German businesses heavily invest in Vietnam

Germany, with 236 foreign direct investment (FDI) projects valued at US$1.34 billion as of September 1, ranked 22nd among 101 nations and territories investing in Vietnam.

German businesses have invested in a cumulative total of 177 cooperation projects valued at US$917.93 million, 52 joint venture projects at US$409.16 million with the remaining projects implemented in the form of build-operate-transfer (BOT) projects.

HCM City is the most popular destination for German businesses with 93 projects valued at nearly US$234.34 million, followed by Ninh Thuan with two projects at US$156.7 million, and Dong Nai with seven projects at US$145.63 million.

On the reverse side, Vietnamese businesses have invested in 17 FDI projects in Germany with total investment of US$92 million. They are investing in such fields as finance and banking, real estate, informatics and trade.

German businesses have invested a broad range of sectors including manufacturing, production, water, electric and gas distribution, retail and wholesale, agro-forestry and fisheries, wastewater treatment, finance and banking, insurance, and science and technology.

5th Asian Development Forum scheduled for Hanoi

The fifth Asian Development Forum (ADF-5) themed "Challenges and strategies towards sustained growth of Asia" will be held in Hanoi on September 19 by the Ministry of Planning and Investment in collaboration with the Asian Development Bank (ADB).

The event will be attended by representatives from international organizations such as the International Monetary Fund (IMF), the Japan International Cooperation Agency (JICA), the Office of the United Nations Development Programm (UNDP) in the Asia Pacific region, and delegations from Japan, the Republic of Korea, Bangladesh, Malaysia, the Philippines and Cambodia.

The focus of the forum will be on important issues related to institutional capacity and infrastructure to improve productivity, innovation and economic transformation, human resource development, encouraging enhanced productivity and mobilization of financial resources for sustainable development.

Issues on the development of the infrastructure networks to ensure the efficient shifting of human resources and goods will also be debated based on the ADB Report.

Additionally, delegates will also share their experiences and discuss on how to overcome the middle income trap. Through the forum, Vietnam wants to know more about the legal framework of privatization, the involvement of the private sector and the application of the market economy.

Hanoi hosts energy efficiency exhibition

More than 2000 guests attended an energy efficiency exhibition entitled – Xperience Efficiency (XEE) 2014 – on September 17-18, sponsored by Schneider Electric at the International Convention Centre in Hanoi.

Within the framework of the exhibition, more than 30 symposiums were held with domestic and foreign experts in attendance. Additionally, 15 booths were set up to introduce solutions for green energy management and new technology trends to participants.

Attendees included representatives of Ministry of Industry and Trade, French Embassy in Hanoi and CEO of Schneider Electric in Vietnam Xavier Denoly and domestic and foreign businesses.

Schneider Electric sponsored the event, in celebration of its 20th anniversary of operations in Vietnam.

Since 1994, the company has strengthened its presence in Vietnam with three representative offices in Hanoi, Ho Chi Minh City and Danang and a network of 15 authorized distributors and more than 250 points of sales throughout the nation.

Vietnam seeks business opportunities in RoK

A delegation from the Vietnam Trade Promotion Agency (VIETTRADE) under the Ministry of Industry and Trade will pay a working visit to the Republic of Korea (RoK) on November 8-11 in a bid to seek business opportunities there.

The delegation will organise a working session with the RoK-based Vietnam Trade Office and the Korean Importers Association and visit local manufacturing enterprises.

During the five-day study tour, the mission plans to attend the Korean Design Festival 2014 and Food Week Korea 2014.

In recent years, RoK has become a leading export market for Vietnam. In the first seven months of 2014, Vietnam’s export to RoK totaled US$3.65 billion, up by 2.4% compared to the same period last year, according to statistics of the General Department of Vietnam Customs.

Philippines to purchase 200,000 tonnes of Vietnamese rice

The Philippines' National Food Authority (NFA) has decided to import 200,000 tonnes of 25% broken rice from Vietnam under a signed agreement between the two governments.

Vietnam and Thailand put in a bid of supplying 500,000 tonnes of rice to the Philippines.

Thailand won a 300,000 tonne contract due to its cheap price offer.

The NFA proposed Vietnam supply the remaining amount at the same price as Thailand’s.

Vietnam is scheduled to deliver the rice from October 15 to December 15, 2014.

Japanese businesses are bullish on Vietnam

A recent survey conducted by the leading insurance agency Nissay of 4,285 companies from across Japan indicates they are sanguine on Asia and Vietnam in particular, with its economic prominence on the uptick.

The survey released on September 17 reflects 45.8% of Japanese business firms say the economic importance of Asia, especially Vietnam, Indonesia, and India, is on an uphill rise.

About 40.7% of the respondents stated overall they believe Asia has high growth potential, 16.7% others believe Asia is a key production base, while 12% others say Asia has good prospects in the manufacture of machinery and components.

Around 14.2% of the Japanese firms surveyed think that young people in Asia can benefit from overseas study and training courses.

Vietnam boosts tourism promotion in Russia

Thirty travel operators, hoteliers, and Vietnam Airlines managers are attending an international tourism fair Otdykh Leisure 2014 which opened Russia’s Moscow capital on September 16.

The four-day event has attracted a large number of foreign travel enterprises from across the world including Australia, Austria, Argentina, Belarus, Bulgaria, Germany, Greece, Egypt, India, Spain, Italy, China, Thailand, the Philippines, the United Arab Emirates, Serbia, Mexico, Norway, Japan, the Czech Republic, Slovakia, France, and the US.

Vietnamese representatives introduce to foreign visitors the country’s tourism potential and beautiful landscape, popularise their services, and seek business partners.

They organised a seminar on Vietnam-Russia cooperation in the tourism sector on September 16 with the aim of attracting more Russian visitors to the Southeast Asian nation.

Otdykh Leisure Moscow is the largest international autumn trade fair for tourism in Russia and the Commonwealth of Independent States (CIS).

Vietnam welcomed more than 22,700 Russian tourists in July alone, a year-on-year increase of 36.5%, raising the total number of the visitors in the first seven months of this year to 216,000.

The number of Russians visiting Vietnam increased 6.8 fold in four years, from 49,000 in 2009 to 298,000 in 2013, achieving an average growth rate of 59% per year.

Russian holiday-makers often prefer to stay in central and southern localities such as Danang, Phu Yen, Lam Dong, Khanh Hoa, Binh Thuan, Ninh Thuan, and Ba Ria-Vung Tau.

ExxonMobil expands operation in Vietnam

A senior ExxonMobil executive has pledged to boost cooperation in the oil & gas industry with Vietnam, a potential market in Southeast Asia.

The leading US oil & gas company will work closely with relevant Vietnamese agencies to implement agreements it has already signed with Vietnamese partners, said Neal Goins, Vice Director of International Government Relations for Exxon Mobil.

At a September 16 meeting with Nguyen Van Hoa, Vietnamese Consul General to Houston City, Goins voiced the company’s commitment to bring the best projects to Vietnam in terms of both investment value and environment protection.

For his part, Hoa appreciated ExxonMobil’s investment projects and charity activities in Vietnam and hoped that the world’s reputable group will continue to expand cooperation and investment in the country.

Hoa introduced his guest and other ExxonMobil executives on the development of the Consulate General in Houston and affirmed that the Consulate will do its utmost to promote cooperation between the two countries’ businesses, especially oil and gas enterprises in Houston.

Firms discuss winning consumer trust

Business executives held a direct dialogue with national and international experts on how their companies can win consumers' trust and boost their credibility in the market at a forum held in Hanoi on September 17.

The issues they discussed at the CSR (Corporate Social Responsibility) Calendar Forum on Consumer Issues included making more Vietnamese select and trust local products, surviving the harsh competition in the retail market, and building a market where consumers trust producers.

The forum was held as part of a new project called "From Global Compact to Local Impact! - Promotion of CSR among Vietnamese Business Community for Sustainable Consumption and Production (SCP)".

The project is a joint initiative by the Office for Business Sustainable Development (SDforB) of the Vietnam Chamber of Commerce and Industry (VCCI), the UN Industrial Development Organisation, and the UN Environment Programme.

Funded by the UN One Plan Fund, it aims for synergies with the EU-funded Switch Asia policy module for the development of a national SCP action plan lead by UNEP as well as with the UN Global Compact Vietnam Network under SDforB.

The CSR Calendar Forum is engaging with the Association of Vietnam Retailers and Vietnam Environmental Administration.

Other issues discussed at length were CSR and SCP - Together for Responsible and Sustainable Business, Draft national action plan on SCP and Environmental policy to support SCP, Overview of new CSR Project and consumers' issues, Sharing experiences on gaining consumers' trust in Vietnamese products, The UN Global Compact as a way to improve the trust in enterprises.

"The CSR Calendar Forum is a good chance for enterprises taking part in the badly needed multi-stakeholder dialogues to better understand 6 core CSR subjects based on principal documents such as ISO26000 and UN Global Compact," Nguyen Quang Vinh, director of SDforB, VCCI, said.

"Since 2007 Vietnam has become a local network of UN Global Compact aiming at supporting its members implement effective CSR in the country."

Florian Beranek, chief technical advisor of the project, said: "Multi-stakeholder dialogues had become a kind of trademark CSR initiatives during the recently concluded EU funded VCCI – UNIDO project on CSR that helped improve the collective understanding of the needs, challenges, and business opportunities associated with each of the core CSR subjects.

"Improved social performance is expected to enhance competitiveness and trade performance of the subject enterprises, reduce their environmental impact and resource consumption and improve their relations with stakeholders, including workers, communities, consumers and business partners."

Dinh Thi My Loan, chairwoman of AVR, said: "Vietnamese enterprises are facing huge challenges of competitiveness. According to the WTO roadmap commitment, from January 11 next year foreign retailers are allowed to set up business with 100% foreign investment capital, replacing the 50 currently applied.

"Vietnam has witnessed big names such as Lotte (Korea), AEON (Japan) entering the distribution and retail market or planning for their participation in near future like E-Mart (Korea), Takashimaya (Japan), Auchan (France).

"Hence, it is necessary for Vietnamese businesses to improve their strategies if they want to compete in the domestic market in the context of integration."

To help businesses know more about CSR and to bridge international and national experts to understand enterprises as well as consumers needs and demand, a workshop titled "Gaining Consumers' Trust in Local Products and Services to Support Sustainable Consumption and Production" was held in the afternoon.

A similar event will be held in HCM City on September 19.

A forum opened in Seoul, the Republic of Korea (RoK), on September 17 to introduce Vietnam’s tourism potential and create a forum for travel agents of the two countries to seek partnerships and boost cooperation.

This is part of Vietnam Tourism and Culture Week held by the Vietnam Administration of Tourism (VAT) in Seoul and Gwangchu from September 17-22.

At the opening ceremony, Vietnamese Minister of Culture, Sports and Tourism Hoang Tuan Anh highlighted the country’s tourism potential with rich and diverse ecosystems and beautiful landscape. Specifically Vietnam has many world tangible and intangible heritage examples recognised by UNESCO, as well as cultural identities close to Korean people.

Ambassador to the RoK Pham Huu Chi said that Vietnam and the RoK have great potential for promoting culture and tourism exchange, including golf tourism, and that if there is close coordination among travel and aviation agents, hotels and golf courses, tourism businesses of two countries will have cheap golf tours, attracting more Koreans to Vietnam.

Chi urged relevant Korean agencies to relax immigrant requirements, making it easier for more Vietnamese people to visit the RoK.

At the forum, representatives from Korean groups which are operating in the hospitality and tourism industries in Vietnam, such as Charmvit, shared evaluations on Vietnam’s tourism potential, especially golf tourism, and encouraged Korean travel agents and visitors to come to Vietnam.

Representatives from Vietnamese businesses like Vietnam Airlines answered Korean partners’ questions relating to designing tours.

The RoK is the key tourism market of Vietnam. The Vietnam Administration of Tourism has implemented measures to attract Korean travellers to Vietnam, such as exempting visas and opening more direct flights between the two countries.

The RoK has ranked second among countries with the highest number of visitors to Vietnam for the past five years.

Vietnam welcomed 750,000 Korean people last year and nearly 550,000 in just the first eight months of this year alone.

Pharma buy opens path into Myanmar

Hau Giang Pharmaceutical (DHG) will begin its expansion into Myanmar by acquiring a majority stake in ASV Pharma, which partners with a Myanmar firm building drug factories.

Hau Giang Pharma plans to acquire 72.86 per cent of ASV Pharma, which will help the company enter the Myanmar market and increase exports. ASV Pharma currently owns a US$23 million investment project in the country.

According to the Association of Vietnamese Investors in Myanmar, medicines and medical equipment were one of the four largest export items to the country.

A representative from Hau Giang Pharma told the financial information website vietstock.vn that the company was still negotiating with its partner. It would announce the results of market research in the fourth quarter.

The company is pushing to improve the sale of over-the-counter drugs to cover the declining revenue of prescription drugs due to the State's administrative policies.

It also plans to invest more than VND52 billion ($2.4 million) in building warehouses in Ha Noi, Nha Trang and Da Nang.

By the end of August, Hau Giang Pharma had achieved 60 per cent of its VND3.88 trillion ($183 million) revenue target.

It closed yesterday's trading at VND90,500 ($4.3) per share, sliding 1.5 per cent.

Industrial, trade sector unveils whopping $102b growth target

The industry and trade sector in 28 northern cities and provinces will strive to achieve an index of industrial production (IIP) this year of VND2.17 quadrillion (over US$102 billion).

If they achieve their target, it would be a 22.5 per cent year-on-year increase.

The targets were announced at the first conference of representatives from the industry and trade sector from 28 localities in the north, held in the northern Lao Cai Province on Wednesday.

Speaking at the meeting, deputy minister of Industry and Trade Tran Tuan Anh said that the conference was an opportunity for localities to share specific solutions to develop the sector.

Anh said that the provinces should continue to improve administrative procedures and facilitate organisations and businesses in their production.

The cities and provinces including Lao Cai, Ha Giang, Lang Son, Bac Giang, Thai Binh, Ha Noi and Hai Phong set 12 specific solutions to meet the targets, focusing on accelerating the construction of infrastructure projects and industrial zones; enhancing the application of information and technology in resolving administrative procedures; and strengthening the association among provinces.

Last year, the sector saw a relatively high growth rate with an IIP of VND1.77 quadrillion ($83 b illion) , a 16 per cent increase over 2012.

In the first nine months of this year, the IIP was estimated at VND1.42 quadrillion ($66 billion), meeting 70 per cent of the whole year's target and posting a nine per cent year-on-year increase.

The total retail and service turnover in 2013 reached VND883 trillion ($41 billion), 16 per cent higher than in 2012.

The provinces' total export turnover last year increased by 37 per cent to be more than $56 billion.

In the first nine months of the year, the turnover was $45.87 billion, meeting 75 per cent of the whole year's target.

AEC to expand VN footwear sector

Vietnamese footwear exports will enjoy zero tariff once the ASEAN Economic Community (AEC) is established in late 2015, allowing producers to expand their markets and access new materials.

ASEAN represents a substantial footwear market for Viet Nam, as the region spent more than US$1.8 billion on footwear imports last year. The establishment of the AEC in 2015 would offer Viet Nam a host of advantages.

Viet Nam has an abundant qualified and low-cost workforce, giving it an edge over Thailand, Indonesia and Malaysia, General Secretary of the Viet Nam Leather, Footwear and Handbag Association (LEFASO) Phan Thi Thanh Xuan said.

AEC member states will have a better chance to develop new materials, reducing their reliance on imports and increasing the added value of the end products, she said.

Xuan added that the countries are also expected to provide a steady supply of footwear and gain a solid foothold in major markets such as the United States, the European Union and Japan.

However, Xuan pointed out that competition will intensify once zero tariffs are applied and that this trend was inevitable.

At the moment, almost all AEC countries have set up technical barriers to protect their domestic products, she added.

To strengthen the sector, Minister of Industry and Trade Vu Huy Hoang called upon the Viet Nam Textile and Garment Association and LEFASO to devise plans to develop support industries.

According to industry insiders, domestic firms should reinvent themselves by improving the quality of their products and popularising their trademarks.

They are also advised to prepare for the implementation of international agreements on issues of intellectual property, consumer protection, small and medium-sized enterprises, workforce quality and funding.

The relevant bodies will update the business community on the opportunities and challenges ahead once they are fully integrated into the AEC.

In the first eight months of this year, Viet Nam's footwear exports gained a year-on-year increase of 23.1 per cent to reach $6.69 billion. The key export markets for Vietnamese footwear products are the United States, Japan, Netherlands, Germany and Belgium.

Dredger sells for fraction of cost

The Ministry of Transport said on Wednesday it was unfazed by the auction of dredging equipment for one thirteenth of the original cost of VND7.18 billion (US$346,000).

The equipment brought VND562 million ($27,000) at auction in July, after eight years of being in stand-by mode as an asset of the Viet Nam Inland Waterways Administration No 1 (VIWA 1).

However, a valuation by the Ha Noi-based International Valuation and Investment Consultancy JSC. before the auction showed that the dredge was worth only VND449 million ($21,600).

The VIWA 1 received the equipment in September, 2006, in a project to dredge a part of the Lo river running through the northern province of Phu Tho.

After a few months in use, the dredge and associated equipment were kept in storage until sold at auction to Mua Xuan Transport Cooperative JSC.

"The equipment was not used because its operation costs about twice that of other machines," VIWA 1 director Tran Xuan Khoi told Giao Thong Van tai (Transport) newspaper. "The dredging bridge was also not long enough to reach the river bed".

The dredging bridge was only three metres long while river depths ranged from five to 20 metres following years of sand and gravel mining.

The Ministry of Transport blamed the Shipbuilding Science and Technology Institute (SSTI), an establishment under the Viet Nam Shipbuilding Industry Group (VINASHIN), for using outdated river data to design the dredging machine.

The numbers the institute used were from 1995-2002 when the Lo river was only about 1-1.3 metres deep in a dry season.

"The equipment stayed in storage and there were no maintenance funds provided for it. This quickly led to the decline of the equipment," said Khoi.

FDI attraction policy in steel industry should be reconsidered, experts

Experts have said that Vietnam should reconsider Foreign Direct Investment attraction policies in the steel industry after another foreign investor decided to withdraw a US$4.5 billion steel project in the central province of Quang Ngai.

Guang Lian - Dung Quat steel mill project by Japanese Steel Corporation JFE was approved with highest incentives in the province.

The project was licensed in 2006 with the total capital of US$4.5 billion. The plant’s designed capacity was seven million ton steel per year.

The investor has disbursed only US$50 million for the plant. After eight years, it is still a large empty land over 330.6 hectares spotted by some rows of houses for workers.

The project enjoyed highest incentives in land, rent, electricity and water prices as per Vietnam’s law. All costs arisen from sire clearance would be paid by the Quang Ngai Province People’s Committee.

On the other hand, the province has planned to revoke investment certificate of a seaport project in the Dung Quat Economic Zone for construction of a port serving the plant.

Quang Ngai authorities have also proposed relevant agencies to provide the investor with a lot of tax incentives.

However, JFE has officially sent a document to authorized agencies, proposing them to consider stopping the project.

The province People’s Committee is expected to work with JFE to decide the steel mill’s destiny on September 19, said Mr. Vo Tien Dung, deputy head of the Dung Quat Economic Zone Management Board.

“The company can narrow the plant’s scale if they want. In case they still want to withdraw, we might have to revoke the project,” he said.

Earlier, the Indian Tata Group asked for withdrawal from a US$5 billion steel project in Vung Ang Economic Zone in the central province of Ha Tinh.

Professor and Dr. Dang Dinh Dao, former head of the Economics Research and Development Institute, said that Vietnam should reconsider policies of foreign investment attraction in the steel industry.

Authorized agencies should map out a long term policy, which should approve projects producing special steel for mechanical engineering or steel products for exports.

They should not license en mass projects of construction steel and steel rolls and plates any more, he said.

According to another expert in the steel industry, local authorities should reconsider providing highest incentives to lure investors, which is only suitable with the first phase of FDI attraction in the steel industry.

At present, the steel supply has far exceeded demand. FDI attraction policies should aim at exports, he said.

Hau Giang feather-backs receive PGI

The Department of Science and Technology in the Mekong Delta province of Hau Giang has handed over the Certificate of Protected Geographical Indication (PGI) of brand name Hau Giang Feather-Back Fish issued by the Intellectual Property Bureau to the province’s Office of Standards, Metrology and Quality.

Products from feather-back fish of Hau Giang must be produced and processed in the province and meet quality norms. For instance the fish fillets must be pure white and firm.

The feather-back fish is a well-known specialty of Hau Giang Province and considered to be the most delicious in the Mekong Delta. Products from the fish are famous nationwide with many ways to cook such as fish ball soup, salted fish fillets with lemongrass…

Hau Giang Province has over 20 hectares of feather-back farming area with a total output exceeding 750 tons.

 The Certificate of Protected Geographical Indication (PGI) will help feather-back fish producers in both domestic and foreign markets, said chairman of the province People’s Committee Tran Cong Chanh.

FPT 8-monthly revenues up 21 per cent

FPT Group's revenue in the first eight months of this year reached VND21 trillion (US$988 million), increasing by 21 per cent compared to the same period last year and representing 108 per cent of the group's eight-month revenue plan.

Pre-tax revenue reached VND1.59 trillion ($75 million), 0.7 per cent lower than last year. Net profit reached VND1.34 trillion (US$63.3 million), up one per cent.

The group's global strategy continued to be successful. Turnover from foreign market reached VND2 trillion ($95.7 million) in the eight-month period, a year-on-year increase of 28 per cent.

Metro starts programme to popularise VN products

Metro Cash & Carry Viet Nam on Wednesday kicked off a campaign urging Vietnamese to prioritise use of Vietnamese products at all its 19 outlets nation-wide.

The week-long programme is targeted at professional customers like hotels, eateries, and cafes, and offers discounts of up to 45 per cent.

"It is a meaningful movement aimed at raising awareness of Vietnamese people about consuming Vietnamese products and helping domestic businesses develop," Philippe Bacac, the wholesaler's general director, said.

Vietnamese products had improved much in term of design and quality, he said.

Metro said it has relationships with over 1,500 Vietnamese suppliers and offers customers over 25,000 products of which over 90 per cent are sourced in Viet Nam.

YES Centre signs staff deal with BPO company

The HCM City Youth Vocational Training, Career Orientation and Employment Service Centre (YES Centre) signed a co-operation agreement to provide human resources for Mat Bao Business Process Outsourcing (BPO) as the company officially opened on Tuesday.

The BPO model is a development management solution becoming more popular worldwide, with total turnover of US$132-162 billion from 2012-15.

The Philippines and India are major international BPO centres. In the Philippines, there are over 400,000 working in call centres.

The BPO model first appeared in Viet Nam in 2005, but it has yet to be fully developed. In 2007, around 17 per cent of enterprises, especially foreign and telecommunication companies, hired BPO services.

There is still much room for municipal bonds

With the first issue of municipal bonds in 2003, Vietnam’s municipal bond market is still in its infancy, but it is expected to become bustling as many localities are planning to issue bonds this year, said an official.

Speaking to the Daily, Phan Thi Thu Hien, deputy director of the Department of Banking and Financial Institutions under the Ministry of Finance, said that municipal bonds were issued for the first time in 2003. After over ten years, the municipal bond market size has remained small, accounting for only 2.3% of the entire bond market and 0.45% of gross domestic product (GDP), she added.

According to Hien, six provinces and cities – HCMC, Hanoi, Danang, Dong Nai, Bac Ninh and Quang Ninh – have successfully issued bonds worth VND28.78 trillion. Late last month, outstanding loans of the municipal bond market were recorded at nearly VND19.24 trillion.

This year, Hanoi has issued VND2.22 trillion of five-year bonds. However, other localities like HCMC, Danang and Bac Ninh have drawn up bond issuance plans and send them to the Ministry of Finance, with a total bond amount of around VND4.5-5 trillion to be issued in the rest of this year.

Money earned from selling bonds is added to the provincial State budgets and used to invest in projects approved by the People’s Councils and the People’s Committees of localities, Hien told the Daily.

The use of bond capital is supervised annually by the People’s Council, the State Audit and inspection agencies.

Regarding bond payments, according to Hien, until now provinces and cities have paid principal and interest sums to buyers on time, and no case of late payment or insolvency has been reported so far.

The ministry has also formulated a legal system for municipal bond issuance. To create liquidity for the market, the ministry is drafting a new circular to replace Circular 81/2012/TT-BTC with some changes in issuing municipal bonds.

Under the draft circular, provinces and cities have to provide information about each issuance phase. Information has to be made available before and after issuances and during the valid periods of municipal bonds to instill confidence among investors in bonds issued by provinces and cities.

Currently, the method of issuing bonds is regulated in Circular 17/2012/TT-BTC. However, the Government bond market is large while the segment for municipal bonds is small and limited, posing certain difficulties to provinces and cities when issuing bonds as the people prefer the former.

Therefore, the draft circular changes the issuance method to simplify procedures to suit the small scale of localities.

Saudi Aramco joins refinery project

In addition to Thai firm PTT, Saudi Arabia’s petroleum and natural gas company Saudi Aramco will inject capital into the Nhon Hoi refinery and petrochemical complex worth some US$22 billion in Binh Dinh Province.

Man Ngoc Ly, head of the Nhon Hoi Economic Zone Authority, told the Daily on September 11 that PTT and Saudi Aramco would contribute 40% of the required investment each. The project investor expects a Vietnamese partner to hold the remaining interest.

PTT and the government of Binh Dinh Province earlier announced the project’s investment amounted to US$28.7 billion. The investment was then scaled down to US$22 billion, prompting doubt about the feasibility of the project, especially when PTT did not reveal the partner and the financial advisor, though PTT is known as a giant oil firm.

But concerns have been eased after the participation of Saudi Aramco in the big-ticket project was announced.

Ly said besides capital contribution, Saudi Aramco is also in charge of supplying crude oil for the refinery.

On Monday, PTT and Saudi Aramco officially presented the feasibility study for the Nhon Hoi refinery and petrochemical project to the Ministry of Industry and Trade.

According to the pre-feasibility study released last year, the project in Nhon Hoi Economic Zone would have a processing capacity of 660,000 barrels per day, equivalent to 30 million tons of crude oil per year.

However, as mentioned in the feasibility study, the capacity has been revised down to 440,000 barrels per day, or 20 million tons per year. The investor said the downward adjustment aims to make the project more feasible.

PTT does not request any credit guarantee but expects to enjoy the incentives the Government has given to similar oil refining projects in Vietnam such as Dung Quat, Nghi Son and Vung Ro.

According to Ly, the project is now only awaiting final approval from the Prime Minister.

After the feasibility study was presented to the ministry, PTT, Saudi Aramco and leaders of Binh Dinh Province had a meeting with the Prime Minister, who voiced support for the project, Nhon Hoi Economic Zone said on its website.

Vinatex giant buyers unveiled

According to a source from the Vietnam National Textile and Garment Group, two strategic investors just registered to buy up to 120 million shares, tantamount to 24 per cent of the state textile and garment giant.

The source revealed that the two investors are local firms, Vietnam Investment Development Group JSC (VID), a leading industrial zone developer, registered to buy 14 per cent or 70 million shares and Vingroup, a leading property and retail developer, registered to buy a 10 per cent stake, or 50 million shares.

Vinatex’s IPO is planned for September 22 at the Ho Chi Minh Stock Exchange (HoSE).

The Vinatex IPO is one of the most anticipated this month by investors amid a much faster restructuring drive by the government and a resultant flurry of mergers and acquisitions.

Vinatex’s public offering has been delayed a number of times, it had previously planned to hold the issue on July 22, but it was again pushed to this month to ensure the company was fully prepared for the transition.

Ministry to halve 50% PIT for employees, business owners at EZs

The Ministry of Finance has issued a circular allowing for a 50% reduction in personal income tax (PIT) for employees and business owners subject to this tax at economic zones (EZs) from October 20 this year.

Circular 128 clarifies that the PIT cut will be applied to individuals who have signed labor contracts with the management boards and State administering agencies as well as owners of businesses at EZs. Those who have labor contracts with employers outside EZs but have been assigned to work inside those zones will also benefit from this tax reduction.

Individuals or groups of individuals who have fixed addresses at EZs and run businesses in the licensed areas in their business certificates at those zones will be allowed to enjoy the tax incentive.

According to the circular, the taxable incomes applicable to the tax reduction are the wage of employees at EZs, and those of individuals and groups of individuals from business operations among others at EZs.

VietinBank borrows US$50 million from foreign lenders

The Vietnam Bank for Industry and Trade (VietinBank) on September 10 inked a deal to borrow US$50 million from four Taiwan banks led by Cathay United Bank, Vietnamplus reports.

The other lenders are Mega International Commercial Bank, Far East National Bank and Hua Nam Commercial Bank.

The syndicated loan will help improve foreign currency liquidity at VietinBank to meet domestic demand.

VietinBank general director Le Duc Tho said the US$50-million deal will not only strengthen cooperation between the local bank and the four lenders but also support development of VietinBank and Vietnam’s financial markets as a whole.

Cathay United Bank is wholly owned by Taiwan’s leading financial group Cathay Financial Holding. In Vietnam, Cathay United Bank has offices in Hanoi and HCMC to offer comprehensive financial services to Taiwanese firms as well as customers in Vietnam.

State-owned power generation firm to go public

Power Generation Corporation 3 (Genco 3), the biggest by capacity of the three Gencos under Electricity of Vietnam, is going to be the first among them to go public as part of the government’s plan to create a competitive power generation market.

Genco 3 shares are not considered attractive. According to EVN’s analysis of the Gencos in preparing for equitisation, in the 2014-2019 period they are projected to have negative cash flow.

The firms have trouble raising enough reciprocal capital to carry out already started projects. Specifically, Genco 1 needs VND24.443 trillion ($1.16 billion), Genco 2 VND5.284 trillion ($250.4 million) and Genco 3 VND39.652 trillion ($1.88 billion).

“The Gencos will have to figure out a solution to this problem very soon,” said an EVN official, who added that “After equitisation, EVN cannot guarantee 100 per cent of the loans the Gencos take out the way it did back when the Gencos were still limited subsidiaries of EVN.”

Genco 3 has a capacity of 4,445 megawatts per year. In 2013 the firm earned consolidated net profit of VND238 billion ($13.4 million) and consolidated revenue of VND19.056 trillion ($903 million).

The Vietnamese government has been preparing for the creation of a competitive power generation market since 2005. In early 2014 Deputy Prime Minister Hoang Trung Hai asked EVN to pick one Genco with relatively stable operations to equitise within the 2014-2015 period.

PetroVietnam Power Corporation (PV Power) and Vinacomin Power Holding Corporation Limited have also been asked to develop their own equitisation plans.

Airport service firm’s IPO only a week away

Southern Airport Services Company (Sasco), a major seller of goods and services in Tan Son Nhat airport, plans to offer 31,097,900 shares, or a 23.65 per cent stake, at its IPO at an initial price of VND10,000(0.47 US cent)/share.

The public offering is planned for September 18, reported Doan Thi Mai Huong, Sasco’s deputy director, at an event on September 5 to announce the company’s move.

Sasco is also selling 31,034,000 shares, or 23.6 per cent, for an estimated VND310 billion ($14.7 million) to three strategic investors which are all related to Imex Pan Pacific Group, which owns Trang Tien Plaza in Hanoi.

Specifically, Sasco is selling 21 million shares, equal to a 16 per cent stake, to Imex Pan Pacific (IPP), 6.57 million shares (5 per cent) to Duy Anh Fashion and Cosmetics (DAFC) and 3.4 million shares (2.6 per cent) to Au Chau Fashion and Cosmetics (ACFC).

After the sale, Sasco will sell the three firms’ products – cosmetics, garments and consumer goods – at Tan Son Nhat airport.

At the event, Sasco unveiled its plan to expand to outside the airport to sell mostly souvenirs and local specialty food and goods. The firm said it hoped to benefit from its strategic investors’ retail experience.

The reason the company is expanding, according to Sasco, is that while duty free retailing at Tan Son Nhat airport is Sasco’s main source of revenue, Sasco is facing fierce competition in this field from other firms, whose combined commercial area in the airport accounts for around 50 per cent.

Moreover, Tan Son Nhat airport currently services 20 million arrivals per year. In 2015, when the airport expands its two passenger terminals, it will reach its maximum capacity of 25 million arrivals per year. This estimate prompted Sasco to seek a new growth strategy.

Sasco earned VND83 billion ($3.9 million) in pretax profits, up 72.92 per cent on-year, and revenue of VND1.060 trillion ($50.23 million) in the first half of this year. It plans to pay dividends of at least VND900 (4.2 US cent), VND1,100 (5.6 US cent) and VND1,200 (5.8 US cent) each year in the 2014-2016 period and targets VND2.403 trillion ($113.9 million) in revenue and VND185.95 billion ($8.8 million) in net profit in 2016.

CIRDAP examines regional rural development in Hanoi

Officials from the Centre on Integrated Rural Development for Asia and the Pacific (CIRDAP) Technical Committee gathered in Hanoi on September 15 to discuss issues related to agricultural and rural development.

Delegates to the 29th meeting talked about the impact of climate change on plantation and food security, an increase in income for farmers and poverty reduction, women’s involvement in agriculture, contribution of small-and medium-sized enterprises to poverty reduction, and post-harvest losses.

At the opening ceremony, Vietnamese Deputy Minister of Agriculture and Rural Development Le Quoc Doanh expressed his hope that 15 CIRDAP member countries and international organisations will join hands to help CIRDAP develop into a dynamic international organisation.

He shared Vietnam’s experience in socio-economic development in recent years, attributing its achievements to economic reform, turning the country from one of the poorest nations into a middle income earner, with an average per capita income increasing from just US$100 in 1986 to nearly US$2,000 in 2013.

Currently, Vietnam is one of the world’s main exporters of rice, coffee and some other agricultural products, significantly contributing to agricultural and rural development and ensuring food security.

Cecep Effendi, CIRDAP Director General, said the gathering creates a forum for member countries to share experience in policy development and scientific technological application for the cause of agricultural and rural development in the Asia-Pacific region.

CIRDAP was established in 1979 on an initiative of the United Nations Food and Agriculture Organisation (FAO). Vietnam was one of the first six members of CIRDAP.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR