BUSINESS IN BRIEF 30/4 Vung Tau to host Int'l Seaports Festival An International Seaports Festival will take place in the southern province of Ba Ria-Vung Tau from May 17–19. The event aims to further the Government’s marine-based economic development strategy and consolidate the marine sector’s leading role in the new period. It is also expected to raise the international community’s awareness of Vietnam’s sovereign seas and islands. The festival—the first of its kind in Vietnam—will encompass various activities, such as a carnival, a golf tournament, music performances, seminars, exhibitions, and fairs. The festival’s programme is designed to introduce Vietnam’s various tourism, investment, and maritime industrial policies, promote the sectors’ potential for development. It will showcase the products, equipment, and internationally advanced technology used in the construction and operation of Vietnamese seaports. It will also demonstrate the quality of their human resources, logistics, imports and exports, and modern customs procedures. The festival also offers opportunities to exchange commercial port management experiences, carrier and logistics systems connections, and urban and seaport development strategies. Geographical indications safeguard local trademarks Vietnam has been developing a geographical indication system to safeguard the patent rights of the country’s famous traditional products with a hope that the new system will help boost production and trade of the country’s unique produce.  At an EU seminar on Geographical Indications (GI) on April 22, Vice Director General of the National Office of Intellectual Property Tran Huu Nam said that the country had certified 35 unique GIs.  A GI is a name or symbol on the packaging of a product certifying that it possesses a certain guaranteed quality due to its geographical origin and the traditional methods used in its creation. Products bearing a GI prove particularly attractive to buyers.  Nam estimated that the country has around 1,000 traditional agricultural products and produce with a fine reputation for quality and an association with a particular region, and declared that in the near future they should be assigned GIs.  He said GIs help consumers find authentic products, thus boosting the production and trade of traditional goods. They also play an important role in the development of agriculture, rural areas and the quality of local products. Famous certified GIs include Phu Quoc fish sauce, Shan Tuyet Moc Chau tea, Buon Ma Thuot coffee, Doan Hung grapefruit and Binh Thuan green dragon fruit.  The Ambassador-head of the EU delegation, Franz Jessen, said that GIs will guarantee the quality of Vietnam’s agricultural products in the EU.  Vietnam was among only a few countries to achieve export growth to the EU in the last few years, and this growth will help push the negotiation process for a bilateral trade agreement between the country and the EU, he noted.  Deputy Head of the Institute of Policy and Strategy for Agriculture and Rural Development Vu Trong Binh said that GI development in Vietnam faces many difficulties because consumers know little about them and cooperation among sectors remains poor.  He said that the indicators had been mostly used to protect intellectual property, but they should also be seen as an instrument to boost agriculture production. Vietnam reviews climate change investment A conference was held in Hanoi on April 23 by the Ministry of Planning and Investment, to collect opinions on evaluating investment activities and public spending on climate change.  Vietnam has joined a number of initiatives in accordance with the Convention of the United Nations (UN) and Kyoto Protocol on climate change. Many national policies have been revised to incorporate climate change issues into environmental management work, biodiversity preservation and other interdisciplinary goals such as poverty reduction. To date the country has received US$1.2 billion in international aid for climate change adaptation. Experts say investment in this area is expected to increase, but there is a lack of policies and coordination capacity, creating a bottleneck in the implementation process. According to Pham Hoang Mai, head of the Ministry of Planning and Investment’s Department of Science, Education, Natural Resources and Environment, domestic investment in climate change adaptation is still restricted. Thomas Beloe, a UNDP representative, suggested that Vietnam should take a more proactive approach to climate change, particularly to promote green/low carbon development. A tough challenge for developing countries, including Vietnam, is how to mobilise sufficient financial sources to deal with climate change, said Murray, a World Bank representative. Therefore, the country should classify climate change-related costs in order to improve the quality of spending on climate change response. EU says will welcome Vietnam’s GI goods The European Union (EU) says it will open its door wide to Vietnamese products, especially farm produce registered for geographical indication (GI) in EU, heard a seminar in Hanoi on Monday. At the seminar on protection and GI registration, Franz Jessen, head of the EU Delegation to Vietnam, said Vietnam needs to have GI products to enter the EU market of over 500 million consumers when the Vietnam- EU free trade agreement comes into force. The agreement will encourage Vietnamese GI producers to make registration to have their products protected in EU, Jessen noted. This will create favorable conditions for promoting the products on global markets as well, he told the seminar on appellation organized by the European Commission’s Directorate-General for Agriculture and Rural Development. Speakers at the seminar agreed that GI products will be sold at higher prices than others. GI is not only a tool to prevent fake items but is used to develop markets also, ensuring healthy competition between products. GI protection programs have positive socio-economic impacts and are important to remote rural areas where farm products are produced and processed. Tran Huu Nam, deputy director of the Vietnam Intellectual Property Office under the Ministry of Science and Technology, noticed GI can help improve trade and meet diversified demand for foodstuff, food safety and hygiene, and biological diversity. The fact that Phu Quoc fish sauce as the first Vietnamese product to be given appellation protection in EU has paved the way for the registration of other home-made GI products in EU. But it took the fish sauce up to three years to be granted the GI license there. Silva Rodriguez of the EC’s Directorate-General for Agriculture and Rural Development, meanwhile, said protection and market access need to be done at the same time. That is because it is difficult to enter international markets without protection, he explained, adding the quality of products labeled GI in EU will be protected accordingly. However, GI registration is a troublesome and time-consuming process, said Rodriguez. It is a complicated procedure because a product to be protected must ensure that there are no arguments about its origin and quality, he said. Up to now, 35 products had been registered as GI items in Vietnam, including three imported ones. The country has about 1,000 products that are qualified for GI registration, said Tran Huu Nam of the Vietnam Intellectual Property Office. Duyen Hai power center seaport project kicks off The seaport of the Duyen Hai power center that started construction on Sunday will receive 12 million tons of coal and 100,000 tons of oil annually for the three thermo-power plants in the area, Vietnam Electricity Group (EVN) as project owner said. The seaport will be completed and operational at the end of 2015 to serve the supply of coal and oil for the three Duyen Hai thermo-power plants in the Mekong Delta province of Tra Vinh designed with a combined capacity of 4,400 MW. EVN started work on the Duyen Hai 3 thermo-power plant in December and the group also kicked off construction of the Duyen Hai 1 thermo-power plant in September, 2010. The three thermo-power plants will provide some 25 billion kWh of electricity a year, which is expected to help ensure stable power supply for southern provinces in the near future. The seaport, covering a total 427 hectares, is developed in Dan Thanh Commune, Duyen Hai District at a total cost of VND2.32 trillion. Some 15% of the investment capital is provided by EVN, with the balance planned to be funded by Industrial and Commercial Bank of China Ltd. The seaport is located 45 kilometers from Tra Vinh Town and about 250 kilometers from HCMC. Its major components comprise two wharfs for coal ships weighing 30,000 DWT and one wharf for oil vessels of up to 1,000 DWT. Besides, there are also a 3.9-kilometer dyke, handling equipment and oil pipeline systems at the port. Vietnam’s digital content market fetches US$1.3 billion The domestic digital content sector generated revenue of US$1.3 billion last year, up 12% compared to 2011, according to the Ministry of Information and Communications. Speaking at the seminar on online trading organized by the HCMC Young Business Association (YBA) last week, Pham Duy Yen of the ministry’s Department of Information Technology noted that the industry has made strong growth over the past time. The country’s online entertainment service market has also seen the fastest growth rate in the world. Last year, online game revenue in Vietnam stood at US$250 million, a 20% year-on-year increase. Zing, the nation’s biggest social network, has reached 15 million users. These figures prove that the nation’s information technology infrastructure is capable of meeting online trading and e-commerce application demands.  Local experts at the seminar also said that it is the proper time for enterprises to speed up investments in e-trading to enjoy advantages of the sector. Nguyen Ngoc Dung of the Vietnam E-commerce Association said that Vietnam has made improvements in the world’s ICT competitiveness rankings. The nation now ranks 53rd, up three notches against 2011. According to a survey of over 3,400 businesses in various fields conducted by the Ministry of Industry and Trade, up to 60% of enterprises accept B2B (business to business) method while around 95% of enterprises accept online orders. One-third of enterprises have e-commerce incomes making up 15% or more of the total earnings. E-commerce transaction currently accounts for 2.5% of the nation’s GDP (gross domestic product). Samsung reveals interactive smart TV Samsung Vina last Thursday launched Samsung Smart TV 2013 with improved interactive features allowing users to experience interoperability with voice and gesture. With a Smart Hub 2.0 interface, Samsung Smart TV 2013 can understand a lot more gestures and voice commands. The new TV series can recognize voice and gesture faster and more accurate as it is enhanced with a quad-core microprocessor. Featuring the LED TV F8000 and the 4K TV 85S9, Samsung Smart TV 2013 is easier to use and give users access to applications, multimedia and social networks. At this launch, Samsung Vina also announced the upgrade toolkit Evolution Kit for users to upgrade their 2012 smart TVs to the latest version. Budget condo supply limited, says Savills Budget apartments covering less than 100 square meters each are the most marketable, but supply of such apartments is limited, says a research conducted by Savills Vietnam. Do Thu Hang, head of research and consultancy at Savills Vietnam, delivered a report on the research into the Hanoi apartment market, remarking that apartments under 100 square meters sold very well. Savills carried out the research after the Ministry of Construction issued a circular on the conversion of commercial housing projects into low-cost ones. The researcher found that Hanoi does not have so many apartments of less than 70 square meters priced below VND15 million per square meter. In the secondary market, there are only some 1,000 apartments of this category. As per a report of CBRE, the apartments going on sale in Hanoi in the first quarter came from two mid-end projects and seven low-end ones. Project owners pay more attention to the market demand to offer appropriate products, said the property service provider. Apartment prices continued to go down in both the primary and secondary markets in the first quarter. In the primary market, 95% of the newly-launched apartments had prices below US$1,000, versus 26% in the same period last year. A number of project owners continued to offer their unsold products at lower prices. CBRE remarked the primary prices of some projects had been reduced by up to 50%. There are now around 21,600 unsold apartments in Hanoi, up 20% year-on-year. Some 600 flats were sold in the first quarter with budget condos recording the strongest sales. In the urban areas in Hanoi, 250 transactions were made in the first quarter. About 60% of the 9,000 complete apartments in these urban areas are still unoccupied, which is ascribed to the lack of utilities. Nguyen Quoc Tuan, deputy director of the Hanoi Department of Construction, said three projects in Hanoi had been given nod for low-cost house development and conversion of commercial condos into low-cost ones. In addition, three other projects are under consideration and 12 projects have registered for building or turning their commercial houses into low-cost ones, he said. A survey done by the Hanoi construction department reveals that more than 193,000 people have applied for low-cost condos. Property firms said they wanted to transform their commercial projects into low-cost ones to enjoy certain incentives. This move will also make their products more marketable because the demand for budget houses is very huge. Therefore, about ten projects in Hanoi will go through such transformation this year, said Deputy Minister of Construction Nguyen Tran Nam at a recent meeting. HAGL focuses on property projects overseas Hoang Anh Gia Lai Group (HAGL) will focus on developing property projects in foreign countries at a time the domestic property market remains depressed, said HAGL Chairman Doan Nguyen Duc. This does not mean the local realty market is no longer attractive, but it is difficult to sell products at home now, he explained. Real estate is one of three sectors that HAGL is pursuing in Laos, Cambodia and Myanmar, along with agriculture and hydropower. Therefore, the group will do whatever it can in the sectors that still have room to grow, said the chairman. This year, HAGL will focus resources on Myanmar, where the group will build the Hoang Anh Gia Lai Myanmar Center. It will spend around US$300 million transforming a seven-hectare land lot in Yangon City into a complex consisting of a five-star hotel with over 400 rooms, a commercial center, offices for rent and some 2,000 apartments. The first phase of the project is scheduled for completion late next year, said Duc. He declined to reveal the specific apartment price in the Myanmar market, but informed that the price would be several times higher than the level in Vietnam. Last Friday, HAGL started work on the four-star hotel project Hoang Anh Gia Lai – Vientiane in Laos. The 12-story hotel worth about US$16.5 million will be completed in the next 15 months to supply the market with 185 rooms. HAGL’s investment abroad is worth 80% of its total assets, said Duc. So far, the group has poured around US$1.3 billion into foreign markets, with Laos having received US$800 million, Myanmar US$300 million and Cambodia the remainder. The major fields for investment are agriculture (rubber and sugarcane), real estate (office building and hotel) and hydropower. After five years of boosting overseas investment, agriculture has generated profits for the group. It is expected that HAGL will obtain a profit of VND500 billion in 2013 and a larger sum in the following years. In recent years, HAGL has caught the market’s attention with shocking price discounts. Talking about the chance of another price cut, the group’s chairman said prices of mid- and low-end housing projects could be slashed further. In the past, HAGL has been able to reduce prices because its satellite companies provided a close chain of services, from design, building materials to construction and interior decoration. Now, the projects under construction cannot be priced lower. “As an insider, I know… and can tell for sure that if we cannot lower prices, no one can,” said Duc, adding that only incomplete projects would slash prices further to quickly sell products in order to cut losses. Cruise tourism to get popular in coming years Cruise tourism will become an important trend in the coming years, heard a conference themed “Asian vision - adapt to the regional development trend” held by the Singapore Tourism Board in HCMC last Thursday. Cruise tourism in Asian countries, including Vietnam, has been growing in recent years and will grow even stronger in the future, said speakers at the conference. In 2011, the number of cruise tourists worldwide was about 1.7 million, but just a small percentage of them came to Asia. However, it is forecast that 25% of the world’s cruise tourists will come to this region in 2020. Particularly, Vietnam is considered an attractive destination, with many World Heritage Sites, a coastline stretching thousands of kilometers and warm weather. Tran Trong Kien, general director of Thien Minh Group, said the demand for travel by cruise ships and yachts in Vietnam was growing very well and would rise by 25% in the next five years. Thien Minh has invested in ten passenger ships at Halong Bay, but the firm is still worried this is not enough to meet the demand in the coming years. Jeannie Lim, executive director of exhibitions & conferences and conventions & meetings at the Singapore Tourism Board, said Singapore had established a cruise center to promote the development of this important tourism segment. However, cruise tourism needs many destinations, so this is a chance for countries to join hands in developing services for tourists. Regarding the use of the Internet to find tours and book services online, the speakers said this is an inevitable trend that needs investment now. A survey done by Thien Minh Group shows that about 90% of tourists book services online or view photos and reviews of hotels and resorts before arriving there. In Vietnam, some 10% of bookings are made online, but it will increase to 20-30% in the next 2-3 years. Malaysia, Vietnam share experience in attracting tourists Malaysia is a key market Vietnam’s tourism industry should focus on in order to broaden its customer base. Mohd Akbal Setia, Director of the Malaysia Tourism Promotion Board’s Vietnam office, addressed Vietnamese tourism industry leaders and discussed the successful marketing and promotion strategies Malaysia has employed. Malaysia is a multiethnic society with a diverse culture. More than 60 percent of the population is Muslim, a novel feature that can be used to entice tourists. In addition to its unique culinary highlights, the country boasts many beautiful destinations visitors are able to explore, ranging from modern cities and tropical rainforests to mountains and beautiful beaches. Malaysia provides a range of tourism products catering to different tastes at competitive prices, such as resorts, cultural entertainment adventure sports, and shopping. Malaysia is currently developing new tourism ventures based on the meetings, incentives, conferencing, and exhibitions (MICE) markets. Setia affirmed Vietnam’s conditions are favourable for becoming an international tourism hotspot, citing its varied and ancient culture and the many sites officially recognised by UNESCO as natural or cultural heritage. The country has some of the world’s most beautiful beaches and bays, and hospitable people. Vietnam should take advantage of these features to develop distinctive tourism products, Setia said. Malaysia wants to cooperate with Vietnam in tourism development, creating the best possible conditions for citizens from the two countries to explore their respective regional allies. Since its establishment in Vietnam in November 2011, the Malaysia Tourism Promotion Board regularly participates in activities organised by the Vietnamese tourism sector. It recently sent representatives to the Vietnam International Travel Mart (VITM 2013) in Hanoi, where three Malaysian companies discussed tourism strategies with six leading Vietnamese travel agents. The Vietnam National Administration of Tourism has also organized a series of promotional tourism activities in Malaysia, including the Vietnam Night at the ASEAN Tourism Forum in 2005, and the MATTA Fair in 2007- a programme involving 60 Malaysian businesses and press. Many travel agents have sent their staff on fact-finding trips to Malaysia to learn more about its tourism market. Since the two countries exempted each other’s citizens from requiring a visa if travelling for less than a month, the number of Malaysian visitors to Vietnam has increased significantly from 105,000 in 2006 to 233,000 in 2011. Gov’t VND30-tril. home loans still at draft stage The budget home loan package amounting to VND30 trillion promised by the Government to revive the real estate market is still only a draft, despite it was previously estimated to be deployed from April 15. According to the Credit Department under the State Bank of Vietnam, the draft circular stipulating regulations on low-cost home purchase and leasing under the government’s Resolution No. 02/NQ-CP will obtain approval and take effect within next month. The department is revising some contents in this draft to suit real demands of homebuyers and as suggested by relevant agencies. The central bank will set aside VND30 trillion to support five State-owned commercial banks, including VietinBank, Vietcombank and BIDV, to lend eligible borrowers through the refinancing form. The lending rate will be fixed at 6% per year in the first three months and after that, borrowers will continue to enjoy preferential interest rates announced by the central bank. According to the department, the package is not too big to be deployed at many banks. Besides, the refinancing rate of 4.5% per annum, lower than the lending rate by 1.5 percentage points, will be a challenge to commercial banks in cost compensation. Pham Huy Thong, deputy general director of VietinBank, said that commercial banks should bear responsibility in giving loans under the supporting package. The important thing is that banks have to cut expenses to prevent operating losses when extending these credits. Banks have to look into credit applications and set up risk reserve funds for irrecoverable debts. The central bank will collect interest and principal sums at fixed periods regardless of losses or gains commercial banks have made from these loans, Thong said. As lenders will have to spare a maximum 3% of the total outstanding loans to join this loan package, banks will not suffer big impacts from this program. They will also be able to provide longer-term loans to customers thanks to this fund. Besides, the number of home loan applications will increase as loan terms for house buyers and renters will be from up to 10 years, Thong added. Capital’s luxury shopping centres remain empty Luxury shopping centres are being threatened with closure in Hanoi due to a lack of customers. Opened in September 2011, Hang Da Galleria is located in a densely-populated and high-income area; therefore, the investor expected the shopping centre to become an ideal area for service and entertainment activities. However, Hang Da Galleria has seen a very low occupancy rate, forcing the centre to temporarily close for an upgrade. The investor sold its space to tenants, leading to the situation that the centre has many different owners. This has resulted in difficulties in managing the centre. Earlier, Grand Plaza trade centre halted operations in late 2012 for the same reason. A representative from a real estate consultancy firm said initially the project was planned to be turned into a tourism spot which would only sell traditional products, however, the investor did not agree to the solution and instead decided to select a multi-ownership model for the centre. Leanne Mitchell, an expert from CBRE, said that many projects had failed due to failure to reach a consensus between owners. Mitchell said shopping centres were wrong to sell their property to additional investors. The owners should completely control their premises. In cases, where they have to sell their centres, they must have contracts with firm and specific regulations on the responsibilities of any other investor. Meanwhile, the consumer confidence index has been declining since 2012, and is forecast to further drop in 2013. This will seriously affect the retail market. Shopping centres are facing fiercer competition, with Parkson and Lotte expanding operations. Parkson has announced it intends to open an additional 3-4 centres in Hanoi. Lotte is working on opening a 65-floor building costing USD400 million. While the Vingroup will open Vincom Royal City and Vincom Mega Mall Times City covering a total area of 460,000 square metres. AeonMall Vietnam has been licensed to invest in a USD200-million retail centre project. In the current difficult economic situation, shopping centres should have long-term investment strategies following pre-feasibility studies and market surveys. It is also important to survey the incomes of people who live near the project area. LVI offers insurance to hydropower plants in Laos Laos-Vietnam Insurance Joint Venture Company (LVI) and EDL Generation Company last Friday signed an operational insurance contract for seven hydropower plants in Laos with the total liability of US$635 million. Each hydropower plant of EDL Generation Company will be protected in various forms such as asset risks, interrupted business and machine damage during construction and operation. Pham Duc Hau, general director of LVI, said in a statement released on Monday that this is a big and valuable contract of LVI amid tough competition in the insurance market in Laos. Over the past five years, LVI, an affiliate of Bank for Investment and Development of Vietnam (BIDV) in Laos, has reached average growth rate of over 60% annually. Government to inspect SBV activities in gold market The Government Inspectorate has announced that it intends to inspect the State Bank of Vietnam (SBV)’s business management and activities.  The 60-day inspection will focus on the responsibilities and tasks of the State Bank of Vietnam in gold market, as well as the depositing and lending of gold between January 1, 2009 and March 2013. The Government Inspectorate will set up a four-member task force to supervise the inspection team. SBV's management of gold prices has been under scrutiny over the past few years, as domestic prices continue to be volatile. Recent gold auctions sponsored by the state bank were aimed at stabilising the market. But they proved somewhat ineffective at quelling public concern about the disparity between international and domestic prices, which reached VND6.1 million (USD291.1) per tael as of April 23 morning.  The initiative to stabilise gold prices began in November 2011. At that time, the governor of SBV, Nguyen Van Binh, said the bank would try to reduce the gold prices gap to VND400,000 (USD19) per tael in the coming time. He added that if this goal was not met the entire market should be looked at. Tokyu Binh Duong launches first condos Becamex Tokyu Co. Ltd. last Friday launched the sample apartment of Sora Gardens, a component of the US$1.2-billion urban project Tokyu Binh Duong Garden City, and started offering the first apartments of this project. Some 400 Sora Gardens flats among a total of 1,500 are now on sale through the distributor CB Richard Ellis Vietnam, said Hoshino Toshiyuki, general director of Becamex Tokyu. Each apartment covers 67-105 square meters and has a price starting from VND1.28 billion, with 30% to be paid when contracts are signed and the remaining sum to be settled when apartments are handed over in the third quarter of next year. Tokyu Binh Duong Garden City is developed on around 110 hectares in Binh Duong New City at a total cost of VND25 trillion, or some US$1.2 billion. When completed, the project will supply over 7,500 apartments, houses, recreational facilities, and commercial and office space. Tokyu Corporation, the Japanese investor in the joint venture Becamex Tokyu, said that despite the problems of the property market, Binh Duong remained very potential. The property market in Binh Duong has lured a lot of investors from neighboring localities and helped many realty firms grow up through project distribution. Binh Duong is better known when the plan for Binh Duong New City was announced about three years ago. The project covering around 1,000 hectares is expected to become an economic-political-social center of Binh Duong, with utilities and services for some 125,000 residents and 400,000 people coming for work. Binh Duong is one of the few localities with the fastest and the most synchronous infrastructure development. Well-developed infrastructure will create a motivation for the property market. Not only in the new city, multiple infrastructure projects connecting Binh Duong with nearby localities are also under construction, such as National Highway 13, HCMC-Chon Thanh Expressway, Belt Road No. 3 and 4. Vinamilk licensed to build plant in Cambodia Vietnam Dairy Products JSC, or Vinamilk, has just received a certificate for building a milk factory in Cambodia, one of the largest export markets of the company, said Mai Kieu Lien, chairwoman cum general director of Vinamilk. She was speaking at the opening ceremony for the US$100-million powdered milk plant of Vinamilk in Binh Duong organized on Monday with the participation of Prime Minister Nguyen Tan Dung. Lien did not reveal the capacity as well as the total cost of the factory to be developed in Cambodia. Still, she informed Vinamilk every year exported US$40-50 million worth of dairy products to this market, a volume large enough for the company to operate a milk plant there. Currently, Vinamilk is holding a 20% stake in a milk plant in New Zealand. The company is seeking to acquire more factories overseas. “We are eyeing milk factories in Australia and the U.S.,” said Lien. In 2012, Vinamilk achieved hefty sales revenue of VND27.3 trillion, or some US$1.3 billion, including about US$180 million from export. Vinamilk wants to make it to the world’s top 50 largest dairy companies with annual sales revenue of US$3 billion by 2017. Acquiring dairy companies in foreign countries is the shortest way to accomplish such a goal and also an effective method to expand market overseas, said Lien. To realize its goal of becoming one of the world’s 50 biggest dairy firms, Vinamilk has spent US$200 million building two milk plants in Binh Duong for production of powdered milk and fresh milk. The powdered milk plant inaugurated on Monday has a capacity of 54,000 tons per year, meeting 80% of the demand at home, where Vinamilk is holding a 30% market share. The two plants will facilitate Vinamilk to boost export in order to expand market overseas. This year, some 30,000 tons of powdered milk produced at the plant in Binh Duong will be exported, bringing in an estimated US$180 million among US$230 million in the company’s estimated export revenue. Vinasun to raise capital to VND405 billion Taxi operator Vietnam Sun Corporation, or Vinasun, will issue around 10.5 million bonus shares to increase its charter capital to VND405 billion, as manifested in a plan approved at its annual general meeting last Friday. Vinasun will issue the bonus shares at the 100:35 ratio to raise it capital from VND300 billion to VND405 billion. The move aims to sustain development of the company, strengthen its position on the market and improve service quality. Dang Thi Lan Phuong, general director of Vinasun, said that 2012 was a tough year with repeated gasoline price revisions and a rise in social and health insurance premiums. However, the enterprise obtained over VND2.7 trillion in revenues and VND151.5 billion in after-tax profits, up 19.3% and 14% year-on-year respectively. In the first quarter of 2013, Vinasun gained VND746 billion in revenues, or 26.7% of this year’s target, and VND47.7 billion in after-tax profits. The enterprise launched 98 more taxicabs into operation in the first quarter. ONGC continues investment in Vietnam India’s state-run Oil & Natural Gas Corporation, or ONGC, will continue to tap oil and gas offshore to maintain long-term investment in Vietnam. Speaking at the school sponsorship announcement ceremony in Ba Ria-Vung Tau Province last week, Arvind V. Sapkal, representative of ONGC in Vietnam, said that ONGC holds a 45% stake in the block 06.1 including Lan Tay and Lan Do natural gas fields. Located around 370 kilometers from the southern coastal province, the block 06.1 is the first oil field ONGC has invested outside India. The remaining stake of this block is held by TNK Vietnam Company, a subsidiary of Russian oil and gas group Rosneft, and PetroVietnam. Since November, 2002, the block has reached a capacity of 15 million cubic meters of gas each day. The block up to now has supplied over 38 billion cubic meters of gas and 13 million barrels of condensate, enough to produce around 22% electricity output in the country. Natural gas reserves at the Lan Tay and Lan Do fields are expected to run dry by 2023. FPT dials in unflattering 2012 results FPT Group, one of Vietnam’s leading telecom carriers, suffered unhealthy business results in 2012. Despite a 15 per cent downward adjustment to its profit plan for 2012, its profit only made up 92 per cent of its results in 2011. According to report to submit the shareholders meeting early April, the group reached revenue and after-tax profit of VND25.35 trillion ($1.2 billion) and VND1.54 trillion ($74 million), down by 2.4 and 8.4 per cent year on-year, respectively. Le Thi Ngoc Anh, a Vietcombank Securities Company researcher, said the payout ratio of most of FPT’s business sectors declined, with manufacturing and distribution of IT products and system integration seen a sharp decrease. Accordingly, the manufacturing and distribution of IT products, which made up 57 per cent of its revenue, saw a 12 per cent decrease in revenue and 24 per cent decrease in pre-tax profit on-year. The level of system integration was 11 and 19 per cent, respectively. Short and long-term investment provision sharply rose in 2012 with the standby up 3.5 times or VN191 billion ($9.18 million), while investment activities profits declined. The group’s deputy chairman Nguyen Quang Ngoc claimed FPT strived to earn a revenue of VND26,926 billion ($1.28 billion) and pre-tax profits VND2,646 billion ($126 million) this year, surging 6 and 10 per cent, respectively, over 2012. Bad medicine for six pharma firms Six pharmaceutical firms in Vietnam have violated regulations on medicine material trading, a government investigation has revealed. The Government Office last week trumpeted a report on results of inspections over the Ministry of Health’s state management on pharmacy. “Some pharmaceutical firms have violated regulations on trading, export and import of materials. They have sold finished medicines containing habit-forming substances, psychotropic substances and precursor substances,” the report said. These firms include German-Vietnamese joint venture Stada-Vietnam, and locally-owned Imexpharm, Tipharco, Ho Chi Minh City Medical Export Import, Minh Hai Pharmaceutical and Ha Tay Pharmaceutical. Specifically, Stada-Vietnam was found to have in 2011 sold 210 bottles of Partamol siro (PSE 30mg) and 240 boxes of Partamol-Codein (Codein phosphat 30mg) with each box containing 100 tablets to Papua New Guinea without any permission from the Ministry of Health (MoH). Stada-Vietnam is a $20 million joint venture established in September 2012 between locally-owned pharmaceutical firm M.S.T and German-backed Stada Arzneimittel. Meanwhile, Imexpharm was found to have in between July 2010 and August 2011 sold 4,079,800 habit-forming tablets of Nucofed (Codein base 10mg, Pseudoephedrin HCl 30mg) to those not needing treatment with this medicine. In between January 2008 to October 2011, Imexpharm sold seven types of medicines having habit-forming substances, psychotropic substances and precursor substances to Cambodia without MoH’s permission and customs procedures. As for Tipharco, this firm was discovered to have sold 414,900 psychotropic tablets named Phenobarbital 100mg to those not needing treatment with this medicine during July 2010-August 2011. The Government Office also found that Ho Chi Minh City Medical Export Import JSC sold to and Minh Hai Pharmaceutical bought from the former 500 kilogrammes of Pseudoephedrine material, which is a type of precursor substance, without MoH’s permission. Minh Hai Pharmaceutical was also found to sell 501,100 psychotropic tablets named Armicort (Phenobarbital 8mg, Ephedrine HCl 25mg) to those not needing this medicine for treatment from January to June 2011. The authorized agency also saw that this firm had signals of using unlawful invoices for its selling 5,067,000 Artenfed tablets (PSE 60mg) to a pharmaceutical firm in northern Lao Cai province. Also, Minh Hai Pharmaceutical was accused of having sold 1,497,520 Gardenal tablets (Phenobarbital 100 mg) to those not needing this type of medicine for treatment. The Government Office also said that the MoH had for long time completed inspections over operational activities of Hong Kong’s Zuellig Pharma Vietnam-ZPV under Document 1185/VPCP-QHQT dated November 3, 2011. “However no inspection results and report have been made so far. This means that the MoH has failed to obey the government’s order,” said the report. Locals talk up future The global smartphone boom is led by tech giants like Samsung, Apple and Nokia, but Vietnamese firms are starting to make their mark in the low and medium market segments. Q-Mobile has captured articular attention from consumers. The brand first appeared in May 2008 by An Binh Telecom Company Limited (ABTEL) and is now ranked third in Vietnam’s smartphone market in sale volumes. According to Q-Mobile chief executive officer (CEO) Nguyen Quang Minh, Vietnam’s smart-phone market is currently vibrant across all market segments, entailing big challenges to the firm. “But competition is inevitable in the marketplace. With proper strategy, we are confident to compete head-on with other firms on an equal footing,” Minh said. “Nokia and Samsung have their ‘magic’ products. So do we. Consumers will see our ‘magic’ product roll-out in a not distant future,” Minh added, asserting that high-end market segment was one of the company’s top targets in the upcoming period albeit this segment is now dominated by high-profile foreign players. Meanwhile, FPT Technology Products deputy general director Le Hoang Hai pointed to core advantages in FPT smartphone lines, particularly in Vietnam smartphones’ first quad core chipset launched by FPT in the recent past. “Our advantages lie in competitive pricing (averaging VND4.45 million or $210), strong configuration and possession of quad core chipset Qualcomm Snapdragon MSM8225Q, enabling users to experience diversified entertainment applications in parallel to slim design,” said Hai, confirming that FPT IV was a competitive item in medium-range smart-phone segment. Telecom giant FPT reportedly contemplates the creation of one smartphone line each month and constantly improving its smartphone line designs and configurations striving for customer satisfaction. “Promoting products with price in the range of VND2-5 million ($96-$240) is also one our focuses,” Hai noted. Nguyen Van Dao, deputy general director at Samsung Vina, said that to remain competitive, Vietnamese firms needed to target medium- and low-end segments suitable to the budget of pupils and students. “In doing so, their smartphones only need some basic functions and applications to slash costs,” Dao said. Vietnam recorded the sharpest growth of 266 per cent in smartphone and tablet usage in Asia in 2012, according to a Flurry Analytics survey. Flurry Analytics is launched by US-based IT research firm Flurry. Danlait milk given all clear over quality The Viet Nam Food Administration under the Ministry of Health yesterday confirmed that Danlait, a goat milk product imported by the Manh Cam Company, has met quality standards. Speaking at a press conference on the product, Le Van Giang, deputy head of the administration, said that the milk's quality has been certified by the health ministries of both Viet Nam and France. According to Giang, Danlait is a food supplement but the importer had wrongly labelled it as baby formula. Authorities have not yet revealed if they have fined the Manh Cam Company for the violation.  Vietnam earns over 760 mln USD from rice exports Vietnam has so far this year raked in more than 760 million USD from shipment of over 1.73 million tonnes of rice, according to the Vietnam Food Association. Currently, the rice price in the Mekong Delta, the country’s largest granary, continues to drop 100 VND (about 0.05 USD) a kilo compared to the last week’s figure. Prices of dry unhusked rice in the Mekong Delta hover from 5,000 VND (around 0.25 USD) to 5,100 VND (0.25 USD) per kilo. According to the association, provinces of the Mekong Delta have harvested about 10.5 million tonnes of unhusked rice from the winter-spring crop 2013. Meanwhile, local farmers have sowed over 480,000 hectares out of 1.6 million hectares planned for the upcoming summer-autumn crop. To ensure stable rice production and supply as well as profits for local farmers, the construction of a storage system capable of storing up to 4 million tonnes of paddy rice in the Mekong Delta is underway. The facilities are expected to be operational by the end of this year.- Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR