BUSINESS IN BRIEF 19/4 Mining Vietnam 2018 kicks off in Hanoi The fourth International Mining and Minerals Recovery Exhibition for Vietnam (Mining Vietnam 2018) kicked off in Hanoi on April 18.  Co-organised by the UBM Asia company and the Vietnam Chamber of Commerce and Industry’s Vietnam Exhibition Services Company Ltd, the biennial event took place for the first time in 2012 and has become a bridge connecting domestic and foreign firms and diversifying advanced technologies and equipment.  The three-day exhibition attracts more than 137 enterprises from 18 countries and territories, including the UK, Czech Republic, Germany, Singapore, China and Australia. They displayed equipment, machinery and technologies used for mining on a site of 4,000 sq.m.  Apart from well-known names such as Volvo, PET, Tamiha, Tsurumi, Vinza, YHI, Weir Minerals, the Vietnam National Coal and Mining Industries Corporation (Vinacomin) also joins the event.  Tran Tu Ba, Director of the Vinacomin Institute of Science and Technology, said Vinacomin is willing to work with partners to bring technological advances used in mining to Vietnam.   During the event, three seminars will gather prestigious speakers to discuss breakthroughs and sustainability of mining, progresses in mining and underground works, and use of modern technology in mining and management. They will also talk about restoration of mineral resources and environment protection.  Asia Miner, one of Australia’s well-known magazines specialising in mining and exploitation of mineral resources, will be also present. It will continue partnering with Vietnam in the Regional Technical Conference Vietnam 2018 with speakers from major foreign firms taking part. Participants will also discuss measures to improve mining output and safety standards in the field. Ho Chi Minh City bolsters tourism ties with Binh Thuan, Lam Dong Around 50 percent of tourism projects in the south central province of Binh Thuan and the Central Highlands province of Lam Dong are invested by businesses from Ho Chi Minh City. At a conference reviewing the four-year partnership between HCM City, Binh Thuan and Lam Dong on April 15, the Department of Culture, Sport and Tourism of Binh Thuan reported that 239 tourism projects in the province (62 percent) are run by investors from HCM City. The figure reported by Lam Dong was 100 (44 percent). Under their partnership, the three localities have regularly exchange experience in State management of tourism and jointly hold events annually for their travel agencies. Director of HCM City Department of Tourism Bui Ta Hoang Vu said the outcomes of the partnership proved that connectivity help the partners better tap their own potential and advantages.  From a business perspective, Nguyen Van My of Lua Viet company said the tourism brand of the three localities is weak, adding that for the connectivity to produce desired result, each locality should develop its own strength, which are then combined to create unique products able to compete with other regions. Deputy Director of Lam Dong province’s Department of Culture, Sport and Tourism Nguyen Thi Bich Ngoc proposed building a joint tourism development plan with specific mechanisms designed to support local tourism firms, thus making the partnership more strong and effective. The tourism sectors of the three localities pledged to push forward with the trilateral cooperation. They will take measures to improve joint promotion activities and build a joint brand along with a tourism app for the three localities as a whole.- 54 excellent estate businesses, projects honoured A total of 54 businesses and projects were honoured with the Vietnam Property Awards 2018 in Hanoi on April 14 in recognition of their significant contributions to the development of the real estate market in Vietnam. The awards were launched by the Vietnam Real Estate Association (VNREA), the Management Agency for Housing and Real Estate Market under the Ministry of Construction and the VTV24 news centre. Speaking at the award ceremony, Deputy Prime Minister Trinh Dinh Dung said after a period of decline, the real estate market has recovered and developed strongly with high liquidity and reasonable structure, helping modernise urban areas. Particularly, the increasing areas of social housing projects have created accommodations for nearly 500,000 low-income people and workers at industrial parks, he said. The awards encouraged domestic businesses to enhance corporate social responsibility, competitiveness and develop trademark to meet international standards, he added. To ensure sustainable and healthy development, it is necessary to improve relevant institutions, revise and supplement terms of the laws on construction, housing, and real estate business, and build a law on urban management and development to create a legal corridor and favourable environment for property investment and development, Dung said. Planning schemes on urban development should be revised to avoid spontaneous investment, he said, adding that the development of social housing projects is needed to ensure all people could afford safe and quality accommodation. According to VNREA President Nguyen Tran Nam, after four months of launching, hundreds of businesses registered to join the competition - which was divided into eight categories, including prestigious real estate developer (11 awards), best urban area (6 awards), best resort development (5 awards), best office building for rent and shopping mall (3 awards), best residential area (10 awards), best green building (6 awards), best real estate transaction floor (7 awards) and best social housing project (6 awards). Vingroup, Sun Group, and FLC Group were among the winners of the prestigious real estate developer awards, while the best urban projects were Ecopark, Phu My Hung (Ho Chi Minh City), Phu Long – Dragon City (HCM City), Ciputra – Udic (Hanoi), Lakeview City (HCM City), and Vinhomes Riverside (Hanoi). The best resort development awards went to FLC Quy Nhon Beach & Golf Resort (Binh Dinh province), Premier Village Da Nang Resort, Novotel Phu Quoc Resort-Novotel Villas (Kien Giang province), Silk Path Sa Pa Resort & Spa (Lao Cai province), and Flamingo Dai Lai Resort (Vinh Phuc province). The Eurowindow Office Building and Vincom Centre in Hanoi and HCM City-based Cantavil Premier won the best office building for rent and shopping mall awards. In 2017, the real estate market in Vietnam saw positive changes in all segments. In the capital city of Hanoi and the southern economic hub of Ho Chi Minh City alone, there were 64,263 successful deals. A range of new products such as condotel, officetel and hometel were developed, making the real estate market in the Southeast Asian country more attractive. Labour productivity enhancement – key to economic growth    Vietnam’s labour productivity is very low compared with growth need, thus raising productivity is the key to economic growth, experts said at a conference on April 13. According to Ngo Van Tuan, deputy director of the Party Central Committee’s Economic Commission, the country’s productivity increased by an average 4.7 percent a year during 2011-2017, while the GDP growth was about 6.21 percent and real wage rose by an average 12.59 percent. “This means production costs in Vietnam is becoming more expensive, which directly affects the country’s competitiveness,” Tuan told the CEO forum 2018 held by the Vietnam Economic Times. The General Statistics Office (GSO) reported that local productivity has been increasing throughout recent year, but remains lower than regional levels. By purchasing power parity in 2012, Vietnam’s productivity in 2016 reached 9,894 USD in 2016, equal to only 7 percent of Singapore’s, 17.6 percent of Malaysia’s and 36.5 percent of Thailand’s. The gap is still expanding, GSO Director General Nguyen Bich Lam said, attributing it to the slow restructuring process of the economy, with the high proportion of the workforce working in the agricultural sector where the labour productivity is low. The prevalence of outdated machinery, equipment and technology in the economy is another cause, he said, noting that most domestic firms, particularly private ones, use technology that are two or three generations backward compared to the world’s average. Furthermore, the capacity of resource management and use is low, as is business administration capacity, according to Lam. He urged the Government and sectors to make raising labour productivity a leading task to improve the national economy’s competitiveness and sustainable growth. The Government should set up a national labour productivity committee to coordinate efforts to enhance productivity, and develop a national strategy to help the country catch up with regional countries in terms of productivity. Deputy director of the Party Central Committee’s Economic Commission Tran Van Tuan was of the opinion that the most effective solution to enhance productivity is to attract FDI into industrial production and services of higher value. He said the country needs a new strategy and new directions in attracting FDI, in order to allow the FDI sector to play a greater role in technology transfer. A representative from Deloitte Vietnam Ha Thu Thanh said as the human factor is the first to affect labour productivity, the country needs a human-based approach to productivity enhancement. URC sales plunged after notorious lead scandal Filipino firm Universal Robina Corporation experienced weak sales in Vietnam in 2017, following a major food safety scandal resulting in recalls, which forced the company to change its product’s look in March. According to the latest Universal Robina Corporation (URC) report, it incurred a 21.1 per cent drop in net income in 2017. “Profitability remained weak as the company faced a decline in volumes and a change in its product mix, particularly relating to the coffee category in the Philippines, as well as a slower-than-expected recovery in Vietnam,” URC said. URC, the food and beverages unit of the Gokongwei group of companies, is focusing on strengthening its business and hopes to recover its share of Vietnam’s beverage market by 2020. URC consists of three main divisions, namely snack foods, beverages, and grocery products. The group manufactures and distributes a diverse mix of salty snacks, chocolate, candy, biscuits, baked goods, beverages, noodles, and tomato-based products in the Philippines and throughout Asia. Its green tea beverage C2 and ready-to-drink energy drink Rong Do are popular in Vietnam. The company faced a price war in the Philippines involving its coffee and salty snack businesses, while its two flagship beverage brands, C2 and Rong Do, were recalled in Vietnam for exceeding the limit for lead content in 2016. The Vietnamese Ministry of Health announced the imposition of a fine of more than VND5.8 billion ($260,000) for producing and selling lead-contaminated products. According to the ministry, a batch of C2 manufactured on February 4, 2016 and a batch of Rong Do made on November 10, 2015 were found to contain high levels of lead. Test results showed these batches had a lead content of 0.053 to 0.085 milligrams (mg) per litre, definitively above the acceptable limit of 0.05 mg per litre. The lead contamination scandal has damaged the reputation of the company and consumers remain wary of its products. In order to recover its sales, URC launched a new look for C2 in mid-March stating in a document that the beverage “still keeps to its unique brewing process where it’s brewed and bottled on the same day, ensuring a fresh and authentic drinking experience”, while also focusing on the product’s base of green tea leaves. Asked about the company’s future strategies for Vietnam’s market, no URC representative was available for comment. According to Euromonitor International, a leading provider of strategic market research, in 2016, the ready-to-drink tea market recorded declines in both on-trade and off-trade volume and value terms, as both of its leading players, Tan Hiep Phat Group and URC Vietnam, were involved in scandals which affected their reputations and sales. In 2017, as the scandals died down, the segment rebounded, although growth was not as strong as it had been prior to the scandals. In recent years, Vietnamese customers have become increasingly aware of health and wellness products due to higher rates of diabetes, high blood pressure, and cancer. For this reason, there has been a perceptible shift in preference towards more nutritious drinks with less sugar and caffeine. With higher disposable incomes, many consumers have become more willing to pay extra for healthier products. VSC-Posco turns to government in land use quagmire One of the leading foreign steel makers in Vietnam, VSC-Posco Steel Corporation, recently filed a complaint with the government concerning the irrational issuance of a land use right certificate by municipal authorities relating to its steel rolling mill project in Haiphong city. VSC-Posco Steel is a joint venture established by four investors including Posco and Posco Processing & Service Co. Ltd. Among the four, Haiphong Steel and Mechanical Building Material JSC (Hascom), under a prime ministerial decision, was allowed to rent 60,094 sq.m to contribute capital to the company. In a document sent to the Government Office and Haiphong’s relevant authorities, Posco Vietnam Holdings claimed that the Haiphong People’s Committee failed to issue the land use right certificate of the land for the joint venture. “Despite our contacting with the relevant competent authorities, we have not been issued the land use right certificate of the land for fully implementing our legitimate rights. The construction works and assets attached to the land were established long time ago, but have not been duly recorded.” VSC-Posco claimed it recently discovered by chance that Hascom had secretly applied for a land use right certificate for the land without consulting the joint venture. Besides, on July 11, 2016, the Haiphong People’s Committee issued a decision allowing Hascom to extend the lease for the land. “Unfortunately the certificate was issued in the name of Hascom, while this land use right has been contributed by Hascom to the joint venture,” VSC-Posco stated in its complaint. “The land lease extension and issuance of land use right certificate to Hascom instead of VSC-Posco Steel Corporation is contrary to directives of the prime minister and the laws of land, enterprises and investment.” According to VIR’s sources, the final government decision could be released this month and published on the government’s website. The VSC-Posco Steel Corporation’s $56 million plant in Haiphong began commercial operation in 2015, with a capacity of 240,000 tonnes per year. Ever since its establishment, the joint venture’s output and revenue have been on a steady trajectory of growth, from 13,000 tonnes and VND47.9 billion ($2.2 million) in 1995, to 3.5 million tonnes and VND2 trillion ($94 million) in 2014, respectively. Moody’s affirms Vinacomin’s B3 rating amid slower coal export Moody’s Investors Service has affirmed the B3 corporate family rating for state-owned Vinacomin Holding Corporation Limited, with its outlook remaining stable, on the back of slower coal exports. “Vinacomin’s B3 rating is primarily driven by its standalone credit quality as captured by its b3 baseline credit assessment, which in turn continues to reflect its strategic importance in managing Vietnam’s coal and mineral reserves, and its demonstrated access to low-cost credit from the local banking sector to support its expansion projects,” said Moody’s lead analyst for Vinacomin, Maisam Hasnain. The company has a long-dated reserve life with substantial reported coal reserves (over two billion tonnes). This translates into a reserve life of over 50 years based on its 2018 expected production of 36 million tonnes. Accounting for about 70 per cent of its revenue, coal sales will remain the primary contributor to Vinacomin’s operations. Vinacomin, however, may have to face a narrow coal export market as Vietnamese coal products do not meet the requirements of importing countries. China has recently requested to reappraise the quality of the coal imported from Vietnam to align with standards on trace elements. Vinacomin ealier on collaborated with its Chinese partners to take and analyse samples of coal to conclude that Vietnamese coal products did not meet the requirements, leaving 2.5 million tonnes of dust coal unmarketable in Vang Danh-Uong Bi. China started to reduce Vietnamese coal imports a while ago now. According to data from Vietnam Customs, coal exports were kept at a reasonably high level in 2010-2014, but sharply declined since 2015. In 2010, China bought 14.644 million out of the 19.827 million tonnes of coal exported by Vietnam. By 2014, coal exports to this market decreased to 4.139 million tonnes. In 2015, Vietnam Customs did not record any coal exported to China. In 2016 and 2017, the agency recorded only several thousand tonnes. China is known to not accept low-quality coal imports anymore. As a result, Vietnam’s coal inventory raised to 8.75 million tonnes in 2015, 9.42 million tonnes in 2016, and over nine million in 2017. The volume of Vietnam's coal export in 2017 only met 50 per cent of the set goal. Last year, the country exported 2.229 million tonnes of coal, way below the target of four million tonnes. Moody’s opinion of Vinacomin’s ablility to meet all of its financial obligations (B3 rating), meanwhile, recognises key challenges including Vinacomin’s large debt-funded capex programme; the standard, quality, and timeliness of its consolidated financial reporting; its dependence on short-term bank funding; and the limited degree of clarity regarding long-term shareholder intentions and strategic direction. “The rating is constrained by Vinacomin’s large capex plans which will keep its adjusted leverage—as measured by adjusted debt to EBITDA—elevated at around 5.5-6.0x, and its high dependence on short-term debt to fund its operations,” noted Hasnain. “However, based on its status as a state-owned enterprise, Vinacomin has built long-standing relationships with banks and financial institutions in Vietnam and has a track record of successfully rolling over its short-term bank loans,” added Hasnain. While Vinacomin is 100 per cent owned by the Vietnamese government (B1 positive), Moody’s believes that the government is unlikely to provide more than selective and partial support in a distress situation, and Vinacomin’s rating therefore does not include any uplift for expected government support. The stable outlook reflects Moody’s expectation that the company’s leverage will remain elevated but within its rating parameters while it works to improve its cost competitiveness amid increasing coal imports in Vietnam. The outlook also takes into account Vinacomin’s proven access to state-owned banks and the domestic bond market as it carries out its capital investment plans. International know-how to help local fruit exports Vietnam has gained a licence to export fresh rambutan to the fastidious market of New Zealand. For more export success, local fresh fruit producers and farmers must leverage international know-how to enhance their produce quality in order to meet global standards. Some ten years ago, a New Zealander living in a provincial town would hardly have known what dragon fruit tasted like, let alone other exotic fruits like rambutan. Yet now, dragon fruit imported from Vietnam has become exceedingly popular at provincial supermarkets in New Zealand, according to Emmet McElhatton, commercial manager of the New Zealand Government-to-Government Partnerships Office (G2G Know-How). McElhatton said that the tropical fruit market in New Zealand is rapidly growing, thanks to the exposure to new flavours that Kiwi travellers have gained after their visits to tropical destinations. “[Our] supermarkets are more willing now to stock different products and consumers are really demanding variety,” McElhatton said. For Vietnamese fruit exporters, the commercial manager stressed that it is important to “get the flavour profile right for all consumers” when looking to export their fresh produce to New Zealand. “It is important to have a product that they can easily consume without too much fuss. Think about a banana. A banana is the ultimate consumer product that comes in its own packaging, with beautiful flavour, in different sizes, and is very easy to consume,” McElhatton told VIR on the sidelines of a New Zealand-Vietnam Rambutan Trade and Opportunities event for bilateral horticulture co-operation, held in Hanoi on April 10. “I think the diverse Asian population in New Zealand—up to 15 per cent of the population, with some parts of Auckland being 20-30 per cent Asian, for example—is driving demand for these products,” he added. To date, three local tropical fruit have been granted market access to New Zealand: mango in 2011, dragon fruit in 2014, and rambutan that was recently permitted to cross New Zealand’s borders. In fact, Vietnam is the very first nation to export fresh rambutan to New Zealand, according to New Zealand’s Ministry of Primary Industries. Being able to export fruit to New Zealand, meanwhile, means much to Vietnam. If it can make it into one of the pickiest markets in the world, it can make it to anywhere else, according to Deputy Minister of Agriculture and Rural Development Le Quoc Doanh. Doanh noted that in 2017, Vietnam exported a record $3.5 billion worth of fresh fruits. In the first quarter of this year, the country reported $934 million in fresh fruit exports, an up of 33 per cent compared to the same quarter in 2017. The shipments of local rambutan are expected to reach New Zealand’s shores in the next few months, upon completion of price negotiations and shipment arrangements between local exporters and their New Zealand partners, according to the Ministry of Agriculture and Rural Development. The fruit will then join its compatriots of dragon fruit and mango on the shelves of Kiwi supermarkets, where demand for tropical produce is on the rise. Apart from the trio, more Vietnamese fruits have high hopes to make their move to satisfy the taste buds of not only New Zealand, but many other nations. This hinges on whether local fruit producers and farmers pay due attention to the flavour profile and, above all, the investment that is needed to help them move on from traditional farming to more advanced varieties, in a bid to meet international standards and demand for fresh produce. Whilst more investment is definitely needed in the agricultural sector to help switch from traditional farming to more modern approaches, it is essential to note that local agricultural businesses or organisations should be prepared to pay premium for global expertise or consultancy services, which can bring benefits for themselves and the sector as a whole. For years, Vietnamese fresh produce has struggled to meet international standards for exports in terms of quality and quarantine treatment. Given the aid of international know-how, high-technology, and innovation, this could change. “What we have noticed is that a lot of Vietnamese investors are quite comfortable buying equipment and technology, but [when it comes to] the human input (knowledge, intellectual property, and expertise), they are less willing to pay premium. I think this really is the key thing that needs to change,” said McElhatton of New Zealand G2G Know-How. “Because once you have partnered up with them and access high-quality international expertise at a proper rate, you benefit from that, everybody benefits from that,” he added. “New Zealand is one of the most efficient agricultural economies in the world, with a reputation for producing cutting-edge research and technology, robust and safe agricultural practices, and delicious and high-quality products.” New Zealand’s world-class agriculture expertise is already making a practical difference in Vietnam by improving farmer income and food safety. Agriculture is one of four priorities for the New Zealand Aid Programme in Vietnam, along with education, disaster risk management, and renewable energy. Vietnam has officially become one of the first nations to export fresh rambutan to New Zealand, with the first shipments of the fruit to be ... Haiphong to step up infrastructure Haiphong is giving priority to mobilising resources to develop modern and synchronous transportation infrastructure, with the aim of promoting its central role as the main sea trade gateway of the economic corridor in the northern region. Infrastructure acts as a key element leveraging traffic connections and comprehensive development co-operation between Haiphong and three other localities of the economic corridor, namely Lang Son, Hanoi, and Quang Ninh. The spotlight of Haiphong’s traffic linkages comes from three completed infrastructure projects that are now in use: Hanoi-Haiphong Expressway, Tan Vu-Lach Huyen Highway, and Dinh Vu-Cat Hai Bridge. These projects facilitate the connection to Hanoi-Lao Cai Expressway, shortening the travel time between the northern province of Lao Cai and Haiphong International Gateway Port (HIGP) to some six hours. Haiphong’s port area is a key driver of the development co-operation of the five localities that make up the Vietnam-China economic corridor: Lao Cai, Hanoi, Haiphong, Quang Ninh, and Yunnan (China). The Haiphong port area works as both the main sea trade gateway of northern localities of Vietnam and the closest sea route to the Chinese province of Yunnan. With its 42 terminals with a combined length of over 10.7km, the HIGP is capable of receiving 100,000 deadweight tonnage (DWT) vessels. Located in Lach Huyen district, HIGP, which is one of the country’s most crucial deep-water ports, is under rapid construction and is expected to be put into service on May 12. Under a master plan for the seaport development of the HIGP, the HIGP plans to have nine terminals of 3,000m by 2025, including six container terminals and three multi-purpose ones. It will be home to 23 terminals of 7,750m by 2030, capable of handling 118 million tonnes of goods per year. Haiphong pledges to mobilise resources to speed up the construction of the HIGP Industrial Zone (also known as Deep C III). Meanwhile, the city continues to invest in upgrading the transport infrastructure connecting Cat Hai island and Road No.356, backbone roads and dykes in the south of Dinh Vu Industrial Zone and Tan Vu-Lach Huyen 2 Bridge, and the projected wharves of HIGP. In addition to its advantage of seaport services, Haiphong is home to Cat Bi International Airport, which has been upgraded and fully qualified to receive aircraft in accordance with International Civil Aviation Organization (ICAO) standards with varied domestic flights and international routes to South Korea, Thailand, and other countries. It can be said that the local business climate has been improved, with FDI inflows of nearly $1 billion in 2017 and the presence of many large local and foreign corporations. They include the Vinfast automobile manufacturing factory project with a total investment value of over $1.5 billion in the Dinh Vu-Cat Hai economic zone, an eco-tourism and recreational resort project on Cat Ba Island valued at $3 billion, and Japan’s AEON Mall with a total investment value of $200 million. More information about these developments in Haiphong is offered at Haiphong Investment Seminar held in HoChi Minh City on April 23-24. For registration and details, please contact the organiser at huy.vu@dinhvu.com Located at the heart of the above-mentioned key projects, the DEEP C Industrial Zones (DEEP C) is taking the opportunity to become a reliable destination for investors. DEEP C is regarded as the first and possibly the only industrial park in the northern region to successfully develop an industrial zone on the sea from millions of cubic meters of sand. DEEP C has so far called for a combined investment of nearly $3 billion and 72 projects from Japan, Germany, the US, Singapore, South Korea, and Vietnam. These projects are invested by big names, including Bridgestone, JX Nippon Oil and Energy, Idemitsu, Shin-etsu, Chevron, IHI, Nippon Express, Yusen, Knauf, C. Steinweg, Flat Group, and PVOil. Investors come from various industries, including supporting industries, automobiles, logistics, light industries, and others. Investors highly value DEEP C as one of the most successful industrial parks in Haiphong and the country in general. The distinguishing feature of the DEEP C comes from a system of multipurpose zone located immediately adjacent to the new infrastructure development and reliable provision of utilities and services where tenants can enjoy the best tax incentives in the country. This makes the target of developing DEEP C into a world-class industrial zone coupled with seaport services feasible. “DEEP C will lead the way in implementing the initiative on building an eco-industrial zone toward sustainable growth. Besides, Deep C III is expected to serve as a reliable partner and destination for investors,” Frank Wouter, general director of Dinh Vu Industrial Zone JSC, said at the ground-breaking ceremony of Deep C III held last October. Vingroup acquires two mammoth projects from Berjaya Leading multi-functional conglomerate Vingroup has recently acquired two projects from Malaysian Berjaya Corporation which have been delayed for a long time. Vinhomes, Vietnam's leading real estate management company and the property management arm of Vingroup, has completed the purchase of 97.7 per cent stake in Berjaya Vietnam International University Township One Member LLC from Malaysia’s Berjaya Corporation. This VND11.75 trillion ($515.6 million) deal aims to acquire the long-delayed Vietnam International University Township (VIUT) project. BerjayaVietnam International University Township One Member LLC is the investor of the long-delayed VIUT project. The project, which received its investment certificate in July 2008, is located at Tan Thoi Nhi commune in Hoc Mon district. It has an area of 925 hectares and investment capital of $3.5 billion. According to its design, Berjaya would have set aside 100 hectares for a university. The township was to have 20 schools offering education from kindergarten to high school. The remaining 15-ha area was going to be a multi-purpose complex with a commercial area, residential area, administrative and cultural area, and a healthcare centre that would have operated in conjunction with the university, as well as a gym and a park. At the point of receiving the investment certificate in 2008, VIUT was the largest foreign direct investment project in Ho Chi Minh City. The city authorities pegged a lot of hope on the project, giving credit to Berjaya’s renown as a big real estate developer. After ten years, however, the project is still a field of grass and the Ho Chi Minh City People’s Committee requested the city's Department of Planning and Investment to either resolve the difficulties that the Malaysian company is having in implementing the project or revoke the investment certificate. The investor told VIR about a month ago that it plans to kick-off the construction of the project early this year, however, to date, the construction has been immobile—and has now been taken over by Vingroup. After the VUIT acquisition, Vinhomes also finished its capital contribution of more than VND2 trillion ($89 million) to Vietnam Berjaya Financial Centre this March, acquiring 67.5 per cent from the investing company of this project. Located in District 10 of Ho Chi Minh City, the $930-million Vietnam Financial Centre was proposed to have five 48-storey buildings with a total of 600,000sq.m of floor space. It has also been delayed for many years. The site is now used as a parking lot for nearby restaurants. Berjaya has a series of real estate projects that came along slowly after receiving their investment certificates. In 2013, the authorities of the southern province of Dong Nai revoked Berjaya’s investment certificate for Nhon Trach New Urban Area project because the company failed to start implementation. In addition, sales were lacklustre at the Bien Hoa City Square apartment complex in Dong Nai, and the Hanoi Garden City urban area in Hanoi. TPBank could issue convertible bonds to foreign investors As TPBank has virtually no room left for foreign investors, the bank is thinking of issuing convertible bonds to interested parties to whip up more capital. Bui Thi Thanh Huong, TPBank deputy general director, said at the bank’s pre-listing seminar held in Hanoi on April 12 that following its private placement of 15 per cent holding to investors, there is only 0.77 per cent left for foreign investors. Singapore-based SBI Ven Holdings Pte., Ltd. who has been holding 19.9 per cent of TPBank’s holdings for some 10 years, according to Huong, has acquired more shares through a private placement to maintain their current shareholding. Also, with IFC and PYN Fund Management who each secured 4.99 per cent, the room left for foreign investors is very small. As a temporary measure, TPBank could issue convertible bonds to foreign investors “We expect the government will lift the foreign ownership limit (FOL) in the banking sector in the future and should this come true, it will be a great opportunity for TPBank," Huong said. Given that quite a few foreign investors are currently interested in TPB, including a private fund from Saudi Arabia that manages billions of dollars in investment, Huong said that the bank could consider issuing convertible bonds for these investors. “Some have even asked us to issue convertible bonds as an option while waiting for the FOL to be lifted. We may well consider this option as it can provide us with more capital to support our development of technology, know-how, products, policies, and customers,” noted Huong. Hanoi-based TPBank (ticker: TPB), meanwhile, has scheduled April 19 as the date to list 555 million shares on the Ho Chi Minh City Stock Exchange (HSX) at the initial price of VND32,000 ($1.41). TPB’s market capitalisation, as a result, is expected to go up to VND17.76 trillion ($789.33 million), which can put the lender in the 8th spot among listed banks in terms of market capitalisation. “The liquidity of the stock market is rather good at present, and with Vietnam en route to be upgraded to Emerging Markets Status by MSCI as well as the incoming capital inflows, it is an opportunity for us right here. Also, as you can observe, banking stocks are taking the lead in the market and with our good performance in 2017, it is just the right time for us to get listed now,” said Do Anh Tu, vice chairman of TPBank, on the sidelines of the pre-listing seminar. Symposium to spur cooperation between Hwaseong city and Hanoi In the framework of the four-day Vietnam Industrial Tour 2018 starting on April 12, the Hwaseong City Women Entrepreneurs Association attended a symposium in Hanoi’s Sheraton Hotel with the participation of representatives from the Hanoi Women Entrepreneurs Association and the Hanoi Young Business Association. The symposium, hosted by Korean-backed Mirae N Limited, aims to lay the groundwork for a long-term and sustainable business cooperation between the parties as well as create a platform for women entrepreneurs in Korea’s Hwaseong city and Hanoi to present their businesses, exchange experience, and seek investment opportunities. According to Michelle Park, chairwoman of Hwaseong City Women Entrepreneurs Association (HWEA), the city (just one hour from Seoul’s city centre) is home to 30 major businesses and about 7,000-8,000 small and medium-sized businesses. It also hosts R&D centres and the production units of leading Korean industrial groups like Samsung Electronics and Hyundai (the Kia brand, particularly), leading to the presence of numerous satellite units producing components to supply these major players. “Coming to Vietnam this time, we seek to propel international exchange, helping member units increase business opportunities to avail themselves of their advantages and gain more experience to tackle weaknesses.” “I expect exchanges like today’s will help women entrepreneurs in both South Korea and Vietnam learn more useful things for their business. During this visit, we hope to establish relations with more Vietnamese companies to be able to boost exchanges in the upcoming time,” Park added. According to a study by leading management consultancy firm McKinsey, Hwaseong city has the potential to grow into one of the richest cities in the world by 2025 leveraging its industrial and IT strength. Park is also the CEO of Ecoco Limited which was founded in 2000 and is specialised in producing algae-preventing water treatment equipment using sunlight, water plant eliminating machines, and decanting devices. “Our company works in the field of water treatment. I think Vietnam has ample water resources, so environmental treatment might be a concern. If possible, we want to engage in technology transfer with the Vietnamese side or sell products to Vietnam.” “As Vietnam is rich in water resources, the country may have useful experience and technology in water treatment. After a survey, if we find the conditions suitable, we may import equipment or technology back to Korea,” Park told VIR. “Our products have been sold in many countries, including the US, and we are looking to open an agent here in Vietnam to commercialise our products,” she added. Min Ji Young, CEO of another HWEA member unit S Feel Princess Story operating in fashion accessories manufacturing and sales, said, “Our products have been on the shelves of major supermarkets across Korea, but we do not have stores abroad yet, so we decided to join the tour to Vietnam and expect further cooperation in the country.” “I see that many young Vietnamese people favour Korean products, particularly those of Korean stars.” S Feel Princess Story is named among leading Korean businesses certified by Korean authorised agencies in respect to brand development. Today’s meeting marks the start of our cooperation, and I am confident in our augmented ties in the coming time. “Today’s meeting marks the start of our cooperation, and I am confident in our augmented ties in the coming time,” said Dinh Thu Hoai, deputy chairwoman of Hanoi Women Entrepreneurs Association. "Many our members are fond of using Korean goods. Not only potential customers, we can act as your companies’ reliable partners in producing and distributing products in the Vietnamese market.” Founded in 1999, Hwaseong City Women Entrepreneurs Association consists of 52 members. 75 per cent of the members work in the manufacturing industry, 13 per cent in retail and wholesale, and the remaining 12 per cent in the services sector. TTC Sugar approves bond issue The Board of Directors at the Thanh Thanh Cong - Bien Hoa JSC (TTC Sugar, Stock Code: SBT), recently approved the issuance of 450 bonds worth $20 million. The bonds have a par value of around $44,000, are non-convertible, are not accompanied by warrants, are guaranteed for payment, and have a term of one year from the date of issue, maturing in 2019. They will be issued separately to fewer than 100 investors, including domestic and foreign professional investors that are organizations and individuals. The company prioritizes commercial banks, financial institutions, and investment funds via issuing agents. The bonds are projected to be divided into several issuances, with the first in the fourth quarter of fiscal year 2017-2018. The issued price is equal to the par value. The issuance aims to increase and replenish TTC Sugar’s working capital to expand and scale-up production and increase the efficiency of its operations, thereby optimizing production costs and promoting economies of scale. The incremental production capacity reduces fix costs and depreciation per kg of products, etc. The company can therefore boost consumption, expand market share, penetrate medium and small segments in market niches, and target markets such as the Mekong Delta and the north and the export market. Incremental production will simultaneously bring advantages to stimulate consumption and consolidate advantages in distribution to penetrate markets and targeted segments. Once the bonds are issued, capital structure ratios will remain safe and financial risks controlled to meet commercial banks’ requirements, of which the debt-to-equity ratio in consolidated financial statements will increase slightly, from 1.27 to 1.33 times. TTC Sugar has consistently adhered to financial controls and operations, particularly regarding debt ratios or leverage ratios in operations. The increase in the debt ratio helps improve the company’s profitability ratio. It has produced half of the 2017-2018 crop, or 3.1 million tons of sugarcane, representing 90 per cent of the plan. Its business results for 2017 were positive, with total consolidated assets at more than $783 million, including $314 million in consolidated equity, both up 129 per cent compared to those at the end of June last year. Sugar consumption was 308,579 tons, or 50 per cent of the annual plan. Total sales of goods and services stood at $240 million, or 60 per cent of the annual plan, while pre-tax profit was $14.3 million, or 50 per cent, for increases of 161 per cent and 70 per cent, respectively, year-on-year. After-tax profit was $11.4 million, up 49 per cent year-on-year, and the gross profit margin was 11 per cent. Production and operation in the 2017-2018 fiscal year saw many changes, as the corporation and outlets were restructuring and reorganizing after the M&A. Setting a challenging target of “1 million tons of sugar” by 2020, TTC Sugar is gradually implementing marketing and agricultural and manufacturing activities. VNN