BUSINESS IN BRIEF 31/1 Vinachem to accelerate apatite projects    The Viet Nam Chemical National Group (Vinachem) will focus on investment of apatite exploitation projects this year, said the group’s deputy general director Bui The Chuyen. Chuyen said the group would accelerate completing procedures to get licences for apatite projects such as mines 18, 19, Ngoi Dum Dong Ho, Cam Duong 2 and mine 26 of Apatite Viet Nam One Member Limited Company. Vinachem will resolve material issues to implement the expansion project of Bac Nhac Son Apatite Ore Plant in the northern mountainous Lao Cai Province, he said. In addition, Vinachem will quickly complete investment preparation for improving the quality of NPK Fertiliser Plant of Binh Dien Fertiliser Company in southern Long An Province, with a total capacity of 200,000 tonnes a year, Chuyen said. According to Vinachem’s report, production and trading of the Apatite Viet Nam One Member Limited Company is faced with difficulties as the licence for apatite exploitation at its mines has not been granted for a long time. On the other hand, its rivals have lowered prices to gain market shares, a pressure tactic. This is one of the reasons why the company’s business results have not met its expectation. Last year, its output reached 2.8 million tonnes, posting a 2.8 per cent year-on-year increase and an increase of 6 per cent over the set target. Its apatite consumption reached 2.9 million tonnes, increasing 19 per cent from the set target and 3.4 per cent from the previous year. The company’s revenue was VND3.64 trillion (US$160 million), increasing by 2 per cent over the set target and reducing by 7.3 per cent compared to 2016. Nguyen Tien Cuong, general director of the Apatite Viet Nam One Member Limited Company, said its financial results last year did not meet the set targets due to low prices, although its output and consumption surpassed targets. The company contributed VND566.6 billion to the State budget and posted a pre-tax profit of VND150 billion. Cuong said the company has been seeking new export markets as well as continuing its restructuring to improve financial supervision.  Digiworld looks to foray into FMCG sector Digiworld Corporation has said it will make a foray into the fast-moving consumer goods (FMCG) and healthcare products markets this year. Digiworld plans to offer new products in the healthcare sector later this year. The FMCG and healthcare sectors are expected to create new streams of revenue for the company. In quarter three, Digiworld Venture Co Ltd, an arm of Digiworld Corporation, acquired a 50.3% stake in CL Co Ltd, a local FMCG supplier which has a goods distribution system across the country. The deal is expected to help Digiworld venture into the FMCG market. The corporation made VND3.82 trillion (US$168.2 million) in revenue, and over VND78 billion (US$3.4 million) in after-tax profit last year, beating its full-year targets. In quarter four alone, its revenue amounted to VND1.12 trillion, a year-on-year rise of 11.3%. Digiworld general director Doan Hong Viet told reporters in HCMC on January 24 that the corporation expects stronger growth in revenue from cell phones this year, at roughly 60%. Notably, sales of cell phones like Xiaomi and Sharp have become major revenue sources for the firm. SBV asks banks to prioritize loans for production and business The State Bank of Vietnam (SBV) has told local banks and foreign bank branches to increase lending to production and business activities, according to a Thoi Bao Ngan Hang newspaper report. SBV governor Le Minh Hung asked banking institutions to strictly control their credit growth in line with their assigned targets and the central bank’s monetary policy. Credit growth and quality should go hand in hand, he said. Loan assessment and supervision should be properly done to minimize non-performing loans, and guarantee safety for the banking system. Loans for the real estate and construction sectors should be put under control. Lender banks should monitor the progress of the property projects to which they have lent, and check their clients’ financial capability, creditworthiness and assets used as collateral. They should also control the quality of consumer loans, and improve the efficiency of the loan approval process to reduce risks. They should strictly control lending to stock investors to minimize risks in line with the SBV’s Circular 19/2017/TT-NHNN amending and supplementing a number of articles of Circular 36/2014/TT-NHNN which provides safety limits in the banking sector. Loans should be prioritized for production and business activities, especially in agriculture, export and supporting industries, and small and medium, and hi-tech enterprises. Japan firm plans solar power plant in Binh Phuoc Asia Infonet Inc., a subsidiary of AIN Group of Japan, intends to build a solar power plant in the Becamex-Binh Phuoc Industrial and Urban Complex in Binh Phuoc Province, according to news site bnews.vn. Binh Phuoc Province’s Party chief Nguyen Van Loi and chairman Nguyen Van Tram on January 25 worked with Asia Infonet Inc. over the project which will cover 54 hectares and have a capacity of 50MW. Tsuyoshi Sai, chairman and general director of Asia Infonet Inc., was quoted by the news site as saying that the company is capable of developing solar power plants and has invested in multiple projects with a combined capacity of 400MW. According to the company, Binh Phuoc holds high potential for solar power development. The Japanese firm wants to know administrative procedures to implement the project, especially those for connecting the plant to the national grid and for selling electricity to enterprises in the complex. Loi threw his support behind the project, saying this will be the first solar power plant in the complex. The Binh Phuoc government pledged to create favorable conditions and help the company get an investment license and propose the Ministry of Industry and Trade approve the project. The provincial government also asked relevant agencies to help the investor complete procedures this quarter. Binh Phuoc has 2,700 sunlight hours a year, so it is calling for investment in solar power generation. Debt-laden Mai Linh’s effort to seek help seen faltering Faced with huge debt, Mai Linh Group, which is known for Mai Linh Taxi brand nationwide, is seeking emergency help but the possibility of it getting such help is low as it is feared that it might set a bad precedent. The company has proposed its debts be frozen and its unpaid tax and insurance premiums be further extended. A news report on news website Vietnamnet said if Mai Linh’s proposal is approved, it would do more harm than good. Vietnam Social Security was quoted by the news site as saying that it has no authority to freeze or cut insurance debts. Analysts said Mai Linh’s proposal might not be approved. The company earlier wrote to the National Assembly Committee for Social Affairs, the Ministry of Finance and Vietnam Social Security cataloging its difficulties. The economic downturn triggered by the 2007-2008 financial crisis and high interest rates left the company sitting on a mountain of unpaid taxes, social/health/unemployment insurance premiums and bank loans. The news report quoted Mai Linh chairman Ho Huy as saying that like other traditional transport service firms, Mai Linh is struggling with an unfair competition with ride-hailing firms Uber and Grab. With revenue considerably declining, Mai Linh is on the verge of becoming insolvent. As of late last October, Mai Linh’s unpaid tax and insurance amounts amounted to VND150 billion and its late payment penalties some VND80 billion. The company proposed it be exempted from loan interest. The debts belong to Mai Linh’s subsidiaries which have suspended operations and have piled up since 2012. Under the prevailing regulations, tax payments can be rescheduled in some cases such as natural disasters, fires and accidents. Huy previously told the media that for loan interest and late payment penalties, the company would need a hundred years to pay them off. Authorities and experts said difficulties faced by firms should be handled in accordance with regulations and that there should be no exception. Mai Linh has recently made certain changes in its competition with Uber and Grab, such as launching a mobile app, and planning mergers of its units to increase competitiveness. Ho Chi Minh City: January’s CPI increases 0.19 percent Ho Chi Minh City’s consumer price index (CPI) in January rose by 0.19 percent against that of December 2017 and 2.57 percent year-on-year, announced the municipal Statistics Office on November 29. In the month, prices of seven out of 11 commodity baskets recorded slight growth, with the highest rate seen in transport at 1.39 percent which was attributed to the impact of gasoline price adjustments. Other goods with higher prices were other goods and services (0.65 percent); housing, electricity, fuel and construction materials (0.46 percent); beverage and tobacco (0.33 percent); medicine and healthcare services (0.16 percent); culture, entertainment, and tourism (0.04 percent); and equipment and home appliances (0.02 percent).  Meanwhile, decreases were seen in food and catering services (0.21 percent); telecommunications (0.08 percent); and garment, hat and footwear (0.01 percent). In January, the price of education remained stable. The price of gold increased by 0.44 percent, while the price of US dollar declined 0.02 percent from that of January 2017. VND1 trillion mall comes into operation Lead investor Tran Le Nguyen on January 25 inaugurated the VND1-trillion (US$44 million) Van Hanh Mall, the largest commercial center in District 10, HCMC. The eight-story Van Hanh Mall at 11 Su Van Hanh Street has a total construction area of 90,000 square meters and a commercial floor area of 55,000 square meters. The mall has a wide range of products such as fashion, cosmetics, furniture, household appliances, and food, which can be found at more than 200 stores of domestic and international brands like Co.opXtra, CGV, Power Bowl, Nike, Levi’s, Adidas, and Starbucks. Tran Le Nguyen, who is also general director of food processor KIDO Corporation, said he will inject more money into developing infrastructure for the mall. In 2008, he put Hung Vuong Plaza in District 5 into operation, which is now full. He stressed the quality of services and goods, and convenient locations for customers could guarantee success for shopping centers. “We choose prestigious partners and good services to meet customer demand whenever they come to Van Hanh Mall for shopping and entertainment,” he said. He added shopping space at Van Hanh costs US$30-60 per square meter and that it is now over 90% full thanks to the presence of major and reputable brands. France pours over 2 billion euros into Vietnam in 10 years France has funded many projects in Vietnam through official development assistance (ODA), with total disbursed capital amounting to more than two billion euros in the past 10 years, heard a Vietnam-France economic dialogue. The Vietnam-France high-level economic dialogue was co-chaired by Vietnamese Deputy Minister of Planning and Investment Nguyen The Phuong and French Minister of State attached to the Minister for Europe and Foreign Affairs Jean-Baptiste Lemoyne in Hanoi on Wednesday to review the economic relationship between the two countries, news website Dan Tri reports. The event was held as part of activities to mark the fifth anniversary of the establishment of the strategic partnership and the 45th anniversary of diplomatic ties between Vietnam and France. In 2017, two-way trade between Vietnam and France increased 11.6% year-on-year to US$4.6 billion, with Vietnam running a large trade surplus. Opportunities to be brought about when the EU-Vietnam Free Trade Agreement is signed and comes into force are expected to help the two countries’ businesses penetrate their respective markets. France has invested in many projects in Vietnam, especially ODA projects costing more than two billion euros, over the past 10 years. Most of the projects are significant to key sectors like transport, energy, environmental protection, food and banking. At the meeting, the co-chairs underlined growing food trade between Vietnam and France. Despite a number of trade barriers, the sector has achieved encouraging results recently and is expected to gain stronger growth in the future. The European country has exported many of its key products to Vietnam like apple, beef, lamb and goat. The event was attended by Government agencies and businesses from the two countries and focused on two major topics of the bilateral strategic partnership, namely climate change and infrastructure development. The topics have been reflected through the French Development Agency’s Water Action Plan and numerous projects and initiatives that would be funded by French agencies like CLS’s remote sensing service for climate change responses, EDF’s solutions for a sustainable city and Air Liquide’s cooperation project for petrochemical development. Stainless steel traders complain about time-consuming tests Stainless steel traders now have to wait at least six months to receive results of tests on their shipments even though the maximum period under the current regulations is five working days. At a dialogue between the HCMC Customs Department and the American Chamber of Commerce in Vietnam (AmCham Vietnam) on January 24, a representative of Kim Vi Inox Import Export Production JSC proposed the customs shorten the time to three months to facilitate production activities. According to Decision 2999/QD-TCHQ dated September 6, 2017 of the General Department of Vietnam Customs, customs offices must complete inspections and analyses of imports and exports in five to eight days, a customs officer told the Daily on the sidelines of the dialogue. Nguyen Quoc Toan, deputy director of the import-export tax division at the HCMC Customs Department, admitted a large volume of stainless steel samples is being stored at the customs office as tests are done by only one agency, leading to a huge backlog. Tests are conducted in accordance with a decision on anti-dumping duty on stainless steel of the Ministry of Industry and Trade. Although the decision is applicable to steel imports from certain markets, the Ministry of Finance has asked the customs to inspect all shipments. Nguyen Huu Nghiep, deputy head of the HCMC Customs Department, said the Prime Minister would issue a new decree providing new customs regulations in March. Particularly, the customs will classify commodities after relevant agencies provide enough information. In addition, the Ministry of Finance has sent the Government a draft decree which contains measures for removing obstacles to the national one-door customs mechanism. Accordingly, ministries and agencies will implement inspections based on product classifications by customs agencies, and export and import procedures must be completed on the national one-door portal. The draft decree is expected to be approved this quarter. Agriculture ministry advises farmers not to expand pepper planting area The Ministry of Agriculture and Rural Development has advised farmers not to cultivate new pepper plants, transfer into other crops if the plants die of diseases and gradually reduce pepper area to 100,000 hectares. At a conference on sustainable pepper production yesterday, minister Nguyen Xuan Cuong said that pepper growing area has tripled to 152,000 hectares, output had also tripled during seven years in 2010-2017. The too fast development has showed many problems including out of control area and quality and others in farming process and density. Purchase, processing and export organization has not been appropriate to the pepper industry’s value. While pepper demand increases only 3 percent in the world a year, global area hikes 8 percent to 600,000 hectares from 420,000 hectares in 2013. That has caused price fall to about VND60,000 a kilogram, accounting for half of last year price. It is forecast to remain low in the upcoming time. Minister Cuong said that the pepper industry would lag behind without restructuring. Vietnam cashew association building material zone in Cambodia Vietnam’s raw cashew nut import increases year by year while domestic supply meets 20-30 percent of processing plants’ demand so Vietnam Cashew Association (Vinacas) has worked with Cambodia to develop a material zone of 500,000 hectares. The import volume exceeded 1.1 million tons in 2016 and neared 1.5 million tons in 2017 from only tens of thousands of tons in previous years. Businesess have mainly imported the nut from African nations especially Côte d'Ivoire. Vinacas hoped that cooperation with Cambodia will create a material zone providing one million tons a year in the future. According to Mr. Nguyen Duc Thanh, chairman of Vinacas, besides building domestic material zones to prevent area reduction and increase productivity, the association has surveyed some Cambodian places adjacent to Vietnam and realized that local soil conditions are similar to southeast region, the capital of Vietnam’s cashew industry, and suitable with cashew growth. In fact, Cambodia is one of cashew production nations with stable quality thanks to good sapling. Especially Cambodia’s Ministry of Agriculture, Forestry and Fisheries has paid attention to re-planting cashew trees to improve crop yield and income for farmers. Head of the Agricultural Department under the ministry Hean Vann Horn said that Cambodia cashew area has strongly reduced so if production organization and consumption is good, the material zone development would be feasible. For the last two years, raw cashew export from Cambodia to Vietnam has topped 90 percent from only 30 percent in 2014 and before. Mr. Hean Vann Horn said that Cambodian side hoped Vinacas to assist them from sapling selecting, farming process, harvest technique and preservation to improve productivity and cashew quality to ensure profit for Cambodian farmers. According to the Vietnamese Ministry of Agriculture and Rural Development, the country exported 350,000 tons of cashew nuts last year with the turnover of $3.5 billion, up 1.9 percent in volume and 23.8 percent in value over 2016. Cashew ranks first in the group of major export commodities including vegetable, coffee, rice and pepper. The nut consumption increases about 10 percent a year in the world while area increase possibility is only five percent. This is a condition for the cashew industry to develop in the upcoming time. International Nut and Dried Fruit Council (INC) said that dried nut transaction value approximates $30 billion a year in the global market. With this trend, cashew will account for nearly 29 percent of the world market share by 2021, followed by walnut. Vietnamese businesses anticipate interest rate cuts in 2018 Several local banks have decided to cut their lending rates in early 2018, especially for loans in priority sectors, which is welcome news for business as it is anticipated to facilitate them in accessing bank loans. In response to the central bank governor’s request to cut costs in order to lower lending rates, a number of commercial lenders, including Agribank, Vietcombank, Vietinbank, VPBank and BIDV, have recently trimmed their rates by 0.5 to 1 percentage point. Specifically, Agribank has cut the rate on short-term loans from 6.5% to 6% and medium and long-term loans from 8% to 7.5%. Vietinbank has cut its rates on short and medium-term loans for priority sectors by 0.5 percentage point while Vietcombank has lowered its rates to 6% on loans for priority sectors. BIDV has also chopped its rates on short-term loans by 0.5 percentage point to a maximum of 6%. Such rate cuts are considered by analysts as a significant effort by credit institutions ahead of the Lunar New Year. But because of the timing, the rate cuts have been chiefly made by large banks while smaller lenders remain relatively quiet. Many analysts have said that it will be difficult for banks to lower their lending rates in the future because they are still competing for deposits and a market share, making it impossible for them to lower the deposit rates and consequently the lending rates. As such, whether the recent rate cuts would become a clear trend and spread through the entire banking system in the future remains uncertain. Banking expert Nguyen Tri Hieu said that commercial banks are trying to bring down interest rates but it cannot be done immediately because many are struggling with low liquidity as funds are withdrawn for shopping and paying bonuses ahead of the Lunar New Year. In addition, under a recent circular issued by the central bank, the maximum proportion of short-term funds allocated to medium and long-term lending has been reduced from 50% to 45% from 2018 and will fall to 40% from 2019. Such a tightening measure means a likely rise in the medium and long-term rates in the future. Economist Can Van Luc said that there isn’t much room for rate cuts in the near future since it is very difficult to reduce the deposit rates, adding that bad debt has not been resolved radically, although the pace has been accelerated. The National Financial Supervisory Commission (NFSC) stated that interest rates have not been lowered as expected because of a lack of connection between the deposit market and the interbank market. Specifically, interbank rates are relatively low while deposit rates have not been reduced considerably because good liquidity is seen mainly in large banks. In the meantime, a number of small banks or those in the process of restructuring are still struggling to gain access to low-interest funds on the interbank market and are forced to maintain or raise their deposit rates. Furthermore, bad debt remains a significant hurdle to rate cuts while the net interest margin of local banks is rather modest compared with their regional peers, which also discourages them from reducing lending rates, the NFSC said. Therefore, many experts have called for stronger action from both the government and the banking system in order to bring down interest rates. The government needs to maintain inflation at 4% and take bolder measures to tackle non-performing loans in a more effective manner. At the same time, it is also an opportunity to reduce lending rates if bank credit-related public investment is well managed. Revised policies required to develop private sector Vietnam's policies towards the private sector have revealed numerous inadequacies, resulting in enterprises becoming greedy to invest in land, securities and real estate rather than in industries to participate in the global value chain. Despite the implementation of a number of policies in support of the private sector over the past few years, the private sector remains insignificant. According to Nguyen Duc Thanh, Director of the Vietnam Institute for Economic and Policy Research under the Vietnam National University, Hanoi, the private sector's contribution to the national economy has never surpassed 10% of the GDP during the past 10 years, while the rate is at least 80% of the GDP in developed countries. In addition, the State sector and State-owned enterprises (SOEs) are overwhelming the private sector. Professor Tran Van Tho from Japan's Waseda University said that the private sector shows an inefficient structure, low productivity, a lack of capacity for exports and has yet to connect with the global value chain of multinational corporations. SOEs hold high positions and are provided with preferential treatment in terms of capital and land while these factors of production are disadvantages to small private enterprises, requiring institutional reform in the factors of production to enhance resource efficiency and productivity. Although the foreign direct investment (FDI) sector occupies a large proportion of the economy, it creates a negligible impact on economic structure transfer. In addition, the link between FDI and domestic enterprises remains weak, creating limited influence on technology and knowledge transfers. A strategy for increasing the connectivity between the FDI and domestic sectors would help to improve the productivity of domestic enterprises. Thanh said that raising the private sector is crucial for national development, but it is difficult to make the private sector grow in a robust fashion. The biggest obstacle to the economy is the dominant role of the State in all areas, including State management and SOEs. Thus, it is necessary to devise a transparent law system which is committed to protecting the ownership rights and achievements of businesses through streamlined procedures when solving any disputes. When the people and enterprises continue making complaints about policies, it means that the management apparatus has yet to pay off. Professor Tho said that it is necessary to encourage start-ups in addition to devising policies to nurture enterprises and help them to increase their size. He noted that light industries also need to increase their size in order to renew their technology, enhance productivity and improve competitiveness. Furthermore, Vietnam should promote the advantages of a country conducive to the progress of developed countries, through encouraging enterprises to adopt advanced technology and prioritising foreign currencies for importing technology, among others. Sharing the same view as Tho, Dr. Vu Thanh Tu Anh from Fulbright Vietnam University said that Vietnam should facilitate and accompany existing enterprises to develop the private sector. Enterprises operating in Vietnam face prolonged unsolved difficulties, including gaining access to capital and land, high costs, and unfair treatment in attempting to gain access to business opportunities concerning State projects and projects requiring business conditions. It would appear that Vietnam lacks motivation and determination to bring the policies into life, resulting in complaints from the people and enterprises. Economist Pham Chi Lan stated that Vietnam needs to rely on private enterprises to boost the economy, but private Vietnamese enterprises are too feeble. Lan noted that the current policies are making enterprises greedy to invest in land, securities and real estate instead of industries and supporting industries in order to participate in the global value chain. The expert recommended policy adjustments in order to encourage enterprises to take part in industries. In addition, Deputy Minister of Finance Do Hoang Anh Tuan stated that there have been a lot of inadequacies with regards to tax incentives over the past 20 years. For instance, the taxation statistics released by the Finance Ministry showed that the FDI sector received over VND35 trillion (US$1.54 billion) worth of tax exemption out of VND37 trillion (US$1.63 billion) tax payments, which was a result of the price escalation in tax incentives charges. The reality also poses a risk to transfer pricing and incentives following tax periods, requiring the promulgation of a simple tax law system and accounting policy. Meanwhile, it is advisable to revise tax policies on the basis of expanding the tax base but not increasing the tax and tax payment rates. CBRE to manage Van Tri Avenue Villas CBRE Vietnam has been officially appointed by Noble Vietnam as property management agents for its Van Tri Avenue Villas, starting from January 24. Van Tri Avenue Villas is located in Hanoi’s Dong Anh district, with 35 high-end villas designed by renowned South Korean architect Bae Dae Yong. Villas come in four or five bedrooms on areas of 1,100 to 1,300 sq m and are expected to be handed over in December 2019. CBRE will sell seven type A villas and five type B villas. Type A villas cover area of 1,150 sq m and overlook the lake and nearby Van Tri Golf Club, with a housing area of 384 sq m and 814 sq m of total floor area on three floors. Each boasts a swimming pool and are priced from $2,100 to $2,300 per sq m. This is the only golf villa project located in the ASEAN City @ Hanoi complex, which is being planned and developed along the 11-km road from Noi Bai International Airport to Nhat Tan Bridge and covers an area of 1,900 ha, including Van Tri Golf Club, Concordia Hanoi International School, and the Van Tri Urban Area, which will have 1,214 high-end apartments. Outstanding facilities such as the golf course are managed under international ISO:14001 standards with practice holes and greens, while the complex also has an international school, a luxury restaurant, a spa, a wedding center, a clinic, and a supermarket and retail stores. FE CREDIT signs $50mn loan facility with Lion Asia The VPBank Finance Company (FE CREDIT) recently announced it has received a $50 million loan facility from Lion Asia I (RB) Limited as additional capital to continue to grow its business as the market leader in Vietnam’s consumer finance industry and to broaden its ability to meet the financial demands of millions of Vietnamese people. Lion Asia, an entity established in the British Virgin Islands and 100 per cent owned by the Lending Ark Asia Secured Private Debt Fund, acted as facility agent for the $50 million loan. The Fund was established by Lending Ark Asia Secured Private Debt Holdings Limited, a market leader in complex, innovative secured private credit lending across the Asia-Pacific region. As one of only a few pioneers in Vietnam’s consumer finance industry, FE CREDIT has established a solid foundation in its seven years and become the market leader, with business practices that compare favorably with the best in the world. It currently holds nearly a market share of 50 per cent in Vietnam’s consumer finance industry. “This cooperation continues to re-affirm our brand value and the operational excellence of our business in meeting the highest level of international standards,” said Mr. Kalidas Ghose, Vice Chairman and CEO of FE CREDIT. “This loan facilitates the growth of our business in the future by providing solutions to the needs of millions of people across Vietnam, who are not currently served well by banks, with better financial products and services. Also, this cooperation demonstrates the trust that international partners have in our sustainable vision and the commitment of our shareholders as well as management going forward.” “It is a great honor to announce the successful completion of our $50 million loan facility for FE CREDIT,” said Mr. Gregory Park, Managing Director - Fund Head and representative of Lion Asia. “With tremendous support from the State Bank of Vietnam and the hard work of FE CREDIT, the entire working team were able to swiftly complete this cooperation. We believe that with its strong management team serving the expanding consumer finance market of Vietnam’s 95 million citizens, FE CREDIT makes its business an example of a great success in the global financial markets.” FE CREDIT also acquired a $100-million senior secured loan from Deutsche Bank two months ago for its expansion plans. US's Sanford Health shakes hands with Victoria Healthcare The US’s Sanford Health is expanding its presence in international healthcare by extending services to seven countries, including Vietnam. Its international healthcare arm, Sanford World Clinic (SWC), is cooperating with Victoria Healthcare (VHC) in Vietnam to support enhanced clinical and healthcare management education programs for Victoria’s physicians, nurses, and administrative staff. This is the first agreement in Southeast Asia for SWC and represents the beginning of cooperation and professional support to VHC from one of the leading healthcare systems in the US. “We believe in the quality of services, procedures, systems, and business strategies of VHC in Vietnam,” said Dr. Daniel Blue, Executive Vice President of SWC. “This partnership will bring more value to Vietnamese people through our combined efforts in the healthcare industry.”  After more than 12 years of operations, VHC has opened four branches in Ho Chi Minh City serving more than 1.5 million patients under international quality standards and become a trusted healthcare brand in Vietnam. It signing a comprehensive strategic cooperation agreement with SWC is a new step forward for Vietnam’s healthcare sector and represents a hands-on approach to healthcare with American input. Sanford Healthcare is a leading healthcare organization in the US, with 45 hospitals and 300 clinics in nine states. Its international branch, SWC, has branches in Ghana, Germany, and China, and it has more than 1,500 doctors and 29,000 employees in total. Sanford Health will also enter New Zealand, Ireland, Costa Rica, and South Africa this year and increase its presence in China and Ghana. The expansion follows last year’s acquisition of a minority stake in ISAR Klinikum, a hospital leader in stem cell therapies in Munich, Germany. “With these partnerships, we are creating unique opportunities for shared learning,” said Mr. Kelby Krabbenhoft, President and CEO of Sanford Health. “This is not something we are pursuing for financial gain, as we believe this type of collaboration will help further our mission of health and healing.” $185mn raised from PV Oil IPO The government raised VND4.18 trillion ($185 million) from selling 20 per cent of the country’s sole crude oil exporter, the PetroVietnam Oil Corp. (PV Oil), at an initial public offering (IPO), the company announced on January 25. The proceeds exceeded the government’s target of $122 million from the sale, which is part of plans to equitize hundreds of State-owned enterprises (SOEs) to boost their performance, ease a tight State budget situation, and reform an economy that is highly reliant on foreign investment. Demand at the January 25 IPO of PV Oil, Vietnam’s second-largest oil products retailer with a 22 per cent market share in the domestic oil products market, was 2.3-times higher than availability, the company said. A total of 3,195 investors took part, including 54 foreign institutional investors. Overseas investors purchased 6.6 per cent. Post-IPO, PetroVietnam Board Member Mr. Dinh Van Son said PV Oil would file for a listing on the Unlisted Public Company Market (UPCoM) within the next three months and would work to complete the company’s strategic stake sale.  A further 44.72 per cent stake will be sold to strategic investors, both domestic and foreign. The government’s ownership is to be reduced to 35.1 per cent after the equitization process is completed. Eight investors, including a founding shareholder in Vietnam’s private low-cost airline Vietjet Air, have registered to become strategic shareholders of PV Oil, CEO Cao Hoai Duong confirmed on the sidelines of a roadshow on January 12. The six foreign bidders are Shell, Idemitsu, Puma, Kuwait Petroleum International (KPI), PTT, and SK, while the two Vietnamese contenders are the Sacom Investment Fund and Sovico Holding, he said. “We have received an application from a foreign investor who expressed a wish to buy 49 per cent of PV Oil shares, the cap set for foreign investors,” he added. As other foreign investors want to buy between 25 and 35 per cent, the total shares investors have registered to buy exceeds the number to be sold. Foreign ownership of PV Oil is capped at 49 per cent of charter capital, while foreign investors are also required to deposit an amount equivalent to 20 per cent of the stake they have registered for prior to entering the auction. Investors seeking to become strategic investors must commit to long-term investment by retaining their holding for at least ten years. They must also commit to prioritizing buying petroleum products from the Dung Quat Oil Refinery and the Nghi Son Refinery and realize commitments in terms of market, technology, and management development. Mid-year IPO for Vinalines Vietnam’s largest State-owned shipping firm and port operator is planning to conduct its initial public offering (IPO) in the middle of the year, according to acting CEO of Vietnam National Shipping Lines (Vinalines) Mr. Nguyen Canh Tinh. The government has asked for the company to be equitized but plans to retain a 65 per cent stake, he said, with the remainder being sold to local and foreign investors. According to a plan submitted by the Ministry of Transport to the government for approval, Vinalines’ charter capital stands at nearly VND13.92 trillion ($630 million). Mr. Tinh said 2017 revenue was estimated at VND16 trillion ($702.4 million), exceeding the annual target by 15 per cent. More than VND4.4 trillion ($193.16 million) came from port services while VND7.1 trillion ($311.7 million) was made from transport services. Profit was VND515 billion ($22.6 million) and total assets stood at over VND18 trillion ($790 million). It targets consolidated profit of $75.8 million on revenue of $757.7 million by 2020. The company held a regional maritime exhibition in Singapore last April to present the IPO plan to potential investors, with the original date for the sale being set for December. Vinalines has worked with the Auditing Company Limited & Vietnam Appraisal and the ATC Auditing and Valuation Firm Company to complete its valuation, which under current regulations must then be appraised by State Audit of Vietnam. The shipping company once symbolized the post-war promise of Vietnam when it began jockeying for global trade after the US lifted sanctions on Vietnam in 1994. But in 2012 it battled through a major $2.1 billion debt crisis and the arrest of many of its senior executives. The government has taken cautious measures to hasten the overall equitization process, including forcing public companies to list shares on the local stock exchange. Vinalines’ IPO was first due to be held in the first quarter of 2015. It proposed removing five ships - Vinalines Global, Vinalines Ocean, Vinalines Sky, Vinalines Trader, and Vinalines Ruby - from the list of assets subject to corporate valuation, which was rejected. MEF II divests from MobileWorld Mekong Capital has announced that its Mekong Enterprise Fund II (MEF II) has completed its full divestment from the MobileWorld Investment Joint Stock Company (MobileWorld), the largest mobile device and home appliance retailer in Vietnam. This was the culmination of an exit process that began with a pre-listing private placement shortly before the 2014 public listing of MobileWorld on the Ho Chi Minh Stock Exchange and involved gradually selling blocks of shares to institutional investors approximately once a quarter after the listing. The final block of 5 million shares were sold at a price of VND165,000 ($7.39) per share and was completed on January 29. “MEF II was launched in 2006 and ultimately had a 12-year term, hence we needed to complete the divestment of our remaining investments, including MobileWorld, in the first few months of 2018,” said Mr. Chris Freund, Partner at Mekong Capital. “If it wasn’t for MEF II’s limited timeframe, we would have wanted to continue as a shareholder of MobileWorld for the foreseeable future, especially as they ramp up Bach hoa xanh into Vietnam’s leading supermarket chain.” MEF II originally invested $3.5 million in MobileWorld for a 35 per cent stake in 2007. The cumulative net proceeds from the sale of MobileWorld shares and dividends received was $199.4 million. When MEF II originally invested in MobileWorld in 2007, they had seven stores and a $10 million valuation. “Our original goal was to increase to 50 stores and a $50 million valuation,” said Mr. Freund. “The success of this investment has exceeded our wildest expectations.” Many factors contributed to the success, he added, but at the core was MobileWorld’s five co-founders and their open-mindedness, proactiveness, willingness to improve, and complementary points of view. “Together they had a big vision, built an extraordinarily strong team and a strong corporate culture, put the interests of customers first, and created an unstoppable machine that consistently sets the standard for retailing best practices in Vietnam,” Mr. Freund said. He added there is currently no company in Vietnam’s retail sector, either foreign-owned or locally-owned, that can execute on the large scale and high standards that MobileWorld can. “We look forward to finding other ways to partner with MobileWorld in the future,” he said. Mekong Capital’s investment framework, called Vision Driven Investing, has consistently enabled its funds to realize high rates of return. The framework enables investee companies to create a big breakthrough vision and achieve their vision while creating significant value creation for shareholders. MobileWorld was both an inspiration for, and model of, the Vision Driven Investing framework. During MEF II’s ten and a half year holding, MobileWorld has grown from seven stores to over 2,000 today under four different retail brands: thegioididong.com, Dien may xanh, Bach hoa xanh, and vuivui.com. The company has also recently announced the acquisition of Tran Anh Digital World and the Phuc An Khang pharmacy chain. Launched in 2006, MEF II is the second private equity fund managed by Mekong Capital. It made ten investments, of which nine have already been fully exited. The Fund’s only remaining investee company is Asia Chemical Corporation (ACC). Its other notable investments included Golden Gate, Vietnam Australia International School, and ICP. As at December 31 it operates 1,070 thegioididong.com outlets in all 63 cities and provinces nationwide, making it the Number 1 mobile retailer in Vietnam with a 40 per cent market share. VNN