BUSINESS IN BRIEF 16/11 Thai Nguyen to establish IT park Thai Nguyen Province has worked with the Ministry of Information and Communications over a plan to establish an information technology park at a cost of VND3.69 trillion (US$166.6 million). The 545-hectare IT park would be developed in three phases between 2015 and 2024 by a joint venture consisting Yen Binh Investment and Development Joint Stock Company (JSC) and Hanoi General Import Export JSC. At the meeting, director Vu Quoc Thanh of the Information and Communications Department of the northern province said the park would be situated in the Yen Binh urban, industry, agriculture and service complex with good transport, telecommunications and IT infrastructure and human resources. The project is in the middle of five major cities – Hanoi, Thai Nguyen, Bac Ninh, Bac Giang and Vinh Yen – with a combined population of over 16 million, and it is only 16 kilometers from Noi Bai International Airport. The IT park will center on IT research, development, application and transfer; production and sales of IT products and provision of IT services; human resource training; technology incubators; and promotion of domestic and foreign investment. Thai Nguyen Province’s chairman Duong Ngoc Long said the project would facilitate the industrialization and modernization of the province and make Thai Nguyen an IT and electronics center in the nation’s northeast before 2020. Yen Binh JSC chairman Vu Xuan Hop said the project was based on research on advanced models in the U.S. and Europe, so it could potentially attract dozens of billions of U.S. dollars from multinationals. Ho Tram Strip gets US$50 mil. from Harbinger Capital U.S. investment fund Harbinger Capital has announced to inject an additional US$50 million into Ho Tram Strip, the 2.2-km beachfront tourism development in Ba Ria-Vung Tau Province, raising the total investment in the project to nearly US$1 billion. The investment is the second in the past 14 years of Harbinger Capital for the tourism project worth an estimated US$4.2 billion and developed by Ho Tram Project Company Limited, a wholly owned subsidiary of Asian Coast Development Limited (ACDL). Additional capital is earmarked for several signature components, including construction of the second building of The Grand, villas and condos, additional leisure amenities in and around The Grand, as well as organization of the Ho Tram Open golf tournament slated for early next month. ACDL has recently announced the appointment of Michael Kelly as executive chairman of the company. Kelly oversees all aspects of ACDL and Ho Tram Project Company Limited. “It is an incredibly exciting time to be leading the Ho Tram Strip development,” Kelly said, adding the strong commitment of investors enables the company to accelerate the next phase of the Ho Tram Strip.  Ho Tram Strip that opened in 2013 now comprises The Grand Ho Tram, a 541-room integrated resort, and The Bluffs golf course, and the second tower which is under construction will raise the resort’s inventory to 1,100 rooms. Future developments at the project include a second integrated resort, three other five-star resorts, an extensive residential offering and additional entertainment facilities. Vietnam takes advantage of staples when joining TPP Vietnam aims to make the most of its key export products such as farm produce, seafood and garment-textiles when joining the Trans-Pacific Partnership (TPP) agreement. According to Vietnam Chamber of Commerce and Industry (VCCI)’s Director in Can Tho, Vo Hung Dung, this will be an opportunity for Vietnam’s farm produce and seafood to accee major TPP markets with preferential tariff. However, countries are utilising technical barriers and sanitary and phytosanitary measures to prevent Vietnamese farm produce from reaching markets. Besides, Vietnam must remove tariff lines for all products, including farm produce, said Nguyen Anh Tuan, editor-in-chief of the Diplomatic Academy of Vietnam’s International Studies Magazine under the Ministry of Foreign Affairs. The tariff reduction will allow more goods imported from TPP countries into Vietnam with competitive prices, he added. This is particularly worrisome for farm produce, he said, citing sugar import taxes as an example. Vietnam currently applies a 5 percent tariff on sugar from ASEAN members, but up to 40% from non-ASEAN countries and TPP-involved parties. Regarding the seafood sector, the Vietnam Association of Seafood Exporters and Producers said 40% of Vietnamese seafood was shipped to TPP countries in 2013. The US accounted for over 20% and Japan for over 17%. Japan is the main importer of Vietnamese tuna, but the current tuna tariff stands at 6.4% to 7.2%. Meanwhile, the Vietnam Textile & Apparel Association said it hoped the TPP agreement would help the sector earn US$30 billion in export revenue by 2020 and US$55 billion in 2030. The TPP will eliminate current tariff rates of 3.5-57.4% to zero percent for Vietnamese footwear products. The sector is generating jobs for 600,000 workers. This is expected to reach a million once the TPP deal goes into effect. Additionally, deeper involvement in the global value chains will help the footwear industry avoid trade fraud and protect intellectual property for big brands, an expert said. Mutual benefits from the trade pact are extremely huge – especially increasing relations between investors inside and outside the TPP. Vietnam is expected to benefit most from the pact, as it is increasing trade with the US and Japan – the biggest TPP markets. Investment flow poured into Phu Quoc Island The presence of large investors like Vingroup and Sungroup on Kien Giang province’s Phu Quoc Island is expected to increase the investment flow into the “pearl island”.  Phu Quoc has so far attracted more than 200 projects with a total registered capital of 168 trillion VND (nearly 8 billion USD). Investors are ramping up major infrastructure projects such as holiday resorts and amusement parks.  Vingroup is building the Vinpearl Phu Quoc resort complex, which spans 300 hectares in Ganh Dau commune. The first phase of the project was put into operation at the end of last year, while the second phase was commissioned in October 2015 and the third is underway.  Meanwhile, Sungroup is quickening implementation of big resort projects such as J.W Mariott, Premier Village Phu Quoc and Sebel Phu Quoc, along with a sea recreation complex on Hon Thom Island and a cable car line connecting it with An Thoi town in Phu Quoc island district.  Notably, all Sungroup resort projects are managed by leading global hotel brands such as Accor Hotels and J.W Mariott, which is expected to put Phu Quoc on its list of world-class resorts.  Not only leading in cash investment flow, Vingroup and Sungroup also helped create a momentum for the local tourism sector, with the operation of large-scale entertainment projects such as Vingroup’s second biggest zoo, Vinpearl Safari, worth 3.1 trillion VND (139.5 million USD). There’s also Sungroup’s largest cable system, connecting Hon Thom and Phu Quoc islands, and a sea entertainment park (worth 4.9 trillion VND or 220.5 million USD).  Along with Vinpearl Land, the two new projects are expected to increase the number of tourists who visit the island considerably.  Big investments from Vingroup and Sungroup have heated up the island’s investment environment, with a long list of other big investors like LDG Group, CEO Group and Bim Group.  The island’s dynamic growth started in late 2012 after the inauguration of Phu Quoc International Airport.  After only one year, the number of tourists to the island doubled that of the previous year, reaching nearly 700,000. So far the airport has received a new capital flow of over 1 trillion VND (45 million USD) to increase its capacity of handing 2.5 million passengers to 4 million per year by 2017.  Last year, the island was recognised as a second-level urban area and in July 2015, the Prime Minister issued a decision to establish the Phu Quoc economic zone management board, which energised local development.  In addition to developing transport infrastructure by building new airports and roads, and upgrading seaports, authorities have worked hard to connect locals with the national grid and improve their living standards.  With favourable investment mechanism and incentives, the island is nearing its target of becoming a paradise for sea and island tourism, experts said. Cassava exports set to earn 1.5 bln USD this year Vietnam is expected to export 1.5 billion USD of cassava in 2015, said the Ministry of Agriculture and Rural Development. The country shipped 3.42 million tonnes of cassava abroad in the first 10 months of the year, making 1.09 billion USD. This is year-on-year increases of 22.6 percent in volume and 19.1 percent in value.  China is currently Vietnam’s largest importer. It purchased 89.1 percent of Vietnamese cassava exports during the period, up 37.1 percent in volume and 33.03 percent in value. Other buyers include Japan, the Republic of Korea, the Middle East and Malaysia.  The ministry said it believed that cassava exports will expand further if the country gains access to overseas markets other than China.  The cassava industry is planning to head to the US and the EU. It aims to earn 2 billion USD from exports by 2020.  According to the Vietnam Cassava Association, Vietnam plants nearly 600,000 hectares of cassava annually at an average yield of 17.63 tonnes per hectare.  Southern Tay Ninh province ranks first in terms of average yield and second in cultivation area. Millions benefit from business challenge fund About 5.7 million people have easier access to fundamental services and goods as an indirect effect of the Vietnam Business Challenge Fund (VBCF). Javier Ayala, VBCF Executive Manager, said at a workshop reviewing the fund’s operation in Hanoi on November 11 that 4.1 million low-income earners have been able to buy Rang Dong Company’s LED lights which are produced thanks to the support of the fund. Through investment in selected businesses, the fund contributed to raising income of more than 260,000 labourers and generating jobs for about 10,900 workers, of whom 75 percent are low-income earners and the majority of them are working in the farming sector, he said. With an initial investment capital of over 20 million USD, the fund reportedly helped beneficiary businesses generate total revenue of more than 123 million USD. Nguyen Doan Thang, General Director of Rang Dong Company, said investment from the fund helped the company modernize production lines of LED lights and training workers, thus raising productivity and cutting product prices. The VBCF is a specialised fund initiated by the United Kingdom Department for International Development . The fund is designed to support the private sector in Vietnam to develop innovative business models that deliver both commercial benefits for the company and social impact for the low income population using Inclusive Business models. It provides technical assistance, mentoring and non-reimbursable funding of up to 49 percent of the total investment in selected projects through competitive open calls. Binh Duong's FDI surpasses target The southern province of Binh Duong said it had exceeded 60 per cent of its total target in attracting foreign direct investment (FDI) in 2015. According to the provincial Department of Planning and Investment, for this year, Binh Duong plans to attract US$1 billion in FDI. However, the figure to date is $1.6 billion. The province has a total of more than 2,500 projects, worth $22 billion. In the 2010-15 period, it attracted $7.9 billion, exceeding $2.5 billion over the plan. In the next five years, the figure is expected to total $7 billion, raising the total FDI in the province to $30 billion. To reach the goal, the province will develop all economic sectors, in which services as well as high-tech industries friendly to the environment will receive priority. Currently, Binh Duong has 28 industrial zones. The Viet Nam – Singapore Industrial Park and My Phuoc 3 are two zones that have attracted more investors. Local leaders often meet with companies to help them solve difficulties. Administrative procedures are also being improved to help companies save time and money. Thanks to this support, Binh Duong is an ideal destination for investors in the country in general and in the southern region in particular.  Can Tho draws five new FDI projects The Mekong Delta City of Can Tho licensed five foreign investment projects in the first 10 months of this year with total registered capital exceeding 17 million USD, said Deputy Director of the city Department of Planning and Investment Le Manh Tung.  The projects operate in processing rice bran for export, machinery maintenance, trading, processing industry and cinemas.  In the period, the city allowed four operating FDI projects to raise their capital by a combined 38.4 million USD, of which 31 million USD was poured into the Lotte Mart project.  In total, the city attracted 55.7 million USD of FDI in the first ten months this year, meeting 75 percent of the year’s target.  The city is considering a 15-million USD project of Singapore to build the Pegasus International University.  City officials said many investors are exploring investment in the locality, focusing on the fields of hotels and resorts, energy, cosmetic production, garment making, garbage treatment and hospital.  In order to realise its target to become an industrial city by 2020, the locality will devise a number of measures to seek partners from Japan and the Republic of Korea in farm and aquatic product processing, hi-tech agricultural production, agricultural machine, electronics and energy. So far, the city is home to 66 FDI projects, worth 954.6 million USD. Vietnam attends leading SEA food showcase in Indonesia A number of Vietnamese firms are joining the international exhibition on food and beverages InterFood Indonesia 2015, Southeast Asia’s leading food showcase held annually in Jakarta, Indonesia.  The four-day event offers a venue for networking and accessing new innovations used in food and beverage manufacturing.  Exhibitors are more than 800 local and foreign enterprises from 22 countries, including leading players in the industry that came to seek suppliers of materials and goods.  Sideline events include a seminar and customer conferences that introduce new products and technological advances.  With a population of approximately 250 million people, Indonesia is a promising market for food and beverage products which account for 7 percent of its gross domestic product.- Bac Giang eyes 6.5 billion USD in export revenues by 2020 The northern province of Bac Giang is aiming for 6.5 billion USD in export revenues with an annual export growth from 20-21 percent during 2016-2020. To this end, the province will implement comprehensive solutions to increasing both export volume and product value, said Vice Chairman of the provincial People’s Committee Duong Van Thai. Attention will be paid to commodities with high technological contents as well as environmentally-friendly products, while export markets will be diversified through seeking new markets. According to the Vice Chairman, local export activities have seen stellar performance, with total earnings expected to hit $2.6 billion this year. Average export growth stood at nearly 51 percent per year during 2011-2015, which is higher than the nation’s estimated figure of 18 percent. However, the province’s export still faced a number of headwinds, including low added value products, high input cost, labour shortage and slow administrative procedure reform. Smuggling, trade fraud more complicated Smuggling, counterfeit goods, and trade fraud became increasingly sophisticated in the first ten months of this year, according to Nguyen Van Can, Deputy Head of General Department of Vietnam Customs (GDC). Can, who is also Chief of the Office of the National Steering Committee on Prevention and Control of Smuggling, Trade Fraud and Fake Commodities (Committee 389), made the remark during a conference on the issue held on November 11 in Hanoi. According to him, the smuggling of drugs , explosives, firecrackers, violent toys and cosmetics emerged in border areas and border gates in the northern and northern central regions, wood and wild animals were trafficked in border areas in the central and Central Highlands regions and while cigarettes and sugar were illegally transported via the southwest border.  The smuggling of petrol, coal, ores, cosmetics and supplementary good became popular in international waters, he added. Can also raised an alert on the issue of fake fertilisers and plant protection chemicals, saying that Vietnam is home to nearly 1,000 enterprises with about 16,000 agents involving in fertiliser trading but competent agencies just detected 3,000 cases and only 11of them were prosecuted. The committee will increase inspections on and tighten control over smuggling, counterfeit goods and trade fraud from now to the yearend, especially before, during and after the Lunar New Year 2016 , he noted. According to the committee’s statistics, about 169,000 cases of smuggling and trade fraud were detected in the first 10 months of this year, a year-on-year increase of 5.6 percent. More than 10 trillion VND (over 450 million USD) from fining violators and selling confiscated goods was contributed to the State budget.- Binh Dinh attracts 33 projects in 10 months The central province of Binh Dinh licensed 33 domestic and foreign invested projects in the first ten months of this year, said the province’s Investment Promotion Centre (IPC). Of the figure, six were registered by foreign businesses with a total investment of over 947.7 billion VND (43.1 million USD) and 27 others worth nearly 5 trillion VND (227.3 million USD) belonged to domestic enterprises. Prominent among them was the FLC Group’s 3.5 trillion VND (159.1 million USD) to build the Nhon Ly hi-end resort and entertainment complex in Quy Nhon city. The province also approved in principle 16 investment projects, including a trade, industry and urban service complex of Becamex IDC Company, a seafood processing project of Hung Vuong Group, a hi-tech shrimp farming project of Vietnam-Australia Group, and a five-star hotel invested by Kim Cuc investment and tourism service company. According to IPC Director Nguyen Bay, in 2015 many foreign enterprises have made fact-finding trips to seek for investment opportunities in the province. They included Vinacapital Investment Fund, Kinder World, Sembcorp, CPG and Gammon of Singapore and Kato, Daiki, Susan and Hokugan of Japan. Binh Dinh has focused on attracting small and medium enterprises using green and high technology from Japan, Singapore, Republic of Korea, the US and Western European countries with a view to filling industrial parks and developing support industries, he said. In the time to come, the province will continue calling for investment in projects in the fields of tourism-services, transport infrastructure, education, health, support and processing industries, and seaport, he added. Aquaculture centre to be formed in Can Tho The Mekong Delta region will have a centre for aquaculture in Can Tho city and a fishery centre in Kien Giang province, according to the national master plan for aquaculture development until 2020 with a vision to 2030.  The plan aims for the fast, strong and sustainable development of the region’s fishery sector.  Attention will be paid to attracting investments, promoting technology transfer in aquatic farming and processing, and drawing high-quality human resources from centres, institutes and universities to fishery development.  Head of the Southern Sub-Institute of Fisheries Planning Tran Hoai Giang said that the intensive development of the Mekong Delta aquaculture means promoting advantages and production capacity, and using natural resources and potential in accordance with the nation’s economic development orientations.  Aquaculture product processing and trading hold an important role in ensuring the sustainable development of aquatic farming, Giang stated, asking for the improvement of the processing and consumption system with regard to market demands and food hygiene and safety.  The Mekong Delta region boasts nearly 800,000 hectares of aquatic farming. It is home to more than 300 exported aquaculture product processors, accounting for nearly half of the nation’s total number, with a total processing capacity of over 1.2 million tonnes a year.  Fishing vessels in the region amount to 22,000, catching 1.2 million tonnes of seafood per year. French project helps Viet Nam develop regional food brands A French-financed project to develop brands for Viet Nam's farm produce from different regions, worth nearly US$1.3 million, kicked off in Ha Noi yesterday. The Ministry of Science and Technology announced the start of the project, through which the French Agency for Development (AFD) will help Viet Nam improve registration and management systems that will indicate which geographic region the products are from. The agency will provide policy advice with European experience, helping the country advance in regional and international integration. The AFD will sponsor roughly $1.1 million, while Viet Nam will arrange the remaining part of the fund. An alliance of Rural Development Centre (RUDEC), Research Centre for Development and Agricultural System (CASRAD), and Agricultural Research for Development (CIRAD) will be responsible for implementing the project. Deputy Minister of Science and Technology Tran Viet Thanh said that the number of domestic products with protected geographical indication (PGI) in the domestic market remains small, resulting in a lack of consumer confidence. With the French aid, Viet Nam is determined in making the PGI become an effective tool of commerce for agricultural development, especially food production, he added. Locally, the project will provide technical assistance to intensify capacity of pepper producers in the central province of Quang Tri, and cashew nut manufacturers in the southern province of Binh Phuoc. Thanh noted that local authorities, businesses and people should cooperate with project operators to assure the progress of the scheme. Bruno Vindel, who is in charge of the project at the AFD, agreed that an effective PGI system requires support of the community and policies of the authorities. Luu Duc Thanh, an official from the intellectual property department, said the science ministry will propose mechanism for co-ordianation among ministries and sectors to foster PGI development. Viet Nam's farming, fishery and forestry product export values totaled about $24.6 billion in the first 10 months of 2015, a year-on-year reduction of 3.8 per cent, according to the Ministry of Agriculture and Rural Development. E-commerce shipping service poor Shipping services have been developing in recent years, however, the service still has not caught up with the development of Viet Nam's e-commerce sector, said Nguyen Thanh Hung, general secretary of the Viet Nam E-Commerce Association (Vecom). The association co-operated with the Viet Nam E-commerce and Information Technology Agency (Vecita) organising a conference titled "From shipping service to order fulfillment" in Ha Noi on Tuesday with the participation of relevant agencies, e-commerce enterprises and post and fulfillment service companies. The number of post enterprises in Viet Nam increased about three times from 40 in 2010 to 110 in 2013 but the total turnover of shipping companies just increased 1.5 times in the period, according to statistics from the Department of Posts under the Ministry of Information and Communications. So we can see that the average scale of post enterprises is going down, said Hung. According to a survey of Vecita under the Ministry of Industry and Trade, low quality of shipping service is the second-biggest obstacle to the country's e-commerce sector last year. A report from the management board of Online Friday event last year also showed that up to 50 per cent of enterprises participating in the event evaluated the shipping service as "not good" while nine per cent said the service was "weak". Shipping is an important service in e-commerce, which helps sellers deliver their products to buyers, said Hung. The trend of online retail is moving towards high specialisation. Salespeople will focus their resources in activities which lead buyers to online contract signing. Related services such as warehousing, picking, shipping and payment can be outsourced. These services basically are associated with the completion of online contracts and are called fulfillment service. The relationship between online retailers with fulfillment service providers will have great significance to the development of e-commerce in the world as well as in Viet Nam in the coming years, according to Vecom. It is necessary for shipping companies, e-commerce enterprises and relevant agencies to associate with each other to better the cooperation between shipping service and e-commerce enterprises in the time to come, Hung said. Le Duc Anh, a representative from Vecita emphasised that e-commerce is not only a requirement but also tools facilitating the delivery of goods and parcels in particular and logistics in general. Shipping services have flourished recently and have coverage at the community level across the country. With 35-40 per cent of the population using the Internet every day, online shopping is gradually becoming an inevitable trend, which creates opportunities for e-commerce businesses and delivery companies to further develop. Vietnam Retail Banking Forum on horizon The Vietnam Retail Banking Forum 2015, formerly known as the Southeast Asia Banking Forum, will be held in Ho Chi Minh City on November 17 and 18 and provide a venue for the sharing of new trends in the context of mobile banking services being on track to grow rapidly in Vietnam.  The event is being jointly organized by the Vietnam Banking Association (VNBA) and IDG Vietnam, with the theme “New-Generation Bank Model - Taking Modern Technology as the Foundation, Customers as the Centre”. The gathering will be the most prestigious forum in the region for leaders at banks, directors of information technology companies, experts in the field of banking and finance, and companies providing information technology solutions to the banking sector to discuss key issues and identify solutions for improving the operational efficiency of banks in the region. A technology exhibition will also be held, providing visitors with new experiences in technology applications and modern banking products and services. The exhibition features leading technology corporations with technological solutions in modern retail banking such as cloud computing, data management, credit risk management solutions, and security systems. A report from the World Bank (WB) showed that 31 per cent of Vietnamese people have a bank account - only half of the global average and evidence that the country remains in the development stage in retail banking and possesses significant potential. Ascott to manage Somerset West Point Hanoi CapitaLand’s wholly-owned serviced residence business unit, The Ascott Limited (Ascott), secured a contract on November 11 with The Golden Villas Company to manage the 247-unit Somerset West Point Hanoi. “The latest addition via Somerset West Point caps a significant year that saw us grow our portfolio in Vietnam by nearly 50 per cent and add two new brands, Ascott The Residence and Citadines Apart’Hotel, to complement our established Somerset brand in Vietnam,” said Mr. Mark Chan, Ascott’s Country General Manager for Vietnam. The addition of Somerset West Point is timely and in tandem with Vietnam’s robust economic growth, fuelled by steady foreign direct investment, a growing manufacturing base, and a strong export sector, according to Mr. Chan. “We expect the recent signing of the TPP and the upcoming APEC Summit in 2017 to provide further impetus for growth,” he added. “With an established platform for over two decades in Vietnam, we intend to leverage on our deep operating expertise, strong brand awareness and business network to further our growth via suitable investments, management and franchise opportunities in our existing gateway cities and other potential high-growth cities.” “With its unparalleled track record and leading position as the world’s largest international serviced residence owner-operator, we look forward to working with Ascott to develop Somerset West Point, which offers relocating executives the space and security to build a warm and comfortable home,” said Ms. Hoang Chi Lan, Director of The Golden Villas Company. Slated to open in early 2017, Somerset West Point Hanoi is located in the exclusive expatriate enclave of Quang An Peninsula by scenic West Lake. Somerset West Point will offer a range of serviced apartment types, from studios, one- to four-bedrooms, and penthouses, enabling residents to choose an ideal apartment to suit their lifestyle needs. The stylish apartments come with a private balcony overlooking West Lake, a contemporary décor, modern fittings, and a fully-equipped kitchen, with separate living and dining areas, home entertainment systems, and wireless internet access. The new management contract also marks the fourth property Ascott has secured in Vietnam over the past year, and together with recent contracts for Ascott Waterfront Saigon, Citadines Regency Saigon and Citadines Central Binh Duong, reinforce its position as the largest international serviced residence owner-operator in Vietnam with over 2,700 apartment units in 16 properties in Hanoi, Ho Chi Minh City, Hai Phong, Da Nang, and Binh Duong province. Dat Xanh Mien Bac to distribute Seasons Avenue's S3 CapitaLand Vietnam Holdings (CapitaLand) and the Hoang Thanh Investment and Infrastructure Development JSC signed a strategic cooperation agreement with Dat Xanh Mien Bac on November 10 on distributing apartments in Seasons Avenue in Hanoi’s Ha Dong district, with Dat Xanh Mien Bac becoming the exclusive distributor of the S3 building. After working successfully together in the past, CapitaLand and Hoang Thanh believe the cooperation with Dat Xanh Mien Bac will combine their capacity in real estate development with the extensive distribution network of Dat Xanh Mien Bac to assist homebuyers when choosing Seasons Avenue, said Mr. Vu Tuan Truong, Head of Sales and Marketing Department of CapitaLand Vietnam in the northern area. Located at the Mo Lao New Urban Area, Seasons Avenue has a total land area of 1.36 ha and a total gross floor area (GFA) of 196,000 sq m. With investment of $170 million the project comprises four blocks of 40 to 41 storeys, called S1, S2, S3, S4, and draws inspiration from the four seasons concept. The ground floor and the fifth floor are reserved for an array of more than 60 facilities, such as an infinity swimming pool with city views, a wet play area for children, and calorie-burning steps from the ground floor to the fifth. Levels 2, 3 and 4 are reserved for parking and from Level 6 onwards are 1,300 quality apartments for sale. Apartment areas vary from 67 to 135 sq m with two or three bedrooms and all are designed intelligently to maximize natural lighting and ventilation.  CapitaLand and Hoang Thanh also committed to apartment handover starting from the fourth quarter of 2017. Agreement on BIDhomes Golden South signed The Building and Infrastructure Development of Vietnam JSC (BID) and the HANHUD LAND JSC (HANHUD) have recently signed an agreement to develop the BIDHomes Golden South project in Hanoi’s Hoang Mai district. Speaking at the signing ceremony, BID Chairman and General Director Tran Van Manh said the cooperation between the two prestigious property companies will result in the quick completion of the project, thus meeting the needs of the investors and homebuyers.  The 9,760 sq m complex sits in the expanded North Dai Kim Urban Area in the southern suburbs of the capital. It comprises three 28-storey buildings, including a shopping mall, office space for lease, and 874 apartments for sale with areas ranging from 70 to 88 sq m. Construction is expected to begin in the second quarter of 2016 and be completed in the second quarter of 2018. The project is only a 10-minute drive away from the center of the city and is also close to the large residential areas of Linh Dam, Dinh Cong, Dai Kim, and Gamuda Gardens, as well as major universities and hospitals. Mechanical industry faces challenges as TPP trade deal looms Challenges are mounting on domestic mechanical companies as Vietnam becomes more involved in the world economy with the signing of many free trade agreements, especially the recently concluded Trans-Pacific Partnership. With a low starting point, a small domestic market, limited resources and more intense competition, tremendous efforts are required if Vietnamese mechanical companies want to avoid losing out on the home turf in the integration process. Opportunities overshadowed by challenges According to Truong Dinh Tuyen, former trade minister and head of Vietnam’s WTO negotiation delegation, Vietnam was swept with a massive wave of foreign direct investment in the first year the country officially became a WTO member, and he predicted that the scenario would be the same when the TPP comes into effect. Many experts believe that this new wave of investment will drive the import of mechanical machinery and equipment for foreign companies to build their own manufacturing facilities. And this is where the weakness of Vietnamese mechanical companies is exposed. Le Van Tuan, general director of Lilama, a machinery installation company, says that the TPP membership will bring more challenges than opportunities. Members of this trade agreement are mostly advanced economies, thus their product standards are higher than those of Vietnam. If Vietnamese products want to penetrate TPP markets, they must meet scores of requirements on quality, delivery time, productivity, corporate management, working conditions and welfare for workers, which many Vietnamese mechanical companies have yet to meet. Years ago, Vietnamese companies started receiving orders to manufacture mechanical parts when Vietnam first entered some bilateral and multi-lateral trade agreements. However, the number of orders gradually fell because product quality was decreasing order after order. In some cases, Vietnamese companies failed to prioritise precision and care on small orders, leading to the cancellation of larger orders. According to an executive of a large mechanical company, the TPP will bring many difficulties to local enterprises across the board because the staff - from executives to workers - are all less adept than their foreign rivals in terms of communication and negotiation skills. Foreign enterprises also overwhelm local ones in terms of financial resources and market position. Similarly, Vietnamese workers are less qualified and disciplined than their foreign counterparts. Nevertheless, the capability of domestic companies should not be underestimated; part of the problem is the failure of policies to produce the desired effect and the lack of development orientation for the mechanical industry. According to the Department of Heavy Industry under the Ministry of Industry and Trade, in this age of international economic integration, Vietnam cannot stimulate domestic production by maintaining a high level of protection. Domestic content rules and policies to support enterprises will not be able to continue because of Vietnam’s commitments in the integration process. Enhancing corporate management Chairman of the Vietnam Association of Mechanical Industry Nguyen Van Thu says in order to make integration successful, enterprises must change their mindset, moving away from impatient and slapdash business practices. In joining the TPP, Vietnamese companies must meet foreign requirements, with little tolerance for poor quality and delay. While waiting for policies to produce effects, enterprises need to take the initiative and bring more professionalism to their business practices. Thu stressed that Vietnamese enterprises cannot collaborate with foreign partners if they refuse to change their outdated attitudes. According to Lilama’s General Director Le Van Tuan, enhancing corporate management is a vital task and action has been aggressively taken at his company with some initially positive progress. The product quality system must be maintained regardless of the presence of company leaders. There will be no place for products with poor quality when tariffs are cut or eliminated as a result of the TPP. However, the opportunity to play a part in the global manufacturing chain was wasted many years ago when foreign enterprises considered Vietnam a backup option in case of trouble in China. At that time, domestic enterprises did not meet their requirements and orders to manufacture many mechanical products were shifted to India, Thailand and Indonesia. Vietnamese enterprises failed while these countries succeeded because they already possessed the necessary infrastructure to take advantage of this shift. When Vietnam joins the TPP, government support will be restricted, making it necessary to enhance the capacity of trade associations, enabling them to work side by side with enterprises to overcome difficulties and have more say in advising the government on creating favourable conditions for the development of the local mechanical industry. According to an enterprise leader, the role of trade associations in the mechanical industry is very minor and disproportionate to their expected responsibility; they must change to help protect the legitimate interests of domestic mechanical companies. Leaders of the Dong Anh Electrical Equipment Corporation say the level of Vietnam’s mechanical industry is far below the world’s average and domestic enterprises only focus on contract work and assembly with little regard to research and design. Under a strategy to develop the mechanical industry, the Ministry of Industry and Trade emphasises that the mechanical industry will concentrate on products for agricultural production, electrical equipment and the automobile industry. According to the Department of Heavy Industry, there has been some improvement in Vietnam’s mechanical market since the country joined the WTO but the market for each product remains small. Despite these above-mentioned challenges, Vietnam will still have plenty of opportunities to boost the development of the mechanical industry when the TPP and other trade agreements take effect in the future. Soymilk maker looks to VND4 trillion revenue this year Domestic soymilk company Vinasoy expects its revenue this year to rise 27% against the same period last year to VND4 trillion, which will further shoot up to VND10 trillion by 2020. Data of market researcher and analyst Nielsen Vietnam in August showed that Vinasoy is the country’s leading soymilk producer with 83.3% market share. Vinasoy uses 80% of its soybean needs from the Central Highlands to produce soymilk and imports the remainder from Canada. To reduce material import, Vinasoy has established a soybean research center to study and improve soybean varieties, and mechanize soybean farming in the Mekong Delta and Central Highlands. The research center is developing an 8,000-hectare soybean area in the Central Highlands. The center expects to reach three tons of beans per hectare in 2018, equivalent to the world’s average, Vinasoy said in a statement released at an international scientific conference in Dak Nong Province last week on technology application and development of the Central Highlands soybean sector. Huynh Son Hai, director of the research center, said expanding material cultivation in the Central Highlands would help Vinasoy secure sufficient soybean supply. According to the Ministry of Agriculture and Rural Development, Vietnam imported 1.29 million tons of soybeans worth US$592 million, up over 1% in volume and down nearly 21% in value year-on-year. Land-for-road projects growing Investors have since last month proposed developing a lot of huge road projects in HCMC in the build-transfer (BT) format, which means investors are allocated land in exchange for the roads they build, due to the presence of a labyrinth of toll stations in the city. Among the proposed BT projects is phase three of a 7.5km north-south road connecting Nguyen Van Linh Parkway and an interchange near Ba Chiem Bridge, and leading to Hiep Phuoc Industrial Park. A consortium comprising Hoa Phong and Moc An companies has asked the city government for approval to invest VND8.47 trillion in the project, which includes compensation for site clearance. It has recommended the city allocate 1,300 hectares of land in the Hiep Phuoc urban area in return for the construction of the road. The consortium has also proposed the city allow it to invest VND17.88 trillion (US$797.8 million) to develop residential projects in Hiep Phuoc. A project worth nearly VND870 billion (US$38.8 million) to build a road in parallel with the HCMC-Long Thanh-Dau Giay Expressway has also been proposed in the BT format by Nam Rach Chiec Co. Ltd. This investor has proposed the city allow it to use residential land in the resettlement site in the 90-hectare Nam Rach Chiec area in District 2. HCM City launches new investment stimulus Investors committed to HCMC can get loan interest support from the city government if their bank loans are no higher than VND100 billion each, according to the city’s new investment stimulus plan. Under the program signed on October 30, the city will fully or partly cover loan interest for investment projects for period of no more than seven years from the first disbursement. Those projects eligible for interest subsidies must be in sectors such as high technology, industry, trade, agricultural production, healthcare, education, culture and sports, infrastructure and environment. The city will not cover interest accrued by investors’ late loan repayments. According to the HCMC Department of Planning and Investment, the city’s investment stimulus scheme has been executed since 2000, with around 880 projects provided with interest support. Such projects were capitalized at VND35 billion to VND80 billion. The city now has more than 200,000 enterprises, 2,600 representative offices of foreign companies, 250,000 household traders and 5,800 foreign-invested projects worth some US$40 billion in total. U.S. to lift most tariffs on Vietnam footwear Many tariffs imposed on Vietnam’s footwear by the U.S. will be abolished when the Trans-Pacific Partnership (TPP) trade pact takes effect, according to the U.S. road map for tariff cuts. Of products which will enjoy tariff cuts, some are currently subject to tax rates of 37.5-40%. Therefore, the tariff cuts will allow Vietnam to boost footwear exports to the U.S. With the footwear group having the highest export turnover to the U.S. (shoes with rubber, plastic, leather or bonded leather soles and leather uppers), many products will see tariffs eliminated instantly when the TPP takes effect while for others, tariffs will be reduced over a period of seven years and eliminated from the eighth year. The U.S. will also cut some tariffs by half immediately, maintain the new rates in 11 years and remove them from the 12th year. Many products of the group have been exempted from the import tax and footwear products are being charged with 2-10%.  But footwear exported from Vietnam has to meet the TPP rule of origin in order to receive those tariff incentives. In addition to footwear, wooden products will also benefit a lot from the TPP. However, Vietnam’s wooden products shipped to two major markets, the U.S. and Japan, are no longer subject to tariffs. According to the General Department of Customs, Vietnam exported US$8.75 billion worth of footwear from January to September, a 17.7% rise against last year’s same period. Of this export turnover, US$3.03 billion came from the U.S., up 26.1%, followed by the EU with US$2.9 billion (up 12.9%) and China with nearly US$542 million (up 45.4%).  Meanwhile, exports of wood and wooden products picked up 9.3% year-on-year to US$4.9 billion in the nine-month period, with the U.S. accounting for US$1.91 billion (up 18.9%) and Japan for US$733 million (up 3.8%). Businesses lack interest in large-scale farming scheme Businesses have shown little interest in the much-touted large-scale farming model, thus yielding lower-than-expected results after two years of implementation. Just half a million hectares of land has been used to develop large-scale farms, equivalent to a mere 4% of the nation’s farmland. A couple of provinces have yet to have large-scale farms. The information was unveiled at a review meeting on the Prime Minister’s Decision 62/2013/QD-TTg held in HCMC on November 10 by the Ministry of Agriculture and Rural Development and the Ministry of Planning and Investment. Decision 62 encourages developing cooperatives, linking producers and consumers of farm produce, and building large-scale farms. According to participants, one of the biggest hindrances to large-scale farming is a lack of outlets for products. Statistics of the Ministry of Agriculture and Rural Development showed the number of sales contracts secured by big farms is small. For 20-30% of the large-scale farming area, sales contracts have been signed. Nguyen Van Tranh, deputy director of Ca Mau Province’s Department of Agriculture and Rural Development, said the province has 12,000 hectares of land under large-scale cultivation as few sales contracts have been struck. Phan Minh Bau, deputy director of Dong Nai Province’s Department of Agriculture and Rural Development, said another problem is that certain famers have dishonored their contracts with businesses by selling their products to those offering higher prices than contract levels. Therefore, many enterprises have declined to join the large-scale farming model. Some regulations of Decision 62 have rendered the large-scale farming model ineffective. The decision is not clear to some extent. For instance, it specifies the Party chief of a province decides on lending on participating businesses but guidelines of the Ministry of Finance say such lending must be approved by the provincial people’s council. Enterprises seeking further reduction in customs red tape Despite efforts to hasten administrative reforms, there is still room for further reduction in customs procedures, and businesses expect more simplification. A report on the business satisfaction with the customs administrative procedures launched yesterday revealed that 82 per cent of the more than 3,000 surveyed firms said that they expected customs administrative procedures to be further simplified and service quality to be enhanced. Although as many as 94 per cent of firms viewed changes in customs policies and regulations as positive, a significant 58 per cent said they encountered difficulties in conducting customs procedures. Notably, 28 per cent of respondent businesses said they have to pay unofficial charges to complete customs procedures in Viet Nam, down from the rate of 57 per cent in 2012, and 49 per cent in 2013. The report also revealed that 37 per cent of the respondents said that they did not pay unofficial customs fees, while 35 per cent were unaware of these fees. The survey found that a majority of businesses rated the level of compliance of customs officers with regulations as "normal". According to the Chairman of the Viet Nam Chamber of Commerce and Industry (VCCI) Vu Tien Loc, the result of customs administrative procedures remained far below expectations of businesses, and called for enhanced co-operation among relevant agencies to hasten the process. Nguyen Hoai Nam, deputy general secretary of the Viet Nam Association of Seafood Exporters and Producers, said specialised checks were complicated, and would burden firms. Do Hoang Anh Tuan, deputy minister of finance, said customs reforms contributed towards boosting the import-export turnover to more than US$302 billion in the past 10 months. Tuan added that the regulations about checks on quality and food hygiene and safety in import and export, which currently accounted for more than 72 per cent of time for customs clearance, were to be amended in an effort the reduce the rates. In addition, the customs sector would continue to upgrade the e-customs system. On December 5, the one-door customs system would be put into operation in Hai Phong City. The survey was conducted from April to June by VCCI, the General Department of Customs and the Viet Nam Governance for Inclusive Growth (GIG) Programme, which is funded by the United States Agency for International Development (USAID). The findings were expected to help identify appropriate measures to promote customs administrative reforms.  VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR