BUSINESS IN BRIEF 29/10 Garment and textile exports to the US hit US$9.4 bil in ten months Vietnam’s garment and textile exports to the US are estimated to earn US$9.4 billion in the first ten months and are likely to reach US$11 billion this year.  According to statistics from the General Department of Vietnam Customs, Vietnam’s garment and textile exports to the US in the first nine months rose 13.6% to US$8.33 billion against the same period last year. Last year, exports to this market surged 12.6% to US$9.8 billion compared to the previous year’s corresponding period. Nguyen Thi Tuyet Mai, Chief of HCM City office, Vietnam Textile and Garment Association (VITAS) said Vietnam’s exports to the US market have enjoyed favourable conditions as the number of orders jumped over 13% compared to last year’s corresponding period. Earnings from exports to the US, a Trans Pacific Partnership (TPP) member nation, made up 45% of Vietnam’s garment and textile export value.  The substantial tariff reduction to zero percent from the current 17%-30% under the TPP will be favourable for businesses to expand their US market in the coming years.   Nam Duong Sauce gets infusion from Wilmar International Singapore-based agribusiness giant Wilmar International has agreed to invest US$13 million in a 49-51 deal with Vietnamese sauce maker Saigon Co.op to produce differing types of sauces and spices. According to the announcement, Saigon Co.op will form a new subsidiary – Nam Duong International Food Co, Ltd – to construct and operate manufacturing facilities at the Hiep Phuoc Industrial Park in the Nha Be District of Ho Chi Minh City. The Nam Duong brand has been well-known for its Tau Vi Yeu soya bean sauce, which first appeared in Vietnam in 1951. Vietnam losing small retailers to free trade Retailers throughout Vietnam should form affiliated chains to improve their competiveness with foreign rivals, said experts at a recent seminar in Hanoi discussing the opportunities and challenges brought about by free trade. Director Vo Van Quyen of the Ministry of Industry and Trade (MoIT) Domestic Market Department said the retail sector in Vietnam has experienced an average annual growth rate of nearly 16% over the past four years. “However, all of the growth has come from foreign retailers entering the market,” Quyen said and the domestic economy has actually experienced “a drop in the number of retail establishments”. As of the end of 2014, foreign companies had invested in 80 supercentres, 50 specialized small shops and 250 convenience stores in Vietnam Quyen said, adding that 10 retailers from Europe and Asia dominated the nationwide retail market. Quyen said the foreign retailers are having a profound effect on the economy due to their superior business experience and managerial skills and ‘they are better equipped financially to expand their infrastructure in Vietnam compared to their domestic counterparts”. Director General Phan Chi Dung of the Light Industrial Department in turn said the competitiveness of domestic companies is limited due to lack of access to credit, small production scale and lack of management experience. Most importantly, they simply are not professional in their approach to retailing and lack the skills to lay out detailed business and marketing plans he said, adding that few have taken the time to specifically identify a unique selling proposition that distinguishes them from their competitors. Another important part of the business plan Dung said is distribution, or in other words, discerning precisely how customers will buy from the company. For example, will customers purchase directly from the retail store on will they go online and purchase at the company’s website? Or will they buy from other distributors or other retailers? And so on and so forth. To create improved conditions for domestic retailers to develop their distribution system in the future, Quyen said the government should review and complete regulation-related distribution activities to protect rights and interests of Vietnam under international trade agreements. Quyen stressed the government should also provide support for domestic companies to improve the quality of their work forces and advertising, apply information technology and approach credit. “Retailers should form chain affiliations to increase their ability to more cost-effectively purchase through bulk buying, and benefit by advertising together, which also helps with developing brand recognition.” For his part, Central Institute for Economic Management (CIEM) Deputy Head Vo Tri Thanh said local retailers should seize the opportunities to expand their selling markets brought about by integration. They should accept competition and change from competing on price to competing in terms of quality of product Thanh said and “they need to understand that higher quality can only be obtained at a higher cost and in turn sales price”. “Retailers who only focus on selling at a lower price are doomed to failure,” Thanh underscored. Last but not least, Deputy Head Trinh Minh Anh of the National Committee on International Economic Cooperation's administration office suggested domestic retailers pay close attention to changes in the market and keep abreast of the short, medium and long term trends. EU manufacturers of lifestyle products eye Vietnam market Some 100 business-to-business meetings are tailored during “Lifestyle Trade Mission to Vietnam 2015”, a Vietnam-EU trade promotion programme held in Hanoi and Ho Chi Minh City from October 27-30. The event is jointly organised by the EU-Vietnam Business Network (EVBN) and the European Chamber of Commerce in Vietnam (EuroCham), bringing together enterprises from Belgium, France, Italy, Spain, Portugal and the United Kingdom in the sectors of home décor, furniture, tableware, home appliances, and lighting. Speaking at the programme’s opening session in Ho Chi Minh City on October 27, David Hodkinson, Design Director of design firm Noor Ho Chi Minh, said the Vietnam-EU Free Trade Agreement (FTA) and the Trans-Pacific Partnership (TPP) are expected to pave the way for more business opportunities for enterprises. Many European firms have been looking for partnerships in Vietnam, the country of more than 90 million people who form a promising market for lifestyle industries, particularly high-end brands, he added. According to a representative from the Vietnam Chamber of Commerce and Industry (VCCI), consumption of high-end home décor and furniture products has experienced a sharp rise over the past few years and those produced in Europe have been especially sought after in high demand largely because of their top-grade designs and quality. Delphine Rousselet, Project Director of EVBN, urged Vietnamese businesses to add more values to their export products. They should also build their own brands with more focus on product research and design, she stated. Digiworld named among top 50 Vietnam brands Technology and electronic products distributor Digiworld Corporation (Digiworld) has been listed among top 50 Vietnam Brands 2015 by Brand Finance, a brand valuation and strategy consultancy. Brand Finance values the Digiworld brand at 19 million USD. The value of the company is 75 million USD. Last year Digiworld achieved revenues of 230 million USD, a 60 percent increase from 2013. The company distributes products made by top brands like Acer, Samsung, Dell, Toshiba, Samsung, Gateway, Genius, Logitech, Lenovo, and Nokia. It has 6,000 stores around the country. Brand Finance every year announces the values of more than 57,000 brands in the world, and this year the Vietnam list also includes Vinamilk, Viettel, and Vinhomes. Savills offers residential sales, leasing services for foreigners Savills Vietnam on October 27 announced the launch of its International Residential Sales and Leasing Department in Ho Chi Minh City intended to provide services for foreigners. According to the real estate service provider, the number of foreign experts flocking to Vietnam has seen a sharp rise since the beginning of 2015. The firm has been receiving increasing enquiries from foreign clients who expressed interest in purchasing or leasing a property in Ho Chi Minh City and surrounding areas. The trend is largely owing to the newly-amended Housing Law which allows foreigners to lease and own a maximum of 30 percent of an apartment building or a maximum of 250 villas or townhouses. The new law effectively provides a registered 50-year leasehold title. Besides, overseas experts and specialists are expected to extend their staying in Ho Chi Minh City once the Trans-Pacific Partnership (TPP), the ASEAN Economic Community (AEC) and the Vietnam-EU Free Trade Agreement come into effect. Timo Schmidt, who has over 9 years of experience in residential property, was appointed as head of the department. He will support foreign clients to find properties not only in Ho Chi Minh City but also in resort cities, such as Nha Trang and Da Nang. Japanese businesses laud Ha Nam’s investment climate Japan-Mekong Business Cooperation Committee delegation head Yoshio Arakawa spoke highly of the investment climate in northern Ha Nam province during a meeting with the provincial People’s Committee on October 27. Yoshio Arakawa, who is also President of the Universal Computer System Co., Ltd, referred to the locality’s geographical location, infrastructural facilities and investment promotion policies. He affirmed that he will introduce the sound investment environment to Japanese enterprises. He hoped that the province will facilitate Japanese enterprises’ operation, particularly in workforce recruitment and procedures relating to investment certificate granting. Meanwhile, Secretary of the provincial Party’s Committee Mai Tien Dung appreciated the investments of nearly 60 Japanese enterprises in the locality in the past few years while committing to consistent policies for Japanese investments. Ha Nam wants to attract foreign enterprises, especially Japanese small and medium-sized businesses, to its support industry and high-tech agriculture, Dung said. He highlighted that Japanese investors will enjoy a line-up of favourable conditions, including abundance of skillful workers, good infrastructure facilities, security and recruitment support. The province is embarking on a training programme that will provide 1,000 workers for Japanese businesses. Dong Van Industrial Park III covering 300 hectares is developed exclusively for Japanese businesses involving in support industry. It will allocate land for rented businesses in early 2016. Dubai-based port operator vows to expand business in HCM City Dubai Port World (DP World) will continue developing the Saigon Premier Container Terminal Port (SPCT) in Ho Chi Minh City, said Rashid Abdulla, Senior Vice President of Asia Pacific DP World and SPCT President. He made his remarks at a meeting with Tat Thanh Cang, Vice Chairman of the Ho Chi Minh City People’s Committee on October 27 to learn about the City’s infrastructure plan in the coming time. Abdulla hoped that local authority will pay more attention to Soai Rap River dredging and upgrading projects, enabling cargos to move in and out the Hiep Phuoc commune-based port more efficiently. For his part, Vice Chairman Cang unveiled that the construction of Hiep Phuoc port urban area and roads that facilitate goods transport from South-eastern to South-western regions are underway. Besides, the City is studying the feasibility of developing ports in the South-eastern region, he said. The municipal leader pledged to offer the SPCT favourable conditions to expand its business and suggested the firm to evaluate cargo transportation demand by foreign corporations in Ho Chi Minh City. During the meeting, DP World was also introduced to several other local infrastructure projects that are awaiting investment, including beltway, elevated highway and urban railway projects. DP World is a company which owns ports around the world. It has a portfolio of more than 65 marine terminals across six continents, including new developments in India, Africa, Europe and the Middle East. Binh Thuan evolves as investment hotspot in south-central Blessed with favourable geographical location, the central coastal province of Binh Thuan is evolving as an attractive investment destination in the south central region. Sitting near the southern key economic region and acting as an intersection of the Central Highlands, south central coastal, and south eastern economic zones, Binh Thuan is steadily utilising its advantages to draw investment in and outside the country. Potential fields include seafood processing, construction materials, mining, fine arts and handicrafts, according to the provincial Department of Planning and Investment. Director of the department Nguyen Duc Hoa said besides enjoying tax incentives and rent-free land, investors also receive local credit assistance in human resources training, technology transfer, and market development. The province is improving the inter-regional transport system to implement a number of key projects such as Highway 1A, Ho Chi Minh City – Long Thanh – Dau Giay Expressway, Phan Thiet – Nha Trang Expressway, and Phan Thiet airport, he added. Chairman of the provincial People’s Committee Le Tien Phuong said the locality is mobilising all resources and making the best use of its advantages to push ahead with rapid and sustainable economic development. Special focus will be placed on developing industry, service and agriculture by establishing energy, mining processing, and marine tourism-sports centers, he revealed. As of October this year, Binh Thuan has attracted 7 billion USD in investment capital, including 1.68 billion USD registered by investors from 24 nations and territories. Conference seeks to develop national food brand name Vietnam needs to draw up a strategy to develop a national brand name for food as it is among commodities with great potential and increasing added value. Deputy Minister of Industry and Trade Do Thang Hai made the suggestion at a conference jointly held by the Trade Promotion Agency, the Centre for Promotion of Imports from developing countries (CBI) and the State Secretariat for Economic Affairs (SECO) of Switzerland in Hanoi on October 27. A programme to build the national brand name for the food sector began in 2014 with an aim to increase prestige in both quality and value and push the growth of the Vietnamese food, Hai highlighted. However, he noted that a number of shortcomings have been seen in brand building and marketing, resulting in low added and export values. At the event, Nguyen Trung Kien, deputy director in charge of business affairs of Nafoods Group, recommended enterprises operating in the agricultural sector combine processing with material production, adding that it will help them increase their productivity. Meanwhile, Julian Lawson Hill, Managing Director of Giraffe Consulting International, underscored that identifying potential customers, trends and demands as well as studying competitors and their logos are what Vietnamese food businesses need to do in the building of their brand names. Enterprises must renovate machines, equipment and technology to reduce material losses during processing and increase food hygiene and safety, he said, emphasising the need for market study expansion, product diversification and completion of distribution channels. Japanese firms called to expand investment in Vietnam Minister of Planning and Investment Bui Quang Vinh has called on Japanese businesses to increase their investment in Vietnam during the third seminar between his ministry and the Japan Chamber of Commerce and Industry in Hanoi on October 27. He pointed out a fact that Japanese investments in Vietnam remain much lower than those in other regional countries such as Thailand, China and Indonesia. “This situation must be improved as the two countries boast their fine political relations, strategic cooperation, 11-year joint initiative and annual dialogue,” he said, adding that the two sides have agreed on investment strategy and investment climate improvement, presenting a good opportunity for Japanese investors to enter Vietnam. However, the minister also admitted a number of weaknesses in the business climate of Vietnam, including poor infrastructure, incomplete legal framework, and a lack of skilled workers. For his part, Yoichi Kobayashi, Chairman of the Japan-Mekong Business Cooperation Committee called for visa exemption to create conditions for Japanese investors to do business in the country. According to a survey conducted by the Japan External Trade Organisation (JETRO), Vietnam granted investment licences to 517 Japanese investment projects last year, including 342 new ones and 175 for business expansion. Statistics from the Foreign Investment Agency under the Ministry of Planning and Investment showed that in the first seven months of this year, Japan was the fifth largest FDI investor in Vietnam with 176 new and 82 expanded projects with combined capital of 716 million USD. Retails sales revenues in 10 months rise Total retails sale and services revenues in 10 months of 2015 were estimated at VND2.661 trillion, a year-on-year increase of 9.6%, according to the General Statistics Office. In October only, the retails sales and services revenue attained VND274,800 billion, up 1.4% against the previous month and up 6.7% compared to the same period last year. Of the figure, the revenues earned from retails sales, staying and restaurants and travel contributed VND211,000 billion, VND30,600 billion and VND2,800 billion while revenues from other services gained VND30,400 billion. The industrial production index in October rose 8.8% against the same period last year, including the growth of mines and ores (up 6.7), the manufacturing and processing industry (up 9.1%), electricity production and distribution (up 12.3%) and water supply and waste management (up 9.4%). The industrial production index witnessed a year-on-year increase of 9.7% over the recent 10 months of the year. Industrial production increases 8.8 percent in October Industrial production index (IPI) posted a year on year increase of 8.8 percent in October, according to the General Statistics Office of Vietnam. Of these, mining industry increased 6.7 percent, processing and manufacturing 9.1 percent, electricity production and distribution 3 percent, water supply and waste treatment 9.4 percent. The index hiked 9.7 percent for the first ten months this year, it was 6.9 percent in the same period last year. The four above industries rose 8.4, 10, 11.5 and 7.4 percent respectively. In October, products seeing the highest IPI increase were automobile, television, cell phone, rolled steel and leather footwear. Localities seeing the highest indexes were Thai Nguyen province with 121.9 percent, Quang Nam 31.9 percent, Hai Phong 15.8 percent, Da Nang 14.1 percent, Hai Duong 10.3 percent, Dong Nai 8.5 percent, Hanoi 7.7 percent and Ho Chi Minh City 7.4 percent. In related news, Vietnam has attracted 1,657 foreign direct investment project as of October 20 this year, a year on year increase of 26.9 percent, reported the Foreign Investment Agency under the Ministry of Planning and Investment. Total registered capital exceeded US$12.4 billion, up 24.8 percent over a year ago. There were 667 projects licensed in previous years registered to raise investment capital with an extra of US$6.9 billion.  New registered and additional capital so totaled nearly US$19.3 billion, up 40.8 percent. Disbursement was estimated to reach US$11.8 billion for the last ten months, up 16.3 percent. FTAs create motive force for agricultural reform, experts Free trade agreements (FTA), especially the Trans-Pacific Partnership (TPP), will create a motive force to reform the agricultural industry and remedy its weaknesses, because integration commitments have been made in the same direction with ongoing efforts by the Government to develop the industry, said Dr. Vo Tri Thanh, deputy head of the Central Economic Management Institute at a conference on effects of TPP on agriculture.  Difficulties and challenges do not aim to frighten businesses and farmers but urge them to re-determine development strategies, minimize and overcome negative impacts from integration, he added.  Many experts have expressed concern that FTAs and TPP would put heavy pressure on the agricultural industry, particularly breeding.  Vietnam’s agricultural production has been scattered over small scales in most fields. Outdated technologies in production and processing after harvest have caused low quality and high costs.  The breeding industry depends on import feed and regularly faces diseases. Adding to the woes is loose connectivity, and weak environmental protection which has resulted in low food safety and hygiene, they added.  Former Trade Minister Truong Dinh Tuyen, consultant of TPP negotiation delegation, said that TPP would bring opportunities but they would not turn into profits and market strength themselves.  Mr. Tu Minh Thien who is deputy head of the management board of the HCMC Agricultural High Tech Park said that related sides should manage to take advantage of opportunities and reduce challenges from TPP, make it a motive force to restructure the agricultural industry which has long focused on quantity not quality,  Agricultural experts said the Government would play a significant role in improvement of the agricultural industry’s competitiveness by creating an advantageous and fair business environment.  Dr. Nguyen Quoc Vong said that the Government should build a long term land use policy and goods production and supply chains, assist hi-tech application and map out strategies for farm produce exports. Flexible policies should be applied to help businesses improve their competitiveness, he added. Vietnam welcomes 6.34 million tourists, seeing slightly decrease Vietnam welcomed over 649, 000 international tourist arrivals in October, increasing 3.6 percent and 16.1 percent compared to last month and the same period last year respectively. However, number of international tourists arrived in Vietnam between Jan. and October  decreased by 4.1 percent compared to the same period last year, reached only 6.34 million visitors.  The number of tourists from China, Laos, Philippines, Russia, France and Sweden visiting Vietnam reduced sharply. The country saw a dramatic decrease of Australian visitor number, representing 281,500 arrivals reduced by 6.6 percent.  Meanwhile, number of visitors from the Americas increased by 1.1 percent, reaching 524,000 arrivals. The United States topped the list with the most 403, 900 visitors, a 7.9 percent jump over the same period in 2014.  There was a breakdown of African visitors, going up at least 48.2 percent. 77,500 new businesses established in 10 months As many as 77,542 businesses were established over the past 10 months of 2015, with a total registered capital of VND486,100 billion, year-on-year increases of 29.2% in number and 37.9% in capital, according to the General Statistics Office. In October only, 9,195 enterprises, capitalizing VND65,200 billion, were set up, witnessing increases of 30.6% in number and 46.4% in capital compared to the previous month. In comparison with the same period last year, the number of newly-established businesses and registered capital saw respective rises of 34.6% and 102.8%. The average capital per one business attained VND7.2 billion, up 12.1% against the previous month. A total number of 157,900 jobs were created, up 25.4%, raising the total number of jobs created in 10 months to 1.157 million, a year-on-year increase of 31%. Total additional capital fetched VND737,800 billion over the recent 10 months. In October, 3,350 businesses re-operated, up 121.1% while 16,198 businesses stopped operating, up 24.6%. Tien Sa Port set for major upgrade Da Nang Port, the largest in central Viet Nam, will invest VND1 trillion (US$47.6 million) for the second phase upgrade of Tien Sa Port in the second quarter next year. Crane loads container at Da Nang's Tien Sa Port. The central city's port company plans to invest US$47.6 million to upgrade the port in the second phase. - VNS Photo Cong Thanh The chief executive officer (CEO) and chairman of Da Nang Port Company told Viet Nam News that the upgrade was aimed at raising the port's standards to an international level in the coming years. "We have raised funds ourselves and via shareholders for the second phase of Tien Sa Port's upgrade in the 2016-18 period. The port was designed to handle 14 million tonnes of cargo, including 800,000 TEUs (twenty-foot equivalent unit), in 2025," Thu said. "We decided not to use Official Development Assistance (ODA) funds for the port, and hope to accelerate the construction process to begin operations soon," he said. Company General Director Nguyen Huu Sia said the Foreign Trade Bank of Viet Nam (Vietcombank), the Bank of Investment and Development of Viet Nam (BIDV) and the city's Investment and Development Fund have agreed to provide loans for the project. "We have also raise VND350 billion ($16.6 million) ourselves for the project, and have called for investment from shareholders and other sources," Sia said. As scheduled, Tien Sa Port will be built as a ‘valley' of logistics, warehouse, transport and digital customer clearance services, besides having representative offices of shipping companies and banks. Sia said two piers, measuring 310m and 210m in length, would be constructed to dock container ships. Last year, Da Nang's ports handled a record six million tonnes of cargo, and hosted nearly 120,000 tourists disembarking from cruises. The company also sold more than 8.3 million shares, worth 12.57 per cent of the charter capital, in its initial public offering (IPO) in Ha Noi last June, with each share being offered at VND11,400 ($0.54). According to the port, the actual value of the state capital in the port is VND654.5 billion ($31.16 million). The company's revenue grew in the last three years (2011-13) from VND307.9 billion to VND446.5 billion ($14.6 million-$21.2 million), while its after-tax profit increased from VND8.6 billion to VND44.9 billion ($409,000-$2.1 million). The port, established in 1976, has operated as a limited company under the ownership of the Viet Nam National Shipping Lines (Vinalines) since 2008. According to Viet Nam's seaport system development plan towards 2020, Da Nang Port has been confirmed as a major commercial port in the region, making it one of the key gateways to the East Sea from the sub-Mekong region. It handles cargo communication and encourages economic development and tourism in Viet Nam's central provinces and the Central Highlands, southern Laos and northeast Thailand via the East-West Economic Corridor. Currently, Tien Sa Port allows access to only 30,000 DWT (deadweight tonnage) ships, while 50,000 DWT container ships can dock at Lien Chieu. The central city and the port of Kawasaki in Japan have agreed to open a shipping route connecting the two ports in the future. Sapporo remains efforvescent despite consecutive losses Sapporo Breweries, brewer of the oldest beer brand in Japan, has reaffirmed its commitment to the Vietnamese market and its high potential, despite consecutive years of loss. At a recent meeting with the media, Sapporo Vietnam’s general director Mikio Masawaki revealed that the company hadn’t made a profit in the past four years after the opening of its Vietnamese factory in the southern province of Long An in 2011. Masawaki said that in 2014, Sapporo Vietnam saw two-digit growth in the revenue, but did not give details. The company did not publicise its 9-month results either, but Masawaki said this year the company was aiming for a similar growth rate. “Sapporo invested a lot in marketing and promotion to build the brand and create the basis for development in the future. That’s why Sapporo is not making a profit,” Masawaki explained, but added that “competition in Vietnam’s beer market is tough, so we think we have to continue investing in marketing to build and firmly position the brand.” He remarked that in the past 5-10 years, the Vietnamese beer market grew very strongly, but recently, the growth decreased to about 7-8 per cent per year. However, each segment is growing at a different speed. According to a recent research by Nielsen, the medium-high and high-end segments of the domestic beer market should see their market share rise to 70 per cent from the current 55 per cent. The reason is that Vietnam’s income per capita is on the rise, and the demand for higher end beer is rising with the standard of living. According to Masawaki, Sapporo is firmly positioned in this segment. “In Ho Chi Minh City, we’re right behind Sabeco and Vietnam Brewery Limited in market share, but we don’t have official statistics yet,” he said. “After putting in place the basis for development, we hope to get to a phase of growth, then we’ll make a profit.” Sapporo  Breweries can’t give information on when that will be; however, the parent company aims to raise Sapporo Vietnam’s revenue to 50 per cent of its total overseas revenue. Sapporo Vietnam has just bought a 29 per cent stake in its Long An brewery from state-owned Vietnam National Tobacco Corporation (Vinataba). The Japanese company now owns 100 per cent of the 6.5-hectare brewery, which has the designed capacity of 40 million litres per year and is expected to reach the maximum capacity of 150 million litres per year in 2019. It is Sapporo Breweries’ third beer factory, with two others in Japan and the US. Sapporo Vietnam is also seeking to expand its network of vendors, which remains confined mostly to the Ho Chi Minh area, near its brewery. Around 4,000 restaurants and shops now sell Sapporo Premium. By pushing into Hanoi, Danang, and other areas, the brewer aims to increase this number to 7,000 or so by the Tet holiday next February. Vietnam’s beer market measured just 3.41 million kilolitres in 2014, but is projected to grow about 40 per cent by 2019, according to the UK-based research company Euromonitor. The market is still deemed attractive, with foreign breweries continuing to affirm commitment to the country. According to chairman of Carlsberg Group Flemming Besenbacher, Vietnam is a potentially huge market, with its young population base, and thus has always remained in Carlsberg’s long-term commitment agenda. Carlsberg, which currently has four brands in Vietnam, namely Carlsberg, Huda, Huda Gold, and Halida, is also exporting beer produced at its Vung Tau brewery to other markets, like Hong Kong and Singapore. In May this year, Anheuser-Busch InBev Vietnam, the subsidiary of multinational beverage and brewing company Anheuser-Busch InBev, started the operation of its first brewery in Southeast Asia in the southern province of Binh Duong. The 100 million-litre per year brewery shows the company’s long-term commitment to Vietnam, according to general manager of Anheuser-Busch InBev Indochina Ricardo Vasques, who added that the company was going to expand investment and production in the country. Ho Chi Minh City official demands $15,000 for investment license for British firm The deputy chief of a center under the Ho Chi Minh City Department of Planning and Investment has reportedly asked a company to pay US$15,000 under the table to clear paperwork issues to get an investment license. Taiwanese businessman Peng Jung Min and his Vietnamese employee Tran Thanh Thanh have told Tuoi Tre (Youth) newspaper how they received the explicit suggestion to pay unofficial money to have their license application approved from an official from the department’s investment support center. In July 2015, Peng authorized Thanh to seek an investment license for a project in Vietnam, to be developed by K.S.T. International Holdings Ltd., which is registered in British Virgin Islands, at the Ho Chi Minh City Department of Planning and Investment. The Taiwanese said he had included all relevant documents showing that British Virgin Islands is a British overseas territory in the license application file. But an employee in the department’s foreign investment office said he would not be able to get the license because the British Virgin Islands does not belong to the UK and is not a World Trade Organization member. Some officials then explicitly asked for a “service fee” to get the work done, Thanh told Tuoi Tre. However, when Peng and Thanh visited the department again on August 24, some officials agreed to take their application, and asserted the project was eligible to be licensed. Peng then informed K.S.T. International Holdings of the good news, and the developer earmarked more than VND1 billion ($44,643) to lease premises, build facilities and recruit employees to prepare for the investment. On September 7, the department did an about-face by officially announcing that the license application was rejected because “British Virgin Islands is not a World Trade Organization member,” so Vietnam does not necessarily have to open its market to investors from this territory. The Taiwanese businessman said he was very disappointed to see the department giving totally opposite decisions on the same application. He thus called on Tuoi Tre to look into the case, and the newspaper sent one of its reporters to accompany Thanh to get to the department on September 28. The Tuoi Tre correspondent and Thanh were received by Lai Thi Kim Khanh, deputy director of a center in charge of investment support and consulting under the department, in her office. Thanh told Khanh he was facing problems in getting the investment license, and the woman said the case would require “lobbying at the minister-level,” referring to the Minister of Industry and Trade. Khanh added she would ask “an outside source if they can help,” and told Thanh to prepare up to $15,000 as a “service fee.” On October 2, the woman phoned Thanh to let him know that the source had agreed to help him get the license for a fixed price of $15,000. Thanh demanded that the affair succeed with 100 percent certainty, but Khanh only smiled at the request. “I will have to fly to Hanoi to meet people there,” she said, after telling Thanh that the payment had to be made in cash. On October 7, Khanh asserted that Thanh would surely receive the license, and demanded he give her 70 percent of the deal, or $10,000, in advance, and she would return the sum if the affair fails. Thanh reported the case to the Ho Chi Minh City administration, and the municipal chairman Le Hoang Quan demanded that the planning and investment department resolve the issue by October 15. But Thanh said he had yet to receive any information from the department as of last weekend, and is still waiting for a reply from Khanh. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR