Thứ Tư, 20 tháng 4, 2016

BUSINESS IN BRIEF 20/4


China’s influence in Laos overshadows Vietnam

China’s influence in Laos overshadows Vietnam, Chain model increases Vietnamese agriculture values, IMPSA’s project gone with the wind, Real estate M&As spiked in first quarter, Rice exports rising but unstable 

Foreign direct investment (FDI) by Vietnamese local companies in its smaller neighbour to the west, Laos, has reached nearly US$4.9 billion, said speakers at a recent conference in Ho Chi Minh City.
The gathering was held at the new Laos Investment Centre, chaired by the Lao and Vietnamese governments, and attended by government and business leaders from the two nations.
“Vietnam and Laos have been strategic allies since the 1970s,” said Phoikham Houngbounyuang, deputy governor of the Lao province of Xaysomboun.
The Deputy Governor said though land-locked Laos is one of the poorest countries across the globe, it has one thing in abundance, access to the Mekong River and massive hydropower potential.
China is the largest investor in Laos, he said and currently is eying total FDI of more than US$31.45 billion in 240 investments, principally in hydropower, with Chinese investors currently involved in four of nine dam projects in the Laotian Mekong region.
Chinese companies have also committed US$7.2 billion to a railroad linking its Yunnan province to the Lao capital Vientiane as it sees its southern neighbour as an important route into Southeast Asia.
“Vietnamese businesses have invested primarily in agriculture, energy and natural resources,” said the Deputy Governor, and business they operate have generated more than 40,000 jobs for local Lao people.
Vietnamese businesses have also contributed significantly to improving the social welfare of Laos having constructed badly needed schools, clinics, hospitals, roads and low-income housing.
Much of the meeting focused on the industries and regions for which Laos needs Vietnamese investment. The meeting also provided information on incentives the Lao government is offering Vietnamese local companies for doing business in Laos.
However, the degree of penetration of Chinese businesses FDI in Laos continues to grow and now completely overshadows Vietnam’s influence in its western neighbour, said the Deputy Governor.  
Countering the growing influence of China in Laos is one of the driving forces for our opening of the Investment Centre in HCM City and our commitment to boosting trade and investment between the two nations.
Chain model increases Vietnamese agriculture values
Forming chains to increase competitiveness and add values to farm produce is helpful for the development of Vietnam’s agricultural sector.
In Ha Tinh, a number of models of linkage between cooperatives have proven effective in reviving the sandy soil.  
In the past, you had to travel 50 kilometers over rough roads to reach Ky Bac commune, a mountain village in Ky Anh district, Ha Tinh province. Harsh year-round weather conditions made it more difficult for the locals.
But the Hoang Chau cooperative has changed things for the better. The cooperative’s director Tran Thi Chau said the initial six members offered a service transporting goods for Ky Bac villagers and their neighbors.
Chau said the cooperative operated sporadically, with no set schedule, and each member earned only US$22 a month on average.
In 2012, thanks to the consultancy of the Ha Tinh Cooperative Alliance on production plans, loan support, and a link with the Ha Tinh Minerals and Trading Corporation (Mitraco), Hoang Chau cooperative began to raise pigs.
This was Ha Tinh’s first pilot model in pig breeding. In the beginning seven members contributed a total of US$36,000. Now the cooperative’s capital has reached about US$270,000.
Director Chau noted, “All our input and output materials are guaranteed by Mitraco, who has also helped us to build breeding facilities. When the pigs are 20 days old, Mitraco buys them and distributes them to breeding farms. Under the model of linkage we have been given farming techniques and medicine and all our products have been guaranteed. We aren’t afraid of an epidemic anymore because we carefully clean and sanitize the pigsty.”
Deer are suited to the local natural conditions and return a good profit. Considered a hard currency earner, deer breeding is now pursued for antler velvet and meat.
Phan Van Luat, chairman of a deer breeding and antler velvet cooperative, said, “In the past, traders used to lower the price of deer antler velvet. But now Son Lam villagers are glad because cooperatives are in charge of gathering and buying all products. In the future, with the advantages of hills and large fields of grass, cooperatives will continue to grow. Our problem is getting loans. We hope we will get some help in dealing with that issue.”
Those are just two of hundreds of linkage models that Ha Tinh has created, specializing in growing vegetables and fruits and cattle breeding.
The highlight of Ha Tinh agricultural production is the chains that have been established in production and consumption. The province has identified its strongest products - pigs, cows, shrimp, deer, vegetables, and fruits, especially Phuc Trach pomelos.  
The Ha Tinh provincial Party Committee Secretary Le Dinh Son said its 54 cooperatives are linked with enterprises.
“For the current production model, farmers should enhance coordination; otherwise it will be difficult for them to apply high-tech and consume products. To get more investment, cooperatives should also network with enterprises,” Son shared.
Cooperatives, on one hand, link farmers and businesses and, on the other hand, control the production process and support farmers’ investment.
Le Duc Thinh, Deputy Director of the Economic Cooperation and Rural Development Department, said, “When participating in the chains, cross checks are conducted via commitments or contracts, while members can help each other in investment attraction. It is also easier for members to borrow money from financial institutions.”
Carlsberg forays into high-end segment of Vietnam’s beer market with Tuborg
Carlsberg Vietnam expects to overtake its rivals in the domestic high-end beer segment by officially introducing its premium international brand, Tuborg to Vietnam.
Carlsberg Vietnam will spend VND450 billion (US$20.2 million) on its marketing programme for Tuborg, which is the number one beer brand by volume in Carlsberg Group’s portfolio. Accordingly, public relation (PR) girl teams will go to restaurants to introduce the new product. It is considered an important part of the marketing programme, helping Tuborg to penetrate the Vietnamese market.
According to Tayfun Uner, Carlsberg Vietnam’s general director, Carlsberg Vietnam has been planning to launch Tuborg in Vietnam since 2015. With the slogan “Open for fun”, Tuborg represents a dynamic and pioneering lifestyle.
Along with the VND450 billion (US$20.2 million) marketing programme, Carlsberg Vietnam also spent US$1 million on the bottle design. Accordingly, the unique packaging design includes an easy-to-use pull-off cap.
According to Carlsberg Vietnam’s representative, the company is trying to make Tuborg become one of three most favourite beer brands.
Phan Chi Dung, director of the Ministry of Industry and Trade's Light Industry Department, told VIR that Tuborg used to be produced in Vietnam 20 years ago, but Carlsberg failed to popularise the Tuborg brand here.
According to the Vietnam Beer Alcohol Beverage Association (VBA)’s statistics published in January, as of 2015, there were 129 beer companies and facilities with a total capacity of 4.8 billion litres per year. In 2015 alone, the figure stood at 3.4 billion of litres.
Saigon Beer-Alcohol-Beverage Joint Stock Corporation (Sabeco) is the largest beer manufacturer with a 2015 capacity of 1.38 billion litres. The runners up are Heineken with 729 million litres and Hanoi Beverage-Wine-Beer Joint Stock Corporation (Habeco) with 667.8 million litres, respectively. Carlsberg ranks fourth with 229 million litres.
According to expert opinion, Carlsberg have to try its best to enhance its position in the high-end beer segment because Heineken has planted a solid foot here.
Tuborg is the number one beer brand by volume in Carlsberg Group’s portfolio. It is currently present in more than 70 countries and territories around the world. In Vietnam, a bottle of Tuborg’s price at retail stores is between VND13,000 (US$0.58) and VND15,000 (US$0.67).
New Australian dairy products are coming to Vietnam
Pactum Dairy Group- a milk processor based in northern Victoria which is a joint venture between Australian Consolidated Milk and Freedom Foods- has signed a deal to supply local firm IDP with about four million litres of UHT milk a year.
“Big isn't always better when it comes to Australian businesses wanting to capitalise on the so-called Asian dining boom,” said Tran Bao Minh, chief executive of International Dairy Products JSC (IDP).
According to Minh, big firms can be too slow to deliver products to meet fast changing consumer tastes across Asia.
For example, Minh shared that it took 18 months to two years for one big overseas company he had recently dealt with to deliver a product to market.
Minh added that Asian dairy market was fast changing and consumers were constantly looking for new and better products.
“Our objective is looking for a company that is big enough to be reliable but not too big that it may become too slow as when they're too big they're not flexible enough,” Minh commented.
With this above criterion, IDP has recently chosen Pactum Dairy Group- a milk processor based in northern Victoria which is a joint venture between Australian Consolidated Milk and Freedom Foods, the cereal and snack company backed by the billionaire Perich family- to be their partner.
Pactum has signed a deal to supply IDP with about four million litres of UHT milk a year.
Minh said it could evolve into a long-term partnership stretching across a suite of dairy products, provided that Pactum can keep up with the fast changing Asian tastes.
“We are also looking at ice creams, cheese – if you have high quality raw milk you can do all kinds of dairy products that Vietnamese are more and more looking for. So, it might be a very long-term strategy and partnership with Pactum Dairy if the partner can keep up with our fast pace.”
IDP is a mid-sized Vietnamese dairy company, generating about $150 million (AUD$198.4 million) in revenue each year.
Pactum Dairy Group, which launched 2014, operates one UHT plant in Shepparton in Victoria's north. Despite its smaller scale, it has already signed strategic supply agreement with several Asian companies, including China's New Hope and Bright dairies.
Under its partnership with IDP, it will supply UHT milk for the company's LoveinFarm product range, which uses milk sourced exclusively from overseas.
Minh believe that overseas milk was a higher quality than Vietnam’s domestic supply, where cows are kept mainly in pens.
He shared that the name LoveinFarm came from his experiences visiting farms in New Zealand, Ireland and Australia, where cows roamed in paddocks and were more comfortable in a cooler climate.
“LoveinFarm comes from you having love for the cows on the farm as well as having love for the new generation that you are making the milk for,” Minh said.
Vietnamese firms expand online, target 41 million Internet users: report
More than 10,000 e-commerce websites were registered in Vietnam at the end of last year, twice the number of 2014, according to a new report by released by the Ministry of Industry and Trade on April 14.
Their combined sales grew 37% to US$4.07 billion, accounting for around 2.8% of country's total retail sales, the ministry's Vietnam E-commerce and Information Technology Agency said. The sales were forecast to hit US$10 billion in the next five years.
The report covered all companies with websites that allow visitors to buy products and services, not just online retailers à la Amazon.
Biggest earners included Lazada, a subsidiary of Germany's Rocket Internet, platform chodientu, and discount website Hotdeal. Vietnam Airlines and The Gioi Di Dong (Mobileworld) was also named among businesses with strong online sales.
Around 62% of Internet users in Vietnam did online shopping last year, compared to 58% in 2014, according to the agency, which conducted a survey among nearly 970 Internet users around the country.
Each online shopper spent an average of US$160, compared to US$145 in the year before, the agency said. With the population of 91.3 million, Vietnam's Internet penetration was last estimated at 45%.
Clothes, footwear and cosmetics were the most popular among Vietnamese online shoppers, followed by electronics and digital devices.
Despite their increased engagement in online shopping, 91% of the interviewed shoppers paid their online orders in cash, the agency said.
Less than half of them transferred money via bank accounts, while 20% used credit cards.
Laos, Vietnam boost investment cooperation
On April 15, Lao Deputy Prime Minister Somsavat Lengsavad visited the Hanoi-Moscow Complex (Incentra) in Moscow which he said its operations have helped step up investment cooperation among ASEAN businesses, including those from Laos, in Russia.
Le Truong Son, Incentra Director-General briefed the Lao leader on the corporation’s plan to organise a high-quality goods fair of ASEAN member states in observance of the 20th anniversary of ASEAN-Russia diplomatic ties aiming to further enhance trade links.
He said he hopes the Lao Government and offices will facilitate the investment and business of Lao enterprises in Incentra.
Somsavat Lengsavad expressed his belief that the organisation of the fair will give a chance to ASEAN enterprises' easier access to the Russian market and others in the Eurasian Economic Union.
The same day, on the occasion of Laos’ traditional Bunpimay New Year festival, Nguyen Hung, Envoy at the Vietnamese Embassy in Russia, paid a visit to the Lao Embassy in the country, to extend his New Year wishes to embassy staff.
Trade promotion with South American nations
Vietnam has attended trade promotion activities between the Common Market of South American, Mercosur, and the Association of Southeast Asian Nations, ASEAN, in Tucuman, Argentina.
Vietnamese Commercial attaché Nguyen Thi Thanh Van, told a trade conference about Vietnam’s integration process, its active role in ASEAN, and economic achievements over the past two decades.  
Argentinean and Uruguay businesses have visited Vietnam’s Trade office to learn about investment laws and opportunities to import coffee, rubber, tires, and wood furniture from Vietnam.
They also want to export wine, beef, wheat, canned fruit juice, and animal food materials to Vietnam.
Argentina is one of the three Latin American countries (together with Mexico and Brazil ) whose trade value with Vietnam exceeds US$1 billion.
Last year's two-way trade reached more than US$2.5 billion, up 34% from a year earlier.
Meanwhile, bilateral trade between Vietnam and Uruguay hit US$124 million in 2014, of which Vietnam ’s exports registered US$41 million.
Established in 1991, Mercosur is a sub-regional bloc grouping Brazil , Argentina , Uruguay , Venezuela and Paraguay.
Comprehensive competition policy – a need for market
A comprehensive competition policy is necessary to shift the Vietnamese economy to a market economy, stated Nguyen Dinh Cung, head of the Central Institute for Economic Management (CIEM), at a workshop in Hanoi on April 15.
According to Cung, during 2011-2015, Vietnam carried out a lot of measures to become a market economy, with the priority given to macro-economic stability, economic restructuring, growth model shifting, administrative reform and human resources development.
However, the macro economy has yet to be stabilised firmly, the economic growth is lower than the set target, and economic restructuring and growth model shifting remain slow.
He attributed the shortcomings to insufficient awareness of the socialist-oriented market economy among Vietnamese people.
Michael Woods, an international consultant on competitiveness, said that the Vietnamese Government is paying attention to sustainable economic growth.
However, it is necessary to clarify competition principles and have an equality among enterprises, he added.
He also emphasised the importance of reviewing the Competition Law and other relevant laws and policies to ensure competitiveness and sustainability.
Meanwhile, the CIEM head suggested clarifying the functions of the State and the market, improve public awareness of the market economy, and determine the tasks of State agencies in the 2016-2020 period.-
Khanh Hoa takes over Nha Trang port from debt-ridden Vinalines; mulls upgrade
The administration of the south-central Vietnamese province of Khanh Hoa is poised to turn the local Nha Trang port into an international tourist harbor, after taking over the facility from a loss-making company on Thursday.
The cargo port of Nha Trang is managed by Nha Trang Port JSC, a firm 61.41 percent owned by the government through the state-run Vietnam National Shipping Lines (Vinalines).
On Thursday, Vinalines signed a deal to transfer all of the state holdings, worth more than VND150 billion (US$6.7 million), to the Khanh Hoa administration, giving the province the authority to operate the port, located in the provincial capital city of Nha Trang.
Following the takeover, Khanh Hoa will turn the cargo port into Vietnam’s first-ever international tourist port, Tran Son Hai, standing deputy chairman of the provincial administration, said the same day.
The port will focus on receiving international tourists who arrive in the coastal province on luxury cruise ships, the official said, citing a plan approved by the government.
Cargo ships will then be transferred to dock at the province’s Cam Ranh Port, he added.
The Khanh Hoa administration hopes to receive at least 150,000 international visitors and one million domestic tourists via Nha Trang Port on an annual basis.
Vinalines is infamous for a serious corruption case in 2008 that eventually resulted in a death penalty for its former chairman Duong Chi Dung.
Dung and his accomplices were found to cause a loss of over VND366 billion ($17.4 million) to the state budget as of May 2012, through Vinalines’ purchase of an old floating dock, worth only $2.3 million, at $9 million in 2008.
He was sentenced to death in December 2013 on charges of “intentionally violating state regulations on economic management, causing serious consequences” and “embezzlement.”
Gamuda ‘dual-key’ concept a winner
Renowned Malaysian-based developer, Gamuda Land Vietnam, recently opened three show units for public viewing in their signature apartment complex The TWO Residence, and will launch 44 semi-detached Courtyard Homes in their award-winning Gamuda Gardens project in Hanoi’s Hoang Mai district.
Dual-keys concept – is the finest and most innovative design of The TWO Residence
The semi-detached Courtyard Homes, which will be launched in mid April, have a distinctively contemporary design. Each room has large windows to let in lots of natural light. Also, while each level has a common living room, privacy is also catered for in the master and smaller bedrooms.
The aptly named homes are designed with a central courtyard to create an oasis of calm within each residence. This not only serves as an aesthetically pleasing feature, but also allows for better fengshui and air flow into the house, while giving homeowners extra space for future expansion.
On April 9, thousands of visitors came to the official launch of three showrooms of The TWO Residence – the second apartment in Gamuda Gardens. The apartment features a “dual-key concept”, which has received positive feedback from customers. This concept showcases one main door which leads to the common area. Inside this space there are another two doors, one of which leads to a small unit, while the other leads to the main two-to-three bedroom unit. This feature, which has become popular in developed countries, allows the owner to share the space with another tenant without compromising privacy, while generating extra rental income.
For those who wish to expand the living space, the owner is also able to dismantle the wall dividing the two units.
Nguyen Minh Hang, a customer attending the event said that “When I found out the developer was launching a second apartment, I was delighted, hoping I’d have my choice of one of these nice apartments. Upon visiting the show units of The TWO Residence, I was convinced to buy one because of its unique design and affordable price.”
Yap Chin Hua, chief operating officer of Gamuda Land Vietnam, said that “This marks a significant milestone in the commencement of The TWO Residence. These three show units were carefully chosen, and their interiors were decorated to bring out the best attributes of The TWO Residence”.
Covering 73,571 square metres, units in The TWO Residence offer customers excellent design, multi-purpose functionality, and luxury facilities. The 27 and 30-level L-shaped towers comprise of three parking podiums and a single-level shopping centre.
Residents at both Courtyard Homes and The TWO Residence will also benefit from the healthy living conditions in the best residential township in Hanoi - Gamuda Gardens.
State-of-the-art facilities and amenities include the Gamuda Gardens Club with an olympic-sized swimming pool, a gym, a sauna, a tennis court, a conference room, and a restaurant. An international education system is also available to residents through the Singapore International School and IQ Montessori kindergarten.
Strategically located near the southern gateway to Hanoi, Gamuda Gardens was awarded the Best Residential Development in Hanoi at the Vietnam Property Awards. Just a 15-minute drive from the city centre, residents will have an easy commute from the heart of the capital via ring road 3, GiaiPhong street and Tam Trinh road.
Conflict raises in Taiwanese shoe manufacturing factory in Haiphong
On April 14, nearly 2,000 workers of a Taiwanese shoes maker-KaiYang Vietnam Shoes Co. Ltd., in the northern port city of Haiphong started a strike to protest the heavy workload required by the company’s management board, according to newswire Tuoitre.com.
The conflict is running high today when these workers threw rotten eggs and smelly shrimp paste to those who kept going to work.
According to the workers, they have a heavy workload. Notably, they have to work continuously for 12 hours per day from 7am to 7pm but still fail to meet the production target required by the company’s management board. Besides, they could not receive the unemployment allowance when the firm temporarily laid them off in case it does not have enough orders to remain the operation.
Workers proposed that the company cut working hours and pay the unemployment allowance but the company’s management board ignored them.
The local authorities had to mobilise policemen to prevent the workers from throwing rotten eggs and smelly shrimp paste but failed.
A representative of the company said that on April 15, the company invited two workers to represent the on-strike employees to work with the Haiphong’s Labour Federation to resolve the conflict, but no one agreed to be the representative.
Pham Huu Thu, chairman of the Haiphong Labour Federation said that the federation would send representatives to attend the working sessions with the company’s representative as well as workers to clarify the reasons and protect workers’ rights.
In an interview with newswire Dantri, Le Thuong Huyen, a lawyer said that according to Article 233 of the Labour Code, strikers causing public disorder may be imposed a fine of between VND1 million ($44.8) and VND2 million ($89.6), and they will even be prosecuted if causing serious damages.
Starting operation in 2005, wholly Taiwan-owned KaiYang Vietnam specialises in manufacturing shoes with a total workforce of over 2,000.
IMPSA’s project gone with the wind
The Ninh Thuan People’s Committee has recently rendered invalid the plan of Argentinean wind power company IMPSA to invest in a wind power project in the two districts Ninh Phuoc and Thuan Nam of the central province.
The reason is that IMPSA did not finish the administrative procedures to start investment within six months as promised back in 2011 when the people’s xommittee agreed in principle with the project. In a recent document signed by Deputy Chairman of the committee Pham Van Thuan, the committee asked the provincial Department of Planning and Investment to look for new investors to invest in this location – location no. 5 on Ninh Thuan’s wind power map.
IMPSA earlier proposed to the province a wind power project as well as a plant to produce parts of wind turbines with the total investment of between $2 billion and $3 billion. At end-2011, IMPSA asked to raise the area of the project to 1,000 hectares from the initially planned 600, and was allowed. Since then the company has made no more moves.
Earlier, in 2009 IMPSA also went to Binh Thuan to propose a $1.2 billion power plant and an part production factory worth $171 million. It also hasn’t done anything.
Argentinean company IMPSA provides comprehensive integrated hydro and wind solutions focused on Latin America, particularly on Brazil. IMPSA’s website hasn’t been updated since 2014. As of November 2015, according to windpowermonthly.com, IMPSA was in the process of negotiating with creditors to have $1 billion debts swapped into equity.
Ninh Thuan is considered very suitable for wind power development. As of now in the province there are 12 wind power projects in the master plan for wind power, but all of them are behind schedule. The Phuoc Nam –Enfinity renewable power project by Belgian company Enfinity, the Mui Dinh wind power project, South Korean company LandVille Energy’s wind power project and Malaysian wind power company Timur’s project, worth the total investment capital of $800 million, are examples.
Vietnam has incentives for wind power projects in terms of taxes and land use fees. But the feed-in tariff of 7.8 US cent per kWh guaranteed by the government, though higher than the price of electricity currently paid by users, is considered economically unfeasible. The Ministry of Industry and Trade once proposed a 10 US cent/kWh feed in tariff but the proposal has gone nowhere.
$2.2 billion Thu Thiem Eco Smart City project to kick off in July
The construction of the $2.2 billion Thu Thiem Eco Smart City project in Ho Chi Minh City’s Thu Thiem New Urban Area, which is invested in by a joint venture between Lotte Group’s subsidiaries and Japanese enterprises, is expected to start in July, according to newswire Cafef.
Lotte Group’s representative revealed the information in the meeting with Dinh La Thang, Secretary of the Ho Chi Minh City Party Committee on April 15.
Accordingly, the developer of the project is the joint venture between four of Lotte’s affiliates namely Lotte Asset Development Co. Ltd., Lotte Shopping Co. Ltd., Hotel Lotte Co. Ltd., and Lotte Engineering & Construction Co. Ltd. and three Japanese enterprises namely Mitsubishi Corporation, Mitsubishi Estate Co. Ltd. and Toshiba Corporation.
Covering an area of 16.71 hectares, the complex features an international trading-financial-banking centre, hotels, serviced apartments, offices, multifunctional condos with a highlight being a 50-storey building.
Previously, Lotte agreed to place a deposit of around VND2 trillion ($89.6 million) for the land use fee for six lots of land in Thu Thiem New Urban Area to develop the eco smart city project.
Debuting in Vietnam in 2015, Lotte currently owns 12 subsidiaries operating in manufacturing confectionary and fast food, retail, construction, property, amusement and information technology. Lotte has implemented numerous property projects, one of which is $400 million Lotte Centre Hanoi. With 65 stories and the total height of 272 metres, Lotte Center Hanoi is second highest building in Vietnam, behind the 336-metre Keangnam Hanoi Landmark Tower which opened in 2012. Lotte Centre Hanoi opened on September 2, 2014.
Licence of long-delayed Trung Luong-My Thuan to be revoked
The transport authorities have warned to revoke the investment certificate of Trung Luong-My Thuan expressway-phase 1 due to the long delay in construction as well as submitting the investor consortium’s audited financial reports.
The construction of VND15 trillion ($670.3 million) Trung Luong-My Thuan expressway-phase 1 project in the southern region remains standing at starting point after 14 months of re-launching.
As of now, only three of 24 packaging tenders have been kicked off with poor performances although the local authorities have handed over 80 per cent of land for investors.
According to Dang Trung Thanh, deputy head of the Department of Traffic Works and Construction Management under the Ministry of Transport, contractors have yet to concentrate its resource to implement the project, leading to the long delay.
Besides, the investor, namely Trung Luong-My Thuan BOT Company consisting of Tuan Loc Investment Construction JSC, Yen Khanh Production and Trade Services Company Limited, BMT Construction Investment JSC, Thang Loi Group Limited, and Hoang An JSC have yet to submit the necessary application dossiers to the local authorities for approval of the official investment contract.
Furthermore, in spite of being urged, four of six stake-holders have yet to submit their audited 2015 financial reports aiming to prove their finances when they join the consortium.
Nguyen Nhat, Deputy Minister of Transport has recently continued to urge six stake-holders to submit their audited 2015 financial reports, especially, the capital invested in the expressway in reports must match with the figures in biding documents and they are not allowed to transfer the investment right without the authorities’ approval.
Especially, Nhat also asked BMT Construction Investment JSC and Tuan Loc Investment Construction JSC to submit their audited 2015 financial reports before April 30 otherwise the MoT and related agencies will refuse to sign the official investment contract, simultaneously notice the Ministry of Planning and Investment to revoke the investment certificate.
The Trung Luong-My Thuan expressway project involves building a 51 kilometre expressway and 4.5km approach road at the total investment capital of VND15 trillion ($670.3 million) under the build-operate-transfer (BOT) form.
The project construction initially kicked off by Expressway Investment Development Joint Stock Company under Bank for Investment and Development of Vietnam (BIDV) in November 2009 and expected to complete in late 2018. However the construction became suspended due to the investor facing capital constraints. It was resumed in February 2015.
Real estate M&As spiked in first quarter
The real estate market in Vietnam has seen groundbreaking merger and acquisition deals during this year’s first quarter, with the total monetary volume reaching several hundred million dollars.
The deals were made by both local and overseas players looking to consolidate their presence in Vietnam.
Most recently, Singapore’s Keppel Land - through its indirect subsidiary Ibeworth - has entered into a subscription agreement with Nam Long Investment Corporation for VND500 billion ($22.7 million) in convertible bonds, which are due in 2020.
Keppel Land’s CEO Ang Wee Gee stated that its subscription of convertible bonds followed Keppel Land’s initial investment in Nam Long last year, and demonstrated its strong partnership with Nam Long, as well as Keppel Land’s commitment to continue participating in the company’s growth.
“It also underscores our confidence in the long-term investment potential of Vietnam, which is one of Keppel Land’s key growth markets,” Gee said in a statement.
Meanwhile, CapitaLand, another Singaporean real estate developer, has bought two developments – Somerset Vista and Vista Walk in Ho Chi Minh City – from Nguyen Binh Trading for a total value of around $45 million.  
Currently, many foreign investors are entering the domestic real estate market to conduct market studies, including those from South Korea, Japan, and Singapore.
A good number of foreign investors are planning to buy office buildings in Hanoi and Ho Chi Minh City, including projects that are already completed, those currently under construction, and those scheduled for a future build date.
Phan Xuan Can, chairman of Soho Vietnam Real Estate Consulting Company, said increased mergers and acquisitions (M&A) activities in the property market had been caused by a rise of equity in the market, low interest rates on loans, and a low supply of property products relative to the demand.
In Hanoi, buyers are typically attracted to the districts of Cau Giay, Tu Liem, Thanh Xuan, and Hoang Mai. Meanwhile, in Ho Chi Minh City, the favoured destinations include districts 2 and 9, where most enterprises have set up their projects and sold some of them to restructure their company’s investments.
M&A activities among real estate companies are expected to increase, as large investors often prefer to acquire existing projects instead of applying for fresh investment licences.
Steven Chu, CEO of the Nam Long Investment Corporation, said that M&A deals would see added momentum given the opportunities arising out of free trade deals in 2016.
“Vietnam remains a magnet for foreign developers and investors. The government needs to facilitate foreign investment in real estate by increasing access to the land bank without complex land clearance burdens, and by addressing concerns over quality speculation and state property policies,” Chu said.
“Despite strong demand for property, the growth of the middle class, low inflation, and good products offered by banks, it remains difficult for investors to get good sites without complicated land clearance issues,” he added.
Rice exports rising but unstable
The Vietnam Food Association (VFA) has released a plan for rice exports in the second quarter of the year, which are to grow 1.6 million tons, or 200,000 tons less than the previous plan. Total exports in the first half are to increase 12 per cent year-on-year, excluding non-registered exports via border gates.
There were positive signs for rice export in the first quarter, VFA said. Quantities rose significantly, by 500,000 tons, with three-month productivity nearly 58 per cent higher year-on-year.
Despite exports rising, Vietnam’s rice price is also the highest compared to other exporters in Asia.
VFA believes exports may lose their competitive advantage and market share in the future. Vietnam must balance needs and demand because this has a major effect on the world rice market. Signed contracts on rice export have fallen noticeably since March.
According to VFA, however, there were still outstanding export rice contracts at the end of the first quarter, of around 1.4 million tons. This will help export productivity for a few months.
Trade surplus double estimate
Vietnam’s trade surplus so far in 2016 stands at $1.36 billion, according to Vietnam Customs, or almost double the estimate of $776 million from the General Statistics Office (GSO).
In the first three months total trade turnover was $76.17 billion, a 1.1 per cent, or $817 million, increase year-on-year.
Total export turnover was $38.77 billion, up 6.6 per cent, or $2.4 billion, year-on-year. Import turnover, meanwhile, was $37.4 billion, a 4 per cent, or $1.58 billion, year-on-year decline.
Vietnam Customs’ figures show the major contributor to the trade surplus was foreign enterprises, with the domestic sector recording a trade deficit.
Total import and export turnover by foreign enterprises was $44.77 billion, a 3.3 per cent, or $1.59 billion, year-on-year increase. Total export turnover, was about $27.28 billion, a 10.8 per cent year-on-year increase and accounting for 70.4 per cent of total export turnover. The sector therefore recorded a trade surplus of $4.79 billion.
Domestic enterprises, meanwhile, racked up a trade deficit of $6.15 billion in the first three months of the year.
Vietnam also cut its trade deficit with China in the quarter; its second-largest export market and largest import market.
Nielsen: Vietnamese love convenient cleanliness
It should come as no surprise that efficiency and value top the list of most important attributes in a home cleaning product, according to a report from market researchers Nielsen released on April 14.
Nearly nine out of every ten Vietnamese (87 per cent) it surveyed said that good price/value and performance (it cleans well - 85 per cent) are very important.
Connected with efficacy are previous experience and trust.
About four-fifths (81 per cent) of Vietnamese also say a trusted brand name is very important, while nearly three-quarters (73 per cent) say that previous experience is one of the most important attributes they look for when selecting household cleaning products.
The report also indicates that Vietnamese pay attention to eco-friendly products. Seven out of ten respondents (70 per cent) said that organic/all-natural ingredients are very important and more than six in ten (62 per cent) said they prefer products with environmentally-friendly/sustainable packaging.
Convenience attributes should not be overlooked. About three in five respondents (61 per cent) said that convenient product packaging that is easy to use or store and a packaging size that fits family needs (58 per cent) are key traits when choosing household cleaning products.
“Urbanization largely means smaller storage spaces, and as a result the availability of a range of pack sizes, concentrates, and multi-use/multi-function products is key,” said Mr. Regan Leggett, Nielsen’s Executive Director for Thought Leadership and Foresight, Southeast Asia, North Asia and Pacific.
Modern retail channels are the preferred choice for purchasing cleaning products, even in Vietnam where traditional trade still reigns for everyday shopping.
Seventy-four per cent of respondents purchased household cleaning products from a large retail chain (such as a mass merchandiser or hypermarket) in the last 12 months (compared to 75 per cent regionally) while more than half of respondents (58 per cent) purchased cleaning products from a small local, family-owned shop in the last year.
Ministry keen to lift puffer fish catch ban
Even though the plan to export puffer fish has proved a failure, the Ministry of Agriculture and Rural Development still seems keen to promote the industry.
The government banned exploiting, processing and trading in puffer fish in 2003 after a number of deaths were caused by improper processing. But many Vietnamese still trade the fish illegally and the fish also has high commercial value. Importers from Japan, South Korea and China have all expressed interest in buying the fish from Vietnam.
Several years ago, Khanh Hoa, Phu Yen, Hai Phong and Kien Giang provinces were chosen as pilot provinces that were allowed to catch, process and export puffer fish to South Korea. The VND2bn project was expected to generate 1,000 jobs but the results are disappointing so that the National Agro-Forestry-Fisheries Quality proposed an end to the project.
The main reasons for the failure of the project were unstable fish yields and poor quality of the catches. Vietnam was able to export just 112.6 tonnes while the project targeted an ambitious 6,300 to 6,720 tonnes. Only Khanh Hoa Province wants to continue the project.
Nguyen Quoc Bao Anh, director of Phuoc Tho Company, raised another concern, saying that Vietnamese companies were lowering their prices so low to the point of getting no profits. "We still receive orders from South Korean partners so I want to continue the business and find ways to improve the prices to ensure profits to both firms and farmers."
Deputy Minister of Agriculture and Rural Development Vu Van Tam said even though the project had failed in economic terms, it showed positive results in social aspect as people's awareness about puffer fish classifying and processing had been raised. While the project was being carried out, there were no reports about puffer fish poisoning.
"As we are catching 100 tonnes of puffer fish per month, where will this amount of fish go to if we maintain the ban?" he said.
Khanh Hoa’s authorities said puffer fish were becoming a specialty and many people expressed the desire to open puffer fish restaurant if the ban was lifted.
Tam said he would create favourable condition for export firms to continue business and tighten a grips on food management to prevent poisoning. "The sector will co-operate with the Ministry of Health to decide on a safe level of toxin," Tam said.
Tyre bead steel to enjoy zero percent import duty
Iron and steel used for tyre bead wire production will enjoy a preferential import tax rate of zero percent from May 2, the Ministry of Finance announced in a recent circular.
Tyre bead wire is used to reinforce virtually all types of pneumatic tyres for motorcycles, passenger cars and trucks, as well as off-road and farming vehicles.
Circular No 51/2016/TT-BTC specifies that the zero-percent rate will be applied for non-alloy iron and steel in stick, bar or roll shapes, laminated with a diameter of less than 14mm. The rate will also be applied for iron and steel wires.
The ministry gave out the preferential import duty after suggestions by steel-maker Posco Vietnam Processing Centre Co Ltd, which is based in Nhon Trach 5 Industrial Zone in Dong Nai Province.
Hai quan, an online Vietnam Customs newspaper, reported that Posco and tyre makers in Vietnam currently have to import non-alloy hot-laminated steel sticks with a tax rate of 3 percent because the country isn't yet able to make this product domestically.
Around 30 tyre manufacturers in Vietnam, including Sao Vang Rubber JSC, Da Nang Rubber JSC and Kumho, are seeing stiff competition from about 460 firms that import tyres from Thailand, Japan, China and Taiwan for domestic sale.
Posco proposed the import tax rate be lowered to zero percent for the steel sticks until this material can be made in Vietnam. This will encourage development of domestic supporting industries, the firm said.
Appetite for safe food opens growing niche
Amid growing concerns over unsafe food in Vietnam, many foreign firms are seeking investment and business opportunities in producing safe food in the country.
David Lennarz, vice president of the US’ Registrar Corp, which assists businesses with US Food and Drug Administration compliance, told VIR that many US companies were assessing prospects for safe food production in Vietnam, especially as the local market was currently inundated with unsafe food.
“Many American firms are tending to shift their production from China - where labour costs are rising - to other low-cost markets like Vietnam, which has great potential in terms of their food and foodstuff production,” Lennarz said.
Registrar Corp has been operating in Vietnam since 2005, and has already worked with 400 local companies in collaboration with US partners to produce high-quality products for export to the US as well as for consumption in Vietnam.
At present, Registrar Corp is actively seeking to expand its operations in Vietnam.
Nguyen Vu Loc, CEO of locally-owned Westfood, told VIR that many foreign firms were turning Vietnam’s unclean food problems into an opportunity to invest in safe food production chains here.
Loc added that the demand for safe food among Vietnam’s population of 93 million was expanding, and income had improved. “This helps foreign firms strengthen their confidence that they will succeed in this market,” Loc said.
Last week, 13 Canadian enterprises met with several Vietnamese pork importers, processors, and end-users to discuss the introduction of Canadian pork products, and finding opportunities for co-operation via joint ventures or business contracts.
Canadian Ambassador David Devine said that “The impressive growth of 230% in Canadian pork exports to Vietnam in 2015 confirms the high potential of the Vietnamese market for Canadian pork products, and also the confidence that Vietnamese clients have in the quality and safety of Canadian products.”
In another case, despite failing to acquire a 14% strategic stake in Vietnam’s state-owned food processing  company Vissan,  the Republic of Korea-based food and bio-business holding company CJ Cheil Jedang was said to be planning to invest an additional US$500 million into the country via direct investments and mergers and acquisitions of food firms.
The firm already owns a farm and four processing plants in Vietnam in addition to its retail division. The US$500 million investment will raise the company’s total investment capital in Vietnam to US$900 million.
In addition, France’s Techna Group, which specialized in the improvement of animal nutrition as well as plant nutrition, is considering Vietnam as a strategic location for its ASEAN expansion plan.
It opened Techna Nutrition Vietnam in 2012 and is planning to build a factory in the country in 2018.
Currently, all of the firm’s products in Vietnam are imported directly from France.
Acknowledging the use of banned substances in Vietnam’s agricultural produce, and a livestock diet that reduces the competitiveness of Vietnam’s poultry and pork sector, Techna is offering its natural ingredients to help farmers increase livestock performance and reduce dependence on antibiotics.
In Vietnam, the prevalence of unsafe food has increased alarmingly, prompting the government to trigger campaigns to remedy the situation.
CLV-DTA hopes to finalize trade pact soon
The fourth round of negotiations to devise a trade and economic development agreement for the Cambodia-Laos-Vietnam Development Triangle Area (CLV-DTA) convened April 18 at Buon Ma Thuot City in the Central Highlands province of Dak Lak.
On the first day of negotiations, the trade representatives from the three countries said they hope to hammer out a resolution to all differences that remain and come to an agreement boosting commercial trade among the 13 border provinces soon.
The border provinces of the CLV are rich in natural resources and have great potential in agriculture and forestry they said, however, due to poor infrastructure, the region has been stymied in its past economic development.
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR

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