BUSINESS IN BRIEF 30/4 Digiworld targets revenue of $206 million in 2018       Digiworld Corporation (DGW) targets revenue of VND4.7 trillion (US$206 million) in 2018, an increase of 23 per cent over 2017, according to a report from the company’s annual shareholders’ meeting held in HCM City late last week. DGW targets having consumption products, including fast-moving consumption goods and healthcare products, achieve the strongest jump in revenue, at nearly 300 per cent, followed by mobilephones, with an increase of nearly 60 per cent. At the meeting, the company approved a plan to earn after-tax profit of VND101 billion ($4.4 million) this year, up by 29 per cent year-on-year. The shareholders said that, based on the results of the first quarter, the annual targets for revenue and profit were feasible. DGW reported that in the first quarter of this year, total revenue reached VND1.26 trillion ($55 million), a jump of 66 per cent year-on-year. The after-tax profit was VND19.5 billion ($855,000), up by 127 per cent. These figures represent a record amount since the company was listed in 2015, according to the company. Digiworld said that in the first quarter, it had reached revenue growth in all categories: mobile phones, office equipment, consumption goods (including fast-moving consumption goods and health-care products), tablets and laptops. For 2017, Digiworld achieved revenue of VND3.8 trillion and profit of VND55 billion ($2.4 million). Digiworld was established in 1997 as a market expansion service provider in Viet Nam and authorised distributor for more than 30 world-renowned technology brands, with a distribution network of 6,000 points of sales (POS) nationwide. More Vietnamese companies keen on Dubai market Numerous Vietnamese companies have recently gathered at Gateway to Dubai 2018 in Ho Chi Minh City to explore business opportunities in Dubai and the Middle East. Dubai is on the radars of both Vietnamese and foreign investors as the city has been growing rapidly in the past years. Indeed, Dubai is a potential market with many opportunities in different fields, including real estate and construction, infrastructure, fast-moving consumer goods, food and beverage, entertainment, and hospitality. With a boom, which took population from 1.5 million in 2007 to 8.5 million in 2017, the Dubai government is also conscious of the environment and adapting infrastructure for more eco-friendly living. This opens the doors to more innovation and creative collaboration. According to Van Tran, managing director of VANTT Consulting, Gateway to Dubai 2018 aims to foster business relationships between Vietnam and the Middle East. The event gathers all the key decision makers in one place, which facilitates Vietnamese companies to take their first steps into the fast-growing market. Gateway to Dubai 2018 is held as a tribute to the forthcoming Expo 2020 in Dubai. The mega expo will be an amazing opportunity for Dubai to showcase its vision for the next decades that it is already implementing today. Haiphong boosts FDI attraction through key infrastructure connectivity With the recent major infrastructure developments, the northern city of Haiphong has stepped up its game for FDI attraction to drive economic growth. The information was stressed at the Haiphong Investment Seminar organised by Eurocham and DEEP C Industrial Zone with the support of KPMG and Saigon New Port. The seminar gave an insight into the investment climate and potential business opportunities at Haiphong city. The development of Haiphong International Gateway Port, also known as Lach Huyen Deep Sea Port, is a recent key infrastructure project in the city. Haiphong International Container Terminal, a joint venture between local company Saigon Tan Cang Port and its partners Mitsui OSK Lines, Wan Hai Lines, and Itochu Corporation, pioneer the deepest seaport in the north of Vietnam. With a draft of minus 14 metres, vessels with a capacity of 14,000 TEU will be able to make calls to Haiphong, a significant improvement compared to the existing 2,000 TEU port. Once Lach Huyen Port is in action from May this year, shipping times to Europe will be substantially reduced from 30 to 23-25 days, to the US West Coast from 35 to 27-30 days, and to the US East Coast from 20 to 13-15 days, thanks to new direct routes and the omission of transshipment. Accordingly, the incoming opening of Lach Huyen Port will bring more logistics advantages for the projects in the active city. Substantially, the Lach Huyen port project is connected to the hinterland with other mega infrastructure projects, including highway connections to Hanoi, the coastal provinces, Quang Ninh, and China, as well as Cat Bi International Airport. These projects have turned Haiphong into the main gateway of North Vietnam to regional and world markets. In particular, they lowered the barriers to Vietnam’s major trading partners, such as Europe, America, the ASEAN, China, turning Haiphong into the new Ho Chi Minh City in the north of Vietnam. "DEEP C Industrial Zones lies in the heart of this infrastructure network, bringing to investors advantages not only in logistics but also international-standard utilities provision, economic zone tax incentives, and support for investors to start business," stated Hans Kerstens, international business development manager of DEEP C. The seminar also brings practical guidelines from experts of KPMG on setting up an expansion project in the north by companies that are already present in the south, while maximising the benefits of tax incentives. The development in the region also caught the attention of European investors. This is the reason why EuroCham started its northeastern chapter last year, said Almut Roessener, executive director of EuroCham. Investment from market leaders, such as Accor Group, Hilton, Daiwa House, Fujita, and AEON have been pouring into the city to develop facilities for business. Vinh Tan 1 thermal plant to reduce power thirst in southern provinces The $1.75-billion Vinh Tan 1 thermal power project, the largest Chinese-invested project in Vietnam, will come into commercial operation ahead of schedule after concerns of potential power shortages in the southern provinces in the time to come. According to the latest report of Vinh Tan 1 thermal power project, its first unit will come into commercial operation in July 2018, five months earlier than initially scheduled. Phan Ngoc Cam Thanh, deputy director of Vinh Tan 1 told the National Steering Committee for Power Development that after 1,025 consecutive days of construction, the project is now 93 per cent complete. “We target to push forward the date of commercial operations,” said Thanh. On April 18, 2018, the first unit of Vinh Tan 1 was successfully connected to the national grid and met all standard requirements during the testing as well as operation. Member of the National Steering Committee for Power Development Dinh The Phuc, deputy director of the Electricity Regulatory Authority of Vietnam under the Ministry of Industry and Trade, said Vinh Tan 1 thermal power plant’s significant generation capacity will help increase energy supply in the nation. The 1,240MW project is the first thermal power plant applying the pulverised coal combustion technology in Vietnam. It will play an important role in supplying power to the country’s southern parts, as there are concerns over power supply risks due to delays in the Song Hau 1 and Long Phu 1 thermal power plants. The Long Phu 1 and Song Hau 1 projects in the Mekong River Delta provinces of Soc Trang and Hau Giang are designed to produce 1,200MW each annually. However, the two plants are now years behind schedule. Both of them are invested by Vietnam’s state-run oil and gas group PetroVietnam. Vinh Tan 1 is expected to provide more than 7.2 billion KWh per year, increasing the southern region's electricity supply and helping reduce the region's dependence on hydropower—especially during the dry season or droughts. Electricity demand in Vietnam is expected to see an increase of more than 10 per cent per annum in the coming years due to rising population and accelerating economic growth. Southern Vietnam, the country’s largest economic bloc which includes Ho Chi Minh City, faces a critical situation in relation to the current imbalance between existing supply and the increasing demand for electricity. There is therefore urgent need for the development of power generation infrastructure in the region. At a recent visit to the southern provinces, Deputy Prime Minister Trinh Dinh Dung urged the acceleration of the pace of constructing power plants, especially in the south, as well as called on investors to upgrade transmission projects as a main task in the years to come. Tran Viet Ngai, president of the Vietnam Energy Association, is also concerned over the power supply of southern provinces. He called for synchronised solutions to minimise power shortages, including ensuring progress on schedule, operational safety, quality management of power projects, as well as environmental protection and effective power usage. Thaco transfers bus manufacturing technology to Kazakhstan Leading Vietnamese automaker Thaco has transferred the technology for manufacturing Thaco HB73S buses to its partner HTA in Kazakhstan, under a contract signed by the two sides in February 2017. Thaco engineers worked at HTA during all of March to complete the task following the Vietnamese company’s bus component shipment to HTA last August. The demand for public transport in central Asian countries is reported to be rising quickly but transport production by regional countries is yet to meet demand. HTA therefore decided to cooperate with Thaco to import full bus components. Fifty more sets for 29-seat HB73S buses will be shipped to the country this year. To assist its partner in producing Thaco HB73S buses under IATF 16949 international quality management standards, Thaco sent eleven engineers to work at the HTA factory in Almaty, Kazakhstan. In addition to technology transfer, the team provided training on assembly and quality control. Such training covered all assembly and manufacturing work, including body finishing, the painting process, and turning out the completed buses. Thaco HB73S bus components have been researched, designed, manufactured and tested by Thaco engineers and offered at competitive prices compared to similar products from South Korea. The technology transfer to HTA marks an initial success in Thaco mastering manufacturing technologies, quality testing, and exporting buses. In recent years it has invested in manufacturing expansion, research, and the application of modern technologies and automation in manufacturing vehicles and components and increasing technological content and localization rates, gradually implementing its plans to join global value chains. Thaco’s exports of components amounted to $3.8 million last year and it continues to work on researching and expanding markets and diversifying export products. With a manufacturing capacity of 20,000 units per year, Thaco’s bus manufacturing plant is the largest in Southeast Asia. The facility boasts various bus lineups meeting Euro 4, 5 and 6 emission standards, including a Vietnamese bus lineup with a localization rate of 60 per cent that meets requirements for export to ASEAN countries. Appworld nursery launched to support mobile startup apps The $1 million Appworld nursery, a unique project finding ideas and mobile apps and providing support to bring ideas into reality, was launched at an event in Hanoi on April 21. Appworld will bring tools to connect, build and deliver global mobile apps. “We expect that in the first phase of about 18 months there will be 1,000 apps deployed, reaching traffic of 50 billion,” said Mr. Nguyen Ngoc Dung, Vice Chairman of the Vietnam E-commerce Association (VECOM). “Those who have an idea for mobile apps need only present it to the Organizing Committee to seek mentoring support.” Its Digital Content Center will provide legal support, tax registration, and the fulfillment of tax obligations. It hopes to replicate the success of the “Flappy Bird” game, developed by Nguyen Ha Dong, which found success worldwide and boosted Vietnam’s profile, Mr. Dung added. “The Appworld project will partner with the digital content community through the Yeah1 Network and develop products to conquer domestic and international markets,” said Mr. Nguyen Anh Nhuong Tong, Chairman of the Yeah1 Group. “The goal is to create an ecosystem that helps young people start up on the internet.” Appworld is a joint venture between the Yeah1 Group, VECOM, and the Vietnam Youth Union. At the launch, the organizers also announced the first two projects to be officially invested: Diff Cat and Gamify. MWG counting on Bach hoa Xanh chain At 8.30 am on a normal day, the Bach hoa Xanh store in Le Trong Tan Street, Tan Phu district, Ho Chi Minh City, is busy serving a lot of local customers, mostly housewives. They are the store’s regular customers and previously did all their shopping at traditional markets. Though launched two years ago, the store is now one of the fastest-growing among the 300 in the Mobile World JSC (MWG)’s Bach hoa Xanh chain. MWG Chairman Nguyen Duc Tai has kept plans for the Bach hoa Xanh chain on track over the last two years. The company identified a successful formula for the chain after completing a pilot in 2016. The chain established important foundations last year and this year is the time to boost its development. In the first stage, average monthly revenue at each store was expected to be about $22,000 but is now around $57,000. The figure at the Le Trong Tan Street store is about $100,000, Mr. Ngo Trung Duc, Manager of the Bach hoa Xanh chain in Tan Phu district, told VET. Average monthly growth per store in the district is about 20 per cent. CEO Tran Kinh Doanh said during the pilot period that the expected profit rate was 15 per cent on $22,000 in revenue each month. The rate is low for a concern with dozens of stores but substantial when hundreds of stores are involved, as is the case with Bach hoa Xanh. As such, MWG set an ambitious target for the fast-moving consumer goods (FMCG) field, planning to blanket Ho Chi Minh City with 1,000 Bach hoa Xanh stores this year. It’s important that Bach hoa Xanh has positioned the brand in the market and is gradually creating different values and attracting sufficient numbers of customers to its stores who previously shopped at traditional markets. “With the mini-mart model, we have made efforts to create a more modern shopping environment than at traditional markets and more interesting than at grocery stores,” Mr. Tai told local media. “We listened to the demands of consumers and the market.” According to Mr. Tai, 30 per cent of consumption in fresh and processed products is supplied by supermarkets and 70 per cent by traditional markets. Bach hoa Xanh aims to reach 10 per cent of the 70 per cent in traditional markets. The chain, indeed, will not compete with other supermarkets like Co.op Foods and Satrafoods or convenience stores like Circle K and Family Mart. Its strategy is to focus on broad coverage and to be similar to traditional markets but with better services and a more diverse range of food and goods. “The purpose of opening the chain is to encourage customers to buy food from us for 20 days a month and from traditional markets or supermarkets for the remaining days of the month,” Mr. Tai told an analyst meeting in February. Industrial insiders said that the successful factor in its model is it targeting low to medium-income earners and setting up stores of less than 200 sq m on small streets in order to better approach customers. Vietnam’s retail market holds significant potential, with estimated revenue of $60 billion annually. Its promise has resulted in the emergence of tough competition, with the presence of major foreign retailers from Thailand, Japan and South Korea as well domestic counterparts like Vingroup. As a newcomer, MWG is forecast to face a range of challenges in the market, despite being the pioneer in the mobile and electronics market. Half of all food and goods at Bach hoa Xanh stores are fresh vegetables, fish and meat, and the remainder FMCG. The challenge is how to resolve the inventory question and offload products approaching their use-by date, as well as buying safe products when needed and at cheap prices. These are, of course, issues for all retailers, not just Bach hoa Xanh. MWG has also recorded notable results in its thegioididong.com and Dien may Xanh chains, thanks to adopting smart and flexible solutions to meet demand among local consumers while cutting operational and other costs. “The strength of the company is customer services and chain management,” said Mr. Doanh. “I haven’t seen any company in Vietnam that does this better than MWG.” Despite only a few Bach hoa Xanh stores earning a profit, the chain will be a driving force for MWG’s growth over the years to come. Though the leading mobile and consumer electronics retailer attracted attention from local and overseas retailers and investors by completing its acquisition of the Tran Anh Digital World and Phuc An Khang pharmaceutical chains, the concern for Chairman Tai this year is the Bach hoa Xanh chain. Understandably, growth in mobile and consumer electronics is slowing, coming in at 9.3 per cent and 15.1 per cent, respectively, in 2017 according to the ACB Securities Company (ACBS). Instead of opening “two stores every day” as MWG did before, the company plans to cease opening new thegioididong.com stores and instead open 50-100 new Dien may Xanh stores this year. The retail market also has the most potential in terms of investment expansion. Vietnam ranked sixth among the Top 30 developing countries in retail expansion in the Global Retail Development Index, released by A.T. Kearney in 2017. There were 800 supermarkets, 150 shopping malls, 9,000 traditional markets, and about 2.2 million retailers in Vietnam at the time the Index was prepared. Convenience stores and mini-marts are the fastest-growing segments in the market. Japanese retailers like Family Mart, 7-Eleven, and Takashimaya, and South Korean retailers like Lotte Mart and GS25 are flooding into Vietnam and plan to open thousands of stores and dominate the market. Thus, Mr. Tai and MWG also plan to develop the Bach hoa Xanh chain as soon as possible, having 1,000 stores in Ho Chi Minh City this year. Bach hoa Xanh recorded revenue of VND1.38 trillion ($60.9 million) in 2017, contributing 2.1 per cent to MWG’s total, but didn’t post a profit. It is now making greater efforts to improve operations and attract more customers. It will review its 1,000-store plan after implementation and plans to open 5,000-6,000 stores in other major cities such as Hanoi and Da Nang over the next five years. In assessing such plans, ACBS reported that expansion will not be easy in second-level cities and rural areas and the retailer needs to be cautious about the speed of its network expansion over the next few years. Meanwhile, the Vietnam-focused private equity firm Mekong Capital expects the company will be successful in ramping up to several thousand locations. “MWG focuses on the customer experience and they do a better job of it than most of their competitors,” Mr. Chris Freund, Partner at Mekong Capital, told VET. His comments are based on solid facts and figures, as his company’s Mekong Enterprise Fund II (MEF II) completed its divestment of 100 per cent of its holding in MWG after more than a decade of investment. “It was one of the most successful private equity investments in the history of Asian private equity,” Mekong Capital has said. While the reason MEF invested in MWG was the energy and commitment of the five co-founders and its growth potential, Creador, a South Asia and Southeast Asia-focused private equity firm that invested $43.8 million in the local retailer in February, said it sees a strong track record of growth in multiple store concepts and the opportunity for consistent growth going forward. “We think the team led by Mr. Tai is truly world-class and has tremendous capabilities to build a very large business,” Mr. Brahmal Vasudevan, CEO of Creador, told VET. “Their historical growth trend has been amazing. I see the potential for this company to record 20-30 per cent growth over the next five years.” Shinhan Bank partners with MoMo to launch overseas remittances Shinhan Bank Vietnam (Shinhan Bank) has officially partnered with MoMo e-wallet (owned by M_Service) to launch the “MoMo ID overseas remittance service”. Vietnamese who are working or studying in South Korea can transfer money from the country’s Shinhan Bank to the MoMo e-wallet app of the recipient in Vietnam. The service is free from transaction charges from now until August 31. Applicants in South Korea can use the Shinhan Global S Bank app to transfer money to family or friends in Vietnam, who only need the MoMo e-wallet app to receive the funds immediately. Money in an MoMo e-wallet can be transferred to bank accounts linked with the e-wallet of the recipient or be used to pay bills, airline, train, bus, and movie tickets, insurance premiums, installment payments, and online shopping, as well as at over 4,000 MoMo-accepted points, such as restaurants, entertainment centers, and shopping centers. “Through this partnership, Shinhan Bank and MoMo want to create an easy and transparent money transfer service for the more than 150,000 Vietnamese living and working in South Korea,” said Mr. Shin Dong Min, CEO of Shinhan Bank in Vietnam. “With a network of branches and transaction offices stretching from Seoul to Gyunggi-do, Gyeongsangnam-do, Dae-Gu, and elsewhere and an excellent digital banking platform, Shinhan Bank hopes that the partnership with the MoMo ‘transporter’ will bring customers an easy, fast and safe money transfer experience.” MoMo now has one more practical service for users, according to Vice Chairman Mr. Nguyen Ba Diep. “We hope the service will give users an enjoyable experience, especially those in rural areas, who can receive money immediately without having to travel anywhere,” he added. “From now on, overseas workers in South Korea can send money to parents and family members in Vietnam at the lowest charges in the fastest time.” VIISA invests $60,000 in four startups The Vietnam Innovative Startup Accelerator (VIISA) will invest $15,000 each across four startups after five month careful selection of over 100 startups in different fields, the accelerator announced on April 23. Vietnam’s accelerator VIISA – a partnership between Dragon Capital, FPT Corporation and Hanwha Investment & Securities – has started investing $15,000 each across four startups. Based on set standards including having a strong team to implement business ideas, technology ideas applied in reality, ability to expand business and and grow sustainably in future, four selected startups in the fields of agriculture, banking finance, digital tech and software service are eligible for a three-month training course. In addition to $15, 000 cash, each startup receive accommodation, office and technique expenditure. Moreover, most potential startup will have a chance to get a maximum investment $200,000. Not only receive financial assistance and facility, selected startups in VIISA’s training course will be trained important skills such as detecting and finding potential customers, calling for contribution and sale by leading enterprises and investors like FPT, Dragon Capital Group, Microsoft Vietnam. Dr. Le Hoang Anh, chairman of VIISA said that VIISA’s new strategy in 2018 will separate training into two parts; one named Nurture and other Accelerate. Nurture program will be for fresh startups while Accelerate will be for older startups to help them grow more. Thanks to VIISA’s training courses, several startups have grown quickly; for instance Wisepass and Wefit was successful in calling for contribution of over $600,000 and it is calling for the new contribution. Cyfeer and Ella study has grown in sale and the number of customers. The development of startups is clear evidence for VIISA’ efforts in pushing startups in Vietnam. These startups in VIISA’s third Accelerate program will graduate in July, 2018 as per schedule. Four startups in the program comprise Urbox.vn with it website http://urbox.vn on smart electronic gifts for individuals and enterprises ; Goalify Chat - a communication app for team work at https://goalify.chat/en/; SmartMeal specializing in designing and providing balanced meals to help customers keep fit and good body ( its website http://smartmealvn.com/); Aqua Grow Greens deigning and making products to grow vegetables as per Dutch and Japan’ technology ( its website https://aquagrowgreens.com) Established in January 2017, VIISA has attracted 400 startup participants so far and over 18 startups have been selected into its training courses. Businesses requested to comply with software copyright laws A workshop on ‘Vietnamese businesses and the intellectual property right enforcement under the revised Penal Code’ was held yesterday in Ho Chi Minh City. Belonging to the series of activities in the Action Month to commemorate the World Intellectual Property Day, the meeting discussed hot issues that have attracted much attention of the business community regarding software copyrights, especially after the revised Penal Code was effective as of January 2018. The workshop aimed at providing businesses and managers with more detailed information on new regulations in the Vietnamese law related to the observation of intellectual property rights (IPR). It also shows how businesses can ensure their data security, intellectual property rights, while avoiding the risk of illegal activities so that they can develop healthily. Mr. Tran Van Minh, deputy chief inspector of the Ministry of Culture, Sports and Tourism reported the task of implementing IPR in the field of computer software when the revised Penal Code was effective. “Article No. 225 of the revised Penal Code shows the determination of the Vietnamese government in fighting against copyright piracy, including computer software copyright. Now that the severe punishments are inflicted, it is high time business leaders checked the software installation of all computers they use and adopted timely solutions in order to avoid grave damage on their finance as well as prestige or interruptions of operation once illegal activities have been discovered”, said Mr. Minh. In this workshop, Mr. Gary Gan, Director of the Compliance Programs of APAC under BSA, presented effective solutions for businesses. He suggested that companies should make use of software asset management models to ensure employees only install and use legal software with valid licenses bought by their organization. Computer software copyright violation is one of the most infamous IPR breaches in Vietnam. In 2017, while inspecting 2,472 computers of 63 businesses, related authorities discovered that 54 companies copied software programs without permission, with VND1.65 billion (about $72,463) in administrative fines collected. In the beginning of 2018, relevant authorities also inspected the observation of IPR regarding computer software in 26 businesses, and collected VND750 million ($32,940) administrative fines. The workshop was held by Vietnam Chamber of Commerce and Industry (VCCI), the National Office of Intellectual Property of Vietnam (NOIP), Vietnam Intellectual Property Association (VIPA), and BSA| the Software Alliance. Exports of textiles and garments up strongly Vietnam’s exports of textiles and garments are estimated at US$7.62 billion in the first quarter of this year, a 13.35% rise against the previous period last year. Nguyen Thi Tuyet Mai, deputy general secretary of the Vietnam Textile and Apparel Association (VITAS), told a press conference in HCMC on April 20 that the textile and garment export growth rate was only 11.9% in the same period last year. Garments alone generated around US$6 billion in export revenue, up 12.4% year-on-year. Other value-added products such as fabrics, fibers, geotextiles, and textile accessories posted rapid export growth, said Mai, who is also chief representative of VITAS in HCMC. The United States was the largest buyer of Vietnamese textiles and garments in quarter one, accounting for a staggering 48.5%. The member countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came second, she noted. China, South Korea, Southeast Asian nations and European Union (EU) countries were also major markets for the industry, she said, adding a majority of export products were shirts, T-shirts and jackets. The import bill of textile and apparel materials in quarter one rose 22.8% year-on-year to an estimated US$4.6 billion. This means the trade surplus was  US$3.9 billion, up 3.6% from a year earlier. Mai said many companies had already received orders which are enough to keep them busy until the third or fourth quarter this year. Therefore, she predicted the industry’s full-year outbound sales target of US$34-34.5 billion could be attained. She said VITAS will further organize trade promotion programs and seminars, develop human resources, and propose changing policies and removing obstacles involving taxes, customs, charges and surcharges. Silt buildup, high logistics costs hinder Mekong Delta’s export Sedimentation in waterways along the Hau River and high logistics costs are causing difficulties for the Mekong Delta to export goods straight to foreign markets. Delegates at a meeting of the Vietnam Maritime Administration, Can Tho authorities and relevant agencies in Can Tho City last week said the delta holds great export potential. Vu Khanh Duong, director of Saigon Newport Corporation for the Southwest, said cargo transport volume in the region reached 17-18 million tons last year, including 3.3 million tons of seafood, four million tons of vegetables and 4.3 million tons of rice. However, cargo throughput at Can Tho Port, the biggest in the Mekong Delta, just accounts for 50-60% of the port’s capacity. Last year, containerized cargo throughput at the port totaled over 99.4 million TEUs, representing a mere 1% of the total at Vietnam’s ports, said Trinh The Cuong, head of the Maritime Transport Services Division of the Vietnam Maritime Administration under the Ministry of Transport. Silt has built up along the navigational passage to the Hau River through Quan Bo Chanh Canal, disenabling ships of 10,000-20,000 tons to come to ports in the Mekong Delta. Shipping companies often shun the delta due to high logistics costs. Nguyen Minh Toai, director of the Can Tho Department of Industry and Trade, said Quan Bo Chanh Canal should be dredged to attract shipping firms in HCMC to the delta. Duong said Saigon Newport Corporation has suspended shipping commodities directly from the Mekong Delta to foreign destinations. The Government has allowed the dredging of Quan Bo Chanh Canal to make it possible for container vessels to enter ports inside the Mekong Delta, Cuong noted. Meanwhile, Toai suggested cutting logistics fees in Can Tho City to attract more shipping companies. Duong shared Toai’s view, saying the Vietnam Maritime Administration and relevant agencies should lower fees for shipping firms to directly export the Mekong Delta’s commodities, instead of through ports in HCMC or elsewhere. New incentive policies for agriculture and rural development projects The Government has issued Decree 57/2018/ND-CP on a series of incentive mechanisms and policies to stimulate investments in agriculture and rural area development. Accordingly, beneficiaries shall be businesses which are established, operate in line with the Law on Enterprises and have agricultural projects encouraged by the State. Beneficiaries shall be entitled to a wide range of State support in terms of land, credit access, high-tech application, workforce training, market development among others. Specifically, projects eligible for investment incentives  shall be exempted from land and water surface rents in the first 15 years since the State allocates land/water surface to the owners of the projects. The rents shall be reduced by 50% in the following seven years. Projects eligible for investment promotion shall be exempted from land and water surface rents in the first 11 years and shall be offered 50% reduction of the rents in the following 5 years. Countries plan Asia-Europe railway system Members of the Organization for Cooperation of Railways (OSJD) have plans to develop a railway transport system running from Vietnam to Russia through other Asian and European countries. The plan is part of a memorandum of understanding signed on April 19 at OSJD’s conference of general directors in Danang City. Directors pledged to promote logistics development through rail, expand research cooperation and supply locomotives and machinery. Deputy Minister of Transport Nguyen Ngoc Dong said that if the aforementioned railway takes form, there would be both opportunities and challenges for Vietnam’s railway. According to Dong, Vietnam Railways (VNR) has recently cooperated with Chinese and Russian firms in freight transport. However, Vietnam needs to concentrate on improving transport networks and logistics facilities. In addition, Vietnam’s railway is making plans to enhance investments and connections with railways in Laos, Cambodia and other ASEAN countries to increase its transport market share, Dong told the Daily. The conference of general directors of the OSJD approved 16 resolutions, including cooperation in infrastructure and human resource development. The resolutions will be presented in the coming ministerial conference. OSJD was founded in 1956 with members having around 227,000 kilometers of railway at the time. Now its members possess 281,215 kilometers of railway and transport four billion passengers and six billion tons of freight per year. Business environment still needs further improving Vietnam’s efforts to improve the business environment and competitiveness have yielded remarkable results but they are not equal among sectors, leading the country to lag behind neighboring countries, head a meeting in HCMC on April 19. The outlook of upcoming business environment reforms is unpredictable, according to the Central Institute for Economic Management (CIEM) and enterprises participating in a seminar titled “Improve the quality of the business environment: reform business conditions, specialized management and administrative procedures.” CIEM deputy president Phan Duc Hieu said the biggest challenge is the unpredictability of administrative reforms. Other neighboring countries have reached their targets in reforming the business environment while Vietnam has issued Resolution 19 annually to improve the business environment without much progress seen. Nguyen Minh Thao, head of the Business Environment and Competitiveness Committee at CIEM, said the Government’s Resolution 19 has helped Vietnam improve the business climate leading to a 14-notch leap to 68th in the world ranking last year. Electricity access, investor protection and tax payment indicators have improved. However, many other business spheres have barely made a move, such as in asset use, ownership registration and bankruptcy handling indexes that remain unchanged. In addition, only the Ministry of Finance has sought to improve the cross-border trade regulations under its jurisdiction while 12 other ministries have failed to do the job as required. If the time for the cross-border trade is cut by a day, US$1 million could be saved, Thao said. CIEM president Nguyen Dinh Cung said Vietnam’s ranking in the business starting index was low and kept decreasing steadily from 2014 to 2017 despite the availability of Resolution 19 in as many years. As for the abolishment of business conditions for specialized management, ministries have reported a reduction of hundreds of business conditions, such as the Ministry of Industry and Trade having scrapped more than 650 conditions. However, they have also added new conditions in replacement. As for customs clearance, informal fees have become a new normal. If the informal fee is VND300,000 for each customs manifest, enterprises would end up paying VND10 trillion a year to the customs sector, Thao said. Nguyen Dinh Tue, director of the Center for Supporting Small and Medium Enterprises of the HCMC Union of Business Association, noted the lack of the consistency of legal documents has resulted in more power for customs agencies. Nokia cuts deal with Thegioididong to boost phone sales HMD Global, the maker of Nokia-branded mobile phones, signed a strategic cooperation agreement with electronics retailer Thegioididong on the occasion of the launch of two new products, Nokia7 Plus and New Nokia 6, in Hanoi on April 18. HMD Global’s representative said at the event that sales of Nokia phones via the retailer are expected to reach 500,000 units this year. They initiated the cooperation by marketing the two new smartphone models Nokia 7 Plus and New Nokia 6 (2018). Thegioididong for its part is also optimistic to achieve sales of 500,000 phones this year as its annual sales exceed nine million units of various brands, said Nguyen Duc Tai, board chairman of Thegioididong. Together with the cooperation, the retailer will seek to boost its sales by partnering with Home Credit to offer interest-free installment plans for buyers, while Nokia buyers have to make a down payment of 30%. Addressing the event, Kyler Tan, CEO of HMD Global in Vietnam, said the corporation and its partner will efficiently collaborate to promote consumption of all Nokia products, including the two latest smartphones, Nokia 7 Plus and New Nokia 6 (2018). The recently released members of the Nokia family run on Android One, the latest phone operation system by Google, which allows users to enjoy a highly qualified software experience. Their devices will continue to run on the latest version along with innovations of artificial intelligence, and top security features from Google. Talanx eyes controlling stake in PVI Germany’s Talanx Group owning a stake of over 47% in PetroVietnam Insurance Joint Stock Company (PVI) wants to hold a controlling stake in the latter, Christian Hinch, vice president of Talanx Group, said in a meeting with Deputy Prime Minister Vuong Dinh Hue on April 19. Christian Hinch said the group invested in Vietnam in 2011 with a stake of 25% in PVI and that to date Talanx has raised the figure up to 47% while the majority stake is still held by PVI. Now his group wants to buy more shares to hold a controlling stake, the Government news website reports. To acquire a controlling stake in PVI and have a chance in developing the company in the ASEAN market in line with the shareholders’ wish, the vice president proposed the Government support raising foreign investor’s ownership in PVI. In response, Deputy PM Hue said the life and non-life insurance market size in Vietnam is growing faster but its scale is quite small compared to Vietnam’s GDP, and the Government will restructure the sector to bolster its efficiency. The Government has agreed to allow PetroVietnam as the parent firm of PVI to divest all State capital from the insurer. Being a big shareholder, Talanx has helped PVI improve governance and manpower resources. The Government will allow the group to buy more shares of PVI, Hue said. VNN