BUSINESS IN BRIEF 21/10 Gold prices decline in local market Gold prices went down VND150,000 (US$6.7) per tael or 37.5 gm in the local market yesterday from last week's rate. The Sai Gon Jewellery Joint Stock Company sold a tael of gold from the State-owned gold brand SJC for VND33.97 million ($1,519). Doji Gold and Gems Group reduced the selling price for a tael of gold from VND34.02 million ($1,522) to VND33.94 million ($1,518) while Phu Nhuan Jewelry Company (PNJ) sold one tael of gold for VND33.92 million ($1,517). Bao Tin Minh Chau Gold and Jewellery Company listed their selling rate for one tael of gold at VND33.92 ($1,517), recording a buying/selling ratio of 60/40 within the day for the valuable metal. Most of the gold and jewelry companies thought that the local prices of gold were influenced by lower global prices. According to international media, gold struggled after three days of losses on Tuesday, hurt by a stronger dollar and fears the Federal Reserve could still raise US interest rates this year. On the global gold trading website Kitco.com, the price for one ounce of gold was $1,173.20 ($1,413 per tael). Thus, the local price for each tael of gold was $104 higher than the global gold prices. Meanwhile, in the local forex market, most commercial banks sold a dollar at around VND22,350 and VND22,370 each while the ceiling price of the State Bank was VND22,547 per dollar. The rates of each dollar were of 10 or 20 dong lower than yesterday's rate. Quoc Trinh Gold and Jewelry Company in Ha Trung Street, which was popular for currency exchange in Ha Noi, bought each dollar for VND22,320 and sold each for VND22,360. On September 28, the SBV slashed the interest rate cap on dollar deposits offered by commercial banks to organisations and companies from 0.25 per cent to zero per cent per year, while the rate for individuals was reduced from 0.75 per cent to 0.25 per cent. According to the latest report of Vietcombank Securities Company, the SBV circular would closely control the trading of foreign currency in the local market and help curb speculation and hoarding of the greenback, therefore reducing the demand for foreign currency in the market. The company said that it did not see any obvious factors that may put significant pressure on exchange rate by the end of 2015. The company said at the end of the year, demand for foreign currency may rise to meet payment demands and production orders at year end, however, the foreign direct investment disbursements and remittances are expected to continue a positive trend. In the first nine months of this year, disbursements of FDI reached $9.7 billion while the remittances for all of 2015 are expected to reach between $13 billion and $14 billion. VN President welcomes GE Chairman State President Truong Tan Sang met with Jeffrey Immelt, Chairman and CEO of the US industrial giant General Electric (GE), in Hanoi on October 19.  President Sang lauded GE’s business expansion, particularly in health, wind energy, construction and aviation, in Vietnamese localities, saying the conglomerate is becoming a long-term partner for Vietnam’s of sustainable development.  Talking about the Trans-Pacific Partnership (TPP) and other agreements that Vietnam takes part in, he said Vietnam is actively integrating and hopes for support from development partners.  Immelt, who is also head of the US President’s Council on Job and Competitiveness, said his firm intends to reach Vietnam’s remote areas while attempting to increase the rate of locally made materials in the country through high-quality manpower training.  Concerning the TPP, Immelt claimed the success of domestic small- and medium-sized companies lays the groundwork for the pact implementation. Acronis Partners with NTS Group Software Distributor in Vietnam Acronis®, the global leader in new generation data protection, today announced a partnership with NTS Group to promote and distribute Acronis products and solutions in Vietnam. NTS plans to target small and mid-size businesses (SMBs) with Acronis Backup for Windows Server, as well as home office and personal usersAcronis Backup for Windows with Acronis True Image 2016, which supports Windows andMac computers and mobile devices with full disk-image backup functionality and a family dashboard to manage multiple devices online.  Powered by the AnyData Engine, Acronis solutions enable customers to safely backup, migrate, protect and recover critical data in any location and any physical or virtual environment. The growing IT market in Vietnam creates new market opportunities for adopting Acronis solutions, which is already trusted by over 500,000 businesses and 5 million consumers in over 145 countries around the world. According to country analysis prepared by BMI Research, the size of Vietnam’s software sales market will expand from VND 9.9 trillion in 2015 to VND 16.1 trillion (USD $644 million) in 2019, growing at a 12.4 percent compound annual growth rate (CAGR), partly driven by security products. In the same period the demand for cloud computing will expand the IT services market at a CAGR of 16.8 percent, reaching VND 29.8 trillion (USD $1,192 million) in 2019. For the consumer market, out of the 90 million people currently living in Vietnam, 40 million use Internet-connected devices and 22 million have smartphones. According to the IDC report released earlier this year, Vietnam remains the only major growing PC market in Asia, with over 2 million units being sold in the country each year.  “We see a great opportunity for providing data protection solutions in Vietnam.  We are excited about the partnership with NTS and honored that NTS has chosen Acronis as their preferred vendor for backup, disaster recovery, and secure access solutions. We are confident that the Vietnamese market will benefit from our solutions and NTS will help businesses and consumers to protect and secure their important data,” said Danny Ong, Business Manager APJ at Acronis. NTS Group has a proven track record in promoting, distributing and supporting security software in Vietnam. For example, the company was successful in making Kaspersky Antivirus the number one antivirus solution in the country, among many other brands.  “Acronis will bring leading products, a leading brand, good support, and good price point to Vietnam. Our plan is to make Acronis as the data protection solution of choice for the Vietnam market,” said Ngo Tran Vu, Marketing Director of NTS ICT Corporation. Electricity sector copes with water shortages The Electricity of Vietnam (EVN) corporation has stepped up efforts and preparations to cope with droughts and water shortages caused by the El Nino phenomenon to ensure a stable supply of electricity nationwide. El Nino is an abnormal weather phenomenon caused by the warming of the Pacific Ocean. It began at the end of 2014, and it was expected to last until next year, the EVN said. According to the EVN, water volumes in reservoirs in the North and Central regions of the country have been much lower than normal since August, especially water levels in reservoirs in the Central Highlands, which have dropped to record lows. Le Dinh Ban, Deputy Director of A Vuong Hydropower Joint Stock Company under the EVN, said the rainy season began in September, but the average speed of the water flow in rivers has been recorded at 17 cubic metres per second, a drop of 68 percent compared to the same period last year. As a result, A Vuong Hydropower Plant only operated from four to six hours per day. The National Steering Committee for Disaster Prevention and Control asked the Ministry of Industry and Trade to reserve water and to collaborate with the Ministry of Agricultural and Rural Development to properly manage and ensure water supply for daily needs and agricultural production.  The committees also asked the two ministries and relevant agencies to place priority on providing water for irrigation stations, especially during drought periods. To address the problem of water shortage, the EVN said it would manage water usage in a proper manner to ensure adequate water supply for low-lands and to reserve water. The EVN aims to ensure adequate coal supply for Duyen Hai 1 and Vinh Tan 2 thermal-power plants, which provide electricity for the South. In addition, it will accelerate the construction of other power plants in Binh Thuan, Tra Vinh and Thai Binh. In October, despite water shortages, the electricity sector said it will ensure water supply and reservation. It was projected that the loads (the amount of electric power used by a machine) of the national grid will reach 164.4 billion kWh at the end of this year, an increase from 12 to 13 percent compared to 2014, the EVN said. The EVN said it has taken measures to ensure that reserved water volumes would be enough to fill reservoirs at the end of this year, and ensure water supply for electricity generation in the dry season next year. In addition, it has taken steps to repair and upgrade coal thermal-power plants and turbine systems to ensure that they will function properly in the rainy season this year. This will help to maximise the reservation of water, it said. The EVN also prepared plans to handle electricity shortages in case the Central-South grid had any problems, considering it experienced overloads over the last year.- Dollar lending interest rate stays unchanged despite deposit cut The US dollar lending interest rate has remained unchanged though the central bank has recently made a significant cut on dollar deposit rates.  On September 28, the State Bank of Vietnam (SBV) slashed the interest rate cap on dollar deposits offered by commercial banks to organisations and companies from 0.25 percent to zero percent per year, while the rate for individuals was reduced from 0.75 percent to 0.25 percent per year.  After the move, businesses expected the dollar lending rate would reduce from between 3 percent and 3.5 percent per year, to roughly between 2.5 percent and 3 percent, which would help them cut input costs to enhance competitiveness.  The businesses estimated that the rate between 2.5 percent and 3 percent rate was reasonable as it still helped lenders make profits after deducting costs for capital mobilisation and setting aside for compulsory reserves regulated by the central bank. Hoang Thi Lan, director of a consumer goods import company, which often borrows US dollar from commercial banks, said as dollar lending often faced foreign exchange volatile risks, the lending interest rate must be attractive enough to offset the risks.  However, experts said that it would be difficult to see a reduction in the dollar lending rate as lenders currently encouraged borrowers to be access to dong loans instead of dollar loans to avoid the foreign exchange volatility.  Besides, the dong lending interest rate currently has reduced significantly, making the rate gap between the dong and the dollar loans insignificant, they said.  Commercial banks forecast that demands for dollar loans would not increase with customers adopting a wait-and-see attitude about the volatility of the domestic foreign exchange, though the central bank affirmed that it would keep the forex rate steady this year and even in the first quarter next year.  Last week, the central bank said that the dollar deposit interest rate cut last month would not cause economic losses for organisations or individuals, adding that it is more beneficial to shift to the dong as the difference between the interest rates on dollar and dong deposits was now above 5 percent.  The central bank recommended that companies making future payments in dollar transfer their dollar deposits into the dong to eliminate any potential opportunity costs and purchase dollar under a forward contract for the payment.  According to the central bank, the forward contract will enable the company to exchange an amount of currency in a specific future date for a specific rate in order to avoid exchange rate risks. Interest payments from the new dong deposits would both make up for the cost of the forward contract and generate profits for the firms. Thai Nguyen tea producers focus on domestic market Tea producers and processors in the northern mountainous province of Thai Nguyen are focusing on the domestic market over foreign options as a stable means of development, according to the provincial Department of Agriculture and Rural Development.  The province currently sells an average of 31,500 tonnes of tea to the domestic market every year, or 80 percent of its total yearly output of over 39,000 tonnes.  Only 20 percent of Thai Nguyen tea is sold abroad, mostly in Pakistan , Russia , China , Japan and the Republic of Korea , with lower prices than those in the domestic market.  Phan Huy Binh, Chairman of the Board of Members of Trung Nguyen company, said that his firm exports about 1 million USD worth of tea per year priced between 1.7-2.3 USD per kilogramme, much lower than domestic price of at least 200,000 VND (9 USD) per kilogram.  Meanwhile, Do Thi Duc Ly, Director of Tan Cuong-Hoa Binh company – another leading tea enterprise in Thai Nguyen, said that in the past, her company exported about 2,500 tonnes of processed tea each year but yielded low profit.  The firm has recently focused on promoting trademarks and developing in the domestic market through major supermarkets and distributors, helping it gain a stable position in the market, she said.  In the past nine months, the company earned 6.2 billion VND (278,000 USD), up 20 percent over the same period last year, noted Ly, adding that the firm has also invested in upgrading its equipment and machines to raise its capacity to process 18 tonnes of fresh buds each day.  According to the Thai Nguyen Department of Agriculture and Rural Development, a number of famous local enterprises, cooperatives and tea areas have also gained market shares in the domestic market with increasing sales volumes. Can Tho, Dutch city work to curb after-harvest agricultural loss Can Tho authorities met with the mayor of the Netherlands’ Oss city to discuss cooperation on reducing the loss of agricultural produce after harvest on October 19.  The yield lost across the Mekong Delta city has been caused by outdated technology and transport, and reliance on traditional methods that overlook the importance of preservation.  The situation has damaged the sector’s quality and quantity. Poor preservation often results in vitamins and minerals lost and even products contaminated. This pushes prices down by up to 20 percent.  Oss’ Mayor Wobine Buijs Gkaudemans said Can Tho’s soil and weather are similar to her hometown. She said she hopes to cooperate to prevent post-harvest losses.  Oss will send experts and specialised machinery to Can Tho in a bid to improve local performances in processing, preserving and packaging produce, the mayor said.  Can Tho People’s Committee Chairman Le Hung Dung spoke about local commitments to helping farmers access non-interest loans and improve transport infrastructure.  Dutch investors are welcomed in with a favourable business climate and policies, he said.- State capital investment corporation set to be strategic investor The State Capital Investment Corporation (SCIC) targets to become a government strategic investor with total assets of 22.5 billion USD by 2020, as heard at a ceremony marking its 10th founding anniversary in Hanoi on October 19.  It was awarded with the Labour Order, the first class, on the occasion.  National Assembly Chairman Nguyen Sinh Hung and Deputy Prime Minister Vu Van Ninh attended the ceremony.  By 2030, it is set to develop into a regional-scale financial corporation that manages a combined 46 billion USD.  Looking back at the past 10 years, the SCIC exercised its State ownership representation rights in around 1,000 enterprises worth more than 8.7 trillion VND (395.4 million USD), including six equitised corporations. At the PM’s request, an additional 20 State-owned corporations and groups will transfer their ownership rights to the SCIC from 2015-2016.  The return on equity ratio averages 15-17 percent, bringing a total after-tax profit of more than 30 trillion VND (1.36 billion USD).  Compared to 2005, its turnover has soared 65-fold, total assets are up 14 times, State budget contribution is up 41 times and after-tax profits have increased 61.5 times.  The SCIC has offloaded State capital to pull in 5.36 trillion VND (243.6 million USD) and its portfolio now comprises 230 firms with a booking value of 17 trillion VND (772 million USD) and market value of 78 trillion VND (3.54 billion USD).  Its total equity is currently valued at nearly 35 trillion VND (1.59 billion USD).  It has also taken the lead in equitisation with 90 percent of its single-member limited liability companies going public.  In his speech, Deputy PM Ninh asked the SCIC to continue improving its operating model, speeding up divestment in several companies and performing its role as a shareholder in several large-scale and efficient firms. Gazprom seeks cooperation with Dong Nai Representatives from Russia’s Gazprom International group had a working session with leaders of the People’s Committee of the southern province of Dong Nai on October 19 to discuss multifaceted cooperation with the locality. During the meeting, Gazprom expressed its interest in building liquefied gas supply stations serving the transport sector in Dong Nai and other southern localities. Provincial People’s Committee Vice Chairman Tran Van Vinh lauded Gazprom’s plan to invest in the locality, highlighting the great potential and advantages for the firm to operate in the field. Around 100,000 vehicles traverse national road routes in Dong Nai every day and the province is home to 30 industrial parks (IPs), Vinh cited. Business and production enterprises operating in IPs directly import and export goods through sea and river ports along the locality, he noted, adding that the upcoming construction of the Long Thanh international airport will present a great opportunity for clean and environmentally-friendly fuel suppliers. According to Vinh, Dong Nai is working to promote green economy and as such, the use of clean energy like liquefied gas is a priority. He went on to reveal the locality’s plan to develop a network of 500 buses powered by Compressed Natural Gas (CNG). Kramarenko from Gazprom said his firm is implementing a project to produce and supply natural gas for the transport sector in Vietnam. It plans to build a liquefied gas factory with a capacity of 250,000 tonnes per year in the southern region to serve the transport and industrial sectors. Gazprom urged the local authorities to facilitate the group’s plan in the province, and ratify its involvement in supplying liquefied gas for the locality’s public transport system development plan using CNG buses. In reply, Vice Chairman Vinh requested relevant sectors work closely with Gazprom in order to carefully study and evaluate specific cooperation plans in the field. Vietnamese rice needs quality, branding improvements: experts Improving quality and building a national brand name for Vietnamese rice is essential to securing a firm foothold in the international market, experts have commented.  Vietnam is facing increasingly fierce competition from potential foreign rivals, including Cambodia, Myanmar and the US. Pressure lies in not only pricing but also quality and branding, according to Deputy Director of Tien Giang food company Le Thanh Khiem.  Khiem said Vietnam is the world’s third biggest rice exporter but its rice value remains modest, adding that besides traditional markets like the Philippines and Indonesia, the country should move towards choosy ones such as Europe and Japan by shifting attention to quality rather than quantity.  Additionally the country should select stable and long-term rice varieties, since most of the current options are produced over a short term and quickly degrade, he added.  Director of the Vietnam Institute for Economic and Policy Research under the Vietnam National University Nguyen Duc Thanh said concentrating on easy markets will make Vietnamese rice products reduce quality standards in production and exports, resulting in the dwindling competitive edge in the global market.  Particularly, when the free trade agreement with the EU and the Trans-Pacific Partnership agreement come into effect, the rice sector will have little motivation to adjust its quality to obtain the pacts’ opportunities, he stressed.  Deputy Minister of Industry and Trade Tran Tuan Anh suggested focusing on restructuring, improving quality and building a national brand name to avoid negative impacts when import demand declines.  The Prime Minister has approved a project developing brand names for Vietnamese rice through 2020 and with a vision towards 2030.  Under the project, about 20 percent of local export rice is expected to have national brand names and enter the global supply chain by 2020, increasing to 50 percent by 2030.  According to the Ministry of Agriculture and Rural Development, rice demand in Vietnam’s traditional markets is showing positive recovery signs, demonstrated by the country’s winning of the bids to supply 450,000 tonnes of rice to the Philippines and around 1 million tonnes to Indonesia.  However, rice prices are forecast to decrease slightly after the first quarter of 2016, which will require adjustments in production structure to meet the increasing demand, said Deputy Minister Ha Cong Tuan.  The International Monetary Fund forecasts average rice prices in 2016 will decline by 13 percent over the previous year and the World Bank anticipates a downward trend of 2-3 percent in the following years. Thailand's Saha Group looks to expand business in Vietnam: report Thailand's largest distributor of consumer products Saha Group is working with a Japanese company to establish a joint venture in Vietnam, Bangkok Post reported on October 19. It is not clear about which sector the joint venture will operate in, but an executive with the conglomerate, now running a distribution subsidiary in Vietnam, was quoted as saying that it is interested in logistics, property, and wholesale. The expansion plan has been apparently prompted by upcoming changes brought by the ASEAN Economic Community, which will be officially formed this year end. "The regional community will make cross­border logistics more important," according to the unnamed executive, who also stressed Saha's interest in expanding its property business here in the long term. Saha started venturing in property a few years ago, and has developed housing projects around Thailand in collaboration with local and Japanese partners, Bangkok Post reported. It will continue to expand more businesses abroad, particularly to ASEAN members, Saha chairman Boonsithi Chokwatana was quoted as saying. The group recently opened a garment factory in Myanmar to serve both the domestic market and exports to Thailand, according to the news report. Showa Holdings launches new start-up in Vietnam Showa Holdings Co Ltd headquartered out of Kashiwa, Chiba Prefecture, Japan has formed a new wholly-owned subsidiary producing rubber coated products for the construction industry in Vietnam. “The rubber coating industry is still in its infancy and we are excited about getting in on the ground floor of an industry that holds so much promise,” said an official of Showa at the launch. In addition, the nation has extensive natural rubber reserves, which makes it an ideal location to base our production facilities and is a primary reason we decided to locate the new venture in Vietnam. The formation of Showa Rubber Vietnam, Co, Ltd will help execute the group’s business strategy in Southeast Asia and become the leading producer of coated rubber products in Asia. Farmers, businesses remain indifferent to TPP Farmers in the Mekong Delta region, as is true with most businessmen and women in Vietnam, lack a solid understanding of issues related to regional and global integration and the potential impact on their livelihoods. In fact, the ASEAN Economic Community (AEC) formation by the end of the year or matters related to global integration and Free Trade Agreements (FTAs) such as the Trans Pacific Partnership (TPP) are little more than some vague concept to them. Nguyen Thanh Hai, who operates a 5,000 square metre mango tree farm at the Tan Thuan Tay Village in the Cao Lanh district of Dong Thap province, is a typical example.  Hai was happy to hear the news that Cao Lanh mangoes were allowed to ship to the Republic of Korea (RoK) and Japan, but he is totally unconcerned with whether the RoK is or is not a member of the 12 nations comprising the TPP. His only anxieties relate to whether or not his mangoes will have a chance to ship to these countries and his sole focus is on increasing mango yields and quality as part of his endeavour to get the best price for them. Farmers in the Mekong Delta have little to almost no opportunity to collaborate and coordinate with others in the agriculture industry, so they simply hope that the government will help them sell their products stably. However they are generally cognizant of the fact that they face brisk competition from a wide range of fruits imported from Thailand that have become strong favourites of Vietnamese consumers. The agricultural industry in the Mekong Delta region is now confronted with pressure to reinvent itself in order to adapt to the fiercer competition resulting from the deep and wide integration process. “The agricultural industry has only one way but to move ahead,” especially should the TPP be ratified, said Deputy Head Pham Van Du of the Plantation Department, adding that most likely it will need to “shift to a larger scale model”. Farmers will need to transition from their more traditional production methods and retrain to more modernized and skilled ones, better-witted with market information, Du said. The TPP, if ratified, will undoubtedly result in an increase in trade exchanges with Japan and the US. A reduction of import duties brought about by the agreement should stimulate exports, especially in agricultural and aquaculture, which are strengths of the Mekong Delta. Director Tran Dinh Thien of the Central Institute of Economic Management (CIEM) said the output of agricultural is currently primarily mainly consumed by households in the region. Scientific technology has yet to take root, allowing for increased production and competitiveness in the global marketplace, he underscored. However, the Mekong Delta region’s advantage rests in agriculture that still applies backwards traditional cultivation methods. If it thrives and prospers in a post AEC and FTA world it must evolve in a more decisive manner that integrates seamlessly into the global agricultural production chain, Thiem stressed. The proposed TPP should serve as an incentive for farmers to improve the competitiveness of agricultural and as a consequence more and more Vietnam products will have chances to enter many countries. On the other hand, more foreign agricultural products will begin to flood the Vietnam market and that’s why it’s high time to help farmers to know what the AEC and FTAs are all about so that they are ready for the onslaught of healthy competition. Lotte Mart targets 60 supermarkets in Vietnam Lotte Mart is destined to raise the number of its supermarkets in Vietnam from current 11 to 60 by 2020. The information was revealed by the Republic of Korea (RoK) Vice Consul General Hoong Soon Chang at a recent ceremony to grant Lotte Mart scholarships to 54 outstanding students from 8 universities in HCM City. Mr Hoong said Lotte Mart is one of the major Korean investors in Vietnam, leading in a number of business areas- retail, hotel and cinema. Hong Won Sik, Lotte Mart Vietnam Director General, said the group wants to pour more investment into Vietnam as a result of the nation’s highest growth in the regional retail market. The RoK is the largest foreign investor in Vietnam with more than 4,000 businesses pumping US$32.8 billion into the country up to July 2015. Local business coordinates with Japan to produce chocolate Trong Duc Cocoa Company Ltd. is coordinating with a Japanese partner to produce chocolate for export to Japan, the Republic of Korea and Taiwan (China), said company’s director Dang Truong Khanh. Khanh said initially the company plans to ship around 40 tonnes of fresh cocoa annually. He added that the company is cooperating with farmers in the districts of Dinh Quan, Tan Phu, Thong Nhat and Xuan Loc to develop a special cocoa material zone. To ensure the product quality, the company has invested in production after the UTZ Cocoa Certified Program and developed 134ha of cacao with UTZ Certified good inside in Dong Nai. The program has benefitted farmers by cutting down production cost, and improving productivity and price. The participating farmers have received free training on using fertilizer and pesticide. Khanh said his company is supporting farmers to expand clean plantation areas with the aim of building a credential brand name for Dong Nai cocoa. Licensing regulations put brakes on business The granting of licences in the industry and trade has seen shortcomings though several administrative procedures had been simplified, Le Hong Lam, a representative from Vietnam Bar Federation, said. Lam gave an example of the tobacco processing industry which was granted a licence. However, the tobacco plantations and cutting of fibre for processing were not stipulated under the current laws and not granted licences from the local industry and trade departments. "The regulations have caused difficulties to businesses and have become one of the shortcomings in the current administrative procedures," he added. The units which are in charge of granting such licences also said that they faced difficulty in implementing State management rules as several administrative procedures were too common and caused a misunderstanding or were even in conflict with each other, Tran Thi Phuong Lan, deputy director of Hanoi's Department of Industry and Trade told the conference held here yesterday. The event, co-organised by the Ministry of Industry and Trade and The European Trade Policy and Investment Support Project (EU-MUTRAP), aimed to collect ideas on administrative procedures and regulations in the sector. Lan said the Circular No 58 promulgated by the ministry stipulates that small food production units are not required to apply for certificates of food safety. However, the Decree No 38/CP stipulates that the initial small food production units would not need to apply for the licence. She said the "initial" phrase in the sector has made it difficult for the department to decide whether to grant the licence or not. Another case that has caused a headache is the granting of certificates for food processing units at supermarkets. "Both, the departments of Industry and Trade and Agriculture and Rural Development, do not know who will have the main responsibility," she said, adding that there was a lack of communication between management agencies. Sharing these ideas, Nguyen Sinh Nhat Tan, head of the ministry's Legal Department said the publicity with regard to some administrative procedures has not been effectively done to several businesses. Tan affirmed that the ministry has been extremely transparent and clear in each administrative as well as steps for implementation. However, it has not been strictly implemented in localities. "Time for resolving administrative procedures is stipulated. If ministries and localities refuse to grant licences, they are required to provide reasons in documents," he said. By October 10, the ministry had managed 361 administrative procedures of which 50 are public services. He said, most of the public services would be upgraded to level 3 or 4 in 2016. It means that almost all applications would be implemented online to save time and costs for businesses. The ministry also published all administrative procedures on its website: http://kstthc.moit.gov.vn.  Fibre plant closes due to big losses The Dinh Vu Polyester Fibre Plant in the northern port city of Hai Phong has shut down and faces bankruptcy after only one year of operating due to losses. The plant has the total investment of nearly VND7 trillion (about US$310 million) and planned to use materials from the Dung Quat Oil Refinery Plant to make fibre. PetroVietnam (PVN) owns 75 per cent of the plant. But since the plant started to operate in May last year, it continuously could not sell its products. Observation of the Tuoi tre (Youth) newspaper's correspondent showed that the plant's large property did not have anybody in it except for some guards at the gate. Most of rooms in the plant were locked, and only some workers passed by to maintain equipment. It was the second time this year the plant had to temporarily closed, according to the newspaper's research. The first time it stopped its work was from January 6 to March 12. The second time was from September 9 and is scheduled to last until the end of this year. About 1,000 workers of the plant are temporarily out of work. A spokesperson for the plant told the newspaper that it was because by the end of March this year, the plant suffered a loss of VND1.7 trillion (about $76.5 million). Reasons for the losses were that expenses were higher than expected. For instance, it was scheduled to spend about $4.6 million on electricity a year, but in fact the plant spent $12 million on power. It planned to use $500,000 for chemicals a year, but in fact it needed $11 million. The plant could not sell its products due to some quality problems, said the speaker. According to a report from the Ministry of Industry and Trade, the plant produced 32,000 tonnes of products in the first five months this year, but sold only 23,000 tonnes. The plant lost at least VND3.3 million ($140) for each tonne of products. To improve the plant's condition, PVN proposed the Ministry of Finance and Ministry of Industry and Trade give the plant breaks on taxes and some expenses such as electricity, land and waste water treatment during the next two years. PVN also proposed the two ministries give preferential treatment on taxes and loans for domestic fibre plants which buy the plant's products. But the two ministries did not accept the proposal. To reduce the plant's difficulties in the short term, the Ministry of Industry and Trade sent a document to textile plants and associations asking them to give priority to products of the plant. But a representative from the ministry said that the plant's financial condition still faced a lot of obstacles and it could go bankrupt. State investment firm sets assets target The State Capital Investment Corporation (SCIC) expects to have assets of US$22.5 billion by 2020, it said at a ceremony marking its 10th founding anniversary in Ha Noi yesterday. By 2030, it is set to develop into a regional-scale financial corporation that manages a combined $46 billion. National Assembly Chairman Nguyen Sinh Hung and Deputy Prime Minister Vu Van Ninh attended the ceremony. Looking back at the past 10 years, the SCIC exercised its State ownership representation rights in around 1,000 enterprises worth more than VND8.7 trillion ($395.4 million), including six equitised corporations. At the PM's request, an additional 20 State-owned corporations and groups will transfer their ownership rights to the SCIC from 2015-2016. The firm was awarded with the Labour Order, the first class, on the occasion. The return on equity ratio averages 15 per cent to 17 percent, bringing a total after-tax profit of more than VND30 trillion ($1.36 billion). Compared to 2005, its turnover has soared 65-fold, total assets are up 14 times, State budget contribution is up 41 times and after-tax profits have increased 61.5 times. The SCIC has offloaded State capital to pull in VND5.36 trillion ($243.6 million) and its portfolio now comprises 230 firms with a booking value of VND17 trillion ($772 million) and market value of VND78 trillion ($3.54 billion). Its total equity is currently valued at nearly VND35 trillion ($1.59 billion). It has also taken the lead in equitisation with 90 percent of its single-member limited liability companies going public. In his speech, Deputy PM Ninh asked the SCIC to continue improving its operating model, speeding up divestment in several companies and performing its role as a shareholder in several large-scale and efficient firms.  Apartment building fees under debate Residents of high rise apartment buildings are concerned that management boards are squandering maintenance fees. According to the law, the owner of an apartment has to pay an extra two percent of the total apartment sale price for the maintenance of facilities inside the building. Draft regulations on apartment block management, proposed by the Ministry of Construction (MoC), clarify that the building's developers are in charge of opening a bank account for temporary management of the fees when the building management board has not yet been established. The fees must be given to the management board no later than seven days after the board is set up. In a seminar to discuss the draft regulations on Friday, Nguyen Nhu Vinh, general director of Hoang Thanh real estate company, said that many management boards have been unclear in using the fees. The maintenance fees may be massive in many apartment buildings, comprising up to millions of US dollars. "If the fees are used effectively, they can last from 40 to 50 years. Otherwise, they can run out within ten years. It is necessary to advise residents on how to use the fees effectively," Vinh added. The holders of the fees' bank account should include one person representing the developers and two members of the building management board to prevent the risks in case the board members sell their apartments or no longer live there, suggested Nguyen Quoc Hiep, chairman and general director of the Global Petrol Investment Joint Stock Company (GP Invest). Nguyen Manh Khoi, deputy head of the MoC's Housing and Real Estate Market Management Agency, said that to ensure the correct use of the fees, strict rules on the board's financial management have been imposed in the draft regulations. Accordingly, the management board can only open a bank account when they prove all documents required by the bank. The amount of withdrawn money and the number of bank account holders must be determined at the board's meetings. The board members are allowed to withdrawn the money when 100 per cent of the board members agree, he said. Regarding the fact that many apartment building developers have not returned maintenance fees to the management board even after the board has been established, Khoi said that the People's Committees would apply coercive methods to force developers to refund the fees. Recently, the Viet Nam Construction and Import-Export Joint Stock Company (Vinaconex) was reported to delay the refund of VND70billion (US$3 million) of fees for N05 Trung Hoa Nhan Chinh apartment building residents in Ha Noi. Earlier, people living in Keangnam Ha Noi Landmark Tower, the country's highest skyscraper, demanded their money back from the South Korean developer. VN, Thai firms eye closer ties Vietnamese and Thai businesses discussed increased co-operation between themselves at the second congress of the Business Association of Thai Viet Nam (BAOTV) held in Udon Thani Province on Sunday. Association chairman Nguyen Quang Trung said in its six-year existence the association has organised many activities to connect Vietnamese and Thai businesses. More than 200 business delegations have visited Thailand to explore business opportunities, he said. Besides, hundreds of Thai businesses and Vietnamese-owned businesses in Thailand were helped by the association in looking for investment and business opportunities in Viet Nam, he said. BAOTV is also organising programmes to help its members prepare for the ASEAN Economic Community that would come into being at the end of this year, he said. Deputy Foreign Minister Vu Hong Nam, who is also chairman of the Committee for Overseas Vietnamese Affairs, said he was delighted to see the success of Vietnamese business people in Thailand. He gave away certificates of merit to BAOTV and Trung for their achievements in mobilising the Vietnamese community. The congress elected new leaders for 2015-17, including Ho Van Lam who became the chairman. Lam said the association plans to increase exchanges and strengthen businesses links between Vietnamese entrepreneurs in Thailand and their Vietnamese and Thai counterparts. It would also work with authorities in Viet Nam to provide its members with essential legal information pertaining to the country to facilitate investment and business.  S Korea imports Vietnamese mangoes Cao Lanh District in the Mekong Delta province of Dong Thap shipped nearly 20 tonnes of Hoa Loc and Cat Chu mangoes to the Republic of Korea in early October, showing positive signs for local farmers. According to the My Xuong Mango Collective, the price of Cat Chu mangoes ranges from VND20,000 to VND25,000 ($0.9-$1.1) per kilogram, and Hoa Loc mangoes range from VND50,000 to VND70,000 ($2.25-$3.15). The collective has received weekly orders of up to 30 tonnes of mangoes, which are grown under the Vietnam Agriculture Practice (VietGAP) and the Global Good Agricultural Practice (GlobalGAP) standards from KTC Ltd., Co. for export. Da Nang transfers stake in Vinataba Da Nang has transferred 30 per cent of its stake in Viet Nam National Tobacco Corporation (Vinataba), worth VND56.6 billion (US$2.7 million), to the company as part of an agreement. Vice-Chairman of the city's People's Committee Phung Tan Viet said the transfer of funds would help Vinataba restructure its business and production for future growth. The stake will be used for investment by Da Nang Tobacco Company, a subsidiary of the corporation. Vinataba Chairman Vu Van Cuong said the corporation earned VND11.217 trillion (US$534 million) in revenue in the first five months of this year, contributing more than VND3.2 trillion ($152 million) to the state budget.  PNJ cancels share sale, opts for bond issuance Phu Nhuan Jewelry JSC (PNJ) has decided it will not sell 20 million shares to the company's current shareholders, local media reported yesterday. The plan was announced early this month to raise the company's capital by 20 per cent to VND1.2 trillion (US$52.4 million). Instead, PNJ will issue bonds this year, which will be worth a maximum of VND500 billion ($22.2 million), valued at VND1 million ($44.4) per bond and will mature within one year. The amount of money collected from the bond issuance will be spent on restructuring VND350 billion ($15.6 million) of the company's short-term loans and developing a retailer network, which is worth VND150 billion ($6.6 million). The bonds will be divided into two types – a secured bond, which are stakes owned by shareholders with benefits such as dividends and rights to purchase shares, and non-secured bonds. The bond interest rate will be based on the market interest rate at the issuance date and will be fixed until the maturity date.  BVSC reports lower Q3 revenue Bao Viet Securities Corporation (BVSC) has reported its revenue in the third quarter of this year fell 16 per cent from a year ago to VND65.74 billion (US$2.92 million). Of which, revenue from the brokerage sector fell 27 per cent and revenue from trading stocks dropped 33 per cent. During the third quarter of this year, BVSC reduced its operation costs by 44 per cent to VND21.64 billion ($962,000), however, its management cost was up 149 per cent to VND27.46 billion ($1.22 million). Consequently, BVSC recorded a net profit of VND17 billion ($753,333) in the third quarter, a decrease of 41 per cent from a year ago. In the first nine months of this year, BVSC recorded a revenue of VND212 billion ($9.42 million) and a net profit of VND84.2 billion ($3.74 million), equal to 70 per cent of this year's target.  Real estate developers in final rush Developers are actively pushing their sales campaigns to sell units to Vietnamese buyers before the year ends. Last week, CapitaLand launched 200 units in the Orchid building, the best building of Vista Verde, with more than 100 units registered to buyers. According to Nguyen Thuy Duong, director of Marketing and Business of South CapitaLand, more than 100 units were sold at the launching ceremony, confirming the allure of the real estate market in the eastern areas of Ho Chi Minh City. Located at an ideal venue in District 2, Vista Verde is expected to produce high profit, with the price increasing by 30 per cent since the end of 2014. Meanwhile, another domestic developer, Vingroup, has been continuously pushing its projects. Among these is Vinhomes Central Park in Ho Chi Minh City, with thousands of units on offer. Vingroup has also announced its new partnership with Saigon Port to develop a 32-hectare prime site at the Khanh Hoi port waiting to be removed in District 4 in the eastern area of the city. Dai Quang Minh Real Estate Company has also introduced two new condominium projects in District 2 to the market last week. The Sarica Condominium and Sadora Apartment projects will offer combined 780 units to the market. Those projects will be finished in mid-2017. In the third quarter of 2015, positive market momentum continued, boosting new launch activities and sales performance. According to CBRE Vietnam, a total of 10,114 new units were launched from 26 projects, triple the number seen in the same period last year. By location, new supply from the south, encompassing districts 4, 7, 8, and Nha Be, accounted for 36 per cent of the total newly-launched stock, while the recent hot spot in the east (districts 2, 9, Binh Thanh, and Thu Duc) accounted for a more modest 29 per cent this quarter. “The market is believed to witness more competition between these two hot zones in the coming time, especially in the context that the Thu Thiem new urban area in the east has begun development, with the first condominium blocks, called Sarimi, being launched in the third quarter of 2015,” said Dung Duong, director of CBRE Vietnam’s Research and Consulting. The review quarter also witnessed a repackaging of some long-delayed projects where new developers have taken over and revitalised developments by providing more finance or redesigning the unit layout, size, and mix. These projects include City Gate Towers (District 8), Linh Tay Tower (Thu Duc district), and C.T. Plaza Nguyen Hong (Go Vap District). CBRE Vietnam commented that overall, market sentiment remained relatively positive despite the “ghost month,” with good cash inflow from buyers.  An estimated 7,862 units were sold during the quarter, signifying an increase by 88 per cent year-on-year.  Continuing the trend from last quarter, high-end apartments still account for an increasing share of units sold. For the first nine months of 2015, high-end apartment sales accounted for 35 per cent, up from the 32 per cent reported at the end of 2014. However, cautiously looking at the sales performance of new launches in the third quarter of 2015 showed an absorption rate of 35.1 per cent, partly due to the fact that buyers lack confidence in suspended developments. Central Highlands province to revoke six project licences The Central Highlands Dak Nong Province will revoke the investment licences of six tourism projects because of their slow commencement of work. Deputy Director of the provincial department of culture, sports and tourism Bui Quang Mich said the six ecotourism investment projects, with a total registered capital of VND1 trillion (US$47.6 million), were to cover an area of 900ha, but the investors were yet to start construction. He said Dray Sap-Gia Long and Fairy Fall Ecotour projects were the largest projects with total investments of VND700 billion ($33.3 million). He said the province has invited powerhouses to take the place of the delayed construction projects. According to the province's investment promotion centre, the Viet Nam National Coal and Mineral Industries Group has registered capital of VND722 billion ($34.4 million) for its Nhan Co bauxite project. Last year, the Nguyen Kim Trading and Apartment Complex and the International Hospital were the two largest domestic projects with a total investment of VND7.2 trillion or more than $343 million. The province has received only nine foreign direct investment projects with $34.29 million in capital. Korea's Intellect Company has proposed to invest in a solar cell plant in the province. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR