BUSINESS IN BRIEF 31/5 Gelex to increase charter capital in Gelex Eletric      The Vietnam Electrical Equipment Joint Stock Corporation (Gelex) may increase the charter capital of its subsidiary business Gelex Eletrical Equipment Co Ltd (Gelex Electric) six-fold, to VND2.2 trillion (US $98.6 million). The charter capital increase will be carried out through merging Gelex Electric with three other subsidiaries of Gelex and cash funding. Gelex has a 100 per cent stake in Gelex Electric. Gelex will hand over its ownership in the three sub-businesses, which are Vietnam Electric Cable Corporation (Cadivi), Electrical Equipment JSC (Thibidi) and Hanoi Electro-Mechanical Manufacturing JSC (HEM), to Gelex Electric after raising its stakes in these three firms to 100 per cent. Gelex is holding a respective 79.76 per cent, 79.79 per cent and 65.88 per cent stake in the three companies. Therefore, the three companies may be delisted from the stock markets once the deals complete. In addition to handing over the three companies to Gelex Electric, Gelex will also add VND19 million in cash to the charter capital of Gelex Electric. Gelex has recently announced it will issue maximum 72 million shares to convert 1,440 warrants for bondholders at VND16,600 per share. VN-Japan talk farm technology co-operation      Viet Nam and Japan can accelerate co-operation in applying Japan’s new technology and advanced value chain management methods to Viet Nam’s agricultural production, according to experts at a conference in the capital city on Tuesday. Head of the Viet Nam Academy of Agricultural Sciences Nguyen Hong Son said Viet Nam was transforming its agricultural production to focus on increasing quality rather than quantity. The application of science and advanced technologies is a key factor in this transformation process, he said, emphasising the importance of technology in the entire farming production chain from cultivation and harvesting to processing and trading. Viet Nam has gradually co-operated with foreign partners to evaluate and choose suitable technologies which can help the country produce quality farm produce. Technologies from Japan and South Korea, where farming methods are relatively familiar to Viet Nam, are among the best candidates. Son described the adoption of advanced technologies from Japan in several areas such as seeds, bio-preparations, soil improvers and biosecurity besides those in quality control as an effective way for Viet Nam to promote exports of agricultural products to Japan as well as other countries with which Japan has trade relationships. If Viet Nam wants to export goods to Japan, its technology needs to be compatible with that of Japan in order to churn out products that meet the quality demand of this strict market, Son explained. Koichiro Abe, CEO of Raycean Co from Japan, affirmed that cutting-edge techniques and marketing strategies can increase the value of agricultural goods. During the event yesterday, Japanese firms discussed technologies Viet Nam could adopt in the areas of cultivation and livestock. VN’s five-month agro-forestry-fishery exports    The country’s total exports of agro-forestry-fishery products witnessed positive year-on-year growth of 10 per cent to US$15.6 billion in the first five months of this year, the Ministry of Agriculture and Rural Development (MARD) announced yesterday. During the period, forestry products led the agro, forests and seafood export group with turnover of $3.4 billion, up 9 per cent year-on-year and accounting for nearly 22 per cent of the total export value. Among major importers of Vietnamese wood and wood-based products were China, Japan, South Korea and the US. The export value of key agricultural products reached $8.25 billion, up 10 per cent from the same time last year. In May alone, the country raked in $347 million from shipping abroad some 452,000 tonnes of rice, bringing the total value of rice exports in the January-May period to $1.45 billion, up 40 per cent and 14 per cent. The average rice price in the period experienced an increase of 13 per cent to over $500 per tonne. China remained the largest buyer of Vietnamese rice, holding nearly 34 per cent of the market share. According to MARD, seafood products contributed $3.12 billion to the group’s five month export turnover, a hike of 10 per cent year-on-year. The ministry also said that the country spent $12.29 billion importing agro-forestry-fishery products during January-May, marking a yearly rise of 11 per cent. Imports of garment and footwear materials from Canada surge strongly Imports of materials for garment and footwear industries from Canada saw a tremendous growth of 179.8% to US$11.8 million in the first four months of this year, according to the statistics from the General Department of Vietnam Customs. Imports of the products in April reached US$497.05 million, bringing the total import value in four months to US$1.74 billion, down 0.02% against the corresponding period last year. Currently, the five major suppliers with a value of more than US$100 million each are China, the Republic of Korea, Taiwan, the US and Southeast Asian countries. China took the lead at more than US $645.95 million (down 4.3%), accounting for 37.2% of Vietnam’s total imports, trailed by the RoK (down 5.1% to nearly US$226.16 million), Taiwan (down 11.2% to US$148.11 million), the US (up 14% to US $118.83 million) and Southeast Asian countries (up 14.2% to US$113.55 million). It’s noteworthy that imports of the materials from many markets particularly from Canada increased against the same period last year. Meanwhile, imports from other markets suffered a sharp decline, including Argentina (down 51% to US$7.68 million), New Zealand (down 50.3% to US$4.23 million), France (down 41.6% to US$1.3 million), Austria (down 32.8% to US$0.44 million) and Germany (down 31.4% to US$8.44 million). TH Group expects IPO in Singapore within next two years TH Group may one-up Vietjet and VNG by becoming the first Vietnamese firm to have its stock listed on an overseas stock exchange. However, the IPO is planned for 2020, which leaves a lot of space for action for the other firms. TH Group is planning to be listed on the stock exchange in the next two years. Group founder and chairwoman Thai Huong said that the IPO will be conducted in Singapore. Since late last year, TH Group has consulted several financial institutions to prepare its plans for the initial public offering (IPO) of its dairy business. TH Group set the revenue target of US$1 billion from the dairy business before listing. The proceeds of the IPO will be used to develop their domestic market and expand business in Russia. On the note of listing on overseas stock exchanges, one year ago, Vietjet announced intentions to become the first Vietnamese company to list its shares on a foreign stock exchange. Currently, the carrier controls more than 40 per cent of the domestic air transport market and seeks more funds after spending billions of dollars to purchase aircraft. A number of overseas stock exchanges, including London, Hong Kong, Singapore, and New York expressed interest in the stock of Vietjet. This company is still weighing its options and has yet to make a final decision. Not only carrier giant Vietjet, technology company VNG Corporation is also conducting the IPO process and expects to list its shares on Nasdaq. On May 29, 2017, VNG’s general director and Nasdaq’s vice chairman signed a memorandum of understanding to hold the IPO of VNG’s shares on this stock exchange, enabling VNG to approach US funds. According to the plan, VNG would take between 18-24 months to complete the procedures for listing and conducting its IPO. In reality, Vietnamese firms are facing difficulties in listing overseas due to the strict listing criteria set by foreign stock exchanges. Major corporations Vinamilk, Hoang Anh Gia Lai, and Saigon Securities Corporation have all put forward plans along these lines over the past ten years, but none of them have managed to succeed due to restrictions in foreign ownership (which have since been lifted), differences in accounting standards, and the global financial crisis. After nine years of operations, TH Group established three subsidiaries, namely TH Milk Food, TH Milk, and TH Food, operating the biggest cattle farm in Asia and the largest dairy production facility in Southeast Asia with the total investment capital of $1.2 billion in the central province of Nghe An. The group also intends to develop farms in other provinces, such as Ha Giang, Phu Yen, and Soc Trang, to reach the total scale of 137,000 milk cows by 2020. Up to late 2016, these three companies made hundreds of millions of dollars in accumulated losses, despite a revenue growth of 20 per cent between 2014 and 2017. TH Group’s Thai Huong said that the group has enough capital to develop its dairy business in the country and does not have to seek financial resources at the moment. In addition to shareholders’ capital, the group received loans from BIDV, Vietnam Development Bank (VDB), Maritime Bank, and Bac A Bank, where Thai Huong is CEO. In Russia, TH Group is investing into a dairy cow and high-tech milk processing complex worth $2.7 billion. The project would be completed within ten years and would be divided into three phases in order to house 350,000 milk cows and a number of dairy factories with the total capacity of 1.8 million tonnes per year and the total area of 140,000 ha. Several days ago, TH Group has signed a co-operation agreement with Russian Direct Investment Fund (RDIF), which will invest $633 million into the former’s dairy projects in Russia. Other potential markets for TH Group include China, Singapore, Malaysia, and Indonesia. As TH Group is pouring immense amounts of capital into improving production, business, and developing overseas markets, the listing on an overseas stock exchange is a good decision to approach overseas funds. 50% of Viet Tien garments on local market fake Brands of subsidiary companies of the Vietnam National Textile and Garment group (Vinatex) are commonly counterfeited for the domestic market, especially products of Garment 10, Viet Tien, and Duc Giang companies. Last year, the garment and textile sector grossed an export turnover of more than US$31 billion. In the first four months of the year, total export turnover rose by 14% to US$10.3 billion against the same period last year, fulfilling 39% of the yearly plan. Despite these positive signs, the sector faces a problem in the increasing number of counterfeit goods. According to Le Tien Truong, general director of Vinatex, brands of subsidiary companies of Vinatex have been faked on the market, especially Viet Tien garment products, accounting for 50% of the products. To secure a foothold in the local market, the sector needs to develop its own brands and seek ways to win the support and trust of consumers. Mr Truong underlined the importance of building trademarks and developing intellectual property in accordance with laws in the country and in foreign markets. Mr Truong noted that it takes time to develop trusted brands for the sector, with the starting point being the domestic market, before then gearing up for major markets around the world. Vietnam's fruits struggle for ground in foreign markets Despite relatively high export growth, it is not easy for Vietnamese fruits to look for expansion to international markets and acquire major market shares as it can take 5-10 years to negotiate necessary international business contracts. According to the Plantation Protection Department under the Ministry of Agriculture and Rural Development, many choosy markets including Japan, the US and EU have opened the door to Vietnamese water melon, mango, lychee, rambutan and dragon fruit, bringing the country quite huge value. However, it is not easy to get stable profits in these markets. At a recent discussion between businesses and relevant ministries and departments on how to remove obstacles in production and trade, many participants held that there should have been a long-term strategy for Vietnamese fruits to secure their foothold in choosy markets. So far, inadequate research on market demand and competition has resulted in some market entry failures. They cite the examples of exporting lychees to the US or dragon fruits to Chile. In terms of profits, some experts warned businesses to keep calm after initial success. A report of the Vietnam Fruit and Vegetable Association shows that the average profit of fruit and vegetable businesses was just 7% last year as they failed to consider changes of material prices over seasons. However, exporters find it difficult to control pesticide residues in the fruits before export. No matter what, the fruit export strategy has further been boosted. Fruit and vegetable exports jumped by 42.5% last year and exceeded the mark of US$3 billion for the first time. China topped Vietnamese fruit and vegetable importers with US$2.65 billion last year, making up 75.7% of market share. Exports to Japan, the US and the Republic of Korea also obtained high value with respective market shares of 3.63%, 2.92% and 2.45%. The Food and Agriculture Organization of the United Nations (FAO) forecasts that the global fruit and vegetable market will grow by 8% in the 2017-2020 period and reach US$320 billion by 2020. Therefore,  the door for Vietnamese fruits to foreign markets still opens, but to retain a foothold in international markets is a thorny problem. Experts suggest it is high time to develop a strict monitoring system for agricultural production towards reducing and excluding chemicals in crop protection and fruit preservation. StanChart experts say M&A opportunities abound in Vietnam Vietnam is regarded by foreign investors as a top ASEAN destination to explore investment opportunities via mergers and acquisitions (M&A), heard a recent seminar on ASEAN M&A in Ho Chi Minh City. According to Ralf Pilarczyk, head of M&A for ASEAN at Standard Chartered, investors are seeking opportunities via the bank in various fields as they are appealed by the market’s large scale and growth potential. Equitization and capital divestments at State-owned enterprises (SOEs) are giving foreign investors a chance to join the market, Pilarczyk told the seminar organized by Standard Chartered and the Malaysia Business Chamber Vietnam. Tina Tejwaney, a Standard Chartered expert on M&A in ASEAN, said M&A deals in Vietnam tend to rise thanks to fast and stable economic growth and the big market with a large population. This is proven by major transactions conducted by Thai investors in the past time like Central Group’s acquisition of Big C Vietnam and Thai Beverage’s purchase of a 53.59% stake in Sabeco via Vietnam Beverage. These two deals are among the biggest M&A deals to be struck in ASEAN recently, she added. Besides Vietnam’s loosening of foreign ownership limits at public companies, that SOEs have started to divest capital has attracted investors more, according to Tejwaney. In addition to consumer goods and retail, logistics and transport infrastructure are expected to lure foreign investors in the coming time. Talking about M&A trends in ASEAN, Pilarczyk and Tejwaney mentioned how Standard Chartered work with clients to effectively handle complex, cross-border mergers, divestments and investments. Edward Lee, chief economist for ASEAN and South Asia at Standard Chartered, shared notable points in the bank’s recent report. He said that ASEAN has a bright economic outlook and government investments in infrastructure projects will boost short- and medium-term growth. Theng Bee Han, president of the Malaysia Business Chamber Vietnam, said that ASEAN is the world’s sixth largest economic bloc with a total population of 650 million, a major global manufacturing and trading center and a fast-growing consumption market. M&A activities in Southeast Asia as well as Asia have been on the rise. Theng Bee Han said that the chamber appreciates Standard Charter’s support for ASEAN enterprises as their operations grow and become more complex, as well as their capital needs. Vinfast to launch first Vietnamese electric car The dream of a low-cost "Made-in-Vietnam" electric car will be realised next year when Vietnamese car manufacturer Vinfast launches its electric cars at a highly affordable price. Vinfast will realise the dream by co-operating with EDAG, the world's largest independent German engineering services provider. Notably, on May 24, the two parties signed a contract for the complete development of the first electric vehicle for the Vietnamese automobile market, which is dominated by foreign players. Accordingly, Vingroup, the investor of Vinfast, plans to conquer the car markets in Vietnam and beyond with two conventionally-powered vehicle models and a fully electric car. Top quality, affordable cars—this is Vinfast's formula for success. "We are proud that Vinfast has chosen us as the overall engineering partner to work on their trendsetting electric vehicle project," stated Cosimo De Carlo, CEO of EDAG Group. "Our all-round skills in vehicle and production plant development coupled with our expertise in the fields of eMobility, car IT, and electrics/electronics inspired the confidence of our customer Vinfast. EDAG’s  standing as an independent engineering services provider with international experience predestines the firm to go new ways at high technical levels and turn innovative concepts into marketable products," added Carlo. Vinfast committed not to include expenses on copyright and design, on offsetting the depreciation of the plants or interest from loans to the selling price. Earlier in late-March, Vinfast announced the most popular of the electric designs offered to vote. The winner was the IDC EV A design. According to the plan, the small electric hatchback model will be launched in late 2019, one year earlier than initially planned. These electric models will have a competitive selling price compared to other automobile brands at the same segment. In order to achieve this competitive selling price, Vinfast committed not to include expenses on copyright and design, on offsetting the depreciation of the plants or interest from loans to the selling price of each car. Along with co-operating with EDAG to manufacture electric automobiles, Vinfast has made itself known by concepts made by famous designers Pininfarina, Ital Design, Torino Design, and One One Lab.  These designs will become real automobiles within 16 months. Moreover, Vinfast has collaborated with the leading technology brands worldwide, such as Siemens, Bosch, Magna Steyr, and BMW, and recruited a series of senior employees from international automobile manufacturers. EDAG is an independent engineering service provider working for the global automotive industry. The company has a global network of some 60 branches at the world's major automobile centres to serve leading national and international vehicle manufacturers and technologically discerning automotive suppliers. In addition, EDAG also offers engineering services in the vehicle engineering, electrics/electronics, and production solutions segments. Bamboo Capital, Pavillion Corporation eye Vietnam’s largest water-borne project Envisioned as artificial islands in Danang Bay, Lotus Island could become the largest water-borne project in Vietnam to date, simultaneously, it will mark a breakthrough in foreign investment capital inflow in Vietnam. Bamboo Capital, Pavillion Corporation, and Danang Food JSC have expressed interest in developing the project named Lotus Island in the waters of Danang Bay with a total investment capital sum of $8 billion. The original goal of the Lotus Island project is to build a special economic zone by constructing artificial islands that form functional areas, such as residential areas, casinos, financial centres, duty-free zones,  golf courses, and other infrastructure. The project would be located about 1 kilometre from the coast and connected to the mainland by modern bridges. Pavillion Group, headquartered in Malaysia, is currently implementing many large projects across the globe. Danang Food JSC, formerly known as Quang Nam Danang Food Company, was established in 1992 and is not a realty company. Meanwhile, Bamboo Capital Fund is part of Bamboo Capital—a group of companies operating in various fields in Vietnam. After the recent meeting with the three investors, leaders of the Danang People’s Committee assigned related departments and the authorities of Hai Chau, Thanh Khe, and Lien Chieu districts to work with the Danang Investment Promotion Agency to provide the necessary information for investors to complete their investment proposals. VIR contacted Bamboo Capital for detailed information on the project, however, a staff stated that they, including the two remaining investors, have just expressed their interest to develop the project to the city leaders and so do not wish to publish further information just yet. Lotus Island in Danang Bay will have massive investment capital, thus it will increase foreign capital inflows to the city by a significant amount, however, it also carries a risk of environmental pollution in case of lapses during monitoring and implementation. This will not be Vietnam's first project built on the sea, although several projects which were not meant to be built in water per se but managed to encroach on significant water area have been giving such project a bad name. Take the Nha Trang Sao project, for instane. In mid-May, Nha Trang Sao JSC filed another complaint in order to receive permission to continue a tourism project which was banned for illegally encroaching on the renowned Nha Trang Bay in the central province of Khanh Hoa. The project on Pham Van Dong street was licensed in 2012 with the total investment of $33 million. The construction started in 2014 and was scheduled for completion in late 2016, according to plo.vn. In early 2016, the project investor was fined for VND130 million ($5,909) for failing to monitor the environmental impacts of construction activities, and VND70 million ($3,181) for illegally filling up 23,000 square metres of the bay. The project's investment certificate was also revoked. The investor was asked to restore the bay and remove an embankment. However, little has been done and the project has become stagnant. Nha Trang Sao JSC has since filed two complaints to the provincial Department of Planning and Investment. On May 17, Hong Kim Yen, the legal representative of Nha Trang Sao JSC, claimed that the violations were not the investor's fault as they were decided by the company's old shareholders. After welcoming new shareholders in last March, they adjusted the architectural planning following the Khanh Hoa People's Committee's requests. They also submitted the planning to local authorities but received no feedback. Yen requested the province to authorise the project to resume, saying that if the project is put into use, it will help boost the local tourism sector and protect the coral reef and the marine environment. Meanwhile, the Khanh Hoa Department of Planning and Investment said that they had a meeting with Nha Trang Sao JSC on March 30 and the investor failed to provide sound evidence to prove their claims.  According to the department, not only did Nha Trang Sao JSC violate the regulations in the first place, it did not fix the wrongdoings even after being fined. The department refused to issue another investment certificate and said that Nha Trang Sao had the right to file a complaint to the Khanh Hoa People's Committee. SCG makes final acquisition in Long Son Petrochemical Complex Leading ASEAN industrial conglomerate SCG has reached an agreement to buy PetroVietnam's 29 per cent in the long-delayed Long Son Petrochemical Complex, leaving it king of the hill. This step once more confirms SCG's determination to implement the petrochemical complex that has been delayed for more than 10 years now. According to Roongrote Rangsiyopash, president and CEO of SCG, the group has been investing in Vietnam for more than 20 years. “Long Son Petrochemical Complex (LSPC) is our latest investment in Vietnam and is also positioned as Vietnam’s first petrochemical complex. LSPC will produce an important supply for the manufacturing industry which will in turn support Vietnam’s industrial and economic development. This will also be in line with the national economic development plan,” Rangsiyopash commented. The Vietnamese economy, according to Rangsiyopash, is on an impressive growth path and LSPC is expected to encourage long-term investment in related industries throughout the value chain, as well as improving a competitive standard of products that will lessen the need to import petrochemical products. Moreover, SCG also believes that this project will support the growth of downstream businesses in Vietnam and play a vital role in supporting long-term economic growth, as well as improving the quality of life for people in Vietnam and across the region. LSPC was initiated by PetroVietnam in 2008 with the participation of SCG, Qatar Petroleum International, and state-run chemical group Vinachem. However, it was not until February 2018 that the project officially started construction by the remaining two investors, PetroVietnam and SCG. The Thai investor also increased the total investment capital of the complex to $5.4 billion from the previous $3.8 billion. According to SCG, the engineering, procurement, and construction contract of the complex will be implemented from the third quarter of this year and the whole project is expected to be put into operation in 2023. LSPC is located in Long Son commune of Ba Ria-Vung Tau province, 100 kilometres from Ho Chi Minh City. This integrated petrochemical complex will have a total olefin production capacity of 1.6 million tonnes per year. The complex is designed to produce various petrochemical products, including essential plastic materials such as polyethylene, polypropylene, and other products in excess of two million tonnes per year, enabling it to substitute imported polyolefin products. Non-petrochemical supporting infrastructure, such as a deep sea port and other facilities, are also included. The project will create more than 20,000 jobs during construction, including more than 1,000 skilled labourers, and is expected to contribute around $60 million per year to the annual budget. SCG began expanding its business in Vietnam in 1992. So far, the group has 23 subsidiaries and affiliates with over 8,300 labourers working in Vietnam. Vietnam attracts additional US$7.1 billion in FDI Vietnam reeled in around US$7.1 billion in newly registered and additional capital from foreign investors in the five months of this year. Vietnam had granted investment licences to 1,076 new projects as of May 20, with a total registered capital of US$4.6 billion, up 14.6% in project numbers and down 16.8% in capital against those of the same period last year. 393 projects saw capital adjustments with additional investments of US$2.5 billion. In the first five months of the year, there were 2,341 deals made by foreign investors to contribute capital to businesses and to buy shares of Vietnamese businesses with total capital of US$2.75 billion, an annual rise of 53.4%. In the period between January and May, the manufacturing and processing industry was the most attractive destination with a total capital of US$2.2 billion, equal to over 49% of the country’s total registered capital. It was followed by the production and distribution of electricity, gas, hot water and steam, and air conditioners with US$898 million, accounting for 19.3%; real estates (US$623.3 million; 13.4%) and the remaining industries (US$846.1 million; 18.2%). Among the 43 cities and provinces that received FDI in the first five months of 2018, Ho Chi Minh City was on top with US$541 million, followed by Hanoi (US$525.6 million), Binh Duong (US$403.8 million), and Dong Nai (US$373.6 million). Among the 50 nations and territories investing in Vietnam in the first five months, the Republic of Korea topped the list with a registered capital of more than US$1 billion, accounting for 22% of the country’s total registered capital. Japan, Thailand and Singapore followed with US$904 million, US$536 million and US$503 million, making up 19%, 11,5% and 10.8% of the total capital, respectively. HCM City to reduce salt farmland, expand aquaculture production The HCM City Department of Agriculture and Rural Development has proposed reducing the land for salt farming in Cần Giờ District by one-third by 2030 and increasing the land for aquaculture farming. Under the plan, the area of salt production would be reduced from 2,172 hectares to 850 hectares by 2025, and to 644 hectares by 2030. These areas eligible for reduction are outside of the planned zones for salt farming and yield low economic efficiency. They would be converted to aquaculture farms and protection forests. In Cần Giờ, salt output so far this year has been over 80,000 tonnes, double the amount of the same period last year. The price of salt is VNĐ1,000-VNĐ1,100 (US$ 4-5 cents) per kilo, according to the city’s Department of Agriculture and Rural Development.  Solar, wind energy projects kick off in Ninh Thuận Province The People’s Committee of Ninh Thuận Province, a typically hot and dry area, has urged investors to focus on solar and wind energy projects.    The province is less affected by storms than other areas in the country, and has become known as the renewable energy centre in Việt Nam. Ninh Thuận Province has approved nine wind power projects and total investment of VNĐ26.5 trillion. It has also approved 22 solar energy projects, with total capacity of 1,259 MW. However, the development of those projects have been implemented at a snail’s pace. Among the nine approved wind power projects, only four are under construction including Công Trung Nam, Phước Dinh and Đầm Nại, according to Ninh Thuận Industry and Trade Department. On January 23, construction began on the first solar energy plant by BIM Group (Vietnam) and AC Energy (Philippines), with total investment of VNĐ800 billion (US$35 million) and 90,000 solar panels in Phước Minh Commune in Thuận Nam District. The second, Bầu Ngữ project, has begun construction since March 31, with a combined capacity of 50MW and total investment of VNĐ1 trillion.  Two other solar projects are due to be built in June this year. The 18 remaining solar energy projects are still on paper. The Ninh Phước District have the most with 9 solar projects with total capacity of 308MW and total investment of VNĐ 9.2 trillion.    The chairman of Ninh Thuận People’s Committee, Lưu Xuân Vĩnh, said the high cost and land clearance for construction of wind and solar power plants were the main reasons that have deterred many investors. “However, if investors don’t have enough capacity and experience, we will withdraw their investment licences,” he said. According to the Ministry of Industry and Trade, investment in wind and solar power costs more than traditional electricity.  Additionally, mobilising capital from banks is also difficult for investors. New firms up by 3.5% in 5 months      Viet Nam saw an increase in the number of new enterprises and their registered capital in the first five months of 2018 due to improving business conditions. This was reported by the Ministry of Planning and Investment (MPI). According to MPI’s Business Registration Management Agency, the number of newly established enterprises in the first five months rose by 3.5 per cent year-on-year to 52,322 units, with a total registered capital of VND516.9 trillion (US$22.7 billion). The capital increased by 6.4 per cent compared to the same period last year due to improving business conditions and registration procedure, the agency said. The average capital for an enterprise reached VND9.9 billion, a year-on-year surge of 2.8 per cent. New enterprises have focused on sectors such as wholesale and retail, repair of cars and motorcycles, processing and manufacturing as well as construction. Twelve sectors saw an increase in newly established enterprises in the first five months. The real estate trading sector had the highest growth in the number of new enterprises at 41.1 per cent. The sector also saw the highest development in registered capital of new firms, accounting for some 29 per cent of the total registered capital. Sectors such as electricity production and distribution, real estate trading, finance-banking and mining led in terms of average registered capital per enterprise. Meanwhile, in the first five months of this year, 13,267 enterprises resumed operations, a year-on-year reduction of 1.4 per cent, while 15,974 enterprises temporarily stopped their operations, a year-on-year increase of 24 per cent.  Ha Noi attracts US$860mn in FDI      The capital city attracted US$860 million in foreign direct investment (FDI) in the first five months of 2018, said municipal Department of Planning and Investment director Nguyen Manh Quyen. Of this, $529.2 million were invested in 225 new projects, over $131 million were added to 48 existing projects and $199.5 million were invested in the stakes of domestic companies. Quyen said the city carried out 27 non-State capital projects, with a combined investment of VND27 trillion ($1.2 billion). In addition to this, 13 projects were permitted to increase investment capital by VND1.98 trillion. In the first five months of 2018, Ha Noi approved another public-private partnership (PPP) project with an investment of almost VND1.41 trillion, bringing the total number of PPP projects to 12, with a total investment of more than VND28.33 trillion. During the reviewed period, 9,420 businesses were established in the city, with a combined registered capital of VND97.5 trillion, down by 1 per cent in number but up by 36 per cent in the volume of investment. The figure raised the total number of enterprises in Ha Noi to 241,000. Last year, the capital city drew up to $3.4 billion in FDI. Central city to host int’l start-up event      The central city will host the third International Start-up Conference and Exhibition, or SURF 2018, on Tuesday, with the aim of attracting participants in technology, artificial intelligence (AI) and big data. The event’s organisers hosted a press conference on Monday, stating that more than 2,000 attendees including 20 investors and 30 speakers have registered to take part in the conference and exhibition at the city’s administrative centre. About 70 pavilions will be set up for the one-day conference and start-up exhibition with the theme ‘linkthewaves’, in the coastal city. The start-up pitch competition this year, which is the largest in central Viet Nam, will offer a total cash-prize of US$6,000 for the winner. Participants will take part in opportunities to share experience with start-up programmes from Israel, Canada, Ireland, the UK, Finland, Singapore and Viet Nam. Deputy Chief of Mission of the Israel Embassy in Viet Nam, Doron Lebovich said SURF 2018 will be an event to mark the 25th anniversary of diplomatic ties between Viet Nam and Israel. He said Israel and Da Nang as well as the Da Nang Entrepreneurship Support Centre has been in positive partnerships with start-up programmes, and the city’s leadership has strongly committed to building a start-up programme and ecosystem. He said experts from Israel will take part in sharing experiences and technology transfer at the exhibition and conference next month. Da Nang has launched its business start-up programme eco-system from now until 2020, with a vision to 2030. The city’s business start-up ecosystem debuted in 2014 as a base for a young generation beginning their business careers. Three hundred start-up projects, of which 10 received funding from investors, were born from the ecosystem’s co-working space. In 2017, the Song Han Incubator Centre, which was seen as the first private sector incubator, was debuted as a consultancy for young people starting businesses. It aims to develop a start-up ecosystem and popularise the spirit of business among other locals in Viet Nam. Da Nang has 18,000 businesses, 95 per cent of which are small and medium-sized enterprises. Vinamilk to spend $127m to advance 2018 dividend Vinamilk will pay the interim dividend for 2018 and issue additional shares to increase the share-capital in the third quarter. On September 6, the dairy company will finalise the list of shareholders that will receive the interim dividend for 2018 at the ratio of 20 per cent (equivalent to VND2,000 per share-holding). The dividend will be paid in cash on September 26, which means Vinamilk will spend some VND2.9 trillion (US$127.2 million) for this payout. Earlier, in its annual shareholders’ meeting on March 31, Vinamilk set a target of VND55.5 trillion in revenue and VND10.75 trillion in net profit in 2018. The 2018 dividend ratio is set at least 50 per cent of the after-tax profit. The first payment will likely happen in the third quarter of this year, while the second disbursement will be made in May or June 2019. In its filing to the State Securities Commission and HCM Stock Exchange, Vinamilk also announced the plan to issue 290 million additional shares to the existing shareholders at the par value of VND10,000 each. The issuing ratio is 5:1, which means that for every five ordinary shares held at the record date, which will be September 6, shareholders will receive one bonus share. The Vinamilk shares have been seeing a downtrend since last week with a total loss of 7.4 per cent during May 7-15, being traded at around VND176,000 ($7.72) per share. The dairy firm reported a fall of 9 per cent in its consolidated net profit in the first quarter of this year, earning 2.68 trillion ($118 million) by the end of March. StoxPlus: Cement industry to recover through robust export activities As stated in StoxPlus Cement Market Report 2018, the Viet Nam cement and clinker sales volume reached 80.3 million tonnes in 2017, posting an increasing growth rate for three years in a row. Although the domestic consumption contributed to more than 70 per cent of the total sales for several years, the recent years have witnessed a sluggish growth rate from 9.5 per cent (2015) to 1.4 per cent (2017). While domestic consumption sustained its growth, the export activity drove the market with the export volume surging up to 19.7 million tonnes, leading to a robust growth of 27.7 per cent year on year, thanks to the increasing demand from key markets, including Bangladesh and the Philippines. Additionally, China emerged as a potential export market as the Chinese government has implemented an unprecedented pollution crackdown in November 2017, with the country shutting down tens of thousands of cement factories in an effort to address China’s air pollution. Compared to 2016, the cement export volume fell sharply by 21.4 per cent, while clinker posted a strong growth of 53.8 per cent, making it the key driver of cement exports in 2017. This could be explained by the fact that foreign countries tend to favour clinker imports over cement due to the cost, and this trend will continue to shape Viet Nam’s cement exports in the long-term prospects. Supply: While local private companies continued to launch “mega” projects, the foreign giant strengthened its presence via M&A activities According to StoxPlus database, there are some 107 cement facilities with a total capacity of 120.9 million tonnes per year (MTPY) belonging to 93 companies in Viet Nam, of which VICEM and foreign-owned companies recorded high utilisation of more than 80 per cent. In 2017, private companies continued to operate five new “mega” projects with total capacity of up to 18.5 MTPY, resulting in a surge in the total production capacity by 18 per cent. The projects are developed not only by giant local private companies such as Vissai or ThaiGroup, but also by other local players, especially Thanh Thang and Long Son, which indicated a trend in favour of large-scale projects. In line with StoxPlus’s analysis, cement facilities can hardly operate efficiently if the designed capacity is under one MTPY, especially when taking into account the electricity cost, maintenance expenses and other fixed costs. With regard to foreign players, 2017 witnessed active M&A prospects when SCCC and SCG invested heavily through the entire ordinary share acquisition of LafargeHolcim and VCM, respectively. Positive signal from regulatory framework In December 2017, the Vietnamese Government issued Decree No 125/2017/ND-CP, which is expected to boost Viet Nam’s cement export activities. The entitled zero per cent export tariff for cement has sharpened Viet Nam’s competitiveness, especially in the fierce race with ASEAN countries apart from China. It is estimated that export companies can now enjoy higher profit by US$3-4.5 per tonne under the new tariff. Additionally, enterprises are being encouraged to participate in export activities thanks to the VAT reimbursement scheme. New regulations have taken effect immediately, which is indicated in the 4M/2018 export results. In 4M/2018, the total cement sales reached 29.83 million tonnes, recording a growth rate of 13 per cent year on year, mostly owing to the active export activities which increased by 29 per cent year on year. Based on StoxPlus analysis of macroeconomics and the historical cement demand since 2000, associated with the impact of related factors such as the status of infrastructure development and the residential house construction recently, the demand for cement is projected to grow at a rate of 5 per cent until 2030. Viet Nam is expected to face continuous supply surplus before reaching the equilibrium in 2027 at 130.8 million tonnes of cement, if the uncertain cement projects in Viet Nam are not taken into account. Even though Viet Nam’s cement sector still moves in tandem with the real estate boom and burst, this industry is still expected to enjoy healthy growth in the years to come. Telefilm expo attracts 250 exhibitors The sixth Vietnam International Exhibition on Film and Television Technology (Telefilm) will be held next month in HCM City, showcasing products, services and technologies used in film and television. It has attracted more than 250 exhibitors from 15 countries and territories and more than 2,000 film and television technology professionals. On display will be TV programmes and serials; value-added and support services; technology and solutions for the TV, media, and communications industries and for image processing and transmission; and post-production services, Several seminars will be held on the sidelines on current television trends amid rapid digitisation in the TV industry globally and in Viet Nam. As a prestigious international exhibition specialising in film and television, Telefilm will offer visitors the opportunity to meet potential partners and learn about the latest international film and television trends. Organised by Viet Nam Television and the ADPEX Joint Stock Company, the exhibition will he held from June 7 to 9 at the Saigon Exhibition and Convention Centre in District 7. Tiki reports second year of losses Tiki’s consecutive losses raise the question whether these are still planned losses or are a result of losing the e-commerce race to competition. Tiki was established in 2010 as a startup e-bookstore but has since diversified operations to sell phones, tablets, digital devices, electrical appliances, toys, and souvenirs. In August 2013, Tiki signed a strategic partnership with Japan’s Sumitomo Corporation and became the first e-commerce company in Vietnam to receive investment from the Japanese company. Under the partnership, Sumitomo would hold a 30 per cent stake in Tiki to become its second strategic investor, after Japanese investment fund CyberAgent Ventures (15 per cent). In May 2016, VNG Corporation, Vietnam's top provider of Internet content, completed a VND383-billion ($17.02 million) deal to acquire a 38 per cent stake in Tiki. Accordingly, VNG spent VND104,000 ($4.57) per share, with the expectation to acquire benefits from one of the largest e-commercial platforms in Vietnam. With backing from Japanese investors Sumitomo Corporation and CyberAgent Ventures, which own a combined stake of 45 per cent, in collaboration with the investment from VNG, Tiki was expected to become a heavyweight in the e-commerce sector in the country. However, the firm has been reporting losses for two consecutive years now. Notably, according to the financial statement of VNG Corporation, a shareholder of Tiki, in 2017 Tiki reported a loss of VND282 billion ($12.38 million), triple its charter capital and seven times higher than the loss in 2016. Hence, Tiki’s total losses two years after receiving investment from VNG were VND320 billion ($14.05 million). Tiki CEO Tran Ngoc Thai Son stated that the losses are a part of the firm’s long-term development plan. Tiki is expanding its scale of operations via investing in infrastructure, warehouses, human resources, and technology. In reality, according to the statistics of Euromonitor, Tiki ranked sixth among the online shopping sites of Vietnam in 2017 with the visitor volume of 15.08 million. However, according to customers, there is a painful lack of transparency in Tiki’s promotion programmes. Notably, the firm often increases selling price quietly to then provide discounts at the original price. Earlier this year, Tiki received $54 million in Series C investment made by Chinese internet giant JD.com and South Korea's STIC Investments. The additional capital is expected help Tiki to consolidate its market presence. At present, the Vietnamese e-commerce sector holds great potential but is also a playground ruled by strict competition by numerous heavyweights. The fierce competition was shown after a series of e-commerce floors had to shut down because of big losses. Beyeu, Deca, and Lingo left the market after long struggles to survive. According to industry insiders, companies need to allocate enormous expenses for their e-commerce business from sales and marketing to warehousing and logistics, so it can easily eat up profits. Also, many platforms suffered losses from special discount offers and promotion campaigns to snag new customers. At present, it is still early to conclude that the consecutive losses of Tiki is a show of weakness, however, Beyeu, Deca, and Lingo are signals that the market is not for players lacking financial potential or methodical development strategies. VINACAS Golden Cashew Rendezvous to be held in Halong Bay The 10th Vietnam Cashew Association (VINACAS) Golden Cashew Rendezvous (GCR-2018), a Vietnamese national trade promotion program, will be held from October 5 to 7 in Ha Long Bay. Ha Long Bay is a UNESCO World Heritage Site and an iconic tourism destination of Vietnam. The program is organized by the Vietnam Cashew Association (VINACAS) and is supported by the Ministry of Industry and Trade and Ministry of Agriculture and Rural Development of Vietnam. As the world’s cashew hub, the GCR-2018 is the place where more than 500 esteemed cashew stakeholders can find real cashew partners and deals and acquire the most reliable cashew information and forecasts from qualified panelists from all over the world. VINACAS hopes that all cashew kernel buyers, raw cashew nut sellers, and other cashew stakeholders will have a wonderful time and enjoy Vietnam’s unique atmosphere, splendid scenery and traditional cuisine. One day prior to the event, a wonderful tour called “Cashew Roadshow” will be held from Hanoi to Ha Long Bay. Along the Cashew Roadshow, attendees will have the opportunity to visit the sites and culture of Vietnam’s capital, Hanoi. These places include Hanoi Old Town, Hanoi Water Puppet Show, and Bat Trang Pottery Village, which are on the list of top ten destinations by TripAdvisor. Upon arrival at Ha Long Bay, the attendees can enjoy the marvelous “Ha Long Bay Sea-Caravan Tour.” In addition to the pre-tour, the organizers will bring the participants on a memorable trekking post-tour from Ha Long Bay to Sapa - a mountainous region in the north of Vietnam where there are a few nearby cashew processing units. Sapa, one of the most attractive tourism destinations in the country, is a precious gift that Mother Nature has given Vietnam. Located here is Fansipan or "The Roof of Indochina," where one can view many picturesque sights. UOB to debut in July The Singapore-based United Overseas Bank (UOB) has received a business registration license and is scheduled to open on July 2. Under the license, the bank will be able to expand its network in the country enabling UOB to extend financial support and offer best-in-class products and service to consumers and businesses beyond Ho Chi Minh City. UOB Vietnam has a charter capital of VND3 trillion ($131.3 million) and has permission to operate in the country for 99 years. This is the first Singaporean bank in Vietnam and is the ninth bank with 100 per cent foreign capital in Vietnam. On March 23 last year, during Singaporean Prime Minister Lee Hsien Loong’s visit to the country,  the State Bank of Vietnam announced that it had given preliminary approval for UOB to set up in Vietnam. The bank received its in-principle license in July of the same year. Previously, UOB had launched a business banking service dedicated to helping small businesses in Vietnam grow. This followed the State Bank of Vietnam’s licensing of UOB as a foreign-owned subsidiary bank on September 26, 2017. The bank recently signed a memorandum of understanding (MoU) with Toong to provide UOB’s small and medium-sized enterprise (SME) customers with preferential rentals at any of Toong’s five co-working office spaces in Vietnam. UOB customers will enjoy up to 20 per cent off rentals and have access to Toong’s business partners, including legal and accounting firms, who can advise them on issues such as local incorporation. The bank has also partnered with the Foreign Trade University (FTU) to launch the finance industry’s first tertiary education program designed for small business bankers in Vietnam. Aside from UOB Vietnam, the eight other foreign banks in Vietnam are Standard Chartered (UK), Shinhan Vietnam (the Republic of Korea), Hong Leong Bank, CIMB, Public Bank Berhad (Malaysia), CitiBank (US), HSBC (Hong Kong), ANZ (Australia). Online counterfeit goods trap consumers Fraudulent trading and counterfeits have been complicated in the southern province of Dong Nai. Violations have become more diverse, highly sophisticated, and uncontrolled, especially trading and rampant advertising cosmetics and pharmaceuticals via the social network. Some traditional medicines labeled as "Ethno medicine" for various illness including joint treatment, cough, diabetes, and even gynecology are advertised widely on Facebook, said the Dong Nai province Department of Market Management. Without prescribing or consulting with doctors, consumers can click through to purchase and receive folk medicines at home with a guarantee of "a full refund if they do not work" offered by "online pharmacists". However, not only is it hard to check the origin and use of these drugs but also they pose a lot of potential health risks. For example, some mothers have recently passed on the use of a cough medicine for kids which was widely advertised on Facebook. It was said to be an application for pain relief, swelling, cough, cold, healing, burns, insect bites, acne, and itchy rash. The online pharmacists also asserted that the drug was 100 percent natural, formulated by the Dao, and safe for all ages, including infants. However, the medicine was detected falsely labeling its features and use which were originally in the form of emulsion, deodorant, and anti-odor to assist with massage and skin care. It is hard to monitor the quality of the folk medicines heavily advertised online. These products represent both a cost to consumers' pockets and a risk to their health as they are often mixed with modern ingredients to bring immediate effects such as pain relief, acne clearing, firm and youthful skin maintaining, appetite increasing, and weight gain, according to the authorities. "The use of traditional medicines actually takes a certain amount of time and does not work immediately. That some people trust in the misleading advertisement for drugs derived from nature and use for a long time causes a danger to their health", a traditional medical practitioner warned. During the first quarter of 2018, the authorities carried out over 630 inspections, detected 280 violations, fined, and remitted about VND 2.6 billion to the state's budget, the department reported. In particular, counterfeits accounted for the highest rate with 114 cases, food safety 94 cases. The rest included smuggled goods and undocumented foreign goods with low quality. Cosmetic counterfeits are the most common. The Feb.2 inspection of the HMH Trading & Services Co., Ltd (Tam Hiep Ward, Bien Hoa City) came upon more than 600 products without challan, most of them were cosmetics, such as toner, moisturizer, face cleanser, shampoo, conditioner, and lipstick. Previously, the authorities also conducted a spot check on the branch of HV Cosmetics Company (Trang Dai Ward, Bien Hoa City) and found out thousands of undocumented cosmetics, including 18,000 bottles of body lotions, 224 bottles of body shower, 432 bottles of whitening cream, and 40kilogram of cream ingredient and other additives. According to Mr. Huynh Kim Hoa, Head of Professional and Staff Division under Dong Nai Department of Market Management, the department directed the relevant teams to enhance market inspection and control as well as to propagate business households and individuals to strictly comply with the provisions of law to combat against smuggling, counterfeits, and commercial fraud. However, the obstacles to access product information and establishments, and those trading online resulted in the limited number of cases detected and handled by authorities, Hoa concluded. GDP grows 7.38% in Q1 This year’s first quarter saw the nation’s gross domestic product (GDP) growth hitting 7.38%, or 30 basis points higher than in the final quarter of 2017, heard a meeting of the National Assembly Standing Committee. Ha Ngoc Chien, head of the NA Ethnic Council, was quoted by VnEconomy as saying at the meeting on May 14  that the higher GDP growth rate of last quarter was a good result, as GDP growth in the first quarter of the previous years was often lower than in other quarters. Deputies attending the meeting spoke highly of positive socio-economic results of last year. Chairwoman of the NA Justice Committee Le Thi Nga said the Government had acted promptly upon pressing issues, and relevant agencies have managed to live up to commitments by the Government. Such performance is made possible owing to a working group having been established to oversee the implementation of conclusions of Government leaders, she added. According to Nga, much red tape has been removed. In addition, the Government has operated in a more transparent manner when dealing with cases such as the MobiFone-AVG deal and the 12 loss-making projects under the management of the Ministry of Industry and Trade. However, while factors behind good results were analyzed in detail in socio-economic reports, areas with poor performance have not been brought to light, head of the NA Committee for Legal Affairs Nguyen Khac Dinh commented on the Government’s reports. According to Dinh, export growth has still depended greatly on foreign direct investment (FDI) enterprises. Besides, the capital of investment projects licensed in January-March averaged out at only US$3.4 million, equivalent to one third of the projects in 2014. Head of the NA Committee for External Relations Nguyen Van Giau asked the Government to pay special attention to dealing with weaknesses and drawbacks of the economy, including low labor productivity. CAAV rejects service discounts for Etihad Airways The Civil Aviation Authority of Vietnam (CAAV) has requested the Ministry of Transport to not offer service discounts on flights to Vietnam as requested by the UAE’s Etihad Airways. According to the CAAV, the price range for air services is stipulated in Decision 2345/QD-BGTVT dated August 8, 2017, which does not provide special price policies for airlines operating flights to and from Vietnam. The discount request by Etihad Airways cannot be accepted. Since October 2013, Etihad Airways has been operating flights to and from Vietnam’s Noi Bai and Tan Son Nhat international airports. Of these, Abu Dhabi-Tan Son Nhat flights are operated on a regular basis. In fact, discounts have been offered to airlines but at some smaller airports only. In 2013, the Ministry of Transport provided special service prices for international airlines flying to Phu Bai, Cam Ranh, Lien Khuong, Can Tho and Phu Quoc airports, with discounts of up to 50% on landing, takeoff and security screening services in up to three years. The discounts were applicable to new airports which have handled a small number of international flights. As for Noi Bai and Tan Son Nhat airports, only special cases can enjoy service discounts. In related news, the Ministry of Transport has permitted Thai Vietjet to continue operating flights between Lam Dong Province’s Dalat City and Bangkok of Thailand. The Ministry of National Defense earlier agreed on Thai Vietjet operating regular flights between Dalat and Bangkok to promote the province’s economy and tourism, attract investors, and stimulate trade between the two countries. Dalat-Bangkok flights were operated between December 18, 2017 and March 24, 2018 with four flights per week using A320 and A321 aircraft. Forum spotlights business development in digital age Telecom and Internet providers in Vietnam have recorded 6.1 billion USD in revenue and created more than 851,000 jobs, as heard at a forum on enterprises in digital age held in Hanoi on May 17. The forum took place in conjunction with the announcement of the Vietnam Chamber of Commerce and Industry (VCCI)’s annual report on Vietnam business for 2017/2018. As heard at the forum, IT and telecom sector’s production value contributed over 0.7 percent to the nation’s GDP on average. In 2016, the number of IT/telecom businesses surpassed 11,000, accounting for 2.2 percent of Vietnam’s total figure. Apart from the application of advanced technologies in traditional sectors, the digital age has given birth to a number of non-traditional business models in Vietnam, like online car hailing and financial technology (fintech) services. Expert said fast changes of these new models have sometimes left legal regulations behind, thus causing difficulties for their providers and benefit conflicts between them and their traditional peers. VCCI Chairman Vu Tien Loc said last year, the Prime Minister issued Decree 16 on capacity building for the 4.0 industrial revolution. He said the decree put forth key measures on IT infrastructure development, and prioritised the building of digital industry, smart agriculture, and smart cities. He noted companies ought to design their relevant action plans and join the public sector’s efforts in building strategies for smart governance and innovation. Loc also acknowledged achievement of the business sector last year, with the establishment of 126,859 new firms, the highest number recorded to date. Pham Thi Thu Hang, head of the Vietnam Business Insight Survey – a VCCI initiative, said the year saw improvements in the private sector, but the trend of smaller-scale firms persisted and the rate of performance failure among small scale businesses remained high. Seminar collects opinions on inspection on exports-imports A seminar took place in Hanoi on May 17 to collect opinions on building the draft Decree on the national one-stop shop mechanism and specialised inspection on exports-imports. Co-organised by the United States Agency for International Development (USAID) and the Finance Ministry’s General Department of Vietnam Customs, the event attracted over 100 delegates from ministries, agencies, local customs and businesses. Speaking at the event, Deputy Director General of the Vietnam Customs Nguyen Cong Binh said administrative reform on exports-imports has been the top priority of the Government in recent years, adding that the Decree No.19 on improving business climate and national competitiveness requests reducing the rate of goods under specialised inspection in customs clearance to below 10 percent from 25 – 27 percent at present. Despite achievements in administrative reform, the World Bank’s Doing Business Index pointed out that Vietnamese enterprises still meet difficulties in abiding by regulations on specialised inspection on exports-imports, he said. Pham Thanh Binh, advisory expert for the USAID’s GIG project, said regulations on specialised inspection on exports-imports are set in laws, decrees and circulars of ministries and agencies, leading to overlapping in management. Launched in November 2014, the national one-stop shop mechanism has so far connected with 11 out of 14 ministries and departments and 47 out of 284 administrative procedures on specialised inspection. However, a number of procedures on specialised inspection are yet to be conducted online. The draft Decree on the national one-stop shop mechanism and specialised inspection on exports-imports will help simplify customs clearance procedures and establish an inter-sectoral mechanism to ensure effective coordination among units via the national one-stop shop. The Vietnamese Government is also working with the USAID via the Governance for Inclusive Growth Programme to facilitate sustainable and inclusive economic growth in the country. Tien Giang expands fruit production as prices rise Tien Giang province, the Mekong Delta’s largest fruit producer, has increased its fruit cultivation area to nearly 75,000ha this year, up three percent against the same period last year. Farmers have planted 1,300ha of new dragon fruit, 1,200ha of pineapple and 400ha of new green-peel and pink-flesh grapefruit this year.  Under its agricultural structuring plan, the province has encouraged farmers to turn farmland unsuited to growing rice into fruit orchards.  Cao Van Hoa, Director of the province’s Department of Agriculture and Rural Development, said the province had set up concentrated fruit planting areas to produce specialty fruits for domestic and export markets. Specialty exports include Lo Ren Vinh Kim milk apple in Chau Thanh district, Ngu Hiep durian in Cai Lay district, and citrus fruits in flood-prone districts. The province has also established a 7,000 concentrated durian planting area in Cai Lay district, the largest durian planting area in the Mekong Delta. The milk apples, which are exported to the US, offer high profits for farmers. Advanced farming techniques, especially for off-season fruits, and good quality seeds have helped farmers increase profits by 300 million – 500 million VND (13,200 – 22,000 USD) per ha of specialty fruit a year. Some farmers can earn a profit of up to 1 billion VND (44,000 USD) per ha a year. Huynh Van Kem, who plants 7,000sq.m of two specialty durian varieties - Ri6 and Mong Thong - in Cai Lay district, said he harvests an average of 20 tonnes of durian a year and earns a profit of 1 billion VND. Durian yields high profits, but farmers must choose good seedlings, use advanced farming techniques and produce off-season fruits, according to Kem. Le Van Can in Cho Gao district said he earns a profit of 100 million VND a year from planting 4,000sq.m of dragon fruit. This profit is four times higher than from rice, he said, adding that he planted rice on his farmland. Concentrated fruit planting trees have helped farmers increase their income, according to the province’s Department of Agriculture and Rural Development. The province has also started production chains for durian, Hoa Loc mango and dragon fruit cultivation to 2020. The development of new fruit orchards has increased the demand for fruit seedlings. Ut Phuong, a fruit seedlings producer in Cai Lay district, said the price of seedlings of Ri 6 and Mong Thong durian varieties had risen to 100,000 VND a seedling, up two times against the same period last year. Vietnam continues to enjoy large trade surplus in UK market Vietnam enjoyed a 1.5 billion USD trade surplus with the UK for the first four months of 2018 as the country exported 1.75 billion USD worth of goods to the market and imported 238 million USD. According to the General Statistics Office (GSO), Vietnam’s export revenue to the European country in the first three months of 2018 reached 1.31 billion USD, up 30.6 percent over the same period last year. Meanwhile, Vietnam imported 185 million USD worth of goods from the UK, up 17.6 percent year on year, resulting in a big trade imbalance. From January until the end of April, Vietnam mainly exported to the UK telephones and spare parts, footwear, garment, and aquatic products, with respective export value exceeding 705 million USD, 201 million USD, 215 million USD and 78 million USD. At the same time, Vietnam imported from the UK 67 million USD worth of machineries, equipment and spare part, 45 million USD of pharmaceuticals and more than 13 million USD of chemicals. Earlier in 2013-2017, the UK was among the 15 largest trade partners of Vietnam with average annual growth of nearly 5 percent. Two-way trade grew a total 44 percent in the review period to 6.15 billion USD in 2017 from 4.27 billion USD in 2013. Last year, the UK was the eighth biggest export market of Vietnam, one position higher than 2016. Meanwhile, it was Vietnam’s 26th biggest import market, down two positions compared to the previous year. In the past five years, Vietnam’s exports to the UK surged 46.4 percent to 5.42 billion USD, accounting for 2.5 percent of the country’s total export volume. In the same period, the Southeast Asian’s import revenue in the UK market increased 30 percent, reaching 733 million USD in 2017. Vietnam continuously enjoyed a large trade surplus with the UK, with last year’s figure hitting 4.68 billion USD. The UK is also the third biggest trade partner of Vietnam among EU countries. Proposed regime for reporting market prices The Ministry of Finance (MoF) has drafted a circular on rules and methods of collecting information and reporting market prices of some domestic goods and services. The move aims to facilitate the synthesis, analysis and projection of commodities prices by central and local agencies, in order to standardise information and gain a better picture of the national inflation situation. The list of commodities and services subjected to the newly-recommended market price reporting regime includes essential commodities that can represent groups of goods and services relating to food, construction materials, medicines and medical services, transportation, education, entertainment and tourism. The draft recommends that the Departments of Finance of centrally-run cities and provinces nationwide send monthly, quarterly and annual reports on market prices of commodities in their localities to the MoF’s Price Management Department. Reports will include information on the evolution of the consumer price index (CPI) calculated within each locality, together with analysis on the status and the causes of the factors affecting CPI. The reports also evaluate the efficiency of local management and administration of prices, including the price management of some important and essential goods in the locality and the promulgation of legal documents related to commodities’ market prices. In addition, the reports will also forecast the CPI and the market price situation in the next period. In case of abnormal fluctuations in prices, the provincial and municipal Department of Finance have to make irregular reports on price fluctuations of some essential goods and services in the locality. The commodities included in the price report include rice, pork, beef, chicken, fish, shrimp and seasonal vegetables (for food), cement, construction steel, sand, bricks (for construction materials), car fare, bus fare, taxi fare (for transportation services), tuition fees of public kindergartens, public school fees and university fees (for education). The Ministry of Finance is gathering public comments on this draft by posting the draft in the Ministry’s e-Portal. HCMC boosts supporting industries HCM City is enacting policies to aid businesses in the supporting industry by encouraging investment, networking between firms and banks, and creating special zones. The city’s People’s Committee has approved 15 investment projects related to the mechanical, plastic and food industries, with total investment of VND938 billion (US$41 million), VND581 billion of which would be supported by the government in the form of paid interest on loans, according to the city’s Department of Industry and Trade. A city multi-disciplinary team has also appraised nine projects, at a total of VND943 billion. Two of them have been approved by the city. The HCM City Export Processing and Industrial Zones Authority (HEPZA) is working with related authorities to form supporting-industry zones in Hiep Phuoc Industrial Zone and Le Minh Xuan 3 Industrial Zone. Nguyen Phuong Dong, deputy director of the Department of Industry and Trade, said that to provide space for businesses to operate, HEPZA was also building factories at Tan Thuan Export Processing Zone and Linh Trung 1 Export Processing Zone. Factories in the former are already being rented, while those in the latter are expected to start construction within this month. In addition, the Department of Industry and Trade is working with the State Bank of Viet Nam - HCM City Branch to connect banks with businesses and encourage credit unions and financial institutions to offer credit packages to businesses in the supporting industry. Also, in accordance with Circular 29/2018/TT-BTC issued by the Ministry of Finance to manage funding for supporting industry development, nation-wide cities and provinces including HCMC can use state funds to provide financial aid to companies and organisations so they can organise exhibitions and conferences on attracting investment. Accordingly, the companies and organisations in the city would be given up to 70 per cent of the total costs for such activities, or up to VND12 million per participant, as well as help in promotion and brand registration, up to VND50 million per brand. Also, according to the circular, the costs for sending business delegations to events in other countries will also be covered up to VND70 million per participant, depending on the country. In addition, the costs for appraisal, counselling and certification for businesses in the supporting industry would be fully covered by the State Budget. All of these efforts are part of HCM City’s plan to develop its supporting industry. The city targets meeting 45 per cent of national demand for manufactured inputs by 2020 and 65 per cent by 2025. The supporting industry has not grown as quickly as others, affecting the city’s economic development as a whole. Vietnam Airlines to build logistic hub in Can Tho The Vietnam Airlines Corporation plans to build a logistics centre in the southern city of Can Tho this year, said Deputy General Director Trinh Hong Quang at a meeting with local leaders on Friday. The 30ha centre will be built next to Can Tho International Airport to meet the increasing demand of goods transportation by international and domestic airlines, with a capacity of transporting at least 600,000 tonnes of goods per year. Along with the construction of Can Tho logistics centre, Quang said the corporation will open new routes from the city to other destinations in Viet Nam and abroad. He said the corporation opened three logistics centres at Noi Bai, Tan Son Nhat and Da Nang international airports, however expanding these centres was difficult due to a lack of land. According to General Director of Tan Son Nhat Cargo Service Joint Stock Company Nguyen Cao Cuong, cargo throughput at Can Tho International Airport is currently 4,200 tonnes per year. Meanwhile, the output of agricultural and fishery products and other products of Can Tho through Tan Son Nhat International Airport is 150 tonnes per day. Speaking at the meeting, Vice Chairman of municipal People’s Committee Dao Anh Dung said the city was ready to create good conditions for Vietnam Airlines to build a logistics hub. He expected the corporation to work with Can Tho City to complete the procedures soon to receive an investment licence in August, when the city will host an investment promotion conference. Hoa Sen puts up steel construction pipe plant in Yen Bai Steel maker Hoa Sen Group on Friday inaugurated a plant that can produce 60,000 tonnes of steel construction pipes annually in the northern province of Yen Bai. The 20ha Hoa Sen Yen Bai cost VNĐ1.05 trillion. It is expected to meet the demand for steel pipes in the north-west. The production lines incorporate modern technologies imported from foreign countries, the company said. In the first phase, the plant would employ 100 workers, it said. Expanding production is one of its strategies now, it added. Hoa Sen has 11 plants around the country equipped with modern technologies. Spreading them around the country helps the company save transport costs and reduce delivery times. It is also focusing on developing its distribution system by opening more branches and sales points. It now has 400 branches. The giant steel maker exports its products to many markets around the world. VN records huge trade surplus in UK market Viet Nam recorded a trade surplus of US$1.5 billion with the United Kingdom in the first four months of 2018. The country exported $1.75 billion worth of goods to the market and imported $238 million. According to the General Statistics Office, Viet Nam’s export revenue to the European country in the first three months of 2018 reached $1.31 billion, up by 30.6 per cent over the same period last year. Meanwhile, Viet Nam imported $185 million worth of goods from the United Kingdom, up by 17.6 per cent year-on-year, resulting in a huge trade imbalance. From January until the end of April, Viet Nam mainly exported telephones and spare parts, footwear, garments and aquatic products, with the respective export values exceeding $705 million, $201 million, $215 million and $78 million. At the same time, Viet Nam imported $67 million worth of machineries, equipment and spare parts, $45 million worth of pharmaceuticals and more than $13 million worth of chemicals. During 2013-17, the United Kingdom was among the 15 largest trade partners of Viet Nam, with an average annual growth of nearly 5 per cent. Bilateral trade grew by a total of 44 percent in the reviewed period to $6.15 billion in 2017 from $4.27 billion in 2013. Last year, the United Kingdom was the eighth-largest export market of Viet Nam, moving up one place from 2016. Meanwhile, it was Viet Nam’s 26th largest import market, down by two places compared to the previous year. In the past five years, Viet Nam’s exports to the United Kingdom have surged by 46.4 per cent to $5.42 billion, accounting for 2.5 per cent of the country’s total export volume. In the same period, Southeast Asia’s import revenue in the UK market has increased by 30 per cent, reaching $733 million in 2017. Viet Nam has continuously enjoyed a huge trade surplus with the United Kingdom, with last year’s figure hitting $4.68 billion. The United Kingdom is also the third-largest trade partner of Viet Nam among the EU (European Union) countries. AES Corporation keen to invest in thermal plant US-based AES Corporation wants to invest in Son My 2 thermal power plant in the central province of Binh Thuan under the form of Build-Operate-Transfer (BOT). The proposal was made by AES Vietnam President David Stone at a meeting with Deputy Prime Minister Vuong Dinh Hue in Ha Noi on Thursday. Stone said AES was listed among the 200 global energy companies ranked by Fortune magazine. The company currently owns a liquefied natural gas (LNG) project in the Dominican Republic and had invested in an LNG depot in Panama. At the meeting, Stone said his company was carrying out researches for investment in Son My 2 gas-fired thermal power project in the form of BOT and hoped its participation would contribute to boosting trade and investment between Viet Nam and the United States. The project consists of three LNG-powered plants, with a designed capacity of 750MW each. Built at the Son My industry-services-gas complex in the central coastal province of Binh Thuan, the facilities are set to become operational in 2023-25. Hue said he supported the LNG terminal project, urging both sides to speed up the signing of a partnership contract to implement the project at the earliest. Regarding the Son My 2 project, he requested AES to work with PV Gas to identify the most suitable investment model, adding that the Vietnamese Ministry of Industry and Trade will directly address difficulties, if any, arising from the cooperation. AES is known for its 1,242MW Mong Duong 2 power plant in the northern province of Quang Ninh in Viet Nam. The coal-fired power plant was built under a BOT agreement and will be transferred to the Government after 25 years. It has been constructed in collaboration with PetroVietnam Gas JSC to carry out a liquefied gas depot project in Ham Tan District in Binh Thuan Province. VNN