BUSINESS IN BRIEF 17/11 Japan to introduce hi-tech agriculture in Vietnam Seven leading Japanese organic agriculture and hi-tech manufacturers and suppliers will showcase their products at Japanese-style Rin Rin Park in HCM City on December 5-6.  The event is organized by the GK-Organic Corporation – a Vietnam-Japan joint venture. The seven groups are Hyponex, Hanagokoro, Menedael, Toyo Chuu, Watanabe pipe, Hiep Phat and Iseki, said Ngo Chanh, president of GK-Organic Corp. management board. They will introduce Vietnam farmers and customers to products most favoured in Japan and their possible application to Vietnam’s agricultural production. Chanh added that to help Vietnamese farmers access Japan’s clean agriculture, the company has signed contracts with Japanese partners to supply their products at reasonable prices in the first years. Improved economy helps VN banks Improved macroeconomic stability was likely to help Vietnamese banks curb new non-performing loans (NPL), Fitch Ratings said in its latest Asia-Pacific Banks Chart of the Month report on Viet Nam A sustained improvement in the domestic property sector and measures to increase foreign property ownership may also be positive developments for collateral recovery, the US rating agency said. According to government data, the NPL ratio in the Vietnamese banking system fell to 2.93 per cent at the end of September, below the 3 per cent target set to be achieved by the end of 2015. However, Fitch also said the asset quality of the Vietnamese banking system remained a concern, despite the recent implementation of effective regulations that helped align loan-classification standards across banks. The gradual enforcement of asset classification based on data by the State Bank of Viet Nam's Credit Information Center (CIC) should reduce discrepancy in loan classification standards across banks in the country. Since April 2015, Vietnamese banks are required to classify loan quality according to the lowest rating assigned to each borrower by creditors, as collated by the CIC. Fitch said this was a positive step, but long-standing asset-quality issues in the system remained unresolved, underlined by significant outstanding problem loans, which were understated by reported NPL ratios. The recovery rates for bad debts sold to the Viet Nam Asset Management Company (VAMC) have been low, suggesting banks will continue to bear any potential recovery shortfall for these NPLs. VAMC has bought bad loans worth VND225 trillion (US$10 billion) at book value from 39 credit institutions since it became operational in October 2013. It has recouped some seven per cent of the NPLs it has purchased.  VN, Slovenia to develop closer trade relationship The Ministry of Industry and Trade (MoIT) would support and facilitate business opportunities for Vietnamese and Slovenian firms in both countries, said Deputy Minister Ho Thi Thoa. In her speech at a Viet Nam-Slovenia business forum in Ha Noi last Friday, Thoa suggested the sides stepped up economic and investment cooperation, especially in the paper industry, electronics, maritime transport, logistics and processing-related fields.  Slovakia was a crucial bridge that helped Vietnamese goods make inroads into the EU, she stated, affirming that Viet Nam was willing to assist Slovenian firms in accessing ASEAN markets. Ante Milevoj from Slovenia's Chamber of Commerce and Industry introduced participants to Slovenia's market characteristics, saying the country had the highest income per capita among the EU's new member nations. Viet Nam established embassy-level diplomatic ties with Slovenia in June 1994. Two-way trade has recorded considerable development, up 10 times from 2005 to 2014. Viet Nam-Slovenia trade doubled to US$125.3 million in 2014 from only $59.9 million in the previous year. According to Slovenian Minister of Economic Development and Technology Zdravko Pocicalsek, there are many advantages and opportunities for both countries to boost their connections, especially in heavy industry, sea transport and logistics. Slovenia wishes to enhance cooperation with Viet Nam in the fields of water management, bio-technology, nanotechnology, transport and logistics. The economic cooperation agreement signed between Viet Nam and Slovenia and the upcoming enforcement of the EU-Viet Nam Free Trade Agreement (EVFTA) are expected to open up great opportunities for the two countries' businesses.  North's transport to grow 10% Prime Minister Nguyen Tan Dung has approved adjustments to a transport system development plan in the northern economic zone by 2020 and schedule for 2030 with a total goods consignment of between 500 and 550 million tonnes and 1.2 billion passengers carried annually. The announcement last Friday included a target to reach annual growth of 10 and 11 per cent for the whole transport sector in the region. Between 115 and 160 million tonnes of goods are expected to be transported through sea ports in the North, according to the plan. Public transportation is expected to grow between 20-25 per cent in Ha Noi and 5-10 per cent in Hai Phong. The adjusted plan also set a target to complete the upgrade of the North-South railway system, the Yen Vien-Pha Lai-Ha Long-Cai Lan rail route and those through the capital city of Ha Noi. The railway system plan aimed to connect with seaports, mining zones, key economic industrial parks and tourism areas in the North. The plan includes a focus on developing six major transportation corridors including the North-South, Ha Noi-Hai Phong, Ha Noi-Quang Ninh, Ha Noi-Lao Cai, Ha Noi-Lang Son and Ninh Binh-Hai Phong-Quang Ninh. Road transportation is expected to make up about 85 per cent while rail and air services is expected to reach about 6.2 and 9.2 per cent respectively. The North-South railway system in particular, with a total of 33km through the North, is aimed to be upgraded for trains running at an average speed of 80-90km/hour while carrying passengers, and 50-60km/hour when carrying goods. New rail routes to be built after 2020 include 120km Nam Dinh-Thai Binh-Hai Phong- Quang Ninh and 150km Ha Long-Mui Chua- Mong Cai. The plan includes the completion of new metro lines in Ha Noi including Cat Linh-Ha Dong and Nhon-Ha Noi Railway Station.  Vietjet signs MoU on civil aviation development Vietjet Air and Aviation New Zealand signed a memorandum of understanding (MoU) on November 15 in Hanoi that paves the way for both sides to evaluate and exploit mutually beneficial collaborative opportunities. Aviation has been one of the priorities in the collaboration between New Zealand and Vietnam and will be further strengthened in the years to come, according to Mr. John Nicholson, General Manager of Aviation New Zealand. “I am delighted with the MoU signed between Aviation New Zealand and Vietjet, which will facilitate New Zealand experts and engineers to exchange information, provide technical and managerial assistance, and offer training programs, including flight crew, engineering and air navigation, etc., to Vietjet,” he said. “I hope the collaboration will further boost the airline’s growth across the international market.” “As a growing, dynamic new-age airline, Vietjet considers security, safety, and airworthiness as top priorities along with fleet and network expansion, service improvements, our trademark promotions and, of course, customer care,” said Mr. Nguyen Duc Tam, Vice President of Vietjet. “Collaboration with such a renowned organization like Aviation New Zealand will enforce our determination and continuous investment in developing Vietjet as a favorite airline not just in Vietnam but also all across Asia in the future,” Mr. Tam said. Both parties will now look to collaborate in services and initiatives relating to safety, security, and airworthiness. Aviation New Zealand will also provide Vietjet with training, air navigation, equipment supplies, business systems, and consultancy and advisory services over the next five years. The goal of Aviation New Zealand is championing New Zealand companies and product/service solutions to international audiences. It encourages the development of scale through collaboration and connects international customers to product and service solutions developed in New Zealand. Vietjet is the first airline in Vietnam to operate as a new-age airline with low-cost and diverse services to meet customer demand. It also uses the latest e-commerce technologies to offer various products and services for consumers. The airline recently secured IOSA certification from the International Air Transport Association (IATA) after just three years of operations. Vietjet was also declared “Best Asian Low Cost Carrier” at the TTG Travel Awards 2015, which compiles votes from travelers, travel agencies, and tour operators in Asia. It was also rated as one of the top three fastest-growing airline brands on Facebook in the world by Socialbakers, a provider of social media analytic tools, statistics, and metrics for the world’s most popular social media sites. The airline currently boasts a fleet of 29 aircraft, including A320s and A321s, and operates 190 flights each day. Ton Dong A Corp cuts ribbon on $70 million plant According to newswire Bnews, on November 5, Ton Dong A Corporation has inaugurated the first phase of its $70 million steel sheet plant located in the Dong An 2 industrial park in the southern province of Binh Duong. The facility includes a push-pull pickling line, a cold rolling mill, a wastewater treatment system, and other important manufacturing lines. The plant’s second phase, representing the total investment capital of $80 million, is expected to start operation by 2016-2017 and double the facility’s capacity. Construction of the plant was started in February 2013. Covering an area of 125.8 square metres, the plant is equipped with modern technology lines imported from Europe and Japan. Once starting operation, the plant will have the total capacity of 800,000 tonnes of steel products annually. According to Nguyen Thanh Trung, chairman and managing director of Ton Dong A, the plant will not only contribute to meeting the increasing demand for galvanised steel on the domestic and foreign markets but will also support Vietnamese galvanised steel development. Starting operation in 1999, Ton Dong A has built a distribution network across the country and expanded its market to Laos, Cambodia, Indonesia, Thailand, Singapore, and a number of African countries. In early 2015, the firm’s products were licensed to export to the US. Hi-Tech Park opens healthy food product factory Healthy food product Nacur Vital was launched at the Sai Gon Hi-Tech Park last Friday in celebration of the 3rd annual conference of the Park. Nacur Vital is a healthy food product researched by SHTPLABS at the Saigon Hi-Tech Park and exclusively authorised for trading to Vioteck Development Co in 2015. The product contains 10 per cent of nano curcumin and is used to treat stomach pain, liver toxicity and wound healing. Nacur Vital can also help prevent side effects of radiation therapies in cancer patients. The products conform to food safety regulations of the Viet Nam Health Ministry for trading domestically with two licenses issued by the Vietnam Food Administration and the Ministry of Health. The product reflects the increased use of nanotechnology to enhance the potential value of traditional herbs in Viet Nam. Can Tho incubator park underway The Korea-Vietnam Incubator Park (KVIP) has been officially opened at the Tra Noc Industrial Zone 2 in O Mon district, Can Tho city. The project is part of a framework partnership between South Korea and Vietnam regarding industrial, agricultural, and technological capacities. Politburo Member and Chairman of the Vietnam Fatherland Front Central Committee Nguyen Thien Nhan, Minister of Industry and Trade Vu Huy Hoang, South Korean Ambassador to Vietnam H.E. Jun Dae Joo, and Minister of Industry, Trade, and Energy in South Korea Yoon Sang Jick attended the opening ceremony. Construction of the KVIP began two years ago, on an area of 13,000 sq m with investment of $21.13 million, $17.7 million of which came from South Korea’s official development assistance and remainder from the Vietnamese Government. The incubator park can accommodate 40 foreign and local enterprises specializing in agriculture, aquaculture, and mechanical engineering. According to Mr. Vo Thanh Thong, Head of the Can Tho People’s Committee, the aim of the incubator park is to boost research, manufacturing, and foreign investment, particularly from South Korean businesses. Local authorities have committed to providing the best possible incentives to enterprises at the park. Speaking at the opening ceremony Mr. Nhan sincerely thanked the government and people of South Korea for supporting and cooperating with the Vietnamese Government in recent years. “The opening of the KVIP is a breakthrough for the Mekong Delta in improving the quality of agricultural products and the income of farmers,” he was quoted as saying. Wages and HR concern Korean enteprises The minimum wage for Vietnamese workers and human resources in general were the issues of most concern for South Korean enterprises, Chairman of the Korean Chamber of Business in Vietnam (KorCham), Mr. Ryu Hang Ha, told the Vietnam - Korea Economic Forum held in Hanoi late last week. Mr. Ha asked for a clear mechanism on the minimum salary because enterprises believe it is too high. “The minimum salary is to be increased 12.4 per cent this year,” the Chairman of the Vietnam Chamber of Commerce and Industry, Mr. Vu Tien Loc, said, adding that it is indeed high compared with inflation and labor productivity increases. Any rise in the minimum wage must be suitable for enterprises, Mr. Loc noted. “A 12.4 per cent increase will lead to a 34 per cent increase in insurance payments,” he said. The minimum wage has been changed over the last four years, he went on. Overall revenue in the enterprise community, meanwhile, has increased 40 per cent. He said he understands the effort being made by the Vietnamese Government to improve the living standards of workers. Deputy Minister of Planning and Investment Dang Huy Dong said that Vietnam needs to not only improve living standards but also take care of the unemployed. If wage increases are too high it is possible that enterprises will not expand and fewer jobs will be created. Vietnam is experiencing an imbalance in human resources demand based on area. Well-qualified engineers, for example, only want to work in major cities such as Hanoi and Ho Chi Minh City. About 250,000 employees work in northern Bac Ninh province, but 60 per cent are not from the local area, Deputy Minister of Transport Nguyen Van Cong said. In the morning, before the work day starts, the roads around industrial zones are often clogged with buses taking thousands of people to their place of employment. Mr. Loc said that whether workers wish to work in their local area depends greatly on the local policies in place. Agreeing, Mr. Cong suggested that provinces provide land for enterprises to build accommodation for workers. This stability would result in workers being more devoted to their companies and the province. Mr. Dong added that there is mismatch between labor supply and demand, with many unskilled workers looking for jobs while skilled jobs go unfilled. It isn’t possible to open universities or training facilities everywhere, he said, so he suggested enterprises inform universities and training facilities about their needs to identify a solution. Enterprises, Mr. Loc said, play an important role in training and as investors they need to link with training centers like universities and colleges. VIB's lending growth at 18% in Q3 Vietnam International Bank (VIB) has recently released its third quarter financial statements. Pre-provision profit stood at VND747 billion ($33.32 million) while profit before tax was VND370 billion ($16.5 million), an increase of 58 per cent year-on-year. Total lending was VND51.33 trillion ($2.28 billion), 18 per cent higher than in the same period of 2014, including VND44.36 trillion ($1.97 billion) in loans to customers, up 16.2 per cent since the end of 2014. In October the State Bank of Vietnam (SBV) approved maximum credit growth of 25 per cent (from the previous 20 per cent) for VIB this year. Deposits from customers reached VND50.28 trillion ($2.24 billion), up 2.5 per cent, with non-term deposits increasing 21.1 per cent. Though lending growth was positive the bank’s total assets fell by VND8.15 trillion ($363.57 million), primarily because it decreased most of its deposits on the interbank market given the uncertainty in the market and it also re-structured its government bond portfolio to better suit its investment strategy. The bank’s non-performing loan ratio now stands at 2.34 per cent, down 0.18 per cent against earlier this year. VIB was one of the first banks to complete a debt-trading plan with the Vietnam Asset Management Company (VAMC). Its capital adequacy ratio (CAR) remained at 18 per cent - the highest among Vietnam’s large banks. As one of the ten banks selected by the SBV to implement the Basel II risk management standards, VIB quickly kicked off the project with the involvement of highly-experienced experts from its strategic shareholder, the Commonwealth Bank of Australia (CBA), and the Backice and HPT companies. In a recent ratings report released by Moody’s, VIB continued to lead the credit ratings among the ten large local banks by retaining the highest baseline credit assessment of B3. Among all banks rated B3, VIB is the only local bank whose outlook was increased by Moody’s to “Positive”. In the third quarter VIB became the only bank in ASEAN to win “The Best Segment Solution Award” from MasterCard and its also won the “Vietnam’s Outstanding Innovative Digital Banking Product in 2015” award for its MyVIB mobile banking app, from the International Data Group (IDG). Vietnam - Russia payment channel introduced At a conference held in Russia on November 12 on bilateral commercial transactions between the country and Vietnam, banks from the two countries committed to cooperating to boost transaction volumes in local currencies. The Bank for Investment and Development of Vietnam (BIDV), the Vietnam-Russia Bank (VRB), and VTB Bank from Russia announced the launch of a new transaction channel between the two countries, with a target of 70 per cent of commercial transactions being conducted via the new channel this year. “In 2014, commercial turnover between the two countries reached $2.6 billion and was $1.6 billion in the first nine months of this year, which remains modest compared to potential,” Mr. Tran Bac Ha, Chairman of BIDV, told the conference. In particular, bilateral trade turnover between two countries in 2014 accounted only for 1 per cent of Vietnam’s total trade turnover and 0.3 per cent of Russia’s. The target of increasing total two-way trade to $10 billion by 2020 is becoming an even more challenging task. Mr. Ha said that the difficulty in making payments for imports and exports is a barrier to higher trade growth. Ninety per cent of payments for imports and exports are currently conducted by T/T payment, which makes exporters concerned about payments not being made or delayed after goods are sent. A representative from VRB said that many recipients fail to make the payment under the terms of the contract after receiving goods. Enterprises in both countries lack information on customs procedures, quality checks remain complex, and logistics costs are high, forcing Vietnamese exporters to conduct business via go-betweens, which results in them knowing little about the actual market in Russia. The exchange rate between the Rouble and the VND is another concern, as the former has been devalued by some 90 per cent in the last year. With sanctions also in place against the country, its economy may decline in the future and the concerns of Vietnamese exporters are understandable. This is also why banks are unwilling to provide suitable services and consultancy to enterprises from both countries. Bilateral payment and card connections After the FTA is signed between Vietnam and Russia and other countries in the Commonwealth of Independent States, the conference was told, trade flows will increase significantly and the creation of bilateral payment channel is a step in the right direction. The main advantage of the new channel is in minimizing the risk of banks suddenly ceasing international payments and the risk of information on financial transactions being passed on to third parties. It will also reduce the cost of transactions, as customers do not have to pay the costs under the SWIFT channel. Another advantage is that related parties are allowed to make payments in local currencies, reducing risk from exchange rate fluctuations. “Payment made in local currencies is a solution to promoting trade between the two countries,” said Mr. Vasily Titov, First Deputy President and Chairman of VTB Bank’s Board of Management. Vinamilk launches marketing campaign in Russia On November 12, Vinamilk embarked on a month-long promotional campaign in Russia hoping to boost sales in a country where the annual consumption of milk products per capita is very high.   Speaking at a trade fair that kicked off in Moscow that same day a Vinamilk official said the campaign is the first for the company in the Russian market. “Were hoping to daw on our experience introducing our products in the European market,” said the official, adding that the feedback from consumers on the first day was positive. The official said Russian consumers were very keen on Vinamilk products, especially the liquid milk products, soya bean and beverages. Vinamilk also shipped several consignments of its products to St Petersburg on the occasion he said, and there are plans to participate in a large number of demonstrations and seminars over the next month.  JETRO sponsors Vietnam household goods trade event A personal and household goods trade event in Ho Chi Minh City on November 13 sponsored by the Japan External Trade Organization (JETRO) gathered the participation of 37 local businesses. The event aimed to promote business contacts between Japanese exporters and Vietnam importers and nurture the development of expanded supply chains between businesses of both countries. Managing Director Hirotaka Yasuzumi of the JETRO branch in Ho Chi Minh City emphasized the point that although Japanese goods were expensive, they have advantages of quality and attractiveness. He said Japanese products are priced suitably for affluent middle-income consumers who prioritize cost and value over the long-term and don’t make decisions simply based on the lowest initial price. Preparations underway for AEC Scholars and economists yesterday discussed the preparation and readiness of Vietnam towards the ASEAN Economic Community (AEC) in a forum co-organised by the Centre Institute of Economic Management (CIEM) and School of Public Policy under the University of Tokyo. The AEC, which is planned to set up by year end, is in one of the most promising regions in the world for future opportunity as ASEAN is a single market of 600 million people with a combined GDP of almost US$3 trillion. Nguyen Hong Son, Rector of the University of Economics, Vietnam National University said the AEC aimed to support the development of micro-enterprises, small and medium-sized enterprises, the application of digital technology, enhance governance and green technology. Associations and research institutes play an advisory role, supporting the integration process for the next 10 years. Son said though the local business environment has improved significantly in recent years, it was lower than others in the region. Meanwhile, Professor Toshiro Nishizawa, from the School of Public Policy, University of Tokyo said Viet Nam had great potential for development, emphasising that the AEC can be a key driver of new growth for the country. The professor also pointed to some challenges for the country such as the difficulties of small and medium-sized enterprises, financial capacity and low-skilled labor force, thinking that Viet Nam should spend ten years or more to overcome all the challenges. Nguyen Dinh Cung, CIEM chairman, even said the development motivation of Viet Nam was lower than it was ten years ago as many businesses were not ready for economic integration with their limited knowledge and lack of interest. Economic expert Pham Chi Lan said that 70 per cent of SMEs were not involved in import-export, they did not feel the pressure of integration. At the same time, they, on the other hand, were struggling to survive in the local business environment. Lan said economic policies to help the SMEs should be operated in reality rather only on paper, hoping that Japanese partners could create linkages to promote growth in the ASEAN region. CIEM said after 2015 when the country gets deeper into ASEAN integration, it should work more actively to take full advantage of the opportunities for developing capacity building for the business environment as well as the scientific and technological area.  Bac Giang eyes $6.5b in exports The northern province of Bac Giang has targeted export revenues of US$6.5 billion with an annual export growth of 20 to 21 percent from 2016-20. To this end, the province will implement comprehensive solutions to increasing both export volumes and the value of its products, 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 out new markets. The province's key export products include garments and textiles, electronic components, computers and accessories. According to the Vice Chairman, local export activities have seen stellar performances, with total earnings expected to reach $2.6 billion this year. Further, average export growth stood at nearly 51 percent per year from 2011-15, which is higher than the nation's estimated figure of 18 percent. However, the province's exports still faced a number of obstacles, including low added value products, high input costs, labour shortages and slow administrative procedural reforms.  Domestic rice exports decline Rice exports fell by nearly 6 per cent in the first 10 months to 5.038 million tonnes, according to the Viet Nam Food Association. The average export price was US$24.03 per tonne lower than last year, it said. Asian countries remained the main markets, buying 71.58 per cent of Viet Nam's exports, but exports to Africa, Australia, and Europe increased significantly. VFA chairman Huynh The Nang said companies' registration of rice export contracts last month was the highest this year at nearly two millions tonnes, a year-on-year increase of 22 per cent. The increase was thanks mainly to large contracts from Indonesia, the Philippines, and Cuba, he said. According to the Crop Production Department and Cuu Long (Mekong) Delta provinces, many localities will start the winter-spring crop early due to unusually low flooding in the Mekong, meaning some places will begin harvesting the crop by January. Rice exports over the next several months would be robust, the association said. Exports were expected to top 6.34 million tonnes this year, and 7.98 million tonnes if border trade was added, it said. Last year 6.3 million tonnes had been exported.  PVN planning IPO for petrochem unit The Viet Nam Oil and Gas Group, or PVN, will equitise the Binh Son Refining and Petrochemical Limited Company (BSR). According to a statement released on Tuesday, PVN will calculate the corporate value of BSR on December 31 this year. BSR has initiated several activities to prepare for the equitisation, including implementing the equitisation plan, promoting related activities to find partners to buy shares and searching for consultancy firms to estimate the value of the company's assets. BSR is managing the Dung Quat Oil Refinery, the first refinery of Viet Nam. The company's main activities are producing and selling petroleum products, biofuels and polypropylene plastic beads. The company has a charter capital of VND35 trillion (US$1.56 billion) and 1,500 employees. In the first 10 months of this year, BSR produced 5.64 million tonnes of products in various categories, achieving 116 per cent of the 10-month target and 96 per cent of the company's target this year. BSR sold 5.52 million tonnes of products, equivalent to 113 per cent of the 10 – month target and 94 per cent of this year's target. The company contributed more than VND18.3 trillion ($815.9 million) to the state budget. BSR also signed a contract on August 28 with the United Kingdom-based Amec Foster Wheeler Energy Limited for the preparation of a master design for the Dung Quat Oil Refinery expansion project in the central Quang Ngai Province. The contract work, worth US$25.6 million, was launched at the beginning of August and will continue till November 2016.  Binh Thuan to boost GI protection for local products Officials and producers in the southern central province of Binh Thuan studied the Geographic Indication (GI) system of Europe at a workshop on November 13 with a view to developing plans to improve local products’ quality to meet the system’s standards.   Van Cong Thoi, Deputy Director of the provincial Department of Science and Technology, said GI protection is important to the development of local specialty products as well as the rights of producers and traders.  The protection is effective or not, according to Thoi, will depend on the way of running the GI management system, first of all the internal and independent examination of the use of GI, to ensure the quality of products when putting them onto the market.  In order to develop GI protection for Binh Thuan dragon fruits and Phan Thiet fish sauce to overseas export markets, since 2009, the department has assisted the associations of local producers of dragon fruits and Phan Thiet fish sauce in applying for GI registration.  A total of 81 organisations and individuals have been so far granted GI protection for their dragon fruits with a combined area of 2,200 hectares while 52 organisations and individuals have received GI protection for their Phan Thiet fish sauce with a total volume of 47 million litres per year.  Nguyen Thanh Binh, Director of the Intellectual Property Development Centre under the National Office for Intellectual Property, said Vietnam and Europe are finalising the signing of the bilateral free trade agreement under which all GIs of Vietnamese goods will be protected in Europe, including Binh Thuan dragon fruit.  Binh Thuan has more than 28,000 hectares of dragon fruit-farming land, producing around 500,000 tonnes per year, accounting for 90 percent of the country’s total dragon fruit exports to Japan, the United States and India. Some 8,000 ha of farms have met VietGAP standards. Vietnam, Slovenia look for closer trade links The Ministry of Industry and Trade (MoIT) will support and facilitate business opportunities for Vietnamese and Slovenian firms in both countries, said Deputy Minister Ho Thi Thoa.  In her speech at a Vietnam-Slovenia business forum in Hanoi on November 13, Deputy Minster Thoa suggested the sides step up economic and investment cooperation, especially in the paper industry, electronics, maritime transport, logistics and processing-related fields.  Slovakia is a crucial bridge that helps Vietnamese goods make inroads into the EU, she stated, affirming that Vietnam is willing to assist Slovenian firms in accessing ASEAN markets.  Ante Milevoj from Slovenia’s Chamber of Commerce and Industry introduced participants to Slovenia’s market characteristics, saying the country has the highest income per capita among the EU’s new member nations.  Vietnam established embassy-level diplomatic ties with Slovenia in June 1994. Two-way trade has recorded considerable development, up 10 times from 2005 to 2014.  Vietnam-Slovenia trade doubled to 125.3 million USD in 2014 from only 59.9 million USD in the previous year. In the first five months of this year, Vietnam’s export to Slovenia turnover valued at 76 million USD, with main exports being aquatic seafood, coffee, rice, footwear, textiles, wood and wooden products, and handicraft products.  According to Slovenian Minister of Economic Development and Technology Zdravko Pocicalsek, there are many advantages and opportunities for both countries to boost their connections, especially in heavy industry, sea transport and logistics.  Slovenia wishes to enhance cooperation with Vietnam in the fields of water management, bio-technology, nanotechnology, transport and logistics.  The economic cooperation agreement signed between Vietnam and Slovenia and the upcoming enforcement of the EU-Vietnam Free Trade Agreement (EVFTA) are expected to open up great opportunities for the two countries’ businesses. Vietnam-Russia trade to thrive Vietnam-Russia trade is likely to grow 50 percent per year when the Free Trade Agreement (FTA) between Vietnam and the Europe-Asia Economic Union (EAEU) takes effect in 2018. However, trade activities between the two countries still face a number of obstacles in payment, customs and taxation policies, said Tran Bac Ha, Chairman of the Board of Directors of the Bank for Investment and Development of Vietnam (BIDV), said at a Vietnam-Russia business forum held in Moscow on November 12. Ha cited that up to 90 percent of Vietnam’s exports to Russia use the Telegraphic Transfer (TT) payment method, which is riskier than the traditional Letters of Credit (LC). Deputy Minister of Industry and Trade Do Thang Hai said his ministry will assist enterprises from the two countries in using local currencies for payments. Russian Deputy Minister of Economic Development Alexey Likhachev informed that at an inter-governmental meeting in Hanoi on November 2, the countries will discuss many issues, including government assistance in trade and investment activities. At the forum, the Trade Promotion Agency under the Ministry of Industry and Trade and the Russian Agency for Small and Medium Enterprises Support signed a four-party cooperation agreement on providing bilateral payment methods using local currencies. There was also an agreement between Banknet and the NSPK (National Card Payment) system on connecting local card payment systems.- Province ready to transform border gate into role model The central province of Quang Tri has made necessary preparations to develop the La Lay International Border Gate into a model port of entry with modern facilities, bringing a new momentum for local progress.  The objectives are set in a Prime Minister-approved plan on infrastructure construction and amendments to the border gate area’s planning documents, which was publicised on November 13.  Vice Chairman of the Quang Tri People’s Committee Nguyen Huu Dung said that in order to realise the set targets, the province has prepared for important infrastructure-building projects such as building key roads, upgrading the expanded section of National Road 15D, and maintaining La Lay’s facilities.  Total investment needed to develop the border gate by 2020 is nearly 2.4 trillion VND (106.6 million USD), 50 percent of which will be sourced from the State budget.  The La Lay International Border Gate, which bridges Quang Tri and Laos’s southern province of Salavan, is a crucial link on the East-West Economic Corridor traversing Vietnam, Laos, Thailand and Myanmar.  It is also instrumental to fostering cross-border economic and trade activities between Vietnam and Laos, and ensuring defence and security at the border.- Lao Cai, China’s Yunnan province bolster trade partnership The northern province of Lao Cai and the neighbouring Chinese province of Yunnan have agreed to focus on fostering trade ties by continuing Lao Cai-Hekou border trade and speeding up the building of a cross-border economic cooperation zone.  The localities will continue increasing collaboration in transport, tourism, culture and quarantine, as agreed during economic and trade cooperation talks in Lao Cai on November 13, which was held within the framework of the 15th Vietnam-China International Trade Fair.  Last year, Lao Cai’s import-export revenue with Yunnan reached 1 billion USD. In the first 10 months of this year, the figure hit nearly 1 billion USD. The sides also organised a number of conferences, including those to promote the trading of agricultural and aquatic products and handicrafts, while focusing on speeding up administrative reform in customs and e-customs applications.  Currently, Lao Cai is hosting 13 China-funded FDI projects, including the 220kV Hekou-Lao Cai power transmission project, Seng Chung Ho hydropower plant and the Lao Cai iron and steel factory.  The localities will also continue promoting each others’ tourism products with high-quality tours and destinations.  They also signed a Memorandum of Understanding on the building of the Lao Cai-Yunnan cross-border economic cooperation zone, defining their partnership principles, as well as the planning and trade sectors in the zone.  During the talks, Do Truong Giang, Head of the Lao Cai Industry and Trade Department, and local officials answered questions from Yunnan enterprises on storage and transport fees at the Lao Cai border gate. Mekong Delta in need of logistics boost A logistics centre built in Can Tho could help sustainable economic growth across the Mekong Delta region, experts said at a workshop on logistics development in the region held in Can Tho on November 13. Nguyen Phong Quang, deputy head of the steering committee for the southwest region, said such a facility will reduce costs and increase value added to local products. Research studies in some countries showed that boosting logistics capacity could expand trade growth by 15 percent alongside better service quality. Le Van Hy, Editor-in-Chief of the Vietnam Logistics Review, said developing infrastructure related to water transport, such as seaports and warehouses, would ease road transport workloads and enhance local competitiveness. Such infrastructure is lacking in the region and requires greater efforts to build. Under the national development plan, the delta will establish a 30-hectare logistics centre in 2020 and another covering about 70 hectares a decade later.- Local firms still unprepared for ASEAN integration: forum A considerable number of Vietnamese businesses haven’t been ready for economic integration into ASEAN, as illustrated through a lack of awareness and thorough preparation, though the ASEAN Economic Community (AEC) is to be formed at the year’s end.  Director of the Central Institute for Economic Management (CIEM) Nguyen Dinh Cung pointed out the fact at a forum held by CIEM and the Graduate School of Public Policy under Japan’s University of Tokyo in Hanoi on November 13.  Sharing the same view, economist Pham Chi Lan said as up to 70 percent of domestic enterprises are small- and medium-sized firms and do not engage in import-export activities, they haven’t felt pressure to integrate.  On the other hand, the existence of an array of business obstacles has also steered those companies’ focus to their short-term survival and away from future competition, she added.  Nguyen Hong Son, Rector of the University of Economics and Businesses under the Hanoi-based Vietnam National University, said although the country has implemented integration-related commitments well, it hasn’t made full use of opportunities. For example, it has utilised only 30 percent of incentives in ASEAN.  Despite recent substantial improvements, the local business environment is still less competitive than that of other ASEAN countries, he noted.  Professor Toshiro Nishizawa from the University of Tokyo said Vietnam holds enormous potential for development and is coming to an important turning point. The AEC could be the main driving force for it to switch to a new growth model.  However, the country is encountering challenges such as difficulties facing small- and medium-sized enterprises, and a limited ability to integrate into financial and labour markets, he stressed, adding that it takes about 10 years or more to address those problems.  Participants at the forum agreed that Vietnam’s integration into ASEAN will create more opportunities for the nation to develop and promote its capacity in all aspects. Therefore, it should play a more active role by bettering the local business climate, competitiveness and scientific-technological levels, utilising the international community’s support, and setting up cooperation and partnerships. Japanese firms target Vietnam’s household appliances market The Japan External Trade Organisation (JETRO) held a programme in Ho Chi Minh City on November 13 to help Japanese small- and medium-sized enterprises (SMEs) study the household commodities market in Asia, and Vietnam in particular. Japanese businesses said they hope to find partners and distributors with large retail networks through the event, as well as study the environment in Vietnam to boost exports of household appliances. On display are high-quality, beautifully designed products – many with multiple functions, said Chief Representative of JETRO in the city Hirotaka Yasuzumi. A representative from the Nissen Shoko Company described goods prices and quality as the two main competitive factors in Vietnam and other markets. However, Japanese businesses will focus on the quality and safety of their products, rather than prices, as they search for business opportunities in Vietnam, which boasts a large population of more than 90 million with increasing incomes. Work underway as AEC approaches The Central Institute for Economic Management and the Graduate School of Public Policy at the University of Tokyo held the Vietnam - Japan Emerging Researchers Forum: “Partnership Opportunities for Vietnam’s Successful Inclusion in the ASEAN Economic Community” in Hanoi on November 13, identifying the opportunities, challenges, and incentives for the country to expand and strengthen its comprehensive relations with regional partners. Vietnam has implemented its integration commitments relating to investment in ASEAN Economic Community (AEC), the forum heard. The government has reviewed and amended laws and regulations to make them consistent with commitments to establish a more open and liberalized investment environment without discriminatory treatment, such as expanding investment sectors, improving investment protection, implementing regulations on economic ownership, and facilitating and simplifying investment procedures. Resolution No. 19 from the government on key tasks and measures to improve the business environment and enhance competitiveness also express the country’s continued efforts to improve its business environment. However, according to Prof. and Dr. Nguyen Hong Son from the University of Economics and Business at the Hanoi National University, Vietnamese enterprises remain passive and inadequately prepared for AEC integration. “Awareness among enterprises on the general issues in the AEC remains insufficient, with inadequate recognition of the opportunities and challenges,” Mr. Son told the forum. “Most enterprises recognize the opportunities from exporting to other countries, while other opportunities such as low input costs, access to new technology, cooperation with other ASEAN countries, and new capital resources are inadequately recognized.” Enterprises are mainly concerned about competition from increased trade, and as a result are not fully prepared for integration into the AEC. Economic expert Ms. Pham Chi Lan, meanwhile, said that complicated customs procedures, the huge number of taxes and fees, unfair competition between State-owned and private enterprises, and weak institutional connections are obstacles to Vietnam’s development. “Cambodia and Laos has recorded solid performances, with higher growth than in Vietnam, and the distance between Vietnam and other developing countries is quite large,” she said. “After 20 years of ASEAN membership, Vietnam is sadly still in the CLMV (Cambodia-Laos-Myanmar-Vietnam) group of countries.” Difficult payments hinder exports to Russia Difficulties in settlement of payments remain a major hindrance to bilateral trade between Vietnam and Russia, Vietnamese companies said. Pay-as-you-go is still a popular practice among Vietnamese and Russian traders, accounting for 90% of total payments. A business told the Daily that a great number of Russian importers will make payments after they take delivery of goods and do thorough goods checks. They sometimes pay later than contracted. However, the Russian market holds great growth potential for Vietnamese companies. This explains why Vietnam is organizing a high-quality Vietnamese goods fair that opened in Moscow on Thursday. M2 fashion center, which is attending an ongoing in Moscow, said it wanted to take more clothes to the fair but prices are prohibitively high due to the value added tax of 10% and import tariff and charges of around 18%. The Bank for Investment and Development of Vietnam (BIDV) and Bank for Foreign Trade of Russia (VTB) signed a memorandum of understanding (MoU) on April 7 allowing firms of the two nations to use their own currencies for payment. Both sides selected Vietnam-Russia Joint Venture Bank (VRB) as an intermediary for implementation. Vasily Titov, first deputy president of VTB, said VTB is a financial intermediary for payment in Russian ruble and VRB is considered the intermediary for payment in the rubble and Vietnam dong. VRB will support companies to pay in the rubble or the dong. Alexey Lekhachev, first deputy minister of economic development, said he has high hopes on a free trade agreement (FTA) between Vietnam and the Eurasian Economic Union as it will create opportunities to enhance trade ties between the two sides. The FTA is expected to help Vietnam’s exports to the region increase 18-20% per year and two-way trade will jump to US$10 billion by 2020.  Russia’s economy has been mired in troubles due to Western sanctions over the Ukraine crisis. In September, inflation rose to 16% while world oil prices plunged and the rubble depreciated against foreign currencies. If oil prices remain low and sanctions are not eased, the Russian economy will continue facing difficulties in the next two years, according to ministries, agencies and 200 firms joining the Vietnam-Russia business forum in Moscow yesterday. Two-way trade between Vietnam and Russia reached US$1.6 billion in the first nine months of this year, with Vietnam enjoying a trade surplus. However, the amount made up a small fraction of Russia’s total. Russia has 107 foreign direct investment (FDI) projects worth a total of US$2 billion in Vietnam primarily in fields such as petroleum, energy, processing and heavy industry. Russian majors like Gazprom, Zarubezhneft, Lukoil, Rosneft and Kamaz have established a presence in Vietnam. Meanwhile, Vietnam has 19 projects worth a combined US$2.5 billion in Russia. Russia is Vietnam’s third biggest destination for offshore investment.  Newcomers on UPCoM at record high UPCoM, where shares of unlisted public companies are traded, has seen a record rise of newcomers. UPCoM is seen as the nation's third stock exchange after the Hochiminh Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX), the two leading markets for major listed companies. Statistics of HNX showed that 72 firms have joined UPCoM in the year to date, double the number last year. The total capitalization of shares registered by unlisted enterprises this year is around VND25.45 trillion, up nearly 350% over 2014. Now there are 237 businesses trading shares worth VND47.3 trillion on UPCoM. UPCoM-listed enterprises can move to HNX and HOSE  when they meet certain conditions.  HNX and HOSE might be merged into the country's biggest bourse in the coming time. HNX data showed that a couple of large businesses have listed on UPCoM this year, such as Masan Resources (MSR) and Viglacera Corporation (VGC)  with respective chartered capital of VND7.19 trillion and VND2.64 trillion. This fact has made UPCoM stand out. Under Decision 51/2014 / QD-TTg of the Prime Minister and Circular 01/2015 / TT-BTC of the Ministry of Finance, equitized State enterprises are required to join UPCoM within 90 days from the date of their business registration certificates being issued. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR