishment of the IV Board also demonstrates the Government’s determination to bring the spirit of the Party Central Committee’s Resolution 5 on Private Sector Development to life," Dung said. This would promote private sector development and enhance its role and position in the Vietnamese economy, he added. Dung also said that a ACAPR meeting on Monday discussed remaining tasks in 2017 and key tasks for 2018. The council determined that it would prioritise cutting formal and informal costs for businesses, he said. Accordingly, it would ask ministries and agencies to assess how many business procedures could be reduced towards minimising the costs of doing business. The council would also propose appropriate solutions for different business fields after strengthening its dialogue with enterprises and business associations, Dung said. IV Board Chairman Binh said that in accepting the new task, he and other board members felt a solemn sense of responsibility, keeping in mind the great expectations of the business community. "To do well, we know we have to overcome many difficulties. We will have to be very cautious, and not become an interest group," Binh said. He said the first principle that the IV Board had set out was to boost the private sector’s development with specific, practical and detailed proposals. “For example, if logistics costs are higher than in other countries, we will have to clarify how much higher it is, and how much of the cost is on the road and how much is related to storage," he said. The board will focus its attention on most-affected business areas and act to remove entangled bureaucratic procedures that are costly and take a lot of time. "We have promised the Prime Minister that we will increase private businesses’ GDP contribution from 40 per cent to 60 per cent in the future," Binh said. Binh also said the board would initiate long-term support for innovation and startups, take the initiative in dealing with industrial revolution 4.0 in Viet Nam. Binh’s deputy, Don Di Lam, is general director of the Vina Capital Group and deputy chairman of Global Agenda Council on ASEAN (World Economic Forum). Other members of the board include representatives from the Viet Nam Software and IT Services Association, Binh Duong Business Federation, Binh Thuan Shrimp Association, Tourism Advisory Board and Vina Capital Group. Vietnam seeks to export pork to RoK Vu Trong Nghia, director of the Bien Dong Trade Developed Investment Corporation, said his company has signed a contract with the Korea Food Company to sell 2,000 tonnes of pork per year. The company has also inked a Memorandum of Understanding with Japan’s Minami Kyushu University on cooperation in developing agriculture and transferring technologies to process food, he added. It has completed the building of a clean food processing and green breeding complex while a slaughtering plant with capacity of 300 pigs per hour and a cold storage are due to be put into operation in November 2017. The company has two safe pig raising farms in the northern province of Nam Dinh. It has connected with the high-quality livestock breeding centre at Vietnam National University of Agriculture to apply advanced technology in production. Nghia said through the VIETGO Company, his firm has received orders of importing around 9,000 tonnes of pork for the first year from Korean businesses. He hoped the State management agencies will soon open export market for Vietnamese pork products. Workshop spotlights support for SMEs in foreign trade The Vietnamese Government’s latest support policies for small- and medium-sized enterprises (SMEs) and foreign banks’ assistance for their international trade activities were updated at a workshop in Hanoi on October 31. The event, which was co-hosted by the Vietnam Chamber of Commerce and Industry (VCCI) and Standard Chartered Bank Vietnam, attracted many economists and representatives of commercial banks, business associations and more than 100 enterprises. VCCI Secretary General Pham Thi Thu Hang said SMEs have been contributing remarkably to trade activities, creating jobs and fostering Vietnam’s economic growth for many years. Therefore, it is essential to provide them with necessary assistance to develop effectively and sustainably, she added. Hang also spoke highly of opportunities of cooperation with Standard Chartered, which could give SMEs useful information and experiences to gain success in international trade activities, saying this is of special importance amid Vietnam’s deeper integration into the regional and global economies. Nirukt Sapru, CEO of Standard Chartered Bank Vietnam, said over the last two decades, the country has gained a number of benefits from expanding trade and investment ties with many countries. Vietnam is now enhancing external trade relations, and SMEs are an essential part of this process, helping the nation to further integrate into global supply chains, he added. Standard Chartered Bank Vietnam pledges effective support for Vietnamese firms to integrate into the global economy and expand their business activities, Sapru stressed. He added that his bank provides banking solutions for all activities of SMEs from capital management, activity expansion, profit improvement to cross-border business activities. They are particularly designed to help SMEs carry out bank transactions more easily so that the companies can focus on developing their business activities.    Vietinbank reports 318.6 million USD in pre-tax profit The Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) has reported it earned over 7.23 trillion VND (318.6 million USD) in pre-tax profit in the first nine months of 2017, up 11.5 percent year-on-year. The figure is equal to 82.2 percent of VietinBank’s target set for the whole year. In the reviewed period, the bank’s post-tax profit exceeded 5.87 trillion VND (258.7 million USD), up over 13 percent compared to the same period last year. By the end of September, VietinBank’s total assets were valued at over 1,062 trillion VND (nearly 46.8 billion USD), an increase of 12 percent compared to the figure at the end of 2016. Its outstanding credit increased by 14.4 percent from the year’s beginning, higher than the banking sector’s growth rate. The bank’s operating revenue in the January-September period rose 18.7 percent year-on-year to 23.9 trillion VND (10.5 billion USD). US garment-textile firms seek opportunities in Vietnam US garment-textile and footwear businesses are seeking their own investment opportunities in Vietnam as their country has withdrawn from the Trans-Pacific Partnership (TPP) earlier this year. In late October, the American Apparel & Footwear Association (AAFA) and the American Chamber of Commerce in Vietnam (AmCham Vietnam) held a series of activities in Ho Chi Minh City, including an international workshop on product safety and compliance issues. In the first eight months of 2017, Vietnam exported over 30.16 billion USD worth of goods to the US, making up 1.99 percent of the US’s total import turnover. However, during the eight-month period, Vietnam paid over 2.2 billion USD in taxes, ranking second out of the 15 countries paying the highest import taxes to the US. According to Nate Herman, Senior Vice President of AAFA Supply Chain, Vietnam continued to surpass rivals in export growth to the US in spite of receiving no benefits from any trade preferential programmes or free trade agreements. The Southeast Asian country’s garment-textile and footwear exports to the US are likely to increase in the coming time, even without TPP, he evaluated. He noted that the US’s imports of Vietnam’s garment-textile and footwear grew by 8.74 percent and 11.83 percent respectively over the past 12 months and Vietnam was the second biggest exporter to the market, after China. US retailers and consumers recognised Vietnam’s strengths of quality, prices and delivery commitments, he said, adding that this is the reason why the AAFA and US businesses want to arrive in Vietnam. Earlier, the National Cotton Council of America (CCI) coordinated with the Vietnam Textile & Apparel Association to organise the Cotton Day 2017 and granted investment licenses to 12 businesses operating in Vietnam and using the US cotton. The event aims to connect Vietnamese garment-textile enterprises with the US partners, suppliers and experts. Ryan Cabrera Tuazon, regional director of the US HanesBrands group, said after 10 years of operating in Vietnam, its total investment has stood at around 55 million USD with three factories in the central province of Thua Thien-Hue and the northern province of Hung Yen. Vietnam is defined as a production destination for HanesBrands in the Southeast Asian region, he said, adding that the factory in Hue is equipped with the latest technologies and manufacturing equipment. Jon Fee, a senior adviser of Alston & Bird LLP, said without TPP there are other opportunities for the garment-textile and footwear producers in Vietnam such as the Regional Comprehensive Economic Partnership (RCEP), the EU-Vietnam Free Trade Agreement (EVFTA), the “One Belt One Road” initiative, and the “Two corridors and one economic belt” of Vietnam-China strategic cooperation. Experts said Vietnam’s exports to the US will face difficulties in the coming time due to the US’s tighter regulations on product safety to reduce trade deficit. Nevertheless, US garment-textile and footwear companies still have opportunities in Vietnam, they said, warning firms to pay due attention to product safety and compliance matters.- Dutch organisation aids agricultural cooperatives in Quang Nam How to build development plans for agricultural cooperatives was the main topic of a workshop jointly held in the central province of Quang Nam on October 31 by the provincial People’s Committee and the Netherlands-based agricultural organisation Agriterra. The workshop was designed to find out solutions to enhance the operation efficiency and competitiveness of cooperatives in the agricultural value chain. Quang Nam is now home to 172 agricultural cooperatives and one alliance of agricultural cooperatives. However, cooperative members lack comprehensive knowledge about cooperatives, especially the 2012 Law on Cooperatives, while cooperatives management boards’ leadership and planning capacity remain weak. In addition, local cooperatives are still facing difficulties in getting access to markets and capital sources as well as advanced machines and technologies. Harm Haverkort, a representative of Agriterra Vietnam, emphasised the need to set up a transparent and modern financial system to provide members with updated information. He also suggested some solutions, such as offering preferential policies to encourage university graduates join cooperative management boards, organising training courses on production planning and marketing, and enhancing connections with businesses in processing, distribution and technology transfer. Previously, experts from Agriterra Vietnam paid fact-finding trips to cooperatives in Dien Ban town and Dai Loc district to offer consultancy on business strategies, marketing plans, brand development, and basic financial management. Founded 20 years ago by the Dutch farmers association, Agriterra has become an international development organization providing support for cooperatives in terms of financial management, business administration and development. Vietnamese goods shown at Hong Kong fashion fair An increasing number of overseas buyers are sourcing products from Vietnam as the country is rapidly improving its supply chain for locally made garments and taking part in more free trade agreements. The availability of a young, skilled labour force is also attracting foreign buyers to the country, Pham Thiet Hoa, director of the HCM City Investment and Trade Promotion Centre (ITPC), said during a recent interview with Vietnam News. Hoa spoke on the occasion of the business-to-business fashion trade show which wrapped up in Hong Kong on October 31, showcasing quality garments, textiles, and products and services from fashion-related industries. As many as 27 leading Vietnamese manufacturers of garments, textiles, fashion accessories and garment-related industries displayed their products at the Global Sources Fashion Show.  ITPC is supporting most of the Vietnamese pavilions as part of its mission is to help HCM City businesses and attract foreign investment to Vietnam. “Vietnam has become a more attractive complementary garment sourcing destination for overseas buyers. We’re seeing an increasing number of multinational firms from Taiwan, Hong Kong and Singapore making not only completed finished clothes, but also buying fabrics, textiles, yarns, plastics, printing and other accessories,” Hoa said. “They’re looking to expand their production capacity in Vietnam and are shifting their production bases to Vietnam to enjoy tax incentives and other advantages.” Before the show, ITPC worked with Global Sources, a Hong Kong-based B2B media company, to provide effective B2B export marketing workshops to help increase professionalism and buyer-supplier communication among firms. Vu Ngoc Khiem, chief representative of Global Sources, said: “In collaboration with ITPC, we have created a one-stop shop sourcing platform, for yarns and fabrics to completed clothes, from labels and tags and interlining fabrics to textiles and fashion bags, hats, caps and jewelry, so that buyers can meet businesses offline.” Vietnamese exhibitors have improved their manufacturing capabilities and expanded markets, finding new business buyers and growing exports, according to Khiem. Vietnamese-made garments can be alternatives to Chinese suppliers, he said, adding that competitive price points were also important.  “The idea of our show is to help our buyers get in front of Vietnam’s top-quality export manufacturers at one trade-show floor where decision-makers can meet and negotiate trade possibilities. “We’ve seen a trend where many export orders are shifting to Vietnam not only because China is heading toward more sophisticated higher-value manufacturing industries but also because Vietnamese makers have stepped up to a new level of FOB export capabilities, and are more ready to compete with rivals via differentiation and excellent services, not just cost advantages anymore,” Khiem told Vietnam News.  Many of Vietnam’s products will be featured during the fashion parade and at the New Market Pavilion, according to Khiem. Analysy’s Choice, the trusted column viewed and evaluated by top buyers, designers and sourcing professionals, has also taken note of many of these products, he added. Pham Minh Huong, director of the Vietnam National Textile and Garment Group (Vinatex), said: “This is the third B2B tradeshow that Vinatex has exhibited with Global Sources. Vinatex aims to show buyers our wide range of production scale from small to mass production, and our one-stop sourcing house for buyers, from woven to knit items, with our developing ODM services.” “Our capability of supplying materials in a vertical integrated system impresses buyers,” she said. “Not only is this a good opportunity for us to collaborate with new buyers and see global trends, but it is a chance for buyers to learn about our group and other professional manufacturers from Vietnam at one convenient offline event. We met several buyers face-to-face before the show and we will meet them again to further our discussion in the pipeline.” The four-day tradeshow hosted 1,800 booths of accessories, fabrics and apparel from Vietnam, China, the Republic of Korea, India and the Philippines. The on-site Fashion Parade featured many products made in Vietnam, including totes, bags and jewelry. The show offered a unique one-stop shop theme where buyers were enabled to discover Vietnamese manufacturers offering all kinds of garments, textiles, labels, bra cups and fashion accessories. Other highlights include conference programmes, fashion parades and the Trends Forum, presented by Fashion Snoops and Pantone. Global Sources is a B2B media company and a primary facilitator of global trade using its integrated online and offline services. In Vietnam, Global Sources helps match buyers and suppliers through offline events. Korean group proposes BOT road project in Can Tho city YK Group of the Republic of Korea (RoK) suggested a transport project under the build-operate-transfer (BOT) format in the Mekong Delta city of Can Tho during a working session with municipal authorities on October 31. YK Chairman Jang Sang Kyu said his group is interested in some projects in Can Tho, including the construction of a road linking National Highway 91 with Nam Song Hau road. Proposing two plans for this project, he said under the BOT format, the construction could be funded with the RoK’s capital and toll collection will last for 30 years. In the second plan, Can Tho will be the investor and cover 20-30 percent of the total cost while the remaining capital could be borrowed from the RoK Government. According to the municipal Department of Transport, the project will have total length of about 30km, including nine intersections and 25 bridges. Total cost for the construction is estimated at 15.07 trillion VND (714 million USD), including 791 billion VND (38 million USD) for site clearance. Chairman of the municipal People’s Committee Vo Thanh Thong said Can Tho is very interested in the YK-suggested project. It has planned to build this road for a long time but lacks funding. The city wants this project to be carried out under a BOT contract which is more feasible than the implementation funded by the State budget, he noted, suggesting YK Group carry out some cultural or tourism projects to capitalise on this road. Vietnam ships sugar to 28 markets Vietnam exported 43,000 tonnes of sugar to 28 markets, earning 20.6 million USD, in the first nine months of this year. Vietnam currently has 41 sugar plants with a total designed capacity of around 150,000 tonnes of sugarcane a day. According to the Agro Processing and Market Development Authority under the Ministry of Agriculture and Rural Development, Vietnam concluded the 2016-2017 sugar production crop. During this crop, more than 13 million tonnes of sugarcane were used to produce over 1.2 million tonnes of sugar. The new crop is scheduled to begin in November. Ha Giang seeks solutions to sustainable beekeeping development A forum held in Dong Van district, the northern mountainous province of Ha Giang on October 31 discussed how to branch out bee farming sustainably to ensure food safety. Representatives from the National Agricultural Extension Centre and many other agencies under the Ministry of Agriculture and Rural Development shared experience in beekeeping, information about market prices and honey bee consumption. Advanced technology in bee farming, particularly genetic and breeding preservation, and cultivating techniques for mints, whose flowers are favored by bees, on Dong Van Karst Plateau, were introduced to the event. The forum also created opportunities for the state, scientists, businesses and local beekeepers to hold dialogues to handle challenges when keeping bees. Ha Thuy Hanh, Deputy Director of the National Agricultural Extension Centre, said that honey bee farming in the country has developed rapidly. The country is housing 1.5 million beehives. Some 90 percent of the honey is sold abroad and the remainder is consumed domestically, she added. According to Nguyen Duc Vinh, Director of the provincial Department of Agriculture and Rural Development, the province’s 34,093 beehives produce over 193 tonnes of honey per year. Bee farming on mint fields is being developed in four mountainous districts of Dong Van, Meo Vac, Yen Minh and Quan Ba. Ha Giang’s mint honey was known for its remarkable quality and at certain times, can fetch 1 million VND per litre. In 2013, the National Office of Intellectual Property granted Meo Vac Geographical Indication (GI) for the mint honey product made in the four districts. Mint honey product has been grown in stature among consumers. Beekeeping has helped ethnic people residing on Dong Van Karst Plateau alleviate poverty, he said. Coffee exports down 23 percent in quantity The volume of coffee exports decreased nearly 23 percent since the beginning of 2017, dragging down overall revenue from overseas shipments of the products. Statistics showed that Vietnam exported 1.17 million tonnes of coffee for 2.69 billion USD in the first 10 months of this year, with the US and Germany being the top markets. Coffee prices have soared by 28.5 percent, but the local sector has yet to seize the opportunity. The Ministry of Agriculture and Rural Development recommended coffee-planted localities to invest in high-capacity processing and stocking models and not to deliberately expand plantations. RoK’s venture fund funnels capital into Vietnamese startups Lotte Accelerator Corporation, an accelerator and venture capital firm under Lotte Group from the Republic of Korea (RoK), will pour at least 1 million USD into Vietnamese startups in the first five years. The money will be channeled through an alliance with Vietnam Silicon Valley Accelerator (VSVA), which was established based on the Vietnam Silicon Valley (VSV) project. The RoK venture fund and the VSVA inked strategic cooperation agreement last weekend to set up the first venture investment fund designed for startups in Vietnam. The move is expected to serve as a catalyst for the venture investment market in the country. Lotte Accelerator’s capital will be prioritised for retail, information and technology (IT) and trade. Lotte Accelerator and the VSVA will discuss before making investment decision, said Jin Sung Rhee, CEO of Lotte Accelerator. Along with pumping in capital, the RoK venture fund also plans to organise short-term training sources for Vietnamese startups in the RoK, he noted, given that his country has thorough understanding of startup ecosystem. “Vietnam is one of the fastest stably growing economies in the world where Lotte Group has established a strong footprint in various sectors, from real estate, retail, distribution, to commerce and IT. It is a big market and startups are potential. That is why we want to invest in,” he said. Before joining hands with Lotte Accelerator, the VSV trained and offered investment support to over 50 Vietnamese startups. According to Tran Van Tung, Deputy Minister of Science and Technology, strategic collaboration between the two accelerators is a considerable stride for business accelerator models. The VSV project, the Government’s first project to endorse startups, was introduced in 2013 when international venture funds set foot in Vietnam and the country was housing a system of incubators; however, startups’ access to the funds was limited, Tung underlined. He noticed that seeing the benefits that startups and innovation bring to socio-economic development, the ministry supported the implementation of Business Accelerate models and the VSVA has been carried out since 2014 with significant achievements. The VSVA has incubated 50 companies, several of which attracted next rounds of funding from regional venture capital firms. Thach Le Anh, VSV Founder, said that success of a startup depends not only on investors but also mentors who helps the new firm approach the investors. The VSV pays due attention to cooperation with foreign partners to seek market and learn experience, she added. Vietnam-South Korea FTA highly increases two way trade turnover The two way export import turnover between Vietnam and South Korea neared US$45 billion during the first ten months this year, increasing 52 percent over the same period last year thanks to Vietnam-South Korea Free Trade Agreement (VKFTA). According to a representative of the HCMC Department of Industry and Trade, South Korea is now the fifth largest export market of Vietnam with turnover accounting for over five percent. The representative was speaking at a meeting discussing solutions to improve the competitive ability of Vietnamese goods in South Korea yesterday. Explaining the turnover high growth rate, Ms. Trinh Thi Thu Hien, head of Goods Origin Division under the Export Import Department of the Ministry of Industry and Trade, said that VKFTA has worked to boost export of Vietnamese goods which South Korea needs and vice versa. Businesses of the two countries have no direct contradiction so the export turnover of Vietnamese goods to the market has highly increased, she said. In addition, Vietnamese firms have significantly improved goods packaging, designs, quality and types to suit South Korean consumers’ demand. The offering prices of Vietnamese goods are more competitive than Filipino, Chinese, Indonesian and Thai products. Vietnamese firms have well taken advantage of tax incentives from the FTA, especially those exporting seafood, pepper, vegetable and fruit, footwear and vehicle components and accessories. In HCMC, the most exported items are garment and textile accounting for 29 percent; computer, electronic products and accessories 28.9 percent; wood and wooden items 6 percent; seafood 5.9 percent and footwear 5.2 percent. Moreover, they have also got the best out of the FTA to export to the EU. Vietnam-EU FTA has been signed and the EU has also signed FTA with South Korea. When importing materials from South Korea and exporting products to the EU market, businesses enjoy export tax incentives and vice versa. Director of the HCMC Department of Industry and Trade Nguyen Huynh Trang said that Vietnam has signed 12 FTAs with 10 having taken effect. According to commitments, most of the signed FTAs will enter the phase of strong import tariffs cut or exemption in the phase of 2017-2020. FTAs have brought domestic firms more chances to expand export market but tighter trade barriers. The VKFTA has brought them not only many advantages but also barriers. South Korea has just applied preferential tax rates on products which local production is short. This does not create opportunities for businesses from other industries.  For instance, Vietnamese beef products are imposed the import tariff rate of up to 32-45 percent. Mr. Nguyen Quan Phuc, head of Export Import Management Department in HCMC, said that many businesses describe their goods in Vietnamese when making custom declaration, causing confusion and wrong export code application. As a result, their goods have been returned or exported without enjoying tax incentives. Origin regulations have also limited the export volume of Vietnamese goods to South Korea as domestic material source has depended on import. Many businesses at the meeting said that although the Ministry of Industry and Trade has permitted businesses to apply rules of self-certification but so far only two have been licensed to do so including Nestlte and Vinamilk. Mr. Phuc said that implementation of the self-certification rule will be carefully considered and gradually broadened to prevent from affecting the prestige of genuine businesses and improve the competitive ability of Vietnamese businesses in South Korea.  The Vietnamese Government is speeding up negotiations to sign FTAs with the Philippines and Thailand to increase advantages for domestic businesses. The Ministry of Industry and Trade will intensify organization of trade promotion activities for businesses of Vietnam and South Korea to have more opportunities to contact, learn about each other and sign cooperation agreements. In the domestic market, the ministry will implement programs to assist local businesses to improve packaging, designs and quality of products through the distribution channel of Korean firms in Vietnam so that they can meet standards to attend Korean supply chains in the country and in the world. VNA/VNS/VOV/SGT/SGGP/TT/TN/Dantri/VNEVET