BUSINESS IN BRIEF 13/4

Chinese firm expands investment in Dong Nai

Chinese firm expands investment in Dong Nai, US requirements for imported goods reviewed, Tra fish prices bounce back after long slump, South takes lead in attracting FDI, Techcombank announces it will list shares on UPCoM

Center Power Tech Vietnam, a subsidiary of China’s Vision Group, on April 11 put into operation the third phase of its factory at Nhon Trach 2 Industrial Park in Nhon Trach district,the southern province of Dong Nai.

Speaking at the inaugural ceremony, Chairman of the provincial People’s Committee Dinh Quoc Thai praised the effective operation of the group and hoped the firm will invest more in advanced technologies and equipment to produce hi-quality and environmentally-friendly products in the future.

Vision Group, which specialises in battery and accumulator manufacturing, has been investing in over 100 countries worldwide. Its subsidiary, Center Power Tech Vietnam, was granted an investment licence in the province in 2007 and has an investment capital of 60 million USD.

The company manufactures 16 million battery and accumulator products every year . It also makes equipment for producing one million other products.

Currently, China has 56 investment projects in Dong Nai with a total registered investment of 860 million USD. The country is ranked fourth in project volume and sixth in term of investment capital among over 40 countries and territories investing in the locality.

Vietjet launches new routes to Tainan, Kuala Lumpur

The low-cost carrier Vietjet Air will start operating new routes from Ho Chi Minh City to Tainan (Taiwan) and Kuala Lumpur (Malaysia) from this June.

According to the airline’s press release issued on April 12, t he Ho Chi Minh City – Tainan City route will be operated on every Monday, Wednesday, Thursday and Saturday from June 22, with about three hours and 15 minutes per leg.

The flights depart from Ho Chi Minh City at 10:45 (local time) and arrive in Tainan City at 15:00 (local time). The return ones take off from Tainan City at 16:00 (local time) and arrive in Ho Chi Minh City at 18:15 (local time).

Meanwhile, the Ho Chi Minh City – Kuala Lumpur route will run from June 1. Flying time is about one hour and 55 minutes. The flights depart from Ho Chi Minh City at 9:30 (local time) and arrive in Kuala Lumpur at 12:25 (local time). The return ones take off from Kuala Lumpur at 13:00 (local time) and arrive in Ho Chi Minh City at 13:55 (local time).

The airline will also increase flight frequency between Ho Chi Minh City and Taipei city of Taiwan from one round trip per day to twice from June 18, 2016 with flight time of 3 hours 25 minutes per leg.

To celebrate the new international routes, Vietjet will offer 50,000 promotional tickets just from 0 USD. The promotion, which runs from April 12 to 18 between 12:00 and 14:00 daily, is applied for all tickets on routes connecting Ho Chi Minh City with Kuala Lumpur, Tainan and Taipei. Travel period for Ho Chi Minh City – Kuala Lumpur route is from June 1 to October 30; for Ho Chi Minh – Tainan/Taipei route is from June 22 to October 30 (excluding public holidays).

Tickets can be booked at www.vietjetair.com (also compatible with smartphones at https://m.vietjetair.com ) or at www.facebook.com/vietjetvietnam (just click the “Booking” tab). Payment can be easily made with debit and credit cards of Visa, MasterCard, JCB, and American Express and ATM cards issued by 24 Vietnamese banks with Internet banking.

Vietjet is the first airline in Vietnam to operate as a new-age airline with low-cost and diversified services to meet customers’ demands.

Currently, the airline boasts a fleet of 35 aircraft, including A320s and A321s, and operates 250 flights each day. It has already opened 47 routes in Vietnam and across the region to international destinations such as Thailand, Singapore, the Republic of Korea, Taiwan, China, Myanmar and Malaysia. It has carried more than 20 million passengers to date.

US requirements for imported goods reviewed

Opportunities to export to the US and the US’s requirements for imported food and pharmaceuticals were brought to light during a seminar held in Hanoi on April 11.

Vietnam is currently the US’s 13th largest exporter which primarily sells apparel, electronic machinery and spare parts, footwear and interior décor to the American country.

However, agro-fisheries and food exporters ran minus growth last year due to a string of barriers set up by the US, said deputy head of the Ministry of Industry and Trade’s Trade Promotion Agency Do Kim Lang.

According to the ministry, two-way trade between Vietnam and the US soared from 452 million USD in 1995 to 1.51 billion USD in 2002 when their bilateral free trade agreement took effect.

The figure hit 37.9 billion USD last year, during which Vietnam rose to 19th place among the US’s leading trade partners.

US technical expert David Lennarz said US firms are interested in Vietnam and are switching to do business with Vietnamese partners instead of those in the region.

Vietnamese enterprises are facing obstacles caused by the US’s technical barriers and strict food safety requirements.

Moreover, the US also launched the Container Security Initiative and set requirements for food production, processing and warehouses, which will also add to export costs.

Besides, the US trade laws are complicated and cumbersome.

Experts suggested Vietnamese firms thoroughly learn about the US partners, their business rules and practices before making any transaction.

The event was hosted by the ministry’s Trade Promotion Agency.

Vietnam promotes investment in Egypt’s Aswan province

The Vietnamese Embassy and Trade Office in Egypt held a trade and investment promotion conference in Aswan province on April 11 to draw local businesses’ attention to Vietnam.

At the event, Vietnamese Ambassador Do Hoang Long informed local officials and participating enterprises of Vietnam’s development policies, economic strengths and development potential as well as its key export products.

He affirmed that cooperation potential between the two countries is not fully tapped as bilateral trade reached just nearly 390 million USD in 2015, of which 20 million USD came from Egypt’s exports.

The ambassador also introduced the participants to the Investment Law and preferential policies to attract more foreign investment of Vietnam, stressing that thanks to these policies, around 20 billion USD is poured into the country each year.

He took the occasion to ask Aswan province administration to provide information about its policies and projects that are calling for investment, while proposing setting up links between the Vietnamese Embassy and Aswan province’s Chamber of Commerce to connect businesses of the two countries.

President of the Aswan Chamber of Commerce Mohamed Abu Al Kassem called for Vietnam’s investment in the locality’s strong fields like seafood processing and mining, while suggesting Vietnam exempt visas for Aswan businesses.

Tra fish prices bounce back after long slump

After keeping costs low for so long, tra fish prices shot up recently, yielding higher profits for farmers.

Processors buy the fish for VNĐ22,000-VNĐ22,500 per kilogramme, an increase of VNĐ4,000 since early March.

This allows farmers to earn profits of VNĐ2,000-3,000 per kilogramme.

The Cửu Long (Mekong) River Delta has more than 6,000ha of tra fish farms, mainly in the provinces of Đồng Tháp, Bến Tre, An Giang, Vĩnh Long, Cần Thơ and Tiền Giang.

With prices below break-even levels, many farmers incurred big losses and stopped raising the fish.

The remaining farms belong mostly to companies and farmers that have contracts with enterprises.

Thus, the increase in prices only benefits a modest number of independent farmers.

Nguyễn Ngọc Hải, director of the Thới An Seafood Co-operative in Cần Thơ, said the number of tra fish farmers without contracts account for less than 10 per cent.

Contracted farmers may only make small profits, but they are stable and not affected by price volatility.

Đặng Văn Ngôn, a farmer in Thới An Commune in Cần Thơ, said he has had a contract with a tra fish processing firm for a few years and has earned steady profits of VNĐ1,500-2,000 per kilogramme.

While it does not offer high profits, it is a sustainable model based on mutual benefit, he said.

“I signed contracts to breed 300 tonnes of tra fish in our two ponds.”

According to the Việt Nam Association of Seafood Producers and Exporters, tra exports in the first two months of 2016 were worth US$237.3 million, a year-on-year increase of 5.6 per cent.

The US and EU were the key markets, accounting for 40.5 per cent of the exports, it said.

The Việt Nam Competition Authority said that according to a US Department of Commerce decision, the US’s anti-dumping rate on tra fish fillets imported from Việt Nam between August 2013 and July 2014 was $0.41-$2.39 per kilogramme.

Accordingly, the two compulsory defendants, Hùng Vương Corporation and Thuận An Production Trading and Service Co, Ltd, will now have to pay duties of $0.41 and $0.97 per kilogramme, respectively.

The rates are a bit higher than the DOC’s preliminary decision in January of $0.36 and $0.84.

The tax imposed on 14 other voluntary defendants was $0.69.

In addition, a national rate of $2.39 remains applicable to other companies exporting tra fish fillets to the US.

Both compulsory and voluntary defendants have to pay a deposit on their exports this year at the tax rate stated in the DOC’s final decision.

An exporter said the high anti-dumping tax is causing difficulties for Vietnamese firms in exporting the fish to the US.

Australia to import VN mangoes

Australian agencies are finalising procedures to allow the import of Vietnamese mangoes into Australia from 2016, according to the Việt Nam Trade Office in Australia.

That was good news for Vietnamese farmers as well as enterprises trading in fruit products, the office said. Now, the office has implemented market research and connected with Australian partners to prepare export activities of Vietnamese mangoes to Australia soon after receiving the licence.

In 2013, the Vietnamese Farmers Association in North Australia with 100 Vietnamese farming households, built a distribution system of Vietnamese mangoes with popular brand names in the Australian market, including Vina Mango and T.V Farms, Bình Dương Farm and Sài Gòn Farm.

On April 4, 2016, on the sidelines of the visit to North Australia made by ASEAN ambassadors, Vietnamese Ambassador to Australia Lương Thanh Nghị, and Head of Việt Nam Trade Office in Australia Nguyễn Thị Hoàng Thúy, had a meeting with the executive committee of Vietnamese Farmers Association in North Australia, reported chinhphu.vn.

The association is committed to support the import and distribution of Vietnamese mangoes in the Australian market.

Last year, after 12 years of waiting, Việt Nam received approval from Australia’s Department of Agriculture to export lychees to their market.

Irradiation in the north

In a related development, the Hà Nội Irradiation Centre is ready to implement irradiation services for fruit exports this year.

According to the department, the centre has been upgrading equipment to reach international standards for irradiation of fruit products.

The centre, under the Ministry of Science and Technology (MST)’s Atomic Energy Institute of Việt Nam, was initially a small agency providing irradiation services for products in the healthcare field.

Since the end of 2014, the Ministry of Agriculture and Rural Development (MARD) and MST have provided VNĐ20 billion (US$909,000) in funds to improve the centre and equip it with irradiation services for fruits due to the high demand on exporting local fruit products to many foreign markets, such as the United States and Australia.

Hoàng Trung, deputy head of department, said the Hà Nội Irradiation Centre has been upgrading completely and that would ensure a great opportunity for the export of fruit products in the north of Việt Nam, especially lychees and longan.

That meant the fruit export enterprises would not transport their products to the South for conducting irradiation activities as before and would therefore save between VNĐ15 million and VNĐ16 million per tonne of fruit in terms of transport and time.

So far, there have been five companies who registered for the irradiation services in the centre for export lychees and longan this year, Trung said.

The department said that in the long term, together with irradiation services, the enterprises should ship export products to foreign markets by sea via Hải Phòng Port in large volumes and preserve fresh fruit products in cool containers to retain the freshness and quality of the products.

South takes lead in attracting FDI

 The southern region has received US$1.7 billion worth of foreign direct investment (FDI) in the first quarter of 2016, according to the Ministry of Planning and Investment’s Foreign Investment Agency.

This value accounted for 51.6 per cent of the total FDI registered in the country, making the region the leading performer in terms of FDI attraction. The agency said in its recent report that the positive results were due to the region’s huge potential in developing industries such as hi-tech, IT, oil and gas, in addition to several services in banking, finance and tourism sectors.

During the three-month period, 246 new foreign-invested projects received licences while 305 existing ones were approved to raise capital in the region, which include HCM City, Ba Ria – Vung Tau, Dong Nai, and Binh Duong, in addition to Tay Ninh and Binh Phuoc.

Among large projects included $115 million steel mill emissions processing facility, developed by Zincox Resources PLC from the United Kingdom in Ba Ria- Vung Tau Province; a $55 million-garment factory, invested by Brunei’s Promax Textile Viet Nam Co in Dong Nai Province’s Nhon Trach 3 Industrial Zone and a Brunei-funded furniture manufacturing project, worth $38 million, in Dong Nai’s Giang Dien Commune.

There were 41 countries and territories making investments in the region in the reviewed period. Of them, Japan ranked first with $309.3 million or equivalent to 18.1 per cent of the region’s total FDI. South Korea and Brunei came second and third with about $270 million, or 15.7 per cent, and $148.2 million, or 8.6 per cent, respectively.

Among six localities, Dong Nai attracted the lion’s share of FDI with $585.4 million, making up 34.2 per cent of the region’s total FDI. It was followed by Binh Duong with $376 million, or 22 per cent, and HCM City with $354.2 million, or 20.7 per cent.

From January to March, the manufacturing and processing sector was the most attractive sector to foreign investors as it absorbed $1.29 billion, totalling 76 per cent of FDI pledged in the region. Water supply and waste treatment ranked second with $115 million while wholesale and retail came third with $105.7 million.

Viet Nam witnesses ‘impressive’ export-import growth, says WTO

Viet Nam is the only country to have achieved impressive export-import growth in 2015 among the 30 leading export-import economies of the World Trade Organisation (WTO).

This was the conclusion of the “World Trade 2016 and Prospects 2016” report announced by WTO Director General Roberto Azevedo.

The report indicated that Viet Nam’s exports soared 7.9 per cent to US$162 billion, and its imports surged 12.3 per cent, reaching $166 billion last year.

While major exporters such as China, Turkey and Italy recorded a falling value of maritime shipped goods, Asian countries, such as Viet Nam, Bangladesh, Cambodia and Myanmar, posted strong growth, it said.

In overview, the report painted a dismal picture of global trade in 2015, with the total goods value dropping 13.2 per cent to $16.5 trillion.

The United States remains the largest importer, with a total value of $2.3 trillion, down 4.3 per cent, followed by China with $1.6 trillion, down 14.2 per cent.

This year, Viet Nam targeted fetching a total of $178 billion from exports, up 10 per cent from a year earlier, and to control trade deficit at 5 per cent.

Experts forecast that this was not a very difficult target as export doors would be further widened after some bilateral and multilateral free trade agreements signed by Viet Nam take effect.

The new investments, coupled with continued market share gains in key products such as electronics, footwear and textiles and apparel, should boost Viet Nam’s exports, even if global demand remains weak, the experts said.

Techcombank announces it will list shares on UPCoM

The Viet Nam Technological and Commercial Joint Stock Bank (Techcombank) plans to list its shares at the general shareholder’s meeting on April 23.

The bank said it will list in the Unlisted Public Company Market (UPCoM) first, then in one of the two official bourses in Ha Noi and HCM City.

Last year, the bank reported a profit before tax of VND2.037 trillion (US$90.9 million), an increase of 43.8 per cent over 2014.

As of December 31, 2015, the bank’s total assets increased 9.2 per cent to reach VND192 trillion ($8.56 billion) and its deposits from customers rose 8 per cent to reach VND142.6 trillion ($6.4 billion). It also planed a profit before tax of VND3.5 trillion.

The bank also said it would not pay a dividend this year but had used the income to develop the future business of the bank.

Dien Quang Lamp JSC to increase dividend rate

The HCMC-based Dien Quang Lamp JSC (DQC) will increase its dividend rate of 2015 by 15 per cent to reach 35 per cent.

Currently, the company pays a 15 per cent cash dividend. DQC intends to offer a 10 per cent cash payout ratio, while the rest of the payment will be made in shares.

In 2015, DQC earned VND1.082 trillion (US$48.4 million), 14 per cent lower than its target. However, the company reported a pre-tax profit of VND268 billion, 34 per cent higher than their target.

In 2016, the company aims to obtain revenue of VND1.1 trillion and profit before tax of VND230 billion.

Kim Long Securities plans business shutdown

Kim Long Securities Corp (KLS) will propose shareholders shut down the company’s business, the company has recently announced.

KLS will also propose the shareholders allow the company to be delisted from the Ha Noi Stock Exchange after it is shut down.

The company has to be shut down due to the nature of the small-scale stock market, which cannot allow a large number of brokerage firms to participate, and low business efficiency last year, Ha Hoai Nam, the company’s chairman, said.

In addition, the company is unable to make large, long-term investments in other businesses as it has encountered strict rules from government agencies, Nam said.

In the first quarter of 2016, KLS recorded revenue of VND38.4 billion (US$1.7 million), an increase of one-third from the same period last year.

The company also reported a pre-tax profit of VND4 billion, an improvement from the loss of VND39 billion in last year’s first quarter.

However, the company still suffered an accumulated loss of VND62.3 billion over a year.

At the end of the first quarter, KLS had VND627 billion in cash and total assets worth VND1.76 trillion. The company also had chartered capital of VND2.2 trillion and equity of VND2.27 trillion.

Ford VN reports record sales in March

 US automaker Ford Viet Nam has reported its best ever March performance selling nearly 2,400 units, a 71 per cent year-on-year rise.

The record month also capped the company’s best ever first quarter performance as sales rose 69 per cent from a year earlier to over 6,500 units.

With its EcoSport, Ranger and Transit all maintaining leadership of their segments – mini SUV, pickup, and van and bus – the company remains one of the fastest growing in the automotive sector this year.

The Transit saw March sales rise 53 percent to 586 units, as business owners and operators across a range of industries continued to appreciate its durability, versatility and value proposition.

First quarter sales rose 70 percent to 1,746 units.

Sales of the Ranger surged 126 percent in March to 1,198 units and 163 percent in the first quarter to 3,161.

The sporty EcoSport compact SUV saw March sales rise 53 percent to 436 units, helping drive its year-to-date sales up 23 percent to 1,106.

Cai Mep int’l port welcomes large container ship

A large vessel carrying 2,000 TEU anchored at Cai Mep International Port in the southern coastal province of Ba Ria – Vung Tau on April 11 to ship the goods to Northern Europe.

The Millau Bridge ship, which is 366 meters long and 52 meters wide, is capable of carrying 14,000 TEU (equivalent to 150,000 tonnes of cargo). It is managed by the CKYHE Alliance of Asian container lines, including Cosco, Yang Ming, Henjin Shipping, and Evergreen.

This is the first large container ship used by the CKYHE to harbour in the Vietnamese port as part of the service connecting Asian and European markets.

After anchoring at some Chinese ports, the ship arrived in Vietnam and will visit Singapore before going to Europe to habour at Rotterdam Port in the Netherlands and Felixstowe in the UK .

Cai Mep International Port is the only in Vietnam to be able to receive such large vessels that can carry 150,000 tonnes of cargo.

Every week, it handles one heavy-loaded ship to the Mediterranean Sea, two to North Europe, three to the US , two to Asia, and four to domestic cities of Hai Phong, Da Nang and Quy Nhon.

It served 576 vessels carrying 423,000 TEU in the first three months of 2016, up 57 percent against the same period last year.

The Ministry of Transport along with relevant agencies and localities have actively reformed administrative procedures and improved infrastructure quality to attract more cargo ships.

Firm imports used tyres for fuel

Chu Lai-Indevco Float Glass JSC’s pilot recycling programme to turn used car tyres and rubber into fuel for the firm’s glass production was a resounding success, prompting the company to submit a proposal for authorities to allow the continued import of secondhand materials.

According to a recent report by the Ministry of Science and Technology (MoST), the import and recycling of used rubber and auto tyres for Chu Lai-Indevco’s North Chu Lai Industrial Zone factory in the central province of Quang Nam has generated the company about VND700 billion ($32 million) in profits after three years of implementation.

From 2013-2015, the company imported 271,000 tonnes of used auto tyres and rubber. Of this, 166,000 tonnes were put into production, while the remaining 105,000 tonnes are still kept in stock.

During this three-year period, the company also utilised 162,000 tonnes of locally-sourced used tubes and tyres to feed production.

Chu Lai-Indevco was reported to have collected FO-R oil, powder coal, and steel scraps through pyrolysis of the used products, gathering about 80,000 tonnes of FO-R oil from both imported and locally sourced rubber.

This helped the company save around VND500 billion ($23 million) compared to importing FO-R oil for production.

Along with these savings, by selling the powder coal and steel scraps resulting from the pyrolysis process, the company recouped VND145 billion ($6.6 million) and VND60 billion ($2.75 million) of its costs, respectively.

Recycling used rubber into fuel for production was handled at Chu Lai-Indevco’s rubber and plastic recycling plant based in Nho Quan district in the northern province of Ninh Binh.

The plant reports a daily capacity of 485 tonnes per day, equal to 180,000 tonnes per year. According to the MoST, the factory complies with environmental standards while providing jobs to on-site labourers.

Due to the pilot programme’s positive results, Chu Lai-Indevco has lodged a proposal seeking permission to continue importing used rubber and tyres for production at a volume of 130,000 tonnes per year until the end of 2021, to offset a shortage in locally-sourced material.

The proposal was supported by relevant government management agencies (the MoST and the Ministry of Industry and Trade), and the localities that host the company’s manufacturing plants.

Earlier, through Document 679/2013/TTg-KTN, the government green-lighted the company’s import of 160,000 tonnes of used tubes and tyres for three years (2013-2015) to recycle into fuel serving its glass production.

In fact, used materials such as auto engines, accessories, tubes and tyres, tractors, and motorbikes were included in the list of products prohibited from import under governmental Decree 187/2013/ND-CP, which lists goods banned for export from or import into Vietnam in the Commercial Law.

Decree 187 stipulates that used tyres for temporary import and re-export can be kept in Vietnam no more than 60 days and may undergo two extensions, each not surpassing 30 days.

To restrict individuals and organisations from transporting waste and used materials into Vietnam, the Ministry of Finance required the Ministry of Industry and Trade to review temporary import and re-export activities, particularly those of used tyres and tubes, and consider putting these products in the list of commodities whose import and re-export should be temporarily stopped.

Singaporean group backs up southern realty project

Singaporean financial group SynGience signed a contract with local Minh Nguyen Long and L&L-LuckLand yesterday on the development of a property project in District 12 of Ho Chi Minh City.

Accordingly, SynGience will pump VND400 billion ($18.3 million) into DepotMetro Tower-Tham Luong project. The sum will be disbursed throughout the project’s different phases. The first instalment of VND40 billion ($1.8 million) was transferred on March 29 to fast-track the first phase, according to newswire dddn.com.vn.

DepotMetro Tower-Tham Luong features two apartment blocks consisting of about 660 apartments with areas ranging from 48 to 73 square metres. It is located in District 12’s Tan Thoi Nhat ward, near the Tham Luong station of Metro Line No2, promising high profitability as this area is considered a main gateway to Ho Chi Minh City from the northwest.

Besides, this is also the favoured residential area for engineers and experts working at the nearby Tan Binh industrial park.

At the signing ceremony, SynGience representatives said that Vietnam is an attractive market for international financial groups, especially after the country lifted a number of trade barriers and signed a series of free trade agreements, including the Trans-Pacific Partnership Agreement (TPP).

With respect to the recent movements of the Ho Chi Minh City real estate market, Dat Xanh Group recently launched Opal Riverside resort complex project along the Sai Gon River, worth nearly VND1 trillion ($45.8 million) with 648 apartments.

Also, Hung Loc Phat is developing the Golden Star project, worth VND932 billion ($42.7 million), in District 7 with 478 apartments.

Jetro reports very low localization rate of Japanese businesses in Vietnam

According to the Japan External Trade Organization (Jetro), despite cooperation efforts between Vietnam and Japan have seen positive development in recent years, the localization rate of Japanese businesses in Vietnam was very low reaching only 32.1 percent last year.

The rate was a 10 percent increase compared to 2010 but slight reduction over 2014 when it touched 33.2 percent.

Meantime, the localization rate of Japanese businesses in China, Thailand, Indonesia and Malaysia were 64.7 percent, 55.5 percent, 40.5 percent and 36 percent respectively.

Of the 32.1 percent, the ratio of components that Japanese firms purchased from Japanese suppliers in Vietnam was 45.1 percent, from Vietnamese firms was 41.2 percent and others such as Taiwanese invested companies was 13.7 percent.

Therefore the component supply ratio by Vietnamese firms to Japanese businesses was in fact less than 13.2 percent.

Jetro proposed authorized agencies to soon solve problems in tax policies amid the current integration context and remove regulations raising difficulties for businesses. The Government should issue policies encouraging and assisting Vietnamese companies to attend the supply chain.

Steel supply abundant, prices down

According to the Vietnam Steel Association (VSA), steel prices have reduced by VND100,000-200,000 a ton after a briefly sudden increase in mid-March.

It has swung around VND12 million (US$538) a ton in Ho Chi Minh City for the last few days.

Preliminary statistics by VSA show that steel consumption in March was estimated to reach 763,000 tons, the highest level ever in the steel industry’s history. It moved up 66 percent over February and 15 percent over the same period last year.

The record high increase was because the annual construction season has entered its peak time and steel stores have stepped up stockpiling after the Ministry of Industry and Trade decided to impose temporary safeguard duties.

Despite of the strongly hiked consumption volume, steel inventory still hit 325,000 tons at the end of March.

Besides, the market will receive one million tons of steel supply from a slew of new projects going to come into operation this year. This indicates that businesses have been capable of meeting the market’s demand so distributors and store owners should not concern about a scarcity and stock up steel.

Business environment suffers from non-competitive attitude

Even though the number of bankrupted firms is high, government agencies have continued to say that there was nothing to worry about.

Since 2011, the number of shutdown and bankrupted firms has increased sharply. But at all seminars or press conferences, spokespeople from the General Statistics Office and even heads of the Ministry of Planning and Investment have said this is normal. They have often quoted the number of bankrupted firms in Australia, France, the US or Indonesia as facts to prove that everything is quite normal.

However, it’s probably harder to make the normal claim now as statistics for the first quarter were released. While 23,767 new firms were established, more than 20,000 businesses shut their doors, an increase of 23.9 percent on last year.

Nguyen Dinh Cung from the Central Institute for Economic Management (CIEM) said, “Saying that it’s normal is just a way of offering consoling words and is frankly irresponsible. These numbers aren’t normal.”

He is probably the first economist to make such a strong statement.

The reports from the Vietnam Chamber of Commerce and Industry from the last three years have shown that the number of medium, small, very small and extremely small scale businesses has shot up. Big firms often faced difficulties and have downsized in scale. Other surveys and assessments by foreign organisations provide similar results.

According to the World Bank, 40.8 percent of a firm’s revenue is spent on taxes and fees in Vietnam, especially in recent years when the government is trying to balancing the state budget by increasing fees on the environment, transportation or excise tax. There have been no cuts to give firms some breathing space.

In addition to this rampant corruption. CIEM evaluate that since the implementation of government Resolution 19 about improving the business environment in 2014 and 2015 the situation has actually become worse. Bribery has actually increased.

Pham Chi Lan, member of the Advisory Group of the Vietnam National Assembly’s Economic Commission, cited statistics from the World Bank that stated that if a firm generated one Vietnamese dong then they would lose VND0.72 or even VND1.02 to bribery.

“How can firms expand and develop?” she said.

Soldiers are the pillar of a country during war times and businesses are the heart of a country in peacetime. That is because firms play an important role and make the most contribution to the country’s development.

It’s admittedly normal to see firms go bankrupt and shut down when facing such challenges, when taxes and fees are increasing and the business environment becomes challenging and corruption is rampant.

But because this is seen as ‘normal’, many economists have reached the conclusion that Vietnam has refused to improve. There’s abundant FDI and ODA yet Vietnam’s ranking on global competitiveness chart has actually fallen.

Samir Dixit, Managing Director of Brand Finance Asia-Pacific, said at the ninth forum on Vietnam National Branding that the value of Vietnam’s national brand was only higher than Cambodia’s. In 2015, Vietnam’s national brand was valued at USD140bn with Cambodia ranked at USD16bn.

World Bank expert talks down fears over rising public debt

Vietnam’s public debt may quickly exceed the ceiling set at 65% of GDP, which will result in the national economy’s budget risks, warned a World Bank economist.

The WB’s lead economist in Vietnam, Sandeep Mahaja, said that Vietnam has seen a rapid rise in its public debts from 59.5% in 2014 to 62.5% in 2015; and predicted increases to 63.8% in 2016; 64.4% in 2017 and 64.7% in 2018.

According to a recent report from the Ministry of Finance, Vietnam’s public debt is estimated at USD115.7 billion. So, with the total population of 91.7 million, each Vietnamese person now has to bear a public debt of USD28.4 million, the record figure to date.

Mahaja said, “Currently Vietnam’s public debt is still at safe level and we are not worried about Vietnam’s payment ability so far, however, the payment terms are a problem for Vietnam, because they are almost all short. This has put a pressure for Vietnam’s public debt repayments, particularly in the context of the country’s high budget deficit at present.”

He noted that spending up to 16% of the country’s budget every year to pay the public debt is a big risk for the national economy, affecting investment for development in various areas such as education and health. So the Vietnamese government needs to have a stable frequent spending plan.

Multiple incentives sought for Thai Nguyen steel project

State Capital Investment Corporation (SCIC) has proposed the most preferential incentives ever for the Thai Nguyen steel plant to help resume work on its second phase which has been delayed for nearly a decade.

Assigned to solve problems faced with the steel plant, SCIC proposed the Government and the ministries of finance and industry-trade exempt the expansion project from import, contractor and value-added taxes.

Thai Nguyen Iron and Steel Joint Stock Corporation (TISCO), the project investor, has conducted 10 rounds of negotiations with Chinese contractor Metallurgical Group Corporation (MCC) to deal with the problems with the project, SCIC said.

MCC has shown its determination to resume work on the project. However, the two sides have not reached a compromise on several conditions set by the Chinese contractor.

In specifics, MCC required TISCO to pay for it and its subsidiaries nearly US$4.4 million as compensation for a construction suspension since June 2012, and US$53 million for after-sale services, project handover and maintenance and repair for the construction site, and purchases of damaged equipment.

SCIC said the project would only be profitable if it costs a total of VND7.87 trillion (US$853 million) as appraised by the Vietnam National Construction Consultant Corporation (VNCC) and Institute of Construction Economics under the Ministry of Construction.

In addition, the project should have construction work finished on September 30 next year and start production on January 1, 2018.

SCIC said the project would not be effective if the investment cost is adjusted up to more than VND9 trillion (US$405 million) as suggested by TISCO and the selling price of steel ingots is 6% lower than the projected price.

That was why SCIC did not agree with TISCO’s proposal to revise up the project’s cost.

The expansion of Thai Nguyen steel plant began in 2007 with an original cost of VND3.84 trillion. Though TISCO had disbursed VND4.44 trillion for the project, it is still half-done as MCC withdrew from the project in 2012 after it had got paid for over 90% of the equipment cost.

Bac Ninh attracts over 200m USD in investment in Q1

The northern province of Bac Ninh granted investment certificates to 21 foreign direct investment (FDI) projects with total registered capital of more than 200 million USD in the first three months of this year.

The figure represented an increase of 157 million USD against the same period last year.

According to the provincial Industrial Zone Management Board, Bac Ninh is now home to 816 FDI projects worth 11.8 billion USD. Of these, industrial parks have attracted 598 projects with total registered capital of 11.1 billion USD.

The increase is attributed to the province’s efforts to improve its business climate and focus on hi-tech and supporting industries.

The province has also boosted administrative reform to help enterprises.

After falling for two months, auto sales staged a strong recovery last month with a total of 24,802 units sold, more than twice the February figure.

Locally assembled cars accounted for more than 80% of the sales, news website VnExpress said on April 9, citing figures from the Vietnam Automobile Manufacturers Association.

Truong Hai Auto Corporation held 44.7% of the market share, followed by the local units of Toyota and US carmaker Ford.

Nearly 60,000 units have been sold in the first three months, up 23% from a year ago.

Sales dropped 49.4% to 11,718 units in February, the lowest in a year. In January there had been a month-on-month decline of more than 21%.

Many industry insiders have been quoted as saying in the media that the sharp fall in February was because the country was celebrating the Lunar New Year.

A new tax rule that took effect on January 1 forcing auto importers to increase their prices by 2%-13% was another reason, they said.

Now luxury tax is calculated on a car’s retail price, unlike previously when it was calculated on their cost, insurance, freight (CIF) price before the addition of duties and markups.

Vietnam posted strong growth of 55% last year as sales grew to nearly 244,914 units.

Eco-complex to be erected in downtown HCM City

A Vietnamese realty firm has said it will launch an enviro-friendly realty project in Ho Chi Minh City soon.

Vingroup will convert the Ba Son shipyard in District 1 into an eco-urban area, named Vinhomes Golden River, the company said on its website.

Located on the Saigon riverbank, the project will feature financial centers, offices, high-class hotels, restaurants, museums, schools and other services, the firm added.

According to the Department of Planning and Architecture in Ho Chi Minh City, the area spanning parts of Ton Duc Thang Street is designed to give the city a modern look that harmonizes with nature.

Three renowned global design, engineering and project management firms – ATKINS, GENSLER, and ESDA – act as the consultants of the planned development, the property company said.

An artist’s impression of the Vinhomes Golden River project in District 1, Ho Chi Minh City

The realty complex, to be developed on 25.3 hectares, will adopt the eco-city model, which is built on the principles of living harmoniously with the environment, it said.

The firm added that residents in the area can travel by train as the first metro line linking Ben Thanh Market in District 1 with Suoi Tien Amusement Park in District 9 will run through the complex.

Experts said that the realty project will attract lots of potential customers as it nestles in the city’s heart as well as being a riverside complex.

The building density of the project is 18.6%, which is highly appealing as it will provide more green space, they added.

“The urban area just suits the surroundings in every angle since it harmonizes with nature, the city center and the Thu Thiem urban area nearby,” Nguyen Truong Luu, chairman of the Ho Chi Minh City Association of Architects, remarked.

Vingroup was founded in 1993 by a group of Vietnamese youths in Ukraine under the name of Technocom, which was mainly involved in the food production industry.

After growing as one of the largest and most influential companies in Ukraine by the early 21st century, Technocom looked to Vietnam to expand its business in real estate and hospitality with the initial key brands of Vincom and Vinpearl.

The two brands merged into Vingroup JSC in 2012, which has since developed into one of the most dynamic, successful, and well-capitalized companies in Vietnam.

Bac Ninh attracts over 200m USD in investment in Q1

The northern province of Bac Ninh granted investment certificates to 21 foreign direct investment (FDI) projects with total registered capital of more than 200 million USD in the first three months of this year.

The figure represented an increase of 157 million USD against the same period last year.

According to the provincial Industrial Zone Management Board, Bac Ninh is now home to 816 FDI projects worth 11.8 billion USD. Of these, industrial parks have attracted 598 projects with total registered capital of 11.1 billion USD.

The increase is attributed to the province’s efforts to improve its business climate and focus on hi-tech and supporting industries.

The province has also boosted administrative reform to help enterprises.

US anti-dumping duty on PE bags from Vietnam remains in place

The US has decided to continue applying anti-dumping duties on imports of polyethylene (PE) retail carrier bags from Vietnam and some other countries.

The Sai Gon Giai phong (Liberated Saigon) daily reported the Vietnam Competition Authority as saying that the decision comes under the five-year (sunset) review process carried out by the US International Trade Commission (USITC).

The USITC determined that revoking the antidumping and countervailing duty orders on PE retail carrier bags from China, Indonesia, Malaysia, Taiwan (China), Thailand, and Vietnam would likely lead to a continuation or reoccurrence of material injury.

The anti-dumping duty rates are imposed at between 52.3 – 76.11 percent.

Countervailing duty rates of 52.56 percent are levied on the imports of one Vietnamese company. Other Vietnamese producers or exporters of these products are subject to a countervailing duty rate of 5.28 percent.

On July 27, 2015, the US Department of Commerce issued the determinations of a sunset review, which kept the anti-dumping duty and countervailing duty orders in place.

Vietnamese construction products introduced in Cuba

Vietnamese construction firms displayed their products for the first time at the 11th International Construction Fair (FECONS 2016), in Havana, Cuba.

The event, which took place from April 5-9, featured the participation of about 200 enterprises from 29 countries worldwide.

Representing the Vietnamese Ministry of Construction, the Vietnam Glass and Ceramics for Construction Corporation (Viglacera) exhibited products including sanitary wares, ceramic tiles, glass for construction and showers.

Viglacera also signed an agreement on importing and exporting construction materials with the Cuban Ministry of Construction’s IMCO company and another on establishing a joint venture agreement with the Cuban Geicon Group.

The ceramic firm also inaugurated its first showroom in Havana.

An event to introduce construction products from two Vietnamese companies, Thai Binh and Vinh Tuong, was also held during the fair.

VN start-ups need more legal support: firm CEOs

Vietnamese start-ups need consultancy supports on tax policies, legal, finance and accounting, as well as training courses to help them become professional entrepreneurs.

Trịnh Nam Thái, CEO of Koban.vn raised this idea while contributing to the project, “The national programme to support start-up ecosystem and innovation” built by the National Agency for Technology Entrepreneurship and Commercialisation Development (NATEC).

Phạm Hồng Quất, the agency’s director said that NATEC had received several ideas from ministries and sectors to complete the project. It would be built to meet with the demand of start-ups in the science and technology field in the first stage of development.

Specifically, an electronic platform would be established on the network infrastructure of the National Agency for Science and Technology Information (VISTA). The project would also build a database and a system connecting domestic and foreign specialists, especially overseas Vietnamese with experience in start-ups and successful entrepreneurs in the science and technology sector.

In addition, there would be training courses specialising in attracting funding and building business models for start-ups with support from the Government.

“We want to create a working environment which will help investors share business experiences as well as appeal for venture funds. Angel investors would also act as trainers,” Quất said.

NATEC would call for co-operation from institutes, schools and localities to build the best working environment for start-ups.

The project would also propose a mechanism for the association between start-up centres and investment funds to help them access funds and facilitate them in divestment.

However, successful start-ups believed that the support should be closely linked with reality.

Nguyễn Hữu Tuất, CEO Mpos Việt Nam, said that a website or an electronic platform would be only a tool for start-ups accessing information. The Government should have a start-up nurturing programme to support them and their partners, as well as a training system to turn ideas into products.

Tuất said the Government should be active in setting up a centre to give legal aid to start-ups on regulations with regard to business conditions, taxes and listening to their difficulties relating to legal issues.

He said the Government should have policies to reduce or exempt taxes for businesses, provide support services to start-ups such as co-working space, electricity, water and the Internet to minimise their costs.

He expected the Government to create a process to facilitate the entry of foreign funds and organise a discussion with investors to resolve vexing issues.

VN-based ABT to pay 30-50% cash dividend in 2016

Bến Tre Aquaproduct Import and Export JSC (ABT), a Việt Nam-based company that processes seafood for export, agreed to pay a cash dividend of between 30 and 50 per cent in 2016.

In 2015, the company earned VNĐ472 billion (US$21 million) in revenue, a year-on-year increase of 5 per cent. It earned pre-tax profit of VNĐ72 billion and after-tax profit of VNĐ68.8 billion. Its earning per share (EPS) reached VNĐ5,206.

The board of directors has set a target of earning VNĐ500 billion in revenue and VNĐ60 billion in pre-tax profit this year.

VinaCapital fund moves to main market of LSE

VinaCapital Vietnam Opportunity Fund Limited (VOF) has completed its move from the AIM (Alternative Investment Market) to the main floor of the London Stock Exchange, with trading beginning on March 30.

“It has come a long way since its inception in 2003, and we believe a listing on the main market marks the start of a new chapter of growth,” Andy Ho, managing director of the VOF and chief investment officer of VinaCapital Group, said.

“With the higher profile afforded by such a listing, we should be in a better position to improve liquidity and reach a broader investor base,” he added.

He said the fund’s strategy is to make investments in both listed and unlisted firms via negotiated deals, with a focus on the equitisation of State-owned enterprises and the real estate sector.

“We will invest in prestigious property developers as the real estate market is growing well.”

Other investment priorities include the food and beverages, education, communications, logistics, and building materials sectors.

Listed shares account for 48 per cent of VOF’s portfolio, real estate projects for 12.4 per cent and private equity for 12.3 per cent. The portfolio also includes hotels, unlisted shares and other assets.

In terms of industries, food and beverages accounted for 24.5 per cent, property and construction for 24.3 per cent and hotels for over 10 per cent.

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR

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