Standard Chartered picks up stake in leading agro firm

Standard Chartered Private Equity’s investment into An Giang Plant Protection Company is expected to facilitate robust growth of the firm.

Asset management firm VinaCapital announced late last month that its Vietnam Opportunity Fund (VOF) had reached a deal to sell its entire stake in An Giang Plant Protection Company to Standard Chartered Private Equity – a subsidiary of Standard Chartered Bank.

Accordingly, VOF will sell its 23.6 per cent stake in An Giang Plant Protection for $63.1 million in cash, or $4.10 per share, representing a 23.7 per cent internal rate of return over a period of five years.

Initially, VOF invested in An Giang Plant Protection as a private equity investment and has seen it become a public company with over 100 shareholders. The replacement of VOF by Standard Chartered Private Equity is expected to create positive change in An Giang Plant Protection, a leading Vietnamese agriculture company.

“I believe Standard Chartered Private Equity is well aligned with An Giang's mission and vision, so after this transaction there is a very strong alignment between the board and the shareholders in terms of how the business will grow and what the priorities are over the coming years,” said Chris Freund, partner of Vietnam-focused fund management firm Mekong Capital, which is also investing into An Giang through its Vietnam Azalea Fund.

“Standard Chartered Private Equity’s global presence and its experience as an investor in agricultural companies in other countries will be useful for An Giang,” Freund continued.

Founded in 1993, An Giang Plant Protection Joint Stock Company is the leading distributor and a manufacturer of crop protection chemicals (CPC) in Vietnam.

With a nationwide distribution network of 25 branches and nearly 500 large-sized wholesale agents, the company controls 30 per cent of CPC market share. Since 2010, An Giang has expanded into the rice processing and trading business, with a goal of becoming the leading vertically-integrated agricultural service provider in Vietnam by 2015.

As a result of this strategy, An Giang had five rice factories in operation by the end of 2013, each with a maximum designed processing capacity of 200,000 tonnes of paddy rice per year. In the next four years, the domestic leading agricultural company plans to develop 12 rice processing factories serving the total farming area of 316,000 hectares, equivalent to 8.1 per cent of the Mekong Delta’s farming area.

Freund said a customer focused development strategy was key driver in the strong growth of An Giang over the past year. In addition, AGPPS is a unique company in Vietnam in terms of the power of its mission and the degree to which its team members and passionate about and aligned around the company's mission. This is a reflection of the excellent leadership of the Chairman, Huynh Van Thon.

According to VinaCapital, in 2013 An Giang reported revenue of $354 million, an increase of over 17 per cent on-year. During the same period, the company’s earnings grew over 18.8 per cent, reaching $24 million.

Revenue for the first half of 2014 was approximately $200 million, roughly half of the company’s full year target of $399 million, while first half 2014 net income was $12 million. Given the success of An Giang, stakeholders see this company as a quality investment.

“This significant divestment highlights the quality of VOF's overall investment portfolio,” said Andy Ho, VinaCapital’s chief investment officer.

The price that VOF sold to Standard Chartered Private Equity, at $4.10 per share, also brings a bright outlook for other shareholders at An Giang.

“The price of this transaction represents a 4.2x return for Vietnam Azalea Fund and a 31.1 per cent investment return ratio in USD. While this return is attractive, we still believe there is a lot of upside in the company and there is a role for us to play, which will also lead to significant growth opportunities,” said Freund.

Since becoming the shareholder of An Giang, Mekong Capital has been working closely with the company in some areas such as the management reporting systems, evaluating ERP software, building the domestic rice business, and creating alignment between the various stakeholders to empower the company's mission of transforming agriculture, and the lives of farmers in Vietnam.

“We would like to continue as a shareholder in the next phase of An Giang’s expansion, as it becomes more of a total solutions provider to farmers, and also continues to expand its vertically integrated rice business,” he added.

Vingroup buys supermarket chain from OceanMart

Vingroup Joint Stock Company announced Friday that it has bought a 70 percent stake in the Ocean Retail company and will officially change the name of its supermarket chain from OceanMart to VinMart.

As a result of the move, Vingroup now owns 13 commercial centers and supermarkets previously known as OceanMart.

Le Khac Hiep, deputy chairman of Vingroup, said his firm will build around 40 more supermarkets across Vietnam in the future, each covering an area of 3,000 to 15,000 square meters.

In addition, Vingroup will also establish its own chain of convenience stores named VinMart, each of which will cover 150 – 300 square meters.

It is expected that VinMart will have around 100 supermarkets and 1,000 convenience stores across the nation by 2017.

The retail market in Vietnam has great potential for development, and will become a promising market for investors in the future, said Hiep.

Vingroup, formerly known as Technocom, was first established in 1993 in Ukraine to start a food production business before expanding to the fields of real estate and tourism.

Now, it is one of the leaders in the tourism industry, with a series of international five-star hotels, resorts, beach villas, entertainment parks, and golf courses in Vietnam.

Petrochemical projects put Vietnam at risk

Vietnam has expanded the plan to develop the petroleum industry in the country by 2020, but some say that the increasing number of refineries comes with significant risks.

Originally, the development plan through 2020 included three refinery projects: Dung Quat Refinery in Quang Ngai, Nghi Son in Thanh Hoa and Long Son in Ba Ria - Vung Tau. Since then, however, two more, Vong Ro Refinery in Phu Yen) and Nam Van Phong Refinery in Khanh Hoa, have been added, and another is awaiting the approval of the government.

Although so many oil refineries may be good for the petroleum industry, many people are concerned about the environmental effects according to Nguyen Dong Hai, former leader of Vietnam National Oil and Gas Group (PVN),

Hai said Japan was the first country in East Asia to build refineries, but they have stopped, preferring to import refined oil. "A number of other countries are also aware of the negative effects of refineries, especially to the environment. They have policies to reduce or limit domestic oil refining projects and seek ways to move them abroad," he said.

According to Hai, there is also an economic risk. The country likely to get the most benefit from the development of Vietnam's petroleum industry would be China, which is already the top importer of coal from Vietnam. In Hai's opinion, in the end it may be Vietnam which incurs the negative effects of refining coal while giving China most of the benefit.

"Cooperation with other countries is essential for a prosperous economy. However, we need to choose wisely which role we play with our partners, and have clear management strategies so that we benefit from cooperation. This is necessary to have sustainable development," Hai noted.

Lotte Centre Hanoi has a slump after its opening

Right after the opening of Lotte Centre Hanoi, the price of high-end products sold here dropped to 50% but the sales did not go up.

Lotte Centre Hanoi was located on Lieu Giai Street, with the total investment of $400 million for the following: hotel, service apartments, offices, commercial centers. The building in the shape of Vietnamese traditional dress was expected to be in service of a large number of customers.

The building opened on Sep. 2, National Independent Day, after 5 years of construction and was a huge success. However, soon after that, Lotte Centre Hanoi had a great slump regardless of the great sales.

On Sep. 25, one of Lotte Centre Hanoi's elevator freefell from lever 63 and then stuck in the way down with seven people inside.

One of the victim who stuck in the elevator said: "When seven of us was rescued, the representative of the building, who is a foreigner, came. Even though there's a translator, this person only said sorry."

Petrolimex earns US$67.3 million profit in nine months

Vietnam’s largest fuel wholesaler, Vietnam National Petroleum Group (Petrolimex), announced today that it earns a profit of VND1.4 trillion (US$67.3 million) within the first nine months this year.

The total turnover of the state-run corporation during the nine months reached VND155 trillion ($7.45 billion), up six percent against the same period last year, according to Petrolimex chairman Bui Ngoc Bao.

However, the CEO added that the majority of the profit comes from other trading fields as petro-chemistry, insurance, water transport, and construction; while petroleum contributes only forty percent of the total amount.

Since the start of this year, Petrolimex has strictly followed the rules of the government in adjusting the prices of fuel when there is change in the prices in the world.

Bao also suggested the Ministry of Finance to lower petrol import tax because of the competition of foreign firms that sell fuel at sea for fishing ships outside the maritime border of Vietnam.

Last year, Petrolimex’s total revenues topped VND196.33 trillion (US$9.26 billion), dropping slightly by 2.25 percent from 2012.

However, its pretax profits surged 97 percent from VND978.17 billion in 2012 to VND1.93 trillion, or $91.04 million, in 2013.

Profits from fuel trading activity alone accounted for VND768 billion ($37 million) of the sum.

Can Tho calls for Japanese investment in key projects

At a meeting with Japanese business representatives on October 4, Can Tho provincial authorities called for investment in 12 key projects and committed to providing incentives for them in terms of preferential loans and assistance with land clearance.

Nguyen Khanh Tung, Director of the Investment, Trade and Tourism Promotion Centre (ITTC) highlighted the 12 key projects, which are in the hi-tech, tourism, logistics, industrial zones’ infrastructure and real estate sectors.

For his part, Vice President of the Friendship Exchange Council (FEC) Yoshihiko Nakagaki said the visit to Can Tho aims to seek investment opportunities in energy, food industry, logistics, industrial zones’ infrastructure, housing, hi-tech solutions and engineering.

Japanese businesses also want to know more about the city’s incentives, he said, adding that they hope Can Tho will facilitate and support them in dealing with investment procedures.

On the same day, the Japanese delegation visited local rice and seafood production plants in Thot Not district and Tra Noc IZ.

According to the ITTC, Can Tho mainly exports rice, seafood, garment, leather products, handicrafts to Japan and imports chemicals, materials, seafood medicine and other input materials.

Currently, five Japanese businesses are operating in Can Tho.

Workshop seeks ways to increase business competitiveness

A workshop was held in the central city of Danang on October 3, offering a chance for authorities, economists and businesses in the city and other central localities to discuss ways to increase competitiveness in the country’s economic integration and restructuring process.

Nguyen Dinh Thien, head of the Institute of Economics, said that to help enterprises find the right way for development and accelerate economic restructuring, a high-level institutionalised market economic zone should be set up in Ho Chi Minh City while special economic zones should be established in the three strategic areas which are northern Quang Ninh province’s Ha Long-Van Don, southern Kien Giang province’s Phu Quoc Island and the southern coastal province of Ba Ria-Vung Tau.

He also stressed the need to swiftly revise the State Budget Law and relevant laws in order to make funds allocated to localities reasonably.

Vo Duy Khuong, Vice Chairman of Danang People’s Committee said the city now has 15,000 businesses, of which 99% are small and medium-sized.

So far this year, 1,200 enterprises have had to dissolve or temporarily stop operation due to the gloomy market’s impact and lack of production capital.

He reported that the city has carried out practical measures to support local businesses, adding that in the time to come, Danang will focus on developing more big businesses, with priority given to the fields of tourism, services and high technology.

According to a pending project on enterprise development by 2020, the city sets targets of raising the number of businesses by 10% per year, and creating jobs for additional 31,000 people annually.

Military bank cited strongest in Vietnam

The Vietnam Military Joint Stock commercial Bank (MB) has been named as the Strongest Bank in Vietnam 2014 by Asian Banker magazine.

The bank met all six evaluation criteria of the magazine including scale of the banks’ assets relative to domestic GDP, balance sheet growth of net loans and deposits, risk management, profitability and its sustainability, strength and credibility of loans disbursed, and liquidity of assets to meet negative events requiring cash outflow.

The award is recognition of the regional and international financial community to MB’s prestige, stature, financial strength and high growth rate.

Over past years, thanks to its sustainable growth and efficient business operation, MB also won a number of domestic and foreign prizes including 2013 Gold National Quality award of Vietnamese Government, Best Domestic Bank in Vietnam 2013-2014 of Asian Money, and “World Class” 2014 of the Asia Pacific Quality Organisation (APQO).

Vietnam's economic achievements highlighted at WTO Public Forum

In a keynote address to the 2014 WTO Public Forum, Ambassador Nguyen Trung Thanh, Vietnam’s permanent representative to the United Nations, encapsulated developments in the country’s movement to a full market economy.

“As a consequence of innovation and new technologies, the Southeast Asian nation is experiencing solid economic growth and job creation and is rapidly integrating deeper into the global economy,” Thanh said.

New tools and technologies are changing the traditional way of doing business and are leading to the development of a whole new digitalized economy, with expanded investment opportunities.

Since Vietnam’s WTO admission 15 years ago, the country’s total trade turnover has burgeoned more than 10-fold at a relatively fast paced average rate of 25% per year. The year 2012 marked a milestone with the recording of the first trade surplus in the past two decades, Thanh said.

He reported in the first 8 months of this year, Vietnam’s trade volume hit US$191,400 billion, up 12.5% on-year. Of the figure, exports contributed a record US$97,230 billion, while imports were also at an all time high of US$94,160 billion.

Vietnam has entered its third year of stabilized macro-economy with a low inflation rate, growing trade,strong FDI inflow and stable foreign exchange rate.

However, rapid economic growth in previous years was impeded by the cautious restructuring of the banking sector and State-owned enterprises (SoEs).

Asides this, economic growth in an open market mechanism is imposing a burden on natural resources, sustainable environmental development while widening the gap between rich and poor, and between rural and urban areas.

However, Vietnam is facing the risk of middle-income trap and still lacks capable strategic policy makers, economists and skilled workers, Thanh noted.

The Vietnamese Ambassador hailed the remarkable contributions of foreign investors, including those from the EU member countries, to Vietnam – one of the most dynamic nations in Asia with abundant labour force and strong purchasing power.

The Government of Vietnam is committed to boosting economic reform, ensuring politic stability, and creating a social consensus on economic policies.

Thanh described the EU as one of the most important trade partners and investors of Vietnam. Bilateral trade ties have enjoyed fine development over the past decade, noting that the textile cooperation agreement signed with the European Community in 1992 was one of the country’s first trade pact with a European partner.

He also mentioned some key agreements and incentives provided by the EU, such as the most favoured nation (MFN) treatment and the Generalised System of Preferences (GSP), aimed at creating favourable conditions for developing countries to enter the EU market.

Notably, in October 2012, the EU launched reformed GSP programme, providing more preferential tariffs for several Vietnamese key exports, including footwear.

According to the General Statistics Office (GSO), Vietnam’s export volume to the EU market saw an increase of 4.2% in 2013. The EU ranked sixth among largest investors in Vietnam last year, with 71 newly-licensed projects.

In an attempt to lift bilateral ties to a higher level, the two sides officially signed the Partnership and Cooperation Agreement (PCA) in September 2012 after five-year negotiations. They are also conducting official negotiations for the early signing of the EU-Vietnam Free Trade Agreement (EVFTA) by the end of 2014.

Ambassador Thanh proposed Vietnam expand bilateral trade negotiations, scrutinize overall plans on the industrial sector, and priotize developing information and technology (IT) and support industries. The country should also support businesses in market research and loan access to increase added value and develop high-quality human resource.

Entitled “Why trade matters to everyone”, the WTO Public Forum 2014 had 68 sessions with the participation of many leading economists, senior officials, and representatives from non-governmental organizations and other international organisations.

WTO Director General Roberto Azevedo affirmed trade has made huge contributions to global economic growth. Trade-related issues, bad or good, involve all people and affect the quality of day-to-day lives of citizens around the globe.

ASEAN-made car imports to Vietnam rise sharply over tax cut

Members of the Vietnam Automobile Manufacturer Association (VAMA) have enjoyed steady sales growth in the 17-month period ending in August, but this is not good news for local car assemblers.

Sales of domestically assembled cars in the 17 months only rose 27%, while imported cars posted a 66% growth in the same period, according to the VAMA.

Such a huge disparity was also recorded in separate months, the association added.

In July, the growth of imported cars was 62%, compared to 24% for those assembled in Vietnam. The figures were 73% compared to 23% in May.

Cars manufactured in ASEAN countries account for a considerable amount of the vehicles sold by VAMA businesses, as they are subject to a 50% import duty, instead of the usual 60%.

ASEAN is a ten-member bloc which includes such Southeast Asian countries as Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Cambodia, Laos, Myanmar, and Vietnam.

Ford Vietnam sold 1,287 cars in August, 394 of which were imported from Thailand, according to VAMA. Similarly, 423 out of the 3,615 units Toyota Vietnam sold in the same month were manufactured in Thailand.

The VAMA businesses only sell made-in-Thailand pick-up trucks, as the vehicles are only subject to a 5% import duty.

Steel corp signs agreement with Austrian partners

Vietnam Steel Corporation (VNSTEEL) has entered into a long-term comprehensive cooperation agreement with Austrian partner – RHI Refractories Asia Pacific Pte. Ltd.

Pursuant to the agreement, RHI will supply advanced fireproof material and technological solutions for VNSTEEL’s steel plants with preferential prices and after-sales services.

The agreement aims to help VNSTEEL produce steel stably and effectively through reducing expenses, raising productivity, and improving the quality of products.

For its part, VNSTEEL agrees to use RHI fireproof material and technological solutions and encourage its members to utilise them.

VNSTEEL Director General Nghiem Xuan Da said the agreement helps promote cooperation between RHI and VNSTEEL via expanding the application of advanced material and technological solutions to stabilize production.

VNSTEEL and RHI have cooperated with each other for 10 years. Since 2004, RHI has supplied advanced fireproof materials for VNSTEEL plants, such as Vicasa and Thu Duc. In 2005, it provided all fireproof materials for Phu My Steel Plant (now Southern Steel Corporation – SSC), which has so far produced more than 3.418 million tonnes of steel ingots.

RHI Refractories Asia Pacific PTE. LTD Director General Michael Williams John expressed his hope that RHI will have more partners in Vietnam, helping local businesses to operate effectively.

Vietnam sees big jump in beer production

Vietnam has seen a large increase in beer production over the past decade, and among the 25 biggest beer producers worldwide in 2013.

According to a report named Global Beer Production by Country in 2013, conducted by Japanese firm Kirin Brewery, in 2003 Vietnam produced only 1.05 billion litres of beer, which placed it 27th in the world. However, the figure almost tripled to VND3.13 billion litres in 2013, ranking the 13th.

The report indicated that China produced 4.9％ more beer in 2013 than in 2012, and has remained the world’s largest beer producer for 12 consecutive years.

The other countries in the top 10 biggest beer producers in 2013 include the US, Brazil, Germany, Russia, Mexico, Japan, the UK, Poland and Spain. However, production in these countries is not on the rise.

In Asia, the volume of beer production in 2013 jumped 3.9％ from its previous year and has remained the largest beer-producing region in the world for five years in a row.

Vietnamese people spend around USD3 billion on beer annually, the most in Southeast Asia, and third in Asia, just behind China and Japan.

Over the past 10 years, beer consumption in Vietnam has increased by 200%. In 2012, Vietnamese people consumed 2.8 biillion litres of beer, and the figure climbed to over 3 billion litres in 2013. On average, a Vietnamese person drinks 32 litres of beer a year.

According to Nguyen Huy Quang, head of legal department of the Ministry of Health, an estimated 90% of Vietnamese men drink alcohol.

New Zealand to support Can Tho in agriculture innovation

Can Tho wants to strengthen agricultural cooperation with New Zealand, said Chairman of the city People’s Committee Le Hung Dung at a reception for Ambassador Haike Manning on October 3.

During the meeting, the two sides shared experience in rice production, ornamental plant cultivation, and agricultural processing and preservation of agricultural and dairy products.

Ambassador Manning said although New Zealand is a small country with 4.5 million people, it has a developed agriculture and is able to supply food for 40 million people.

The country’s key exports include agricultural products, functional food, Manuca honey and milk.

New Zealand wants to boost cooperation with the Mekong Delta in general and Can Tho in particular to develop a high-quality agriculture, reduce costs and make farm produce more competitive.

For his part, Dung pledged to support New Zealand’s investors in Can Tho by reducing tax, supporting legal procedures, and completing infrastructure.

He urged the ambassador to introduce to Can Tho a New Zealand’s province which has similar economic and natural conditions to be twinned.

Vietnam exported around US$3.5 million of goods to New Zealand last year and US$2.1 million in the first half of this year.

Local businesses seek way to win on home turf

Participants at an October 3 seminar on retails and investment policies raised their concern over the domination of foreign retailers who, thanks to their advantages in capital and technology, may defeat local ones.

Dr. Dinh Thi My Loan, Chairwoman of the Vietnam Retailers Association, said the modern retail sector is experiencing fierce competition between local businesses and foreign rivals. At present, no foreign retailers care about rural areas and traditional markets as these marketplaces are unlikely to generate huge benefit.

Loan denied recent rumours that the local retail market is being cornered, affirming that domestic businesses are sharpening their competitive edge and proving effective operation.

She revealed that modern retail distribution accounted for only 25% of total market share, while traditional retail market is developing well.

According to the Ministry of Industry and Trade (MoIT)’s statistics, by the end of 2013, Vietnam has 8,546 markets of different types. Of the figure, around 1 million are in small size, mostly owned by households. The country has approximately 724 supermarkets and 132 shopping malls.

Regarding the development trend of modern retail channel, Pham Dinh Doan, Chairman of Phu Thai Group, analyzed that the coming signing of free trade agreement (FTA) and the Trans-Pacific Partnership (TPP) agreement will have more open market commitments and offer more opportunities for local retailers.

Apart from building technical barriers following WTO rules, Doan suggested that local firms should enter joint ventures with foreign partners and promote experience sharing in management and trademark development.

Nguyen Anh Duc, Director of Saigon Co.op supermarket chain, stressed that after opening up market in line with international commitments, consumers have been provided with multi choices. Foreign investment has helped lifted Vietnam’s retail market to a higher level, he said.

Local retailers should strengthen linkage, boost technology transfer and increase competitiveness to hold a firm foothold on their home market, Duc recommended.

Tran Nguyen Nam, an MoIT official, said in the future many foreign investors will get involved in the Vietnamese retail market, so domestic businesses should find way to gain success.

Dr. Loan, once again, affirmed that it is unnecessary to provide subsidy as local firms have become stronger. The core matter is how to ensure transparency in foreign attraction policies, she noted.

Vietnam-Brazil trade turnover exceeds US$2 billion

The trade turnover between Vietnam and Brazil was estimated at US$2.005 billion in the first eight months of this year.

Of this figure, Vietnam’s exports to Brazil reached US$909.8 million, up 31.6% compared to the same period last year, while its imports from the South American country stayed at US$1.095 million, up 42.9%.

Among Vietnam’s export commodities to Brazil which saw high growth rate included fibres (up 104%), telephone and components (up 132%), bags, suitcases, hats, and umbrellas (up 36.4%), garment and textile (up 36.3%), vehicles (up 29.6%), and aqua products (up 20.9%).

Meanwhile, equipment and spare parts, computer and other electronic products also experienced a sharp decrease compared to a year earlier.

Brazil is a big importer of Vietnam’s raw materials, with key import items comprising corn seeds, animal feed, wood and wooden products, textile materials, leather and footwear.

Two-way trade turnover between the two countries is expected to exceed US$3 billion in 2014.

Local firms in need of support

The State should formulate and implement policies that will solve domestic enterprises'current difficulties in production and business to enable them to develop next year, experts said.

The recommendation was made at a seminar on The Development of Viet Nam's Enterprises and The Socio-Economic Development Plan in 2015, held in HCM City on Thursday by the Viet Nam Chamber and Commerce and Industry (VCCI).

At the seminar, the experts noted that the national economic situation and the production and business of domestic enterprises had shown more improvement so far this year compared with previous years. But they urged the Government and the National Assembly to provide more support for a number of sectors to ensure the enterprises' development in the future.

The Hai quan online newspaper quoted Nguyen Ngoc Bao, member of the National Assembly's Economic Committee, as saying the nation has achieved its economic targets though difficulties in developing the economy remain, including macro-economic stability and control over inflation.

Meanwhile, numerous difficulties have hounded domestic enterprises, noted Bao. He cited figures from the Ministry of Planning and Investment showing that 44,509 enterprises have either suspended or shut down operations in the first eight months of this year, and this represented a 12.9-per cent year-on-year increase.

Figures from the ministry also showed Viet Nam had 47,450 newly-established enterprises in the first eight months of this year, representing a 9.5-per cent year-on-year decline. Also, the country's inventory of goods for the first eight months of the year surged by 13.4 per cent year-on-year while the industrial production index in some key industrial regions increased slowly.

Bao urged the State to craft policies that would solve these difficulties and enable domestic enterprises to take advantage of numerous free trade agreements between Viet Nam and its partners by developing production, attracting investments and increasing exports next year.

The National Assembly should also promote the setting up of legal systems for State and economic management to create a favourable business environment for attracting investment for production and business, Bao said. These should include laws on the management and use of state capital and assets of enterprises and on trading real estate, as well as amended laws on enterprise, investment and housing.

The chinhphu.vn quoted Pham Thi Thu Hang, VCCI general secretary as saying that domestic enterprises were facing a reduction in scale, with medium and large enterprises on the decline.

Viet Nam has five million small and medium enterprises (SMEs), about 1,000 State-owned enterprises in the process of equitisation and 1,500 foreign direct investment enterprises. The number of medium and large enterprises has accounted for four per cent of the total number of enterprises in Viet Nam.

The nation lacked leading, large and medium enterprises that make use of new technology and new foreign markets to become partners of multinational companies and join the global value chain, Hang said. The State should also support SMEs to develop into medium- and large enterprises.

The VCCI has also proposed that the National Assembly draft a law on small and medium enterprises to create favourable conditions for the sustainable development of SMEs and their future conversion into medium and large enterprises.

The State should also craft policies that reduce the cost of entering the market for SMEs and provide reasonable financial products for them, Hang said.

Doan Thi Quyen of the VCCI Enterprise Development Research Institute said domestic enterprises should undergo a thorough restructuring to improve their ability in production and business, and should have medium- and long term-development strategies, control the cost of production and business and improve their abilities in risk and corporate management.

Firms lose stock market listing fears

A number of public companies have recently come to Viet Nam's stock exchanges to raise capital. A while back, a number of them decided to delist shares.

Last September, the Ha Noi Stock Exchange welcomed four new enterprises: the multi-industry CEO Group (CEO), Tri Viet Management Investment (TVC), Nam Dinh Foodstuff and Agricultural Products Export (NDF) and Petrolimex Installation No3 (PEN).

Thong Nhat Production and Investment (GTN) also debuted on the HCM City Stock Exchange yesterday, with the prices of its shares jumping by 20 per cent.

"Listing our shares helps our operations become transparent and assists us in raising capital and developing relations with other companies," Pham Thanh Tung, Tri Viet chairman, told the Dau tu chung khoan (Securities Investment) publication.

Following the listing of its shares, Tri Viet will improve its services for its clients, which are public companies, he said.

According to other company directors, this is the right time to offer shares to the public, as the stock market is reviving while bank funding remains hard to get.

Apart from fund raising, the increase in share value also encourages them. Companies that have listed recently recorded impressive growth, such as CEO, whose share prices increased by around 50 per cent in just four sessions. Notably, NDF shares soared by more than 100 per cent since its first trading day last September 12.

A hoard of companies are expected to list in the fourth quarter, including mineral companies Bac A, Gia Lai and Visaco, electric cable companies Viet Thai and Cadivi, as well as Thien Viet Securities, Southern Fertiliser, Quang Binh Import and Export and Van Dien Fused Magnesium Phosphate.

Meanwhile, some investors have expressed doubts that manipulation was behind the recent price increases.

The Ha Noi Stock Exchange expects listed companies to take the initiative to make themselves transparent. Transparency has for long been seen as the primary element to enhance corporate value and protect investors.

The stock exchange said in a conference yesterday that more transparency meant less manipulation. "A higher degree of publicity makes manipulators cringe, as the market response could be extremely harsh," a stock market official said.

Binh Duong attracts $1.4b in FDI during first nine months

This southern province lured 212 foreign direct investment (FDI) projects worth more than US$1.4 billion in the first nine months of 2014, according to the local planning and investment department.

Department officials said the amount of capital represented a 26 per cent year-on-year increase and was 40 per cent higher than the quota the province had set for 2014.

Binh Duong now ranks third nationwide in attracting FDI in the first nine months, after the northern province of Bac Ninh and HCM City. The province has so far attracted 2,344 FDI projects worth $20.2 billion and ranks fourth among localities with FDI capital exceeding $20 billion.

HCM City lured the most capital with $35.9 billion, followed by Ba Ria-Vung Tau Province with $26.6 billion and Ha Noi with $23.3 billion.

Foreign firms receive investment licences in Long An

Long An Province granted investment certificates to 74 foreign-invested companies with total registered capital of US$427.5 million in the first nine months of the year, according to provincial authorities.

This was 1.5 times the amount of capital spent in the same period last year, as well as a 94 per cent increase in the number of projects.

Vietnam Airlines promotion to mark website anniversary

Vietnam Airlines is offering a 10 per cent discount on domestic and international fares for passengers who book tickets online from October 8-10 to mark the sixth anniversary of its website.

The first 300 customers who buy tickets with Vietcombank cards will get VND1 million cash back for payments of more than VND5 million (US$235). Those using HSBC Vietnam cards will get reward points.

Members of the carrier's Golden Lotus programme booking tickets in October for departures in November or December will receive 50 per cent bonus miles.

Cashew nut prices expected to rise in 2015

The Vietnam Cashew Association (Vinacas) predicted that the price of raw cashews would rise in 2015 due to growing demand, both for export and processing purposes.

Vinacas urged domestic cashew businesses to establish a brand reputation by ensuring quality control and sticking to delivery schedules, while telling producers to improve nut quality by applying sound cultivation techniques.

During the first eight months of 2014, the export volume of processed cashews reached 198,743 tonnes worth US$1.29 billion. This represented an increase of 20.2 per cent in volume and 21.5 percent in value compared to the same period last year.

Viet Nam has 338 cashew processors who export their products to more than 80 countries and territories worldwide. The US, China and the Netherlands are Viet Nam's biggest cashew importers. In 2013, cashew exports brought home $1.8 billion.

New payment service launched

Sai Gon-Thuong Tin Commercial Bank (Sacombank) and MPOS Vietnam Technology Joint Stock Company (mPOS.vn) say the newly introduced mobile points of sale (MPOS) service can match various devices such as smartphones and tablets connected to the Internet and 3G services at fees much lower than normal points of sale (POS).

In addition, the service does not require a minimum revenue level for users. For traditional POS, users typically have to ensure minimum transaction revenues a month, making them suitable only for medium and high-revenue businesses.

MasterCard, which introduced the MPOS service, has also announced a co-operation programme with mPOS.vn and Sacombank to develop a strong mPOS.vn card payment network. They will also provide payment training to customers .

HCM City credit grows 6 per cent

HCM City achieved a 6.05 per cent credit growth worth VND1,010 trillion (US$47.4 billion) from January to September 2014, the local government announced on its website on Thursday.

Outstanding loans in Vietnamese dong accounted for 83 per cent or VND839 trillion ($39.39 billion) of the total number of loans, while foreign currencies made up the remaining 17 per cent or $8 billion. Short-term loans made up 51 per cent of the portfolio.

Loans in priority sectors, including rural and agricultural development, exports, small and medium enterprises, auxiliary industries and high-technology applied enterprises, totalled VND136.24 trillion ($6.4 billion), a 7.9-per cent increase over that of the end of 2013.

The city's total deposits increased by 4.71 per cent in the first nine months to reach VND1,226 trillion ($57.55 billion). Of these, deposits in dong made up 84.7 per cent.

By end-July, the city's bad debt was estimated to be worth VND59 trillion ($2.76 billion), making up 5.93 per cent of total outstanding loans, or a 1.24-per cent increase over that of last December.

Nguyen Van Binh, the State Bank of Viet Nam (SBV) governor, told the National Assembly Standing Committee last week that bad debts nationwide amounted to eight per cent of total outstanding loans as of late July. Binh said he would bring down the ratio to six per cent by year-end.

The country's credit growth from January to September 2014 reached 7 per cent while the annual target is set at 12 to 14 per cent.

Apartment sales in city edge up in Q3

Around 3,300 apartments were sold in HCMC in the third quarter of this year, rising 8.6% against the previous quarter and 94.88% over a year ago, CBRE Vietnam said.

Previously, the company reported nearly 6,000 apartments found buyers in the city in the first and second quarter.

According to its latest market research report, apartment sales in the city increased as home buyers have regained confidence, helping investors sell their products.

With the better market situation, the primary and secondary markets saw apartment prices in the third quarter edging up 1-4% over the previous quarter and 1.2-5.4% compared to the same period last year.

In the third quarter, sales events attracted many visitors although the number of apartments on sale fell 8.8% over the second quarter.

Apartment projects for sale in July-September included the 8X Plus project of Hung Thinh Corporation with 600 apartments in District 12, over 200 apartments of the Tropic Garden project in District 2 invested by Novaland, and 2,695 apartments of the Vista Verde project in District 2 belonging to CapitaLand and Thien Duc Group.

War for talent seen more intense after establishment of AEC

Training and retaining talent is considered a important task at most enterprises; however, it will be more challenging to keep talent after the establishment of the ASEAN Economic Community (AEC) in 2015, said experts at a conference here on Tuesday.

The “War for Talent” workshop co-organized by Leading Business Club and Boston Consulting Group (BCG) in HCMC urged enterprises to attend more to retaining talent when the country integrates itself deeper into the regional economy.

Many small and medium enterprises in Vietnam have not paid enough attention to retaining their best employees, according to Le Tri Thong, deputy director of BCG. Meanwhile, many multinational corporations and foreign companies from ASEAN nations will join the local market after the inception of AEC in 2015 and the conclusion of free trade agreements (FTA) and Trans-Pacific Partnership (TPP), Thong said.

He added that those firms will join the race to hunt for senior staff at Vietnamese enterprises active in the same sectors, making the “war for talent” harsher.

To survive such competition, domestic companies must put the human resources (HR) issue on top of their development strategies, said Pham Ngoc Phu Trai, chairman of LBC at the workshop.

After each business period, Vietnamese enterprises should review the number of senior employees and their productivity besides concentrating on revenue or profit figures, he stressed.

To map out a strategy for labor issue, Bernd Waltermann, CEO of BCG in Singapore and Jakarta branches, pinpointed six key factors on selecting, training and retaining talent amid an intense competition among corporations.

The first is planning and orienting the strategy, followed by creating a recruitment team, drafting a management trainee program, categorizing employees, working out a talent development program, and maintaining a high quality recruitment team.

NFSC: Economy recovers positively

A recent report of the National Financial Supervisory Commission (NFSC) showed positive improvements in the country’s economy in the January-September period.

In a report serving the government meeting in September, NFSC said the local economy maintained recovery momentum and gained faster growth, especially in the third quarter of 2014. The gross domestic product (GDP) had grown steadily since the first quarter.

In the July-September period, GDP expanded by 6.15% compared to 5.25% in the previous quarter, and this positive quarter-on-quarter growth will back the Government’s efforts to realize a growth rate target of 5.8% this year.

Between January and September, the industrial production index increased by 6.4% year-on-year.

Both exports and imports improved, advancing by 13.2% and 12.1% year-on-year respectively, with trade surplus hitting nearly US$1 billion. Import value of machines and components surged by 33%, metal by 40%, cloth by 82%, plastics by 31% and apparel and footwear by 30%.

Besides, consumption also increased with total retail and consumption service revenues (excluding price factor) up 6.2% over 5.2% in the same period of 2013.

Inflation was still under control, rising only 3.12% year-on-year. The figure is projected at around 3-4% this year.

Low inflation facilitated interest rate cuts. Mobilization rates for the six-month tenor dropped from 7.2% early this year to around 6.1% on September 20.

The banking system continued to have strong liquidity, which was a supportive factor for government bond issue.

Meanwhile, the balance of payments reached a record surplus of US$10.15 billion in the first six months, helping spur foreign exchange reserves and stabilize the exchange rate.

The State budget’s overspending was VND124.5 trillion in the nine months, down 4.7% year-on-year.

The commission, however, pointed out some shortcomings. Aggregate demand improved but was not strong enough to support the economy.

Personal spending remained low while the increase of total retail and consumption service revenue was still much lower than 10% in 2010 and 2011.

The ratio of total social investment/GDP was 30.2% in the first six months, higher than this year’s plan at 29.4% but private investments were only 10.3% of GDP, lower than 11.1% in the same period last year.

In January-September, over 48,300 enterprises were dissolved or halted operations, up 13.8% year-on-year.

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