BUSINESS IN BRIEF 7/2 Property market attracts $77.6 million in FDI in January   Foreign investors poured a total of 77.6 million USD into the real estate market in January, according to the Foreign Investment Agency under the Ministry of Planning and Investment. Real estate ranked third among 19 sectors with foreign direct investment (FDI) in January, attracting 6.2 percent of the total registered FDI. Su Ngoc Khuong, investment director at property services firm Savills Vietnam, said foreign capital would promote the development of the property market in the country. In 2017, the real estate sector lured 3.05 billion USD in FDI, accounting for 8.5 percent of the country’s total registered foreign investment, ranking third in terms of FDI attraction after the manufacturing and processing industry and power distribution sector. According to the General Statistics Office, 1,400 new construction firms were founded in January, up by 21 percent, together with more than 460 new firms in real estate business, up by 47 percent over the same period last year. New construction firms had the highest registered capital worth 20.6 trillion VND (903.5 million USD), accounting for 21 percent of the total registered capital of new firms in January. This was followed by real estate business with 17.5 trillion VND, accounting for nearly 19 percent. Last year, the total registered capital of new firms operating in the real estate sector was 388 trillion VND, accounting for 30 percent. The average capital of new real estate firms last year was also highest, with 76.7 billion VND for each firm.- Sherwood Residence among Top 10 hotels for families Sherwood Residence has been recognized as a 2018 Travelers’ Choice Award winner in the “Top 10 Hotels for Families - Vietnam” category at the 2018 TripAdvisor Travelers’ Choice® awards for hotels, ranking fourth out of ten. Sherwood Residence General Manager Janet Fitzner said the hotel has always strived to deliver an outstanding guest experience by providing excellent service in exceptional surroundings. “The entire team here at Sherwood Residence can take pride in receiving this honor, but we will not rest on our laurels and will continue trying to improve what we can do for our valued guests,” she said. The Travelers’ Choice award winners were based on millions of reviews and opinions collected in a single year from TripAdvisor travelers worldwide. In the 16th year of the awards, TripAdvisor highlighted the world’s top 8,095 properties in 94 countries and eight regions worldwide. This year, the awards celebrate hotel winners in ten categories: Top Hotels Overall, Luxury, Bargain, Small, Best Service, B&Bs and Inns, Romance, Family, All-Inclusive, and Value for Money. The hallmarks of Travelers’ Choice hotels winners are remarkable service, value, and quality. “This year’s Travelers’ Choice awards for hotels recognize thousands of exceptional accommodations that received the highest marks for overall experience, including service, amenities, and value, from travelers worldwide,” said Brooke Ferencsik, Senior Director of Communications. “The global TripAdvisor community informed this list of winners that will inspire and help travelers find the hotel that’s right for them, as they plan and book their next amazing trip.” Sherwood Residence is a luxury serviced apartment hotel conveniently located on the edge of District 1 in Ho Chi Minh City. Its 228 apartments and 12 penthouses are available for short or long-term stays and its extensive range of services and facilities make it an exceptional city living experience. TripAdvisor, the world’s largest travel site, enables travelers to unleash the full potential of every trip. With over 570 million reviews and opinions covering the world’s largest selection of travel listings worldwide - 7.3 million accommodations, airlines, attractions, and restaurants - TripAdvisor provides travelers with the wisdom of the crowd to help them decide where to stay, how to fly, what to do, and where to eat. Cuba promoted as potential market for Vietnamese firms A seminar was held in Ho Chi Minh City on February 5, introducing Cuba as a potential market, in terms of both trade and investment, for Vietnamese businesses. Pham Thiet Hoa, Director of the Ho Chi Minh City Investment and Trade Promotion Centre, said Vietnam and Cuba boast sound traditional relations along with expanding economic and trade ties. Vietnam is now one of the 10 biggest trade partners of Cuba and also the second largest Asian trade partner of the Latin American nation. However, bilateral trade remains modest compared to the two countries’ demand and potential, he noted, elaborating that Vietnam’s exports to Cuba are estimated at 240 million USD per year, accounting for only 3.5 percent of Cuba’s total annual trade – nearly 7 billion USD. Hence, there remains much room for Vietnamese firms to invest in and trade with Cuba. Hoa noted Cuba has big demand for food, consumer goods, footwear, textile-garment, and computer devices, which are also the strengths of Vietnam. Meanwhile, it is strong at pharmaceuticals, training, health care, and construction, which the Southeast Asian nation is interested in. Promoting investment in and trade with Cuba will also help Vietnamese enterprises to access the vast market of the Latin American and Caribbean region. Indira Lopez Arguelles, Cuban Consul General to HCM City, said her country’s economy has improved in recent years with annual growth rate maintained at 4 – 5 percent. A stronger economy has also encouraged consumption in Cuba while the country still has to import most of consumer goods. This is a good opportunity for Vietnamese businesses to enhance exports to the country, especially rice, apparel, footwear, and computers. The sound bilateral friendship is an advantage for Vietnamese firms, she said, adding that the two countries are preparing to sign a bilateral free trade agreement to remove tariff barriers and bolster trade. However, there remain certain obstacles to bilateral trade. Tran Ngoc Thuan, Deputy General Director of the Thai Binh Investment – Trade Company, which has had investment and trade ties with Cuba for 20 years, said the biggest barrier is the geographical distance, which will augment transportation costs. Due to financial difficulties, Cuba importers’ payment also usually lasts for more than one year. He said Cuba needs to shorten the payment period. Meanwhile, Vietnamese companies should learn about their partners’ transaction habits thoroughly while preparing appropriate capital and long-term strategies for investment in Cuba. Indira Lopez Arguelles said Cuba promotes import activities, but in the long term, it will prioritise attracting investment to develop domestic production. She suggested Vietnamese firms develop production and distribution in her country so as to ensure long-term development in this market. Vietnamese economy shows positive signals in January The Vietnamese economy showed positive signals in January with hikes in export-import as well as domestic and foreign investment. According to the General Statistics Office (GSO), there were nearly 11,000 newly-established firms nationwide with a total registered capital of 98.3 trillion VND (4.36 billion USD) in the month, up 20.6 percent in volume and 8.9 percent in value. The additional capital hit 316.4 trillion VND, proving that business confidence is improving. During the first month of 2018, the State investment hit 16,175 billion VND, or 4.9 percent of the yearly plan and up 13.9 percent annually. Notably, the industrial production index surged by 20.9 percent year-on-year as firms focus on manufacturing to meet demand during the upcoming traditional Lunar New Year. Among industries, manufacturing and processing sector expanded by 23.8 percent while other sectors posted year-on-year growth such as mining, electronics, computers and optical products, coal mining and apparel. The consumer price index rose by 0.51 percent monthly and 2.65 percent annually due to higher electricity and fuel prices, said acting Director of the GSO’s Price Statistics Department Do Thi Ngoc. As the Lunar New Year is days away, costs of housing repair services, railway tickets and health care moved higher, thus driving CPI up, she said. Also in January, the total export-import value surpassed 38 billion USD, 19 billion USD of which was export, up approximately 33.9 percent. Top five currency earners include mobile phones and spare parts (4.2 billion USD), apparel (2.3 billion USD), electronics and accessories (2.2 billion USD), footwear (1.3 billion USD), machinery and equipment (1.05 billion USD). However, only roughly 1.25 billion USD in foreign direct investment (FDI) was recorded, equivalent to 75.9 percent in the same period last year. The FDI disbursement went up 10.5 percent to 1.05 billion USD. The top investors remained the Republic of Korea and Singapore. The Overseas Investment Agency said the newly-registered capital fell strongly as only projects worth 100-300 million USD were licensed, accounting for nearly 71 percent of the total. The Ministry of Planning and Investment asked ministries, agencies and localities to complete assigning socio-economic targets, State budget estimate and devising public investment plan for 2018, as well as accelerate disbursement from early this year. It also requested preventing epidemics on plants and animals, closely controlling cross-border fowl and cattle transportation and ensuring food safety and hygiene. Auto imports in record drop in January: GSO Some 1,000 cars worth 94 million USD were imported to the Vietnamese market in January, reports the General Statistics Office. This marks a record drop of 86.2 percent in volume and 38 percent in value compared to the previous month. The drop comes after auto businesses, including Toyota Motors Vietnam and Honda, stopped importing autos due to the government’s Decree 116, which tightens control over quality, technical safety and environment protection of imported autos. Speaking at the government’s recent monthly press conference, Minister and Chairman of the Government Office Mai Tien Dung, said a number of embassies and organisations had sent letters to the Prime Minister proposing him to direct relevant ministries and sectors to reconsider the decree. Dung said the Vietnam Automobile Manufacturers’ Association had submitted four letters of recommendation to the government to remove difficulties, saying that the provisions in the decree were inappropriate. Meanwhile, several associations, such as Japan Business Association in Vietnam, and foreign direct investment joint ventures have repeatedly proposed the government to delay the implementation of Decree 116 by at least six months. Dung said there were three major issues arising out of the decree troubling auto businesses and organisations. The first is that the importers must obtain a Vehicle Type Approval (VTA) certificate issued by authorities in the exporting country. Dung explained that VTA was not a certificate of the State body but of authorised agencies or associations of the exporting countries, which aimed to ensure the origin, quality and value of the vehicle. Such authorised agencies and associations will also be responsible for recalling the vehicles if they have faults during the production process. This is to ensure the rights and interests of automakers and consumers alike, Dung said. As for the second issue, Dung said the decree states that the inspection agency will randomly select one unit of each batch to check. The check will be conducted on every batch of imported autos. This regulation will prove to be more costly and time-consuming in testing vehicles. And it is the customer who will have to incur the cost as businesses will ensure their profit. Dung said the government was considering the issue. The third problem posed by Decree 116 is that it requires automakers to have a testing route of 800m, with minimum 400m straight, before rolling out the vehicles in the market. According to automakers, this condition will require them to pay more, including registration fee, cost of land and cost of building testing routes. Dung said Prime Minister Nguyen Xuan Phuc had assigned the Government Office and relevant ministries and sectors to consider the above-mentioned problems. The recommendations would not only ensure the government’s demand on domestic auto production but also the country’s implementation of international standards that Vietnam was committed to, Dung said. Decree 116’s regulations are being evaluated as a technical barrier for auto importers to overcome. Dung, however, said all countries were applying necessary measures to ensure the quality of imported products as well as the rights and interests of consumers. Further explaining the issue, Dung said a batch of BMW autos previously imported to Vietnam was found with a lot of problems related to procedure and origin of the vehicles, in addition to the fact that they were used cars. “If we do not check them carefully, the consumers will be the most vulnerable,” he said. Vietnam ranks third in natural rubber production, export Vietnam currently ranks third globally in natural rubber production and export, according to the Vietnam Rubber Association. The association revealed that in 2017, the country earned 2.3 billion USD from export of 1.4 million tonnes of natural rubber, up 36 percent in value and 11.4 percent in volume year on year. The Vietnam Rubber Group alone produced over 250,000 tonnes of rubber latex and earned revenue of 21.38 trillion VND (936 million USD), exceeding the plan by 20 percent. Its pre-tax profit reached over 4.1 trillion VND (179.58 million USD), surpassing the yearly plan by 36 percent. The firm contributed 1.7 trillion VND (74.46 million USD) to the State budget in the year, while paying its employees about 7.1 million VND (310 USD) each per month averagely. Spring trade fair introduces Vietnamese specialties     The Spring Fair 2018 began on Monday at the Ha Noi International Exhibition Centre in the capital city, introducing many specialties from different areas across the country to local customers. Co-organised by the Viet Nam Exhibition Fair Centre JSC and the Viet Nam Beverage Association, the fair features over 400 booths of more than 350 businesses nationwide, covering a total area of nearly 5,000 square metres. The annual fair will be a good opportunity for participating businesses to introduce their products in order to better serve purchasing demands prior to the Lunar New Year (Tet) holiday, organisers said. The products on display include fish sauce, tea and fresh farm produce, along with garment textile, footwear, fine arts and handicrafts, household appliances, confectionery and beverages. In addition, the event also introduces products from other countries including Russia, South Korea, the United Kingdom, France and Belgium, among others. It will run until December 12. A previous event, it saw the participation of more than 300 domestic firms, displaying a variety of goods across 500 pavilions. Israelis eye opportunities in VN     A delegation of Israeli business executives visiting the Mekong Delta province of Ben Tre to explore co-operation opportunities in many sectors has said Israeli technologies can be applied anywhere in the world. The application does not depend on workers’ skill, they said. Boaz Zadik, CEO of Arrow Technologies, said his company is looking for investment opportunities in Viet Nam. In his country, a large quantity of water is treated and reused, he said. His company has been undertaking projects in India and Africa for 30 years and is ready to tie up with Vietnamese companies, he said. Other executives also hoped to tie up with Vietnamese companies and transfer technology to the latter. Bar Sharon, marketing director of Argos Company, said: “We will transfer technology and show Vietnamese companies how to use it … so that they can develop steadily for long.” Dr Ngo Ke Xuong, an agricultural expert, said he is intrigued by Israel. “A country with sand and desert can export tomato, cucumber and mango. It is amazing!” “Viet Nam should get technologies from Israel. Adoption of technology in agriculture is inevitable because we are under pressure from an increasing population and limited land.” Huynh Ky Tran, director of Thorakao Cosmetic, said Israeli companies are good. “In future we will co-operate with them to make more new products.” Nguyen Kim Lan, chairman of Incomex Sai Gon, said: “By meeting with Israeli companies, I have obtained new knowledge about clean agriculture. There is a lot of knowledge about technology and skill to ensure high yields and keep the environment clean.” Israel is the only country in the world that has been able to roll back the desert. It is the leader in recycling water, recycling a total of 70 per cent. Electronic components factory being built in Yen Bai     Construction of a fully-owned South Korean factory producing electronic components was kicked off on February 3 in the northern province of Yen Bai’s Tran Yen District. Covering an area of 6.49ha in Bao Hung Commune, the Edge Glass factory has the capacity to produce 54 million products every year. It will produce 18 million products in the first year of operation, 48 million products in the second year and 54 million products in the third year. Manufactured products will include 2D and 3D cover glass for phones and 2D cover glass for tablets. The factory also plans to produce glass for autos in future. South Korea’s Edge Glass Joint Stock Company has invested nearly VND5 trillion (US$220 million) in the factory. It is expected to create 1,500 jobs for local people when it becomes operational by April 2019. Speaking at the foundation-laying ceremony, Prime Minister Nguyen Xuan Phuc said the project investment was a proof that South Korean investors highly appreciated the province’s investment climate. The Prime Minister asked the local authorities to create favourable conditions for the investors to implement the project. He also expressed the hope that the investors would realise their commitment to protect the environment and contribute to sustainable development of the locality. According to statistics of the Ministry of Planning and Investment, South Korea was Viet Nam’s biggest foreign direct investor in January, with a total capital of $355.6 million. This was followed by Singapore with a much lower capital of $199 million. Viet Nam, Cambodia’s bilateral trade surged 30% in 2017     Bilateral trade between Viet Nam and Cambodia last year surged 29.7 per cent against the previous year to nearly US$3.8 billion, the General Department of Customs reported. Of the total, Viet Nam’s export turnover to this market was $2.77 billion, rising 26.1 per cent against the previous year. Vietnamese key export goods to Cambodia last year included steel and iron products ($521 million, up 69.7 per cent year-on-year) and oil and petrol ($375 million, up 30 per cent year-on-year). Meanwhile, Viet Nam’s imports from Cambodia reached $1 billion, a year-on-year increase of 40.6 per cent, mainly with timber and wood products ($214 million, up 16.9 per cent), cashews ($168 million, up 46 per cent) and rubber ($138 million, up 64 per cent). The leaders of Viet Nam and Cambodia have agreed to enhance the comprehensive co-operation between the two nations and raise the bilateral trade value to $5 billion. Viet Nam is currently the third largest trade partner and the fifth largest foreign investor in Cambodia. According to the Asia-Pacific Market Department, under the Ministry of Industry and Trade, trade across the border of the two nations has become easier, contributing to making Cambodia the 16th largest export market of Viet Nam. In recent years, the economic co-operation between the two nations has seen strong development. Statistics showed that the two-way trade between Viet Nam and Cambodia jumped from only $184 million in 2001 to $3 billion in 2016. Major export products of Viet Nam to Cambodia included steel, fertilisers, garments, machinery and plastic products. The two countries also expect to soon sign agreements on avoidance of double taxation, border trade and labour co-operation along with a memorandum of understanding on transport cooperation strategy for 2017-25 with a vision to 2030, which will help advance the trade relationship between the two sides to higher levels. PM agrees to Phu Quoc Island’s planning adjustment     Prime Minister Nguyen Xuan Phuc has agreed in principle to adjustments to the planning of Bai Thom Commune in Kien Giang Province’s Phu Quoc Island. The adjustments were proposed by the provincial People’s Committee. Local authorities were asked to update the adjustments on the island’s master plan by 2030 and to enhance management activity to ensure the implementation of the plan is compliant with land regulations, urban planning and construction planning. Phu Quoc Island’s master plan was approved in May 2010 and was adjusted once, in June 2016. The plan targeted promoting sustainable development, culture, environment protection and security and harmonising economic growth with the preservation of historical monuments. Phu Quoc will be developed into a hub for high-quality services and a centre for science and technology in Southeast Asia, with an international airport and seaport system connecting it with other destinations in the region. Phu Quoc was among three localities, besides Bac Van Phong in central Khanh Hoa Province and Van Don in northern Quang Ninh Province, planned for development into a special administrative-economic unit.  Petrolimex’s profit down despite revenue increase      Viet Nam National Petroleum Group (Petrolimex) reported total sales of more than VND155.65 trillion (US$6.83 billion) last year, a year-on-year increase of 26 per cent. But despite a growth in revenue, Petrolimex posted a consolidated pre-tax profit of nearly VND4.88 trillion, down 23 per cent compared to the previous year. The increase in revenue was attributed to the increasing average price of WTI (West Texas Intermediate) crude oil in 2017, with $50.85 a barrel, up 17.4 per cent over the same period in 2016, Petrolimex explained. According to its report, the most profitable sector was the petroleum business of the group, with over VND2.49 trillion, equivalent to 51 per cent of total consolidated sales. Non-petroleum business activities contributed nearly VND2.4 trillion or 49 per cent of total consolidated profit. Of this, profits from petrochemicals, asphalt and chemicals were the highest at VND651 billion. This was followed by profits from aviation fuel at VND384 billion; ocean transportation, inland waterways transport and road transportation reached VND339 billion; gas sales reached VND202 billion, and the lowest profit of two companies abroad reached only VND47 billion. As of December 31, 2017, Petrolimex’s total assets increased by VND12.306 trillion compared to the beginning of the year to VND66.55 trillion. Its inventories increased by more than VND4 trillion to nearly VND12.69 trillion and accounted for nearly 20 per cent of total assets.  FPT records 41% increase in pre-tax profit      FPT Corporation reported a consolidated revenue of VND43.8 trillion (US1.93 billion), a year-on-year increase of eight per cent, by the end of last year. Pre-tax profit of the corporation increased by 41 per cent year-on-year to VND4.25 trillion, while after-tax profit reached VND3.52 trillion, up 37 per cent. The impressive growth of FPT’s earnings last year came mainly from positive business results and earnings from divestments in two companies: FPT Retail and FPT Trading. The year-to-date profit-after-tax attributable to the parent company’s shareholders was VND2.92 trillion, up 47 per cent year-on-year. The earnings on each share was VND5.12, up 50 per cent over the previous year. FPT’s earnings growth last year continued to be driven by two core business sectors --- technology and telecom. The technology sector recorded a revenue and pre-tax profit of VND11.1 trillion and VND1.13 trillion, up 11 per cent and three per cent, respectively, compared to 2016. The telecom sector’s revenue increased by 15 per cent year-on-year to VND7.65 trillion, while pre-tax profit was VND1.2 trillion, slightly increasing by two per cent. FPT’s overseas markets recorded a revenue of VND7.2 trillion, up 18 per cent over the same period in 2016, and pre-tax profit was VND1.21 trillion, up 29 per cent, accounting for nearly one-third of the consolidated pre-tax profit. FPT’s overseas revenue comes mainly from software exports to key markets in Japan, the United States and Europe.  HCM City real estate market remains on growth path The HCM City property market is expected to remain strong this year thanks to the country’s robust economic growth last year. According to American real estate services firm John Lang LaSalle, mergers and acquisitions in the sector will continue to attract great interest among international investors, especially Japanese, Singaporean, Chinese and South Korean companies, and could reach record levels of almost US$2 billion, up from $1.5 billion last year. New housing launches will continue at a similar pace as last year and the focus will be on the affordable and mid-priced sectors. In the office space segment, two grade A buildings were launched at the end of 2017, but there will be no more until 2020. With the occupancy rate being 92 per cent prices are expected to increase. In other news, Nhịp Cầu Đầu Tư (Investment Bridge) magazine will give away the 2017 Outstanding Real Estate awards at a ceremony later this month. The awards are based on business achievements and management in the real estate sector. They will be given in the following categories: outstanding designer; outstanding developer; outstanding distributor; construction materials provider and construction enterprises; real estate business people of the year; best feng shui project; and best public infrastructure project.  Cashew sector gets modest profits in global value chain Vietnam has been the world largest exporter of cashew nuts for 13 consecutive years and also the world leading cashew processing hub and exporter over the last three years. Despite impressive results, growers and businesses have got less than 40% profits in the global value chains. Chairman of Vietnam Cashew Association (Vinacas) Nguyen Duc Thanh says last year, Vietnam still maintained its market share and gained more than 50% of the global export value with US$5.5 billion to keep its leading position in cashew nut processing and export. Cashew exports are estimated at 25,000 tons valued at US$256 million in January, up nearly 40% in volume and 56.5% in value against the same period last year. Mr Thanh attributed the achievement to great efforts of businesses and diversified markets, and the consistent government policies to encourage and facilitate the sector’s operation. Last year, Vietnam shipped cashew products to 92 markets and secured good market shares in the US, Netherlands and China. New high-growth markets among ASEAN countries have been set up, particularly Thailand with a growth of more than 40% and Singapore, over 20%. The government’s consistent policies have facilitated cashew exports, creating favourable conditions for exporters of processed cashew nuts and importers of raw nuts. As a result, 95% of the processed cashew nuts are exported and only 5-6% are sold in the domestic market. However, Mr Thanh says, only a small number of Vietnamese businesses are benefited from the global value chain. Cashew growers just enjoy 18% of profits in the value chain while processors and exporters get approximately 10% and the rest go to foreign retailers and supermarkets. In sum, the total profits that Vietnamese cashew growers, processors and exporters get from the value chain are about 40% although they have poured much investment, sources and capital into the business. Meanwhile the remaining 60% of profits go to foreign processors and supermarket owners. To improve the situation, Vinacas has launched a program to stimulate domestic consumption while encouraging businesses to process instant products. Over the last two years, a large amount of salty roasted, honey roasted and wasabi cashew nuts have been exported to China. They are also much sought after by Australian and Japanese customers. FMCG forecasted to grow fast during Lunar New Year festivities The increasing demand for consumer goods and evolving distribution systems enable the fast moving consumer goods (FMCG) to become the fastest-growing segment in Vietnam. With increasing income and a newfound hunger for better living quality, Vietnamese consumers are shopping more and more. They are no longer considered as the highest savers anymore, as they are ready to spend much on consumption, tourism, and household appliance goods. According to a survey produced by Nielsen, after essential living expenses, Vietnamese consumers are ready to spend on tourism, shopping, new hi-tech gadgets, and other entertainment services. The high growth potential of the economy and increasing consumption demand are expected to boost FMCG at the end of 2017 and in the first month of 2018. The results of Nielsen’s Market Pulse research showed that FMCG grew by 5% in the second quarter of 2017 in Vietnam, and 5.8% in the third quarter. This figure was forecasted at 6-7% in the fourth quarter. Additionally, an increasing number of super markets and grocery stores are spurring the growth of the FMCG segment in the country. In 2017, the market saw heated competition between supermarket and mini mart chains, with the 1,000 stores of Vinmart and Vinmart+ (VinGroup), 259 stores of Circle K, 11 stores of 7-Eleven in Ho Chi Minh city were duking it out for supremacy. According to the General Statistics Office, in 2017, the total retail market hit US$130 billion, up 10.9% on-year, including the large contribution of the FMCG sector. A survey by Kantar Worldpanel Vietnam shows that non-food items maintained their growth momentum, especially personal care products. Beverage items are back in the first place in growth, while milk and milk products increased lightly in rural areas. On the occasion of the Lunar New Year, Vietnam’s FMCG segment expects a sharp boost. In addition to food items such as confectioneries and household products (washing liquid, washing-up liquid, soap, shampoo, shower gel), Kantar Worldpanel Vietnam forecasts beverage items to see remarkable demand. In 2017, Vietnam consumed around 4 billion litres of beer, 40% of which came from Sabeco. The Lunar New Year is usually the peak demand for beer during the year, and this year is forecasted to follow traditions. Plastics exports forecast on upward trend The Vietnamese plastic industry gained a total export value of over US$3 billion last year, a year-on-year increase of 17.3%, according to the Vietnam Plastic Association (VPA). With the growth momentum, plastic exports are expected to grow between 12%-15% this year with Japan and the US as major markets. China, Cambodia, Laos and Myanmar are also promising emerging markets in the coming time.  Vietnam’s plastic industry needs around 4 million tonnes of raw materials a year. However, domestic petrochemical businesses can meet only 20% of its demand. VN Textile Research Institute to launch IPO next month Việt Nam Textile Research Institute (VTRI) will sell over 2.26 million shares, accounting for 45.25 per cent of its charter capital, in its initial public offering (IPO) on March 12. VTRI will offer 2.26 million shares, corresponding to 45.26 per cent of chartered capital for strategic investors on its IPO next month. The shares will be listed on the Hà Nội Stock Exchange (HNX), with the initial price of VNĐ12, 583 (55 US cents) for each share. VTRI expects to receive more than VNĐ28 billion from the IPO. Domestic and foreign organisations and individuals, who meet the conditions prescribed in Article 6 of the Government’s Decree No. 59/2011/NĐ-CP dated July 18, 2011, on transformation of enterprises with 100 per cent State capital into joint stock companies, can participate in the auction. The registration and fee deposit timing is from 8.30am February 3 to 3.30pm March 5. The deadline for submission of auction tickets is 4pm on March 8. As for its business result, VTRI posted a revenue of VNĐ57 billion last year, down 25 per cent compared to the average revenue of the previous three years. Its profit was VNĐ761 million, down nearly double that of 2016. Total assets of the institute at the end of 2017 was worth VNĐ41 billion. In terms of land, VTRI is managing and using plots of land at 478 Minh Khai Street, Hà Nội with an area of nearly 2,851sq.m; at 454/24 Minh Khai Street with an area of 5,311sq.m; and at 354/128A Trần Hưng Đạo Street, District 1, HCM City with an area of nearly 2,220sq.m. According to the results of the enterprise’s appraisal, the actual value of VTRI for equitisation is VNĐ72.8 billion, of which State’s capital is VNĐ51 billion. Under the equitisation plan, VTRI will offer 2.26 million shares, corresponding to 45.26 per cent of charter capital for strategic investors. The remaining 474,000 shares will be offered to employees. Committee for State Capital Management at Enterprises set up The government announced on February 5 that it has set up a committee to oversee around VND5,000 trillion ($220 billion) worth of government assets in enterprises, as part of an effort to boost equitization. Vietnam has stepped up its planned divestment from hundreds of State-owned enterprises (SOEs) to boost their performance and ease a tight State budget. Progress has been slow but has picked up since 2016, when the current administration took office. The Committee for State Capital Management at Enterprises will be more comprehensive than the State Capital Investment Corporation (SCIC), Vietnam’s main State investment arm that holds shares in firms like Vinamilk, the country’s largest listed firm. The committee will have its own legal status, a seal bearing the national emblem, and a bank account at the State Treasury. It will not manage SOE performance, only State capital and assets. Many State shares, especially in SOEs, are under the management of different ministries, causing complications and delays in selling stakes in some instances. For example, the Saigon Beer Alcohol Beverage Corp. (Sabeco) and the Hanoi Beer Alcohol Beverage Corp. (Habeco), Vietnam’s largest beer brewers, are under the Ministry of Industry and Trade, while telecoms firm MobiFone, which is also earmarked for equitization, is under the Ministry of Information and Communications. A working group on the formation of the committee was established in mid-January with eleven members, headed by Deputy Prime Minister Vuong Dinh Hue and four deputy heads - the Head of the Office of the Government and Minister Mai Tien Dung, Minister of Planning and Investment Nguyen Chi Dung, and Minister of Finance Dinh Tien Dung. Former Secretary of the Cao Bang Provincial Party Committee Nguyen Hoang Anh, the would-be Chairman of the super committee, was assigned as standing deputy head of the working group. Detailed guidelines on the committee’s function and mission are expected to be released in the second quarter, Deputy Minister of Planning and Investment Nguyen The Phuong said. Nine corporations and 21 enterprises will be managed by the new committee, including the Vietnam Oil and Gas Group (PetroVietnam), the Vietnam National Coal-Mineral Industries Holding Corporation Limited (Vinacomin), the Vietnam Posts and Telecommunications Group (VNPT), the Vietnam National Petroleum Group (Petrolimex), the Bao Viet Holdings Insurance Company (BaoViet), Sabeco, and Airports Corporation of Vietnam (ACV), among others. Insurers have role to play in infrastructure investment At the recent World Economic Forum in Davos, the ASEAN Insurance Council (AIC) called on industry stakeholders throughout ASEAN to take an active role in driving local and regional economic growth by funding critical infrastructure developments through public-private partnerships (PPPs). The projection is that ASEAN’s infrastructure development will require as much as $3.1 trillion in investment by 2030, and Ms. Evelina Pietruschka, Secretary General of the AIC, firmly believes that ASEAN’s insurance industry can play a key role in meeting that need. “The Asian Development Bank (ADB) estimates that ASEAN requires up to $60 billion in additional investment annually to bridge the current infrastructure investment gap,” she said “That’s a huge figure for governments to fund alone. ASEAN’s insurance industry is perfectly positioned to help meet this need through innovative PPPs in infrastructure investment. The AIC believes we can shape the future of our nations and region by funding investments in key infrastructure developments that contribute to the realization of the Sustainable Development Goals (SDG).” With a population of over 630 million, increasing urbanization and an affluent middle class, ASEAN governments will need to partner with businesses to deliver on critical infrastructure projects in the transport, healthcare, energy, food, and education sectors. Despite substantial progress in recent decades, the ADB estimates the region is still home to over 400 million people with no or limited access to electricity, while 300 million lack safe drinking water and almost 1 billion are without basic sanitation facilities. Globally, insurance companies are estimated to hold just 2 per cent of assets under management in infrastructure investments. But with insurance premiums in ASEAN growing at an average annual rate of 13 per cent between 2004-2014 - three times the global average - the potential to channel investments to viable infrastructure projects offers a rewarding opportunity. A study by global consulting firm PwC, Understanding Infrastructure Opportunities in ASEAN, concluded there was a direct and positive correlation between infrastructure investment and GDP growth. According to Ms. Pietruschka, that springboard for inclusive and sustainable economic growth represents a mutually-beneficial prospect for both insurance companies and ASEAN member states. “PPPs to fund infrastructure development offer an innovative alternative approach to realize the substantial benefits for insurance companies in ASEAN,” she said. “Not only do long-term infrastructure investment horizons provide the ideal complement to the industry’s own investment timeframes, these projects also help stimulate positive growth for national and regional economies. The use of local currency by local insurance players to fund these investments is also a huge benefit to currency fluctuations and national debt levels.” The AIC, she went on, firmly believes that building mutually beneficial PPPs to fund infrastructure development begins with a shared objective to improve the lives of the people. To highlight the benefits of this blended financing approach, the AIC plans to be a bridge in driving conversations between ASEAN member states and local insurance companies to catalyst vital investments into infrastructure projects throughout ASEAN. The AIC was founded in 2003 following unanimous consent at a Meeting of the Council of the ten ASEAN member states in Hanoi and aims to support the development of insurance and reinsurance in ASEAN, promote regional cooperation, and champion ASEAN’s insurance industry. Today, that mission provides the framework through which the AIC seeks to highlight the opportunities for insurance companies to drive impact investments that will provide a positive multiplier to wider regional growth, including providing blended funding options to national infrastructure projects. It also pays due respect to the aspirations, laws, and regulations of member countries. As an organization, the AIC is keen to inform, support and champion the ASEAN insurance industry and its constituent members, promoting a positive landscape that encourages and enables success in all areas of insurance and reinsurance. VNN