BUSINESS IN BRIEF 19/6 Nawaplastic still hungry for Binh Minh Plastic shares Owning a dominant stake in Binh Minh Plastic (BMP) did not quench Nawaplastic Industry Co., Ltd. (Nawaplastic)’s thirst for BMP shares. Most recently, Nawaplastic registered to buy an additional 1.17 million BMP shares to increase its holding to 44.525 million shares, equalling 54.39 per cent of the charter capital. The transaction is expected to occur between June18 and July16. The registered share volume is the remaining part of the 2.86 million shares that Nawaplastic failed to buy during previous transactions. Notably, Nawaplastic registered to buy 2.86 million BMP shares during transactions on May 14-June 12, however, the Thai investor ended up buying 1.69 million of the registered shares as BMP did not match Nawaplastic’s target price. BMP manufactures and trades civil and industrial products made of plastic and rubber. The company also designs, manufactures, and trades in plastic moulds for the casting industry; produces and trades machinery, materials, and sanitation equipment for the construction industry; provides interior decoration and water supply and drainage services; and offers appraisal, among others. According to its financial statement published at the annual shareholders’ meeting on April 20, in the first quarter, the firm reported VND663 billion ($29.06 million) in revenue and VND105 billion ($4.6 million) in pre-tax profit, up 80 and 85 per cent on-year. BMP expected that in the first half of this year, it will acquire VND1.86 trillion ($51.5 million) in revenue and VND275 billion ($12.05 million) in after-tax profit, equalling 43 and 44 per cent of the whole-year targets. Sticky rice sees price reduction The prices of Vietnam’s sticky rice are facing a downward trend due to its over-supply and dependence on a single large market, according to the Department of Farm Produce Processing and Market Development under the Ministry of Agriculture and Rural Development (MARD). Although it is now the beginning of the harvest of the summer-autumn crop, sticky rice farmers have few orders and few prospective buyers. The statistics of Vietnam Food Association (VFA) showed that, in 2017, Vietnam exported 1.4 million tonnes of sticky rice, mainly to China. Last year, as Vietnam was expanding sticky rice production, China also quickly increased sticky rice cultivation. The current inventory of Chinese enterprises is quite large; therefore, it is impossible to promote the export of sticky rice to China in the near future, a sticky rice exporter to China revealed. Due to the declining demand for sticky rice, its price declined sharply from 530-540 USD per tonne in January-February to 460-470 USD at the moment. The domestic sticky rice price also fell sharply compared to other types of rice. In contrast, the consumption of fresh rice IR50404 in the last winter-spring crop in the Mekong Delta has been quite "smooth". Domestic supply is not sufficient to meet all export contracts. Therefore, prices of IR50404 rice in this region have continuously risen, setting the highest record in recent years. In some periods, the price of fresh rice IR50404 in the field was purchased by traders at a price of nearly 6,000 VND per kg, up 1,000 VND per kg compared with the peak price of 2017. The export price of this type of rice also rose significantly, higher than the price for rice from Thailand, India and Pakistan. Looking at the contrast between the two types of rice, it is clear that the current crop structure in the country’s largest granary is not yet flexible enough to quickly adapt to meet market demands. Exporters said in order to avoid the oversupply of sticky rice and the undersupply of other rice types, MARD should coordinate with the Ministry of Industry and Trade (MoIT) and the VFA to study the import market and the demand for each type of rice. Then they can provide information to farmers, enterprises and localities to make adjustments before the planting season, they suggested.- Bright prospect predicted for agricultural products’ export   Good prospect is forecast in the export of several agricultural products, including rice, in the rest of the year as demand in importing markets has shown optimistic signs, according to the Ministry of Agriculture and Rural Development (MARD). The ministry predicted that domestic rice prices will continue to stay high until the end of June 2018, buoyed by hope for resuming exports to the Philippines. According to a report by the General Department of Vietnam Customs, in the first five months of 2018, rice shipments overseas rose 25.7 percent in volume and 42.6 percent in value, with prices picking up 13.4 percent over the same period last year. Statistics showed that 452,000 tonnes of rice were shipped abroad in May for 347 million USD, pushing the five-month rice export volume to 2.66 million tonnes with value of 1.45 billion USD. China was still the biggest market of Vietnamese rice. Vietnamese rice quality has gradually approached international standards, prompted by the shift in world demand for rice of higher quality. According to the MARD, importing countries now prioritise the import of fragrant and Japonica rice varieties. Currently, African countries are also increasing rice imports, creating opportunities for Vietnamese firms in the markets. Meanwhile, exports of aquatic products in May fetched 700 million USD, raising total value in the first five months of 2018 to 3.1 billion USD, up 11 percent over the same period last year. Particularly, export volume of tra fish in May was estimated at 104,000 tonnes, a year on year rise of 11.6 percent, marking a record growth rate in many years. The US, Japan, China and the Republic of Korea were the top markets of Vietnamese aquatic products, which consumed over 50 percent of total exported volume. High frowth was seen in many markets, including the Netherlands (60 percent), China (27 percent), the UK (27 percent), Germany (26 percent), and the Republic of Korea (21 percent). At the same time, chicken meat is also among products with high hope for growth in latter half of the year. Since the beginning of 2018, export volume of the product expanded 3 times compared to that in 2017. Hanoi licenses $5.4 billion worth of FDI projects Hanoi granted investment certificates and awarded decisions of investment agreements to 71 projects with a total registered investment capital sum of VND397.33 trillion (over $17.65 billion) at the Hanoi 2018-Investment and Development Cooperation conference held on Sunday. The projects included 11 foreign-invested projects totalling at VND130.06 trillion ($5.4 billion) in capital and 60 domestically-invested projects worth VND267.27 trillion ($11.87 billion). What is more, the conference included the ceremony of exchanging Memoranda of Understanding on investment cooperation between Hanoi, neighbouring cities and provinces, and the Management Authority of Hoa Lac High-Tech Park, as well as enterprises in the fields of smart city, education development, high-tech agriculture, healthcare, tourism, and environment. The Hanoi 2018—Investment and Development Cooperation conference is the third consecutive annual edition, showing Hanoi’s strong commitment to improve the business climate. The event attracted the participation of more than 1,500 delegates, including leaders of the government, ministries, central agencies, and cities of the Northern Key Economic Region, the Red River Delta, as well as representatives of diplomatic offices, international organisations, and domestic and international enterprises. Over the past two years, Hanoi’s business climate has improved much, boosting its standing on the provincial competitiveness index (PCI) and a much enhanced administrative system. Hanoi’s economy has maintained a steady growth of 7.15 per cent in 2016, 7.31 per cent in 2017, and 7.07 per cent in the first six months of 2018. “In the months to come, Hanoi will prioritise calling for investment in high-tech, clean energy, housing projects for workers, waste treatment plants, high-tech agriculture, universities, vocational schools, and the manufacturing and supporting industry,” said Nguyen Duc Chung, Chairman of the Hanoi People’s Committee. As of June 15, 2018, Hanoi licensed 4,300 foreign-invested projects with the total registered capital of $33.38 billion. The sum included $12.46 billion attracted in 2016, 2017, and in the first half of 2018, making up 59 per cent of the total FDI attraction in 1986-2015. In the first half of 2018, Hanoi lured in $5.91 billion worth of FDI, becoming the most attractive destination among the nation’s 63 cities and provinces. Vietnam sees more global hotel brands Vietnam has witnessed an influx of international hotel brands and hotel management companies in the last few years, according to property consultant Savills Vietnam.  The five-star Vinpearl Phú Quốc Resort on Phú Quốc Island. More and more hospitality brands and hotel operators are coming to the booming Vietnam market. From 30 hotels with international brand names in 2010, the number had increased to 79 at the end of last year. There has been a particularly big jump this year with recent announcements by Mandarin Oriental and Movenpick in HCM City and Best Western Premier in Quảng Bình and Long Hải. There have also been new brands entering the market in the last three years, including Ozo and X2 Vibe (Hội An), Hilton’s Double Tree (Hạ Long, Vũng Tàu and Hà Nội), Four Seasons (Quảng Nam and Hà Nội), Oakwood (HCM City), Glow (Đà Nẵng), and Mai House (HCM City). Compared to a few years ago projects of higher quality, focus on international design, trust in foreign hotel management companies and need to create a competitive advantage have all increased significantly. Mauro Gasparotti, director of Savills Hotels Asia Pacific, said a large increase in interest among operators in the country in the last three years has resulted in the expansion of the hospitality market. “The number of international operators is expected to grow in the coming years along with local management companies.” Operators are launching new brands to target all kinds of clients including millennials and health-conscious travellers, he said. Việt Nam is a promising market for them to introduce focused brands since people travelling here are largely diversified, he said. Vietnamese investors are still new to hospitality products, but with a large amount of supply coming, there would be rapid learning for some of them and more quality assets are expected to come up, he said. Savills expects more than 30,000 rooms to be added by the end of next year. Việt Nam has also experienced a strong growth in condotels in the last 2 years. It is expected that within two years condotel and second home products will account for 65 per cent of new hotel supply, and one in every four will be categorised as condotels. A condotel is actually much more complicated than a pure hotel possessing features of both a house and a hotel, and thus requires more support in terms of management. Most condotels are managed by their developers, and some lack experience in hotel management. However, a few have begun to create brands and engage management companies, mostly in the case of complexes with a hotel or resort component. The number of international tourist arrivals in Vietnam in the first five months of this year was 6.7 million, up 27.6 per cent year-on-year, according to the Vietnam National Administration of Tourism. Tourism revenues are estimated at VNĐ260.2 trillion (US$11.41 billion), a year-on-year increase of 22.6 per cent. The strong growth of the tourism sector has also given a boost to the hospitality industry. HCM City to host smart-tourism TPO Forum As many as 130 delegates from six countries will share experiences about smart tourism at the 8th Tourism Promotion Organisation for Asia Pacific Cities (TPO) Forum from June 21-22 in HCM City. The biennial forum, with the theme of “Smart Tourism”, is being held for the first time in Việt Nam, according to Nguyễn Thị Ánh Hoa, deputy director of HCM City’s Department of Tourism. Representatives from 25 member cities will give presentations about their smart tourism promotions and services, Hoa said at a press meeting held in HCM City on Friday (June 15). Hoa said the event is a great opportunity for the city’s tourism sector to develop new ideas and strategies for smart tourism.  As the host city of the TPO forum, HCM City will also have a chance to promote the country’s tourism industry as well as strengthen cooperation with other member cities of TPO. The forum will include city leaders, policymakers and officials in the tourism sector from member cities, according to Shin Yeon-sung, Secretary General of TPO. Forum delegates will discuss the use of technology in tourism, which is now in an early stage in TPO member cities. Various programmes will be held in conjunction with the main events of the forum, including a TPO travel-trade and smart-tourism product exhibition that will promote tourism brands and resources of member cities via one-on-one consultations with major travel agencies and tourism-related institutions. The 31st TPO Executive Committee Meeting and the TPO Bilateral Meeting will also be held during the event. The members of the Executive Committee will discuss issues related to the operation of the TPO such as budget plans, joint projects, and the admission of new members. The Bilateral Meeting for TPO Member Cities will provide a chance for one-on-one talks between member cities in a more personal setting and will enhance mutual cooperation and exchange. The Tourism Promotion Organisation for Asia Pacific Cities, with 85 member cities and 45 industry members from 10 countries and territories, is an international organisation established in 2002 to promote the exchange and development of the tourism industry in major cities in the Asia Pacific region. The first forum took place in Busan, South Korea in 2004. Cashew nut exports rise, but processors face shortage of raw materials      Viet Nam exported 141,000 tonnes of cashew nuts for a value of U$$1.39 billion in the first five months of the year, a year-on-year increase of 21.4 per cent and 25.3 per cent, respectively, according to the Viet Nam Cashew Association. With this result, Viet Nam retains its position as the world’s largest cashew processor and exporter for the 13th consecutive year, accounting for 65 per cent of the world’s total cashew export revenue, according to Dang Hoang Giang, the association’s chairman. Despite having positive export growth, cashew farmers and processing firms enjoyed only 30-35 per cent of profit in the value chain, with the remainder in the hands of international cashew processors and traders, according to Nguyen Duc Thanh, Vinacas’s chairman. Currently, domestic processors are facing difficulties due to lack of raw materials. Speaking at a meeting in HCM City on Friday, Giang said the volume of raw material imports had been very low in recent months. As a result, many cashew processing firms had to suspend operations. In Long An Province, only 12 out of 33 cashew processing firms were operating, he said, adding that 80 per cent of cashew processors, mostly small and micro enterprises, in Binh Phuoc Province had also suspended operations. Ta Quang Huyen, who is also deputy chairman of Vinacas and director of Hoang Son 1 Company in Binh Phuoc Province, said in the first five months of 2018, Vietnamese firms imported 283,000 tonnes of raw cashews plus 370,000 tonnes from domestic supply and purchases from Cambodia via border trade, totaling 653,000 tonnes. With the ratio of 4.3 kilos of raw cashew materials offering one kilo of cashew kernels, and 141,000 tonnes of cashew kernels exported in the first five months of the year, all of the 653,000 tonnes of raw materials were processed in the first five months. "This means that enterprises have no inventory or very limited inventory, so they have to wait for raw materials," he said. Huyen said Vietnamese firms this year increased processing capacity by 25 per cent over the same period last year, providing the market with a large volume of cashew products. Thus, foreign traders had been able to force them to sell at lower prices. Cashew prices had fallen this year to $8.2 per kilo from $11 per kilo last year, so processing firms had broken even or taken a loss. "Cashew nuts can be stored for a year, but because most local processing firms are small scale and have limited financial capacity, they have to sell their products soon after production,” he said. "Cashew output globally is estimated to increase by 4 per cent this year, while demand for cashew products is expected to increase by 5 per cent. With limited inventory, cashew prices will recover in the coming time,” he added. Tran Van Hiep, head of the trade promotion board at Vinacas, said cashew prices were expected to increase again. Companies had strong potential, prestigious brands and quality products, and would be able to overcome this difficult period and continue to develop, he said. At the meeting, Vinacas announced that the 10th Vinacas Golden Cashew Rendezvous would be held from October 5 to 7 in Ha Long Bay to promote trade and expand markets for cashew products. Co-organised by the Viet Nam Cashew Association (Vinacas) and Viet Nam Trade Promotion Agency, the largest event in Viet Nam’s cashew sector is expected to attract about 500 domestic and international delegates from 50 countries and territories.  Da Lat to launch $50-m sheep wool yarn spinning plant      Da Lat Worsted Spinning Limited Company on Friday held the ground-breaking ceremony for a sheep wool yarn spinning plant in Phat Chi industrial cluster, Tram Hanh Commune, Da Lat City. The plant has a total investment of US$50 million and is a joint venture project between Germany’s Südwolle Group and Lien Phuong Textiles Industry Company, based in HCM City. The wool spinning mill has a total area of more than 61,00sq.m, of which, the construction area is some 32,000sq.m. The designed capacity of the factory is some 4,000 tonnes of yarn per year, while the domestic consumption and export markets account for 50 per cent. Once in operation, the plant will use imported raw wool to carry out fiber production. Subsequently, the finished wool yarn from the factory will be shipped to textile companies using sheep wool. Currently, there are some 50 garment factories in Viet Nam that use sheep wool, most of them imported from Australia. Da Lat sheep wool spinning mill will be in operation from April 2019, and is expected to earn more than $100 million in revenue per year. In addition to the production function, the factory will be open to visitors who can watch the whole process of producing yarns from natural wool. The project will contribute to the employment of local workers with the need to employ up to 400 people. State Treasury raises over VND65.8 trillion from G-bonds      The State Treasury of Viet Nam has mobilised over VND65.8 trillion (US$2.89 billion) via Government bond (G-bond) auctions at the Ha Noi Stock Exchange (HNX) since the beginning of 2018. From mid-April till date, the interest rates of different terms of G-bonds have continued to increase. Most recently, an auction at HNX on Tuesday raised VND4.2 trillion worth of G-bonds. As much as VND2.1 trillion were mobilised from 10-year bonds with an annual interest rate of 4.32 per cent, up by 0.02 per cent against the previous auction on June 6. Bonds with 15-year and 20-year maturity terms raised VND1.6 trillion and VND500 billion, with annual interest rates of 4.65 per cent and 5.18 per cent, respectively, both up by 0.02 per cent from the previous auction on June 6. The National Financial Supervisory Commission has predicted that the G-bond market in 2018 will see modest changes against last year, thanks to an economic growth of more than 6.7 per cent and inflation of below four per cent. The value of G-bonds issued in 2018 is estimated at some VND180 trillion, with the focus being on long-term maturity and keeping the interest rate at low levels. G-bonds worth VND159.9 trillion with an average maturity of 13.52 years, up by 4.81 years against 2016, were issued last year. The bonds had an average annual interest rate of some 6.07 per cent, down by 0.2 percentage points against 2016, according to the Ministry of Finance.  VN banks actively applying 4.0 technologies      Vietnamese banks have actively researched and invested in technologies of the fourth industrial revolution, said Nguyen Kim Anh, Deputy Governor of the State Bank of Viet Nam (SBV). A seminar on the banking sector in the fourth industrial revolution was organised in Ha Noi on Friday. Some of the technologies applied include cloud computing, big data analysis, artificial intelligence and applications and solutions such as biometric authentication and open application programme interface (open API). These technologies help to improve operational efficiency and overall customer experience, Anh said. Banks also utilise distribution channels and access, and interact with users on digital platforms, smartphone applications and social networks. They have applied digital technologies to improve the efficiency of internal systems operations and business process optimisation. As a result, banks can improve their customer relationship management, helping them to better understand the habits and tastes of their customers to provide the best products and support risk management, said Anh. Speaking at the event, Deputy Minister of Science and Technology Pham Dai Duong said that banking is one of the leading sectors in applying scientific and technological advances in management and business. This has created a solid foundation and competitive advantages in the context of digital economy development as the world economic centre gradually shifts from the West to the East. However, according to Deputy Minister of Science and Technology Pham Dai Duong, besides the advantages there are many risks and challenges when the development of new technologies such as blockchain, big data and artificial intelligence requires the banking industry to adapt its management and product structures. The risks also come from issues such as cyber security, he said. Deputy Governor Nguyen Kim Anh also said that the banking sector will face great challenges in completing the legal framework for banking operations in accordance with the context of industrial revolution 4.0 development. Other challenges for banks include changing their governance and business model to adapt to customer trends, alongside threats in cyber security risk prevention and customer information protection. Economic experts said that to develop rapidly and efficiently in line with the trends of the world, the banking sector should concentrate resources to apply new legal frameworks, and create a good ecological environment for credit institutions and fintech companies to develop financial services in the digital platform to increase the access of people and businesses. In addition, the experts also advised the sector to invest in IT infrastructure to modernise and automate most of the banking process, and to develop banking services through digital technology. This requires the resources of not only banks and credit institutions, but also of the Government. The Government needs to invest in the development of national technological infrastructure, and implement incentives to encourage banks to develop financial products and services.  Foreign trading to be focus of markets      Local markets are set to feature lots of foreign trading again this week, with foreign investors’ taste likely to change market sentiment after foreign selling pressure had weighed down the stock market for the last two months. The benchmark VN Index on the HCM Stock Exchange inched up 0.08 per cent to close Friday at 1,016.51 points, a weekly decline of 2.16 per cent. The HNX Index on the Ha Noi Stock Exchange gained 0.86 per cent to end last week trading at 115.90 points. It fell a total 3.3 per cent week on week. Last week’s decline was mostly caused by investors’ caution as they anticipated a rate hike decision from the US’s Federal Reserve and quarterly portfolio reviews of exchange-traded funds (ETFs) in Viet Nam. On early Thursday, the Fed raised its interest rates to a range of between 1.5 per cent and 2 per cent and promised to make two more rate increases in 2018. The decision resulted in a worldwide withdrawal of foreign capital from emerging and frontier markets. Investor sentiment was also on edge during the final week in which the two ETFs – FTSE Vietnam ETF and VNM ETF – reviewed their investment portfolios for the coming quarter. As investor confidence was down, average trading liquidity last week also fell comparatively to the previous week. More than 207.4 million shares were traded in each session of last week, worth nearly VND6 trillion (US$265.5 million). The figures were down 7.1 per cent in volume and 3.6 per cent in value from the previous week. These factors resulted in a net foreign sell value of nearly VND1.74 trillion on the two local exchanges, focusing on property developers and other large-cap stocks. Real estate business Vingroup (VIC) topped the must-sell list with some VND1.06 trillion worth of stocks net-sold by foreign investors. VIC was followed by steel producer Hoa Phat (HPG) and another property developer in Dat Xanh Group JSC (DXG). Since the VN Index hit a historic high of 1,204.33 points on April 9, foreign investors have posted VND23 trillion worth of net purchases in local stocks, including VND28.55 trillion worth of put-through transactions for high-end property firm Vinhomes (VHM) shares when it debuted on the HCM Stock Exchange on May 17. If the value of VHM share transactions was excluded from foreign trading, foreign investors were net sellers with total net sell value of VND5.46 trillion. According to Ngo Quoc Hung, an analyst at MB Securities Company (MBS), foreign trading would still be a major concern for the whole market. The stock market was still in a correction stage and low liquidity in recent sessions may be due to investors who were quiet when ETFs review their portfolios, Hung told tinnhanhchungkhoan.vn. Net foreign selling last week was a certainty as ETFs sold more than buying in this review period, but it has been questioned if the two ETFs made up the whole net foreign selling last week or if the transactions were carried out by both ETFs and other investment funds, he said. It would become clear if ETFs created the net sell last week or not if they stop selling this week, and investors should be cautious, Hung added. Le Duc Khanh, director of market strategy department at PetroVietnam Securities Inc (PSI), said investors should not worry over foreign selling as it only had short-term impacts on the market. Instead of worrying about foreign selling, investors should look for opportunities in firms that are forecast to report better-than-expected earnings for the second quarter and the first half of the year, Hung said. Those firms may be property developers, led by Dat Xanh Group JSC (DXG), aviation service provider Taseco Air Service JSC (AST), Duc Giang Chemical and Detergent Powder JSC (DGC) and other firms such as PetroVietnam Power Nhon Trach 2 JSC (NT2) and the Refrigeration Electrical Engineering Corporation (REE). TRACODI shareholders set $3.4mln profit goal      Shareholders in the Transport and Industry Development Investment Joint Stock Company (TRACODI) approved this year’s business targets at the company’s annual general meeting in HCM City on Friday. The company expects to achieve after-tax profits of VND77.1 billion (US$3.38 million) and revenue of VND1.15 trillion ($50.4 million), up 3 per cent and 5 per cent respectively. Nguyen Ho Nam, the company’s chairman, said manufactured and agricultural products were expected to account for the largest share of sales at around VND450 billion, followed by infrastructure development and real estate with VND390 billion. Mining was expected to contribute VND300 billion, while the rest would come from labour exports and training, he said. The targets are based on the impressive results achieved last year, when profit and revenue reached VND74.95 billion and VND1.095 trillion, up 24 per cent and 32 per cent from 2016. General director Nguyen Thanh Hung said the company would focus on its core business activities: trading in manufactured and agricultural products, infrastructure construction, real estate, mining and labour exports. In terms of infrastructure construction, it would focus on the BT 830C project and social housing in Long An Province, solar power and property projects under parent company Bamboo Capital, he said. Shareholders also approved several other proposals, including paying a 10 per cent dividend for 2017 in shares and a 10-12 per cent cash dividend for this year. Bamboo Capital owns a 50.61 per cent stake in the company.  Digital economy offers SMEs a bright new world of opportunity With the application of digital technologies and e-commerce, small and medium-sized enterprises (SMEs) will be able to compete on a more level playing field with major enterprises when accessing the market. Mr Trinh Duy Hoang, from Vietanalytics Market Research Company said the digital economy has developed rapidly in Vietnam but there remains limited application of digital technologies in small and medium-sized enterprises (SMEs). According to Mr Hoang, digital technologies have become perceived as ‘strange’ by many businesses and there has still only been a small-scale rollout of these technologies in production activities due to high investment costs. From the perspective of Mr Hoang, the biggest hindrance for businesses is the human resource factor. Currently, newly-emerging tech start-ups in Vietnam are mostly SMEs which originate from households. Especially, these businesses have not improved the capacity and qualifications of human resources to get access to advanced technologies in the digital economy.  Mr Hoang emphasized the need for investments in the field of information technology (IT) as several businesses have gained access to digital technologies and data. He noted that to integrate into the digital economy, relevant agencies need to overcome any hindrances in terms of management thinking for new business forms related to digital technologies. Many economists say that the digital economy presents a revolution in economic development with the foundation of the Fourth Industrial Revolution, which has provided huge opportunities for SMEs and micro businesses to develop and get access to the global market. With the application of digital technologies and e-commerce, micro-businesses will gain a more equal footing to compete with big companies in seeking new partners and markets, opening up huge opportunities for future development. Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry says that the digital economy and e-commerce have brought the world’s markets closer together and helped SMEs to grow while removingbarriers for them when approaching the global market. “To seize these opportunities, businesses of any scale should become more transparent by applying the global standard management system. The State needs to create a favourable mechanism for the application of digital technologies and must invest in creating infrastructure to facilitate the development of technical infrastructure for the digital economy,” says Mr Loc. Mr Loc also underlined the importance of restructuring and reforming the entire system of education and training with a focus on human resources in accordance with the requirements of the digital economy. In the coming time, the demands for the workforce in the digital and IT field has increased sharply, leading to a workforce shortage for the digital economy. Furthermore, several fields face the risks of growing unemployment, such as garment and textile, footwear, and electronics, as they are impacted by the digital economy and the automation process brought about by the Fourth Industrial Revolution. Therefore, businesses need to re-train their workforce to adapt to the jobs available under the digital economy, says Mr Loc. He also identified measures to ensure safety and protect privacy and confidentiality in business activities and in people’s social lives. It is essential to devise mechanisms and legal frameworks for the digital economy and to ensure suitable infrastructure to promote creativity and strengthen control over information security as Vietnam’s digital economy is still in its initial stages, notes Mr Loc. Investor of Trung Luong-My Thuan Expy gets funds for construction The investor of the Trung Luong-My Thuan Expressway has negotiated an agreement with four local banks to receive VND6.86 trillion (US$298.7 million) to develop the long-delayed build-operate-transfer (BOT) expressway project, the Government news website reports. BOT Trung Luong-My Thuan JSC has recently signed a credit agreement with Vietnam Bank for Industry and Trade (VietinBank), Bank for Investment and Development of Vietnam (BIDV), Vietnam Prosperity Commercial Bank (VPBank) and Vietnam Bank for Agriculture and Rural Development (Agribank) in Hanoi City. Under the agreement, Vietinbank will provide a loan package of VND3.3 trillion, BIDV and VPBank VND1.28 trillion each, and Agribank VND1 trillion. The loans are to be used to carry out the first phrase of the big-ticket project, which is of national importance. The project is included in a master plan for developing Vietnam’s expressway system until 2020, with a vision afterwards and a detailed plan for the Eastern North-South Expressway. Duong Quang Chau, chairman of BOT Trung Luong-My Thuan JSC, said at the signing ceremony that the expressway project requires more than VND9.6 trillion (US$421.3 million), with the owner’s equity accounting for 30% of the total, equal to VND2.8 trillion. “The project has already had more than VND1.7 trillion disbursed from the investor’s capital, including over VND1.3 trillion for site clearance and roughly VND460 billion for construction, consultancy and other costs,” Chau said. The company plans to start work on three out of 21 construction packages later this month so that the expressway will be opened to traffic by late 2020, according to its general director, Phan Anh Dung. Minister of Transport Nguyen Van The said the Trung Luong-My Thuan Expressway is part of the HCMC-Can Tho Expressway. Local residents, especially those from HCMC and the Mekong Delta, hold high expectations for the project. The said the Government has issued various policies to ensure the early execution of the project. However, despite having broken ground for the project many times in the past five years, the execution process has moved slowly. In a bid to soon complete work on the Trung Luong-My Thuan Expressway, the transport ministry has suggested the Government and the National Assembly give the green light to develop a bridge called My Thuan 2, facilitate work on the My Thuan-Can Tho Expressway project, and complete an expressway section between Can Tho and HCMC. The minister added the National Assembly has approved VND5.5 trillion to build the bridge. He also pledged to create favorable conditions for BOT Trung Luong-My Thuan JSC to execute the project and remove remaining obstacles in a timely manner so that the project is completed on schedule and guarantees high quality construction. The four-lane expressway will be some 51 kilometers long, with 4.5 kilometers of access roads, through five outlying districts of the Mekong Delta province of Tien Giang. It will start at the intersection of Than Cuu Nghia T-Junction and HCMC-Trung Luong Expressway, and end at the intersection with National Highway 30. Work on the Trung Luong-My Thuan-Can Tho Expressway is scheduled for completion by late 2020. The expressway is expected to shorten travel times between HCMC and Mekong Delta provinces, bolster the socio-economic growth of Vietnam’s southwest region, and reduce traffic congestion on National Highway 1. Grabbing Grab’s share a tough ask in Vietnam After Uber Technologies Inc sold its ride and food-delivery businesses in Southeast Asia to bigger regional rival Grab last March, Vietnamese firms have tried to chip away at Grab’s dominance. A number of ride-hailing apps have been introduced recently, like Aber, which was developed by a group of Vietnamese students studying in Europe; FastGo, an affiliate of NextTech Group; and MVLchain - a Singapore-based transportation startup; VATO; Didi; and MaiLinhBike. Besides competing in the bike- and car-hailing businesses with dominant player Grab, the new entrants also plan to offer good delivery, car rentals and long-haul ride services. But, for the moment, none of them have shown the ability to fill the gap left by Uber or to threaten Grab’s supremacy, because they have not differentiated themselves from the competition. Newcomers did look for some “killer features” that are absent from previous apps to lure customers. For instance, VATO allows users to bargain with the driver for the most competitive price and Mai Linh Bike says it will collect lower commissions from its drivers and will not increase ride prices during peak hours. But such measures are not enough because ride-hailing is a cash burn business and only those with strong financial resources can endure, experts say. EasyTaxi has probably learned how tough this fight is. The Brazil-based company came to Vietnam at the end of 2013, six months before Grab and Uber’s presence in this market. Despite being the first comer, it withdrew from the market just two years later. Money, or the lack of it, was the reason, industry insiders say. Even big players like Grab and Uber have reported heavy losses in Vietnam. According to the General Department of Taxation, Grab, with a total registered capital of only VND20 billion (US$881,057), has incurred losses of nearly VND1 trillion in three years of operating in Vietnam. But this cash burn strategy is how Grab and Uber are eating up traditional taxi firms’ market share. In 2014-2015, they launched intense promotional programs including free rides and discounts to lure customers. They also expanded their driver networks by providing them with subsidies and big rewards based on performance. Limited funding limits the budding competitors’ ability to offer incentives the way the big players can, so the former are always playing catch up. They can’t offer discounts, and can’t expand their network of drivers in order to offer faster, better rides. In a price-driven market, customers are always looking to choose the cheapest possible ride. And they have complained that it is not easy to book a ride with the new apps even in downtown areas. Duc Huy, a senior student at the Academy of Journalism and Communication in Hanoi, told VnExpress that he found it difficult to get a ride on MaiLinhBike as there are not many drivers around North Tu Liem District where he lives. “I have to wait for 10 minutes to get on a MaiLinhBike ride because the river is 2-3 km away,” he said. Drivers too see Vietnamese ride-hailing platforms as backup options. They are not ready to switch despite Grab cutting back on drivers’ incentives. Taxi driver Duy Ngoc said he operates on both Grab and VATO apps, but gets just two or three rides booked on the VATO platform a day. “So, I mainly drive on the Grab platform to ensure my income,” he said. “New apps do not have a large customer base. Drivers just sign up to get incentives, so their main driving service remains the previous one (Grab),” said 25-year-old Grab motorcycle driver Quoc Anh. With Go-Jek about to set foot in Vietnam with its Go Viet app, competition is only get tougher for local firms. The Indonesian ride-hailing firm is a heavyweight competitor to Grab in the Southeast Asian region. Will local apps stand a chance? The answer is, unlikely, in a head-to-head fight. “Capital shortfall is a disadvantage for Vietnamese ride-hailing apps, so they should not enter the cash burn race,” said Dr Nguyen Duc Thanh, head of the Vietnam Institute for Economic and Policy Research. He said going head-to-head with bigger rivals is not the right path to follow. There are other ways to succeed, he added. “They can enter niche markets like good delivery, car rentals or long-distance ride services. Instead of trying to divide market share in the beginning, newcomers should think of a long-term strategy to build a solid foundation,” Thanh added. It was not a fluke that even a well funded Uber lost to a more localized opponent, he said. Australia a land of opportunity for Vietnamese wood Vietnam’s wood enterprises have plenty of opportunity to bolster their exports to the Australian market due to its increasing import demands, favourable geographic position and preferences brought by free trade agreements (FTAs). The General Department of Vietnam Customs reports that exports of wood and timber products hit US$3.37 billion during the first five months of this year, a year-on-year rise of 11.3%. Australia was one of the top ten importers of Vietnamese wood and timber products with a value of more than US$66.7 million 11.3% higher than the corresponding period last year. According to the statistics from the International Trade Centre, the Oceanian nation imported US$362.8 million worth of wooden furniture from major markets such as China, Vietnam and Malaysia during the first quarter, up 6.4% over last year’s same quarter. But, the statistics show that Australia’s imports from China displayed a drastic upturn and a fall in imports from Vietnam in the above mentioned period, which demonstrates that Vietnam’s wooden furniture has not yet met the tastes of Australian customers. IBISWorld - a global business intelligence leader specializing in industry market research and procurement and purchasing research - has announced the results of a review of the 2013-2018 period, showing that Australian customers tend to favour low-cost furniture as local producers failed to compete with imported products in terms of prices due to high labour and material costs. Therefore its furniture industry is following a slow upward trend while imports are seeing strong growth. Particularly, Australian customers pay no or little attention to the origin of products but rather pay heed to the quality, designs and prices of products. The Vietnamese Import-Export Department under the Ministry of Industry and Trade emphasizes the need for Vietnamese businesses to fully grasp opportunities to the highly lucrative market by improving their technology, research, and product designs and quality, and reducing prices in order to suit Australian customers’ tastes. Localities promote litchi trading Bac Giang and Hai Duong province, Vietnam’s litchi hub, farmers are busily preparing for harvesting. The authorities have stepped up trade promotion programs inside and outside the country. With favourable weather and the application of good agricultural practices to VietGAP and GlobalGap standards, litchi growers are enjoying a bumper harvest. The bountiful fruits taste as delicious as they look. Bac Giang province is estimated to harvest 150 to 180 thousand tons of litchi this year. Wholesale prices range from 8,000 to 25,000VND per kg. China remains the key export market. Last month, Bac Giang province held a trade promotion program in Pingxiang city to promote litchi exports. Nguyen Thanh Binh, Chairman of the Luc Ngan district’s People’s Committee, says “The local authority has organized trade promotions to help farmers sell their products at reasonable prices. We have worked with businesses, distributors, and retailers such as Big C, Hapro, SaiGon and Coop... Businesses have placed orders with farmers to buy around 10,000 tons. About 50% of our litchi will be exported to China, the US, Japan, Australia, and South Korea.” Hai Duong province hosted a Thanh Ha litchi festival for the first time this year. The province has 10,500 ha of litchi farms in Thanh Ha and Chi Linh districts with an estimated annual production of 60,000 tons.  Hapro, Coopmart, Fivimart, Vinmart, and Big C have all secured contracts to sell Hai Duong litchi. The province will also export litchi to the US, Canada, Australia, the UK, France, Sweden, China, and Singapore. Minister of Agriculture and Rural Development, Nguyen Xuan Cuong said “When we apply science and technology in production, we have to take into consideration the material zone and cultivation areas to ensure the best quality. We have also prepared the consumption market to complete the chain of production.” Beauty spas targeting Koreans thrive in Da Nang The number of beauty spas catering to Korean visitors to Da Nang, central Vietnam, is racing to meet the demands of the 575,000 tourists from the East Asian country who visit the city each year. "Where there is a Korean, there is a beauty spa,” claims Pham Khac Hieu, a 32-year-old beauty spa owner with several years of industry experience working in Busan, the Republic of Korea (RoK). Appearance is key Looking good is an essential part of traveling in this day and age. After all, what kind of person posts a travel selfie when they are not looking their best? Korean tourists, however, are known to take that mentality to the next level, particularly when traveling to far-flung destinations. Pham Khac Hieu completely agrees with that assertion. With years of experience in the beauty industry, he can spot a Korean tourist from a mile away. Their thick make-up, water mist handheld fans, and no hats are a dead giveaway, he says. And if their make-up does get damaged by poor weather or rough travel? Never fear, a trip to the beauty spa can put anyone back in tip-top conditions. Knowing this, many Koreans choose to brave the harsh sunshine of Vietnam rather than attempt to cover themselves under wide-brim hats or with face masks like visitors from other East Asian countries. Azit, a beauty spa on Phan Boi Chau Street in Da Nang, is known for its Korean customer base. According to Hansol, a Korean traveler visiting the spa, the ‘beauty index’ takes precedence in the way Koreans judge other people. She also said that both Korean men and women go to great lengths to make sure they look their best before leaving their houses. Hansol had intended to bring her own make-up set, but could not afford the space in luggage. Instead, she chose to resort to visiting beauty spas during her stay in Vietnam. “In my country, traveling is a retreat from our stressful lives, so comfort and appearance are key to the success of any trip. Skin and nail care ensures the body is at its best,” Hansol elaborated. Within Da Nang’s main Korean neighborhood, beauty spas are situated alongside mini-marts and food stores. Customers at these spas include young women, men, and even entire families. Zo In Sung, a 36-year-old male Seoul-based tourist, said that making up is a necessity for women in his country. He and his wife, in fact, take advantage of beauty service packages on a regular basis and stick to a primarily vegetarian diet. Sung further shared that this way of life has spread to countries where Koreans have started to settle down. He attributed his Korean fellows’ on-trip spa time to shifts in dietary habits and lifestyles. “Also, pollution can turn you into a totally different person once you’ve returned home,” he added. According to several beauty spa owners, Koreans are willing to spend plenty on beauty services, but are not so easy to please. They are said to be rather generous when it comes to tipping, but also highly demanding in terms of service quality. This is reflected in the type of make-up they often select. Le Binh, a spa owner on Nguyen Van Thoai Street, said that nail polishes and moisturizing cream at his place are imported directly from RoK as their customers are wary of poor product quality. “They prefer to see familiar products from their own homeland as this gives them a better sense of security,” he added. “We once tried to use French products, but the customers did not want to accept them.” Also according to Binh, punctuality plays a crucial role in servicing Korean customers, and staff should possess good communication skills, preferably by speaking Korean. “Koreans also don’t like to see employees with tattoos,” he added. Nam Long Corporation offers five million shares for foreign investors Nam Long Group, one of the leading housing developers in Vietnam, will put 40 million shares on sale to whip up money for its key projects, one of which is the $341 million Akari City in Binh Tan district, Ho Chi Minh City. The starting price for Nam Long’s shares will be VND26,500. The group expects to acquire VND1 trillion($43.8 million) from the sale. Foreign investors can buy a maximum of five million shares, equalling 12.5 per cent of the offered shares. With the sale, Nam Long becomes the first private firm in Vietnam to conduct a share sale via an auction to increase its charter capital. Nam Long stated that it will use the money from the sale to invest in its commercial real estate projects and expand land funds in Ho Chi Minh City and Hanoi. Most recently, in April, Nam Long signed a strategic partnership agreement with its Japanese partners Hankyu Hanshin Properties Corp. and Nishi Nippon Railroad to develop the Akari City township project. Accordingly, the two Japanese investors and Nam Long will contribute 50/50 per cent of the total investment of about VND7.676 trillion ($341 million). This will be one of Nam Long’s key projects in the next 3-5 years and the fifth project to be built in cooperation with the two Japanese partners. According to Steven Chu Chee Kwang, CEO of Nam Long, the company and the two Japanese partners are increasingly tightening relations to create not only homes but also a real estate system where properties for various purposes—commercial properties, schools, hospital, services, and entertainment, etc.—are developed synchronously, offering residential communities high-quality and unique lifestyle. The project has a total floor area of 539,000 square metres, consisting of 4,600 apartments designed following the standards of Nam Long’s Flora product line, with separate facilities, such as community club, swimming pool, children's playground, gymnasium, and many other facilities. UNDP, Citi Foundation support innovation, startups in Vietnam The UN Development Programme (UNDP), Citi Foundation and the Ministry of Science and Technology (MOST) jointly organised a diagnostic workshop on the state of the social impact startup ecosystem in Hanoi on June 15. In his opening remarks, MOST Deputy Minister Tran Van Tung said sustainable development is one of the important orientations in the country’s socio-economic development.  “Social impact businesses both make profit and have a positive effect on the community. And with their ability to adapt and replicate quickly around the world, these innovative businesses are the best models to tackle social challenges, create social impact, and accelerate the achievement of the UN Sustainable Development Goals,” he said.   “A vibrant startup ecosystem and skilling are key to unleashing the creative energies of youth in meeting the most pressing SDG challenges in Vietnam,” said Caitlin Wiesen, UNDP Vietnam Country Director, at the event.  She also informed that UNDP will open up applications for SDG Innovations Incubator and selected teams will receive an intensive business incubation and impact acceleration programme as well as the opportunities to pitch their ideas to national and international investors.  Director and co-founder of Healthy Farm Nguyen Thi Thuy said her company will target providing clean and safe farm produce with clear origin to consumers, hotels and restaurants in order to develop social renovation and startup spirit among youths in Vietnam. At the workshop, speakers focused on discussing young social innovators, developing startup spirit among youths in Vietnam, sustainable investment, and investment vectors, among others. The workshop was part of the Youth Co:Lab Vietnam 2018 initiative, which is looking for the next generation of leading social entrepreneurs in Vietnam, following the success of the SDG Challenge in 2017. Sharp drop in pork and beef imports Vietnam purchased 477 tons of pork worth US$797,250 from foreign markets in April, down 44.8% in volume and 46.2% in value compared to March, according to the General Department of Vietnam Customs. Approximately 19,750 tons of meat and meat products valued at US$30.64 million were imported into the country over the period, a drop of 19.7% in volume and 21.3% in value compared to March. In addition, imports of beef and buffalo meat also saw a fall from March. The country bought meat and meat products from 34 markets in the world, with the US ranking first, making up 37.3% of the total import volume with 7,360 tons, worth more than US$10.49 million (down 11% in volume and 11.9% in value). Poland came second with 1,930 tons, worth more than US$2.16 million, down 17.8% in volume and 6.1% in value. Last year, Vietnam spent nearly US$527 million on meat imports, including US$11.07 million on pork, US$75.7 million on poultry meat and more than US$415 million on live cows and buffaloes, and beef and buffalo meat. Developer of Hanoi-Haiphong Expressway loses $110,000 a day After more than two years in operation, VIDIFI JSC is facing difficulties as total revenue cannot cover its interest payments. Vietnam Infrastructure Development and Finance Investment JSC (VIDIFI) has just submitted its report to the Ministry of Transport (MoT) on the 2017 business results of the Hanoi-Haiphong Expressway project. Accordingly, the revenue from the seven tolls booths on Hanoi-Haiphong Expressway in 2017 hit only VND1.258 trillion ($55.42 million), equivalent to VND3.4 billion ($150,000) per day. Meanwhile, the revenue of two tolls booths on National Route 5 running nearly parallel to th Hanoi-Haiphong Expressway reached VND832.9 billion ($36.7 million) in 2017. The total revenue of the entire project was VND2.091 trillion ($92.12 million), equivalent to VND5.7 billion ($251,100) per day, excluding the costs that VIDIFI spent to operate the nine tolls booths and maintain the two roads. Meanwhile, in the recommendation submitted to the prime minister before his 2017 conference with enterprises, VIDIFI claimed to have to pay VND8 billion ($352,500) of interest a day. Thereby, this project has been making negative VND2.5 billion ($110,132) in profit a day, equivalent to VND900 billion ($40 million) per year. Interest payments capture 94 per cent of the total costs, VIDIFI confirmed. The Hanoi-Haiphong Expressway, which is considered the most modern expressway in Vietnam, has six lanes with the maximum speed of 120km per hour. Its length is 105km, passing through the four cities and provinces of Hanoi, Hung Yen, Hai Duong, and Haiphong with the total investment of approximately VND45.6 trillion ($2 billion). Most of this came from loans at the interest rate of 10.5-11.4 per cent for 30 years. VIDIFI plans to repay around $17.7 million in 2016-2020 and $213.6 million in 2021-2044 to KEXIM Bank. From its $100 million debt to the German Development Bank (KfW), VIDIFI has returned over $46 million in 2013-2017, and intends to repay $29.2 million in 2018-2020. Therefore, VIDIFI has to repay $75 million by 2020, and $24.7 million between 2021 and 2023. Unless the state provides a bailout or incentive policies as proposed in Decision No.746/QD-TTg dated May 29, 2015 on the structure of capital sources for the Hanoi-Haiphong Expressway project, VIDIFI's financial solutions on exploiting the land on the two sides of the expressway will be unsuccessful and this company will face bankruptcy. VIDIFI was established in 2007 with the charter capital of VND5 trillion ($222 million) by Vietnam Development Bank (VDB), Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB), and Vietnam Construction and Import Export Corporation (Vinaconex). Hoa Sen and Nam Kim not threatened by new Indonesian tariffs Domestic steel giants Hoa Sen Group and Nam Kim Group do not expect negative impacts from the Indonesian government’s high anti-dumping duties imposed on colour-coated steels. Indonesia has just announced applying anti-dumping duty of 12.01-28.49 per cent on colour-coated steel products imported from China and Vietnamfor five years. vietnamfinance.vn stated that accordingly, the two domestic steel manufacturers Hoa Sen Group and Nam Kim Group will be imposed tariffs of 12.01 and 19.16 per cent. Previously, Indonesia has been imposing similar taxes of 13.5-36.6 per cent on cold-rolled steel products imported from Vietnam, China, Korea, Japan, and Taiwan since 2013 and has continued to maintain the safeguard measures after the country’s anti-dumping investigation in September 2015. According to Viet Dragon Security Company (VDSC), Hoa Sen Group and Nam Kim Group will not suffer much of an impact from the Indonesian government’s tax because exporting colour-coated steel has never been a major activity of the Vietnamese steel industry. Specifically, in 2017, the total output of domestic steel exports reached 1.6 million tonnes, including 47 per cent of galvanised steel, 38 per cent of cold sheet metal pads, and just 17.1 per cent of colour-coated steel, equalling 278,000 tonnes. VDSC also estimated that nearly three-quarters of colour-coated steel manufactured goes to serve the domestic market. In 2017, the total consumption of colour-coated steel was 1.1 million tonnes, while 278,000 tonnes were exported, equalling 28 per cent of the total consumption. The security firm also stated that domestic steel manufacturers tend to focus on developing products of gavalnised steel and cold sheet metal pads, and are steadily reducing colour-coated steel production because the durability and profit margins of the first two product categories are higher. Manufacturers like Hoa Sen and Nam Kim also have smaller capacity of colour-coated steel than other steel products. Thanks to Hoa Sen Group’s great market share and revenue from its retail chains over the country, the firm does not depend on exporting activities, as 70 per cent of its products go to the domestic market, while the rest is distributed to 70 countries. Indonesia used to be Nam Kim Group’s main market, taking up 60 per cent of its export output in 2015. However, by taking advantage of the globalboycott of Chinese steel, Nam Kim has expanded its export range to reduce indonesia's portion in its exports to 40 per cent in 2017. In addition, the firm’s colour-coated steel output last year only made up 13 per cent of its export output. Thus, the new Indonesian tariffs may not impact the two domestic steel manufacturers significantly. BSR considers second share sale before listing Binh Son Refining and Petrochemical Co., Ltd. (BSR), the operator of Dung Quat Refinery, is considering putting more shares on sale before listing its shares on the Ho Chi Minh City Stock Exchange in April next year. BSR chief exclusive Tran Ngoc Nguyen told Reuters that in order to attract more interested investors, BSR will not limit the sale to only strategic investors as previously planned. The sale is expected to take place via a public auction. The money from the sale will be used to upgrade Dung Quat Refinery’s capacity to at least 192,000 from the 148,000 barrels per day (bpd) now and to allow it to process more types of crude oil. Nguyen added that BSR selected one from seven contractors bidding for the contract to upgrade its facility, but refused to disclose the selected contractor’s name. According to the approved equitisation plan, after selling 7.79 per cent of charter capital to investors at the IPO, BSR will continue to offer a maximum of 1.52 billion shares, equalling 49 per cent of the charter capital for strategic investors. However, BSR has yet to find strategic investors. At the second sale, BSR hopes to ease requirements such as lock-up time and minimum registered capital for the planned sale, and also expects the government to approve the changes in order to speed up the process. In the first half of this year, the firm reported a revenue of VND53.9 trillion ($2.36 billion) and after-tax profit of VND2.69 trillion ($117.9 million), equalling 69 and 77.6 per cent of the annual targets. Previously, BSR has targeted the total sales of VND78.1 trillion ($3.5 billion) for the whole year. Its net profit is expected to reach VND2.95 trillion ($129.3 million) by the end of June, exceeding the six-month target by 70.7 per cent and completing 84.7 per cent of the target set for the whole year. In the next six months, BSR aims to produce and sell more than 3.18 million tonnes of products and earn VND1.75 trillion ($76.7 million) in after-tax profit. Vinataxi and Savico Taxi to merge to compete with Grab Backed by ComfortDelGro Corporation Limited from Singapore, the merger between Vinataxi and Savico Taxi may help them overcome the competition with Grab and other ride-hailing applications. Most recently, the representative of Vietnam Taxi Company (Vinataxi) has announced the plan to merge with ComfortDelgro Savico Taxi—the taxi brand that had to suspend operations in March due to heavy competition. Vinataxi currently holds the third largest market share in the taxi sector in Ho Chi Minh City. Despite the firm claiming that its taxi business has not been much affected by Grab’s presence, its 2017 profit was only 10 per cent of the annual target. Notably, last year Vinataxi reported VND48.7 billion ($2.13 million) in revenue and VND1.2 billion ($52,553) in after-tax profit, equalling 49.8 and 9.87 per cent of the yearly targets. The representative of Vinataxi expects that the merger with Savico Taxi will help increase revenue and profit from taxi business by six times compared to 2017. Vinataxi was established in October 1992 by Tecobest Investment Ltd. (Hong Kong ) and Tracodi. In 2003, the Hong Kong partner transferred its holding to ComfortDelGro Corporation Limited from Singapore, one of the world's largest land transport firms. Once Vinataxi merges with Savico, ComfortDelGro Corporation Limited will be a common backer to both. However, there are concerns that Vinataxi’s optimism is misplaced as Savico might not give it the expected boost, especially after it had to suspend operations due to competition. Savico reported bleak business results prior to the suspension. Notably, according to Savico’s 2017 financial report, the taxi joint venture had total assets of VND92 billion ($4.038 million), however, its after-tax profit was VND235 million ($10,316) only. Previously, in 2016, its pre-tax profit was VND4.1 billion ($180,000), equaling 53 per cent of its plan for the whole year. According to Savico, the purpose of ComfortDelgro Savico Taxi’s decision was to look for other business opportunities as well as safeguard the capital that Savico and ComfortDelgro contributed to the joint venture. First container vessel received at the SSIT Port The SSIT port in Cai Mep welcomed its first container vessel on June 14. The MV MSC Rosaria is owned and operated by MSC Geneva, one of the world’s largest shipping lines. MSC will make regular calls at SSIT in the future. SSIT is a joint-venture port. SSA Marine, headquartered in the US, owns 50 per cent of the facility. Saigon Port controls 39 per cent and Vinalines Hanoi holds the remaining 11 per cent. SSIT was built to handle the largest container vessels in the world. These so-called Ultra-Large Container Vessels can carry up to 20,000 twenty-foot equivalent units (TEU) with a deadweight capacity of almost 200,000 tonnes. SSIT is a deep-water facility with a 16.5m draft alongside the berth. The terminal is equipped with the largest container shore cranes in Vietnam. The overall operational berth length exceeds 1km, of which 425m are dedicated to barge operations. The SSIT’s land area totals 60ha. The container handling capacity of SSIT will reach about 1.2 million TEU annually. SSIT has been actively handling bulk vessels since October 2014. Today, the terminal is the largest and busiest bulk port in southern Vietnam. Starting in June, container operations will be added, complementing SSIT’s operations going forward. First Vinfast cars to debut at Paris Motor Show Recently, images of the first two models of Vinfast’s sedan and SUV designed by Pininfarina through a $5 million contract sharing intellectual property rights from BMW are now exhibited at the Paris Motor Show at the end of last week. With the logo V in front and the word Vinfast in the back, the IDG Sedan 02 design which won the public vote in the sedan line-up with 22,400 votes (36.2 per cent). The vote for SUVs was won by IDG SUV 02, with 13,853 votes (22.4 per cent). However, according to information leaked on social media, IDV SUV 03 will also be introduced at Paris Motor Show. The commercial versions of these cars will be sold in 2019. At Vingroup’s annual general shareholders’ meeting (AGM) taking place on May 31, Vuong stated that the domestic market is the priority of Vinfast. Although Vietnam is a competitive market, he believes Vinfast’s chances of success are high. Vuong confirmed that Vinfast cars will beat competition in quality due to the highly automated manufacturing. There are 1,200 robots working in the welding factory of Vinfast. Moreover, the selling price will be very different from market standards as profit will not be a priority for Vinfast as instead the firm will focus on capturing the market. In the long term, however, Vinfast will export its cars. Russia and the surrounding countries will be the priority market at first because of the large population and the significant knowledge the leaders of Vingroup hold about this market. “In the long term, Vinfast will be the mainstay business line for Vingroup. Vinfast will not only manufacture automobiles, but also set foot in the heavy industry through cutting-edge technology to manufacture so many things. This is the new target of Vingroup,” Vuong said the AGM. With the total investment of VND35 trillion ($1.54 billion), the 335-hectare mega automotive factory project in Cat Hai (Haiphong city) is expected to place Vietnam on the global map of automobile manufacturing with the annual capacity of 250,000 electric motorbike and 250,000 cars in the first phase. Three billion-dollar thermal power plants running behind schedule Failure to discuss between investors and contractors as well as the weakness in management and inadequate operation capacity of contractors are two of the major reasons delaying the construction of three billion-dollar thermal power plants.   The three projects include $1.82 billion Duyen Hai 3 expanded, $2 billion Song Hau 1, and $1.2 billion Long Phu 1 thermal power plants. The project at Duyen Hai thermal power complex located in Dan Thanh commune, Duyen Hai district includes a 688MW power facility. The facility was scheduled to start operation in 2018, supplying approximately 3.9 billion kWh to southern region. In 2014, Sumitomo Corporation received an engineering, procurement, and construction (EPC) contract to construct a supercritical power station in the 688MW Duyen Hai 3 coal-fired thermal power station expansion project of Power Generation Corporation 1, a power subsidiary of state-run utility Electricity of Vietnam (EVN). Duyen Hai 3 is one of four power projects developed at Duyen Hai Power Centre with a combined generation capacity of 4,348MW as outlined in the nation’s power development master plan between 2011 and 2020 with vision towards 2030. The centre occupies a total area of 879 hectares. According to the report of the National Steering Committee for Power Development, the construction of Duyen Hai 3 expanded project is 6.5 months behind schedule. Sumitomo Corporation and sub-contractors’ weakness in management and operation capacity, in collaboration with the delays in supplying machineries and equipment, are major reasons for falling behind schedule. Especially, the fire at the construction site in March, caused by the carelessness of the sub-contractor Jurong Engineering Limited, will extend the delays in the construction of the project. Song Hau 1 thermal power plant is one of the key projects in the National Power Development Master Plan VII. It is invested by Petrovietnam and managed by PetroVietnam Song Hau 1 Power Project Management Board and developed by general contractor Lilama Corporation through the EPC format. This project is part of the 5200MW Song Hau Thermal Power Centre (including three member thermal power plants), located in Chau Thanh district, Hau Giang province with a $2 billion total investment. The construction of the project was started in May 2015. According to plan, the plant would come into operation with full capacity in 2019 and generate 7.8 billion kWh of power per year. However, as of April 2018, the construction progress only met 56.57 per cent of the schedule, meaning a 24 month delay. According tothe EPC contract, 12 months after the signing (April 10, 2016), the project’s management board and the general contractor will be permitted to discuss adjustments to the prices for a number of component construction projects. However, the documents of competent state management agencies do not provide detailed guidance on the method of adjustment, thus, parties have yet to reach a compromise ever since. Besides, according to the EPC contract that PetroVietnam and Vinaincon E&C signed on May 15, 2017, Vinaincon E&C will conduct the construction of the 500kV distribution yard segment within 602 days, however, the segment is still being evaluated and has not even started construction. Furthermore the delay in construction caused the investment capital of the project to increase by VND10.45 trillion ($458.04 million) due increases in the price of machinery, equipment, and labour, among others. On January 26, Power Machines, the EPC contractor of Long Phu 1 thermal power plant, was put on the US Department of Treasury’s extended list of Russian individuals and companies subject to sanctions imposed on Moscow over the Ukraine crisis. The move may delay the construction of Long Phu 1 project by 36 months. After the sanctions were imposed on Power Machines, General Electric announced cancelling the contract of supplying turbines and generators, which are two important segments of the project. In September 2015, PetroVietnam and the Power Machinery-PTSC contractor partnership held a ceremony to begin he construction of Long Phu 1 in the Mekong Delta’s Soc Trang province. The thermal power plant consists of two generators with a capacity of 1,200MW in Long Duc commune, Long Phu district, and is one of the key national projects within the National Power Development Master Plan VII. The first generator was expected to be put into commercial operation in 2018 and the second in 2019. Fire risks uncovered at another 108 buildings in Hanoi Duc Dai Phat Commercial and Manufacturing Company, Sudico Service JSC, and No.1 Dien Bien Province Construction Private Enterprise are three among a hundred developers running buildings that violate the fire code in Hanoi. The Hanoi Police Department of Fire Fighting and Prevention has just uncovered safety violations at 108 high-rise buildings across the capital. Adding to the list of 91 properties in late May. The announcement lists a hundred buildings run by well-known real estate developers that are located in Ba Dinh, Dong Da, and Cau Giay, and some suburban districts. 14 of the listed buildings are developed by Duc Dai Phat Commercial and Manufacturing Company under the Ministry of Defence’s Urban and Housing Development Investment Corporation, including the A1, A2, A4, B1, B2, B3, B4, B5, B6, C1, C2, C3, C4, C5 buildings in My Dinh I urban area of South Tu Liem district. Sudico Service JSC under Da River Urban and Industrial Zone Investment and Development JSC is the developer of four buildings, namely CT1, CT4, CT5, and CT6 in My Dinh-Me Tri urban area of South Tu Liem district. Six buildings in Dai Kim and Hoang Liet wards of Hoang Mai district are managed by No.1 Dien Bien Province Construction Private Enterprise, the developer which was responsible for eight buildings from the 91 listed in May. The list of 108 buildings also includes buildings run by Vimeco JSC (a member of Vinaconex Corporation), Vinaconex Corporation, Hanoi Real Estate Investment JSC, Thang Long Victory apartment building (in Hoai Duc District) by IPACO, and Licogi 18, among others. The Fodacon apartment building in Ha Dong district where a fire occurred on May 25 is also included on the list. High-end apartment buildings are also listed, along with the headquarters of 35 companies, central and local agency offices, and four educational facilities. The 19 hotels listed include OASIS, Candle, Maydeville (Ba Dinh district), ASEAN hotel, Larosa, Emotion Hanoi (Dong Da district), and London Hotel (Cau Giay district). Officials said they would continue to work with building managers to address the shortcomings. Investors who do not follow regulations will be subject to criminal proceedings. Earlier on May 29, Hanoi announced a list of 91 buildings violating the fire code. As a result, there are nearly 200 buildings in Hanoi violating fire regulations. Thai KBank moves another step to bolster local SMEs KASIKORNBANK and Vietnam’s Agency for Enterprise Development last week signed a memorandum of understanding on the promotion of the development of small- and medium-sized enterprises and economic co-operation between Thailand and Vietnam. Thai Prime Minister Prayut Chan-o-cha and Vietnam’s Prime Minister Nguyen Xuan Phuc witnessed the signing on the sidelines of the eighth Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy Summit held on June 15 in Bangkok. The memorandum of understanding (MoU) was signed by KASIKORNBANK (KBank) president Pipit Aneaknithi and Agency for Enterprise Development (AED) acting director general Le Manh Hung. Under the MoU, the two parties will develop long-term co-operation to support and promote small- and medium-sized enterprise (SME) development in Vietnam by exchanging knowledge and initiatives to develop the SME community; design support programmes for innovative startups, business matching, and design scopes for SMEs; implement specific SME support and capacity building programmes to benefit SMEs; as well as to collaborate and connect enterprise data to provide support services for businesses. AED’s Le Manh Hung said the signing of the MoU shows the importance of mobilising international resources and bringing new support models for international SMEs to Vietnam, such as innovative startup training. The MoU signing also aims to promote the implementation of the Law on Supporting SMEs, which takes effect on January 1, 2018, and the government’s decrees in guiding the implementation of this law. Hung said after the signing, AED would co-operate with KBank to develop a collaboration plan for 2018, focused on supporting activities designed for innovative startups as well as business matching activities for enterprises. To emphasise KBank’s strong standing, Aneaknithi said he aims to provide Vietnamese SMEs with comprehensive knowledge and technical assistance programmes to substantially enhance their capabilities and improve their operational efficiency. This would include giving SMEs access to finances by using the supply chain concept with the bank’s network as a connector between Vietnamese SMEs and KBank’s customers – Thai conglomerates that have been investing in Vietnam through foreign direct investment (FDI), mergers and acquisitions, and equitisation in the recent past, with investments valued at over $15.5 billion. Given its expertise, holding almost 30 per cent of the SME loan market in Thailand, KBank aims to introduce its SME capacity development programme, which was previously successfully implemented in Thailand and Myanmar, to help support SMEs in Vietnam, in line with the government’s goal of having 1 million efficient private businesses by 2020. Prior to the co-operation with AED, KBank had successfully collaborated with the State Bank of Vietnam, ministries, and other government agencies in several initiatives and events which aimed to enhance further co-operation between Vietnam and Thailand. KBank, one of the leading SME banks and the fourth-largest commercial bank in terms of assets in Thailand, made an unwavering commitment to providing both credit and supporting investments, especially for FDI from Thailand to Vietnam, by sharing technologies and expertise for Vietnam’s SME development in both the credit and non-credit sectors. AMD targets 2018 revenue of $100.7 mn The FLC AMD Investment JSC (HSX: AMD) targets revenue of VND2.3 trillion ($100.7 million) and pre-tax profit of VND70 billion ($3.06 million) for this year, up 10 per cent and 20.5 per cent, respectively, over results in 2017. The company will focus on promoting the brand name of its AMDSTONE natural stone in addition to executing key projects, buildings, and resorts around the country and developing its distribution network nationwide. Exports are expected to contribute a significant proportion of revenue. A major partner from Belgium visited AMD’s offices, plants, and mines recently, with an eye to closer cooperation in the future. Many partners and agents from Italy, Turkey, and India have also come to FLC AMD to offer cooperation and distribute products. The company is also focusing on building its brand development by holding talks with hundreds of partners and architects on the quality of AMDSTONE natural stone compared to other imported marble. Along with the development of its business plans, communications, and brand development, AMD will continue to bolster information technology and modern machinery and equipment and improve risk management and internal control. The company targets becoming a mining and construction stone corporation with a high profile in the region and the world. Although the business environment in 2017 featured a lot of competition, especially in its core business fields of building and operating mines, AMD, a subsidiary of the FLC Group, continued to strive to achieve significant success. Total consolidated revenue was VND2.09 trillion ($91.5 million) last year, up 50.79 per cent compared to 2016 and exceeding the annual plan by 39.4 per cent. Pre-tax profit was VND58.1 billion ($2.2 million), equivalent to the 2016 figure and representing 83.1 per cent of the annual plan. AMD will also prioritize resources to invest in the construction of stone quarries and production plants in Loang Mountain and Ben Mountain in north-central Thanh Hoa province. In the first phase of mining at Ha Linh, also in Thanh Hoa, results were impressive, reflecting the efforts of the entire board of directors and staff at AMD. VNN