BUSINESS IN BRIEF 21/6 The digital industrial revolution Viet Nam should strengthen market-based reforms and invest in education and training in order to take advantage of opportunities arising from the next digitalisation-driven production revolution, experts have said. At the workshop, "The Next Production Revolution and its policy implications" jointly held by the Ministry of Foreign Affairs and the Organisation for Economic Co-operation and Development (OECD), yesterday in Ha Noi, experts said that the world was on the brink of the next production revolution with profound technological breakthroughs, while Viet Nam was embarking on the new stage of development and integration with accelerated industrialisation from 2016 to 2020. Besides opportunities, the next production revolution posed challenges to Viet Nam particularly the challenge of further lagging behind, according to the experts. It is time for policy-makers in Viet Nam to acquire a better understanding of the digital revolution to make the best of the revolution's opportunities in its early stages and to speed up industrialisation and modernisation, experts at the OECD said. They were optimistic that Viet Nam would turn into a high-income country in the next four decades. Deputy Minister of Foreign Affairs Bui Thanh Son said that innovative thinking was critical for Viet Nam to move forward while the country was losing its competitiveness in low-cost labour. Tran Dinh Thien, director of Viet Nam Institute of Economics, said Viet Nam signed free trade agreements with the world's giant economies such as the European Union, South Korea and the US. "Amidst rapid integration coupled with the approaching next production revolution, if Viet Nam went on the right path, the country could take a giant leap," Thien said. Kensuke Tanaka, head of the OECD Development Centre's Asia Desk, said at the conference that strengthening market-based reforms, SOE reforms and reforms to education and training to meet demand for skilled labour were essential. OECD, on its website, says that the spread of global value chains, the increasing importance and mainstreaming of knowledge-based capital, and the rise of the digital economy, are ushering in the "next production revolution". However, a number of policy challenges must be tackled to enable the next production revolution, the website says. The world went through three industrial revolutions, according to the World Economic Forum. The first was in 1784 using water and steam power to mechanise production. The second was in 1870 using electric power to create mass production, and the third took place in 1969 using electronics and information technology to automate production. Now a digital revolution was in the making. Thua Thien-Hue targets over 448 mln USD in investment Central Thua Thien-Hue province plans to lure 15-20 domestic and foreign investment projects, worth 10 trillion VND (448.3 million USD), into its industrial parks this year. According to the provincial People’s Committee, the industrial parks in the locality target to generate a combined industrial production value of 13.2 trillion VND (591.7 million USD) and exported about 550 million USD worth of products. The province has given priority to projects in the fields of tourism, industrial infrastructure, supporting industries, education, healthcare, agriculture, and hi-tech sectors in which it has advantages. It has worked hard to invite more investors from Thailand, the Republic of Korea, Singapore, Hong Kong (China), Japan, the United States and those having signed free trade agreements with Vietnam. The local authority has also ramped up direct conversations with investors and involved more private investors in public projects, through investors business links with banks, infrastructure firms and investment consulting agencies. Thue Thien-Hue plans to develop an investment database in five different languages – Vietnamese, English, Korean, Japanese and Thai – for investors to learn about the local business climate, investment procedures and investment opportunities. A multi-lingual website will also be created for investment promotion. For key infrastructure projects, the locality will support investors by making compensation and carrying out site clearance in advance in order to shorten the time to get projects underway. Some 99 projects have landed in Thua Thien-Hue province to date, including 75 domestic and 24 foreign investment projects, with a total registered capital of approximately 23.6 trillion VND (1,057 billion USD). They have offered employment to around 18,000 local workers. SOEs contribute less to State budget in Jan-May Tax collections from State-owned enterprises (SOEs) in the first five months of this year slid 16% over the same period last year and met nearly 33% of the full-year target, according to the General Department of Taxation. Pham Thi Tuyet Lan from the department unveiled the figures at a meeting with reporters in Hanoi  on June 15. The drop was one of the reasons behind the budget revenue decline in the January-May period. Particularly, tax collections from the Dung Quat Oil Refinery in the central province of Quang Ngai went down by nearly 60%, or nearly VND7.8 trillion (US$349.5 million), year-on-year and those from PetroVietnam Gas Corporation dipped by a hefty VND1.4 trillion (US$62.7 million). In the year to May, tax revenue from crude oil exports neared VND16 trillion (US$719.9 million), 29% of the estimate.     The world crude oil price drop also affected revenues of SOEs in the period. The price dipped to the average of US$29 per barrel, US$22 per barrel lower than the estimate and over US$21 per barrel lower than in the same period last year.   Total revenue from dividends and profits of the state corporate sector saw a year-a-year decrease of 20% and was equivalent to more than 25% of the full-year target. Lan said budget collections by the tax authority from January to May met 42% of the full-year target. The reason was dissolved and suspended firms in the first five months edged up nearly 20% and 26% year-on-year respectively. Cold spells in northern mountainous provinces, severe drought in the central and Central Highlands regions, saltwater intrusion in the Mekong Delta, mass fish deaths on the central coast placed significant impact on enterprises. Panama to inspect Vietnam fish processors in July The Panamanian Authority for Food Safety (AUPSA) will dispatch a team to Vietnam from July 4 to 7 to check the safety control system for seafood exports and tra fish processing facilities, according to the National Agro-Forestry-Fisheries Quality Assurance Department (Nafiqad). As planned, the inspection team will be divided into one technical and three inspection groups. Each of them will inspect five to seven fish farms and processing facilities in this ASEAN country. Nafiqad director Nguyen Nhu Tiep asked relevant units and seafood processors to review and prepare all food safety and hygiene documents for the inspection team. Nafiqad also required fish processors to improve food safety. Earlier, Vietnam requested Panama to come for inspection after some Vietnamese fish shipments were found to contain pathogenic microorganisms. Shipments of tra fish from Vietnam will be subject to sample checks and only be allowed for sale in Panama if they meet its requirements. The Vietnam Trade Office in Panama said the country needs to inspect Vietnamese tra fish farms and processors to avoid taking samples for testing. Panama plans to inspect 19 tra fish processing facilities in Vietnam. The list can be changed at the request of AUPSA and will be notified in advance, Tiep said. List of tra fish processors planned for AUPSA inspections 1. Minh Dang Co. Ltd. 2. Frozen Factory 8-An Giang Seafood Import & Export JSC 3. Factory 3-Vinh Hoan JSC 4. Workshop 2-Vinh Hoan JSC 5. Phat Tien Seafood Co Ltd 6. Vinh Hoan JSC 7. Cuu Long Seafood Import & Export JSC 8. An Phu Seafood JSC 9. Nam Song Hau Seafood JSC 10. Nha Trang Seafoods-f89 JSC 11. Hoang Phong Seafood Processing Factory-Ut Xi Seafood Processing JSC 12. Hoang Phuong Seafood Processing Factory-Ut Xi Seafood Processing JSC 13. Indian Ocean Co. Ltd.- Indian Ocean Frozen Seafood Factory 14. Quoc Ai Import & Export and Processing Company 15. Bien Dong Seafood Company 16. Hai Sang Seafood Company 17. Dai Thanh Company 18. Hoa Phat Seafood Import & Export and Processing Company 19. Europe JSC Guidelines for customs, tax laws to come out The Ministry of Finance has sent the Government a draft decree guiding the implementation of both laws on customs procedures and export-import tariffs in line with Vietnam’s commitments to the free trade agreements the country has signed. The ministry said it had drafted the decree at the request of the Government. The ministry said the draft decree includes some regulations on administrative procedures provided in the current circulars while revising some customs procedures to make them harmonize with the existing laws and international practices. The draft decree has been posted on the websites of the ministry and the General Department of Customs for comment. As suggested, the ministry’s circulars having regulations on administrative procedures would be converted into Government decrees in accordance with the law on promulgation of legal documents. In addition, the ministry is tasked with preparing the decree guiding the execution of the law on export-import tariffs which has approved by the National Assembly and will come into force this September. Procedures for tax exemptions and reductions as well as tax refunds for exported and imported goods will be added to the decree. The ministry stressed the need to have a comprehensive check of existing documents to ensure the harmony of tax and customs procedures. Experts urge transparency for real estate market Experts have underscored the urgent need to make the property market transparent and fix legal loopholes to minimize risks for homebuyers. Speaking at a conference on how to protect homebuyers and improve transparency on the property market in HCMC on Tuesday, they said a number of homebuyers had fallen victim to apartment projects which developers used as collateral to take out bank loans. Tran Duc Phuong from the HCMC Bar Association said many investors have not publicized their projects on their websites as required. Under the 2014 Law on Real Estate Business, they must provide details about their projects, including detailed development plans and number of apartments for sale, but most of them have not abided by this regulation. There are unclear rules on investors’ equity and capital raising plans. In many cases, investors authorize their partners to sign home sale contracts, leading to fraud. According to Phuong, a number of investors sell their products though they are not yet licensed and apply unclear payment terms which easily trap homebuyers. On top of that, there are no effective regulations preventing developers from selling one apartment to more than one customer. This is a legal loophole in the real estate sector. Phuong said the real estate market has a low level of transparency. It is difficult for customers to buy homes as wished if they decline to come to terms with what is put forth by investors. Bui Quang Tin from the HCMC Banking University said no regulations require enterprises to report what products they sell so they can take advantage of this loophole to sell one apartment to multiple buyers, especially those who settle payments in cash and do not borrow from banks. Tin proposed property investors register their plans to borrow from banks and sell their products with competent agencies to limit risks for homebuyers. Financial and investment expert Dinh The Hien said customers would face all sorts of risks when they buy apartments at half-done projects because they could only get home ownership certificates after they complete payments. In many cases, investors delay handing over apartments to buyers since they are unable to finish their projects as scheduled due to financial constraints. Hien noted a number of banks lack qualified employees to evaluate projects or assist investors in taking out loans at any cost after investors have used their projects as collateral for loans. This puts homebuyers at risk. Le Trong Khuong, deputy general director of Hung Thinh Real Estate Exchange Joint Stock Company, said more collateral and licensing violations were detected at property projects implemented in 2007-2010 when the real estate market boomed. Large numbers of people rushed to buy homes though they had little or no knowledge of the market and regulations. Nguyen Toan Thang, director of the HCMC Department of Natural Resources and Environment, said the city will check all the housing projects which have been used as collateral for bank loans but their buyers have not got home ownership certificates. State Treasury steps up long-term debt issues The State Treasury has in recent weeks put up for sale big volumes of debt with tenors of over five years in addition to three- and five-year debt. Last week, the agency held auctions of five-year, 20-year and 30-year bonds. Investors registered to buy all of the 20-year bonds on offer at VND1 trillion (US$44.7 million). However, the bonds have remained unsold as investors want higher coupons.     Meanwhile, buyers acquired VND500 billion in 30-year debt in a VND1.5 trillion issue at a coupon of 8% a year.   Early this month, the State Treasury sold out VND2.6 trillion of 15-year bonds. It organized an auction of 10-year bonds worth a combined VND1 trillion yesterday.    Notably, VND100 billion of 10-year bonds, VND4.36 trillion of 15-year bonds, VND80 billion of 20-year bonds and VND1.53 trillion of 30-year bonds were sold last month, much higher than in previous months. According to data of the Hanoi Stock Exchange, the State Treasury mobilized more than VND43 trillion from debt sales in May, up 43.1% month-on-month, and VND166.7 trillion in the year to date. Commercial banks have been rushing to buy G-bonds with a tenor of five years but winning bond yields have inched down. Declining coupons are attributable to lower interest rates for Vietnam dong loans on the interbank market and credit loosening by the State Bank of Vietnam. Banks said capital mobilization has been good but major lenders have not boosted lending. In contrast, credit has grown strongly at small banks but this has not left significant impact on the currency market.     The G-bond market has performed well thanks to high liquidity in the banking system. In addition, the central bank has issued Circular 06/2016/TT-NHNN amending and supplementing a number of provisions in Circular 36/2014/TT-NHNN to allow local banks and branches of foreign banks to buy more debt issued by the Government. Market watchers now wonder if the Ministry of Finance will adjust its plan for short-term bond issuance as the volume of less-than-five-year bonds exceeded the ceiling of 30% of all the bonds issued in the year to date. However, market demand for these bonds remains huge as banks have scrambled to purchase bonds to restructure their short-term capital. Last week saw investors snapping up all of the five-year bonds worth VND7 trillion at an annual coupon of 6.07%, down 0.03 percentage point against the previous auction. An additional VND2.1 trillion of five-year bond was put up for sale and snapped up at the same coupon. Financial organizations said macro-economic conditions and cash flow will likely remain stable in the medium and long terms. They forecast bond coupons will not fluctuate significantly and stay low.   The State Treasury has announced a plan to issue debt totaling VND70-80 trillion in the second quarter, including VND23 trillion in 10-to-30-year debt. In all of 2016, VND220 trillion of G-bonds will be issued, with three- and five-year debt accounting for VND166 trillion and 10-year, 15-year, 20-year and 30-year debt for VND54 trillion. IFC supports Anova Feed JSC's expansion of sustainable livestock production in Vietnam IFC, a member of the World Bank Group, is helping Anova Corporation to build more animal feed facilities in support of the country's growing livestock industry, contributing to food safety and creating hundreds of jobs. IFC has provided VND340 billion (about $15 million equivalent) through a five-year convertible bond to support one of the company's subsidiaries Anova Feed Joint Stock Company to expand animal feed production. The investment will help the feed producer construct two additional mills in Dong Nai and Hung Yen provinces and a warehouse in Long An province over the next two years. Once the new feed mills and warehouse come online, more than 500 new jobs will be created to supply products to nearly 40,000 farmers across Vietnam. Domestic demand for meat has been on the rise given the country's growing population and higher standards of living. Vietnam's agricultural landscape is driven by small farms and its farmers are looking to make sustainable strides in biosecurity and feed quality. "IFC's financing will help Anova Feed triple its production capacity, providing quality and reliable feed to the fast growing animal protein sector in Vietnam," said Nguyen Hieu Liem, Chief Executive Officer at Anova Corporation. "We are also seeking IFC's advice in expanding our reach to other countries and strengthening corporate governance standards in preparation for a listing." In addition to financing, IFC will help Anova Feed pursue sustainable operations by adopting IFC Performance Standards and the World Bank Group Environment, Health and Safety Guidelines. "IFC aims to support the sustainable development of Vietnam's agricultural sector, which is rapidly growing and accounts for more than 20 percent of the country's gross domestic product," said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Lao PDR. "By supporting companies like Anova Feed, we are promoting the development of efficient and sustainable local private enterprises along the agribusiness supply chain as a driver of competitiveness and improvement in agriproducts in the local market." IFC has significantly scaled up its investments in agribusiness in recent years. In the fiscal year ended in June 2015, IFC invested $3.0 billion across the agribusiness supply chain—from farm to retail—to help boost production, increase liquidity, improve logistics and distribution, and expand access to credit for small farmers. At the end of the fiscal year, IFC's committed agribusiness portfolio stood at $5.2 billion. Farmers expect latex prices to hike Since 2014, the price of rubber has been drastically down resulting in the Vietnam Rubber Group and farmers facing hardship. Yet, this year, the price of the tree is showing a hike bringing new hope for farmers. To overcome the difficulties, many farmers have cut down the tree to grow other trees such as pepper and cassava. In the end of May, 2016 was in the harvesting season to collect raw latex and at that time the prices were stable in the South East region and slightly higher than last year. As per the Department of Agriculture and Rural Development in the Southern province of Binh Phuoc, from the middle of May, raw latex fetched VND8,700 a kilogram in Dong Phu District meanwhile it was sold at VND8,700 per kilogram in Hon Quang District. In the southern province of Binh Duong’s Dau Tieng District, its price was at VND8,800-8,900 a kilogram; at VND8,600-8,700 per kilogram at Bau Bang District. The current prices are 40 percent higher than the fourth quarter in 2015. However, the farmers in the South East region said that the current prices do not assure them. Farmer Tran Van Duc, owning a 3-hectare rubber garden in Tan Hung Commune in the southern province of Binh Phuoc’s Dong Phu District said that rubber prices this time are merely higher than last year. He added that the price of latex is usually high in the early harvesting time yet it will leap in the middle and end. Consequently, the farmers are not really excited though the rubber prices are higher than last year. To earn more profit, Duc's family members themselves take raw latex instead of hiring others. At this time, the rubber companies have had no enough rubber to sell as they signed contracts with customers. According to the Vietnam Rubber Association, the latex prices increase because of drought. Additionally, Thailand, one of leading country to produce rubber, announced rubber productivity reduced half. The announcement resulted in hike in price in the Southeast Asian countries. Another reason is that consumption of rubber tire in the world showed an upward trend. Furthermore, petroleum price leap also pushed the rubber prices. Ascott appoints new Country GM The Ascott Limited (Ascott), CapitaLand’s wholly-owned serviced residence business unit, has appointed Ms. Lew Yen Ping as its Country General Manager for Vietnam. Ms. Lew, a hospitality industry veteran, will manage Ascott’s operations and ensure the robust growth of its serviced residence business in Vietnam. “Ms. Lew has amassed 25 years of experience in the international hospitality sector,” said Mr. Tony Soh, Ascott’s Chief Corporate Officer overseeing the company’s business and operations. No stranger to Ascott, Ms. Lew has been working in Vietnam since 2011 and has played a pivotal role in expanding the company’s business in the north of the country. She led the team in constantly improving operational efficiency and consistently achieving excellent profits across Ascott’s properties in the north. “Ms. Lew will now step up and take on the leading role in enhancing Ascott’s business performance as well as growing our presence in the country,” Mr. Soh said. Ms. Lew succeeds Mr. Mark Chan, who became Area General Manager, South China, and Vice President, Special Projects, from June 1. “I am honored to lead the Vietnam team and bring Ascott to greater heights under my leadership,” Ms. Lew said. “Ascott pioneered the serviced residence industry in the country 22 years ago and we have successfully established Somerset as a strong, award-winning brand. We are committed to offering the perfect accommodation for business and leisure travelers in Vietnam and we will soon introduce the premium Ascott The Residence brand as well as Citadines’ Apart‘hotel to the country this year.” Before Ascott, Ms. Lew held senior positions with international hotel groups and organizations in Malaysia, Singapore, China, the Philippines, Thailand, Japan, and the US. She studied in the US and earned a Master’s degree in Australia. In Vietnam Ascott currently operates three properties in Hanoi - Somerset Grand Hanoi, Somerset Hoa Binh and Somerset West Lake, one property in Hai Phong - Somerset Central TD Hai Phong City, and five properties in Ho Chi Minh City - Somerset Chancellor Court, Somerset Ho Chi Minh City, Somerset Vista Ho Chi Minh City, Vista Residences, and Diamond Island Luxury Residences. Other new serviced residences to be progressively completed include Ascott Waterfront Saigon, Citadines Bayfront Nha Trang, Citadines Regency Saigon, Citadines Central Binh Duong, Somerset West Point Hanoi, Somerset West Central Hanoi, and Somerset Danang Bay. ADB continues supporting Vietnam’s development projects President of the Asian Development Bank (ADB) Takehiko Nakeo has stated that the bank will continue providing preferential loans and technical support for Vietnam’s projects in the coming time. In a working session with Vietnamese Finance Minister Dinh Tien Dung in Hanoi on June 16, Takehiko Nakeo spoke of Vietnam’s sustained economic growth, poverty and social policies, and infrastructure development. For his part, Minister Dung asked the bank to continue prioritizing preferential loans and extending loan terms for Vietnam, and supporting the Vietnamese Government in selecting investment projects that will bring high efficiency. ADB is one of Vietnam’s important partners and donors, Dung said, affirming that the bank’s assistance helped Vietnam realise its targets, particularly in public financial reform, market development, securities and customs. The official also informed the ADB official about issues related to Vietnam’s public debts and solutions taken by the Government to inflation control and budget deficit reduction, saying that these remarkably contributed to restructuring public debts, ensuring debt safet y and State budget sustainability. The Ministry of Finance has worked and given advices to the Government to perfect laws relating to public debt management, and adjust Vietnam’s Public Debt Strategy to 2020 and a vision to 2030 in accordance with international regulations, Dung noted. He also mentioned measures to improve the efficiency of State-owned enterprises, promote restructuring of the stock market and public-private partnership (PPP), and address bad debts, and policies to develop small- and medium-sized enterprises. As of 2015, loans pledged by ADB for Vietnam totally valued at 11.5 billion USD, including 5.5 billion USD from the Asian Development Fund and 6 billion USD from ADB's Ordinary Capital Resources ( OCR ). Total value of technical supports the bank provided for Vietnam was about 253 million USD. The bank’s fund targeted infrastructure projects for socio-economic development, policy and institution reform, and poverty reduction programmes. Local flower firms could be top exporters With vast areas suitable for growing flowers, Viet Nam has the potential to become one of the world's largest flower exporters, according to experts. Prof Dr Nguyen Quoc Vong of RMIT University said the area for flower growth in Viet Nam is equal to that of Spain, the EU's fifth largest flower producer. Flowers can be grown in every part of the country, and areas like Moc Chau and Da Lat, with an average temperature of 200C, are ideal for growing them for export, he said. Tran Xuan Dinh, deputy head of the Crop Production Department, said flowers would play a key role in restructuring agriculture. Last year ornamental flowers were grown on more than 23,000ha and yielded an income of VND300 million (US$13,452) per hectare, 10 times higher than from rice. High-end flower cultivation models in some places yielded bewteen VND800 million to VND2.5 billion, he said. According to the department, in the past 10 years the area under flowers has increased 2.3-fold and output, 7.2-fold. The value of the output was VND6.5 trillion. But exports remain modest at just $50 million a year, way below the country's potential, Dinh said. A majority of farming households have been slow to revamp their farming techniques and flower plantations mostly remain small-sized, resulting in low value addition. Since farmers and companies are not closely connected, there is no value chain to enhance flower quality and output to boost exports, experts said. Dalat Hasfarm is the country's largest flower producer and exporter. To penetrate the global flower market, the company has invested in modern glasshouses to grow flowers. Thailand is the world's largest orchid exporter, earning $200 million a year. Viet Nam imports a large number of seedlings and cut orchids from Thailand. The agricultural sector has enacted policies to develop technology-based flower farming, but these have not proved effective. Sa Dec in the Cuu Long (Mekong) Delta province of Dong Thap, a town that has long been famous for its flowers, aspires to become one of the delta's leading tourist cities and a major flower exporter, according to provincial authorities. It is planned that all rice growing areas will switch to flowers by 2020, meaning there will be more than 1,000ha under flowers. To achieve the targets, the province government has chosen a Dutch partner. The Netherlands will build a research zone in the Hi-Tech Agricultural Application Centre in Sa Dec, offer training to local agricultural staff and farmers, transfer technologies for making nets and glasshouses, preliminary processing, packaging and help find outlets for flowers. The centre is expected to supply Sa Dec flower village 300,000 seedlings this year and 1.5-2 million every year by 2020 to grow flowers for exports. The province has signed an agreement with a French company specialising in urban planning to redesign Sa Dec on the lines of the delta's leading tourist cities but with its status as a major flower exporter and the region's characteristics in mind. Kien Giang: Over VND7.66 trillion for power projects The Southern Power Corporation of the Electricity of Vietnam (EVN SPC) plans to inject more than VND7.66 trillion (US$344.7 million) into transmission projects across the Mekong Delta province of Kien Giang during 2016-2020. The projects aim to bring electricity to the Khmer ethnic group, rural and islands areas, and improve power transmission quality in Ha Tien town and Rach Gia city, according to the provincial Department of Industry and Trade. This year, over VND1.17 trillion (US$52.65 million) will be poured in building 110 kV power lines, transformer stations and electricity grids in the province. Kien Giang province has also started work on eight power projects worth a combined over VND40 billion (US$1.8 million) in An Bien, An Minh, Giong Rieng, Go Quao, Hon Dat and Kien Hai districts, in an effort to increase the rate of electricity access in the localities. Over the past five years, the EVN SPC allocated more than VND3.2 trillion (US$144 million) for various power projects in Kien Giang, helping raise the percentage of households with access to electricity to more than 98%. Thanks to such efforts, the national electricity grid has reached Phu Quoc island, Hon Tre island commune and the administrative centre of Kien Hai island district. Two other island communes, Lai Son and Hon Nghe, are expected to join the national power grid in late July and at the end of this year. Pleiku 2’s 500kV transformers ready to receive power from Laos A project to install two 500/200kV-450MVA transformers as well as 500kV power distribution devices at Pleiku 2 transformer station in Ia Kenh commune, in the Central Highlands province of Gia Lai’s Pleiku city, were put into operation on June 10. The Pleiku 2 substation recieves power from Xekaman 1, Xekaman Xansay and Sekong 3 (upper and lower) hydropower plants in Laos to supply to the central, Central Highlands and southern localities through the 220kV Xekaman 1-Peiku 2 transmission line. It is expected to contribute to developing a sustainable power supply amidst the country’s international integration as well as regional cooperation, reducing power loss and optimising the operation of Vietnam’s power system. The 500/200kV-450MVA transformers were moved to the station from the 500kV O Mon transformer substation. Apart from two 500/200kV-450MVA transformers, necessary devices for receiving and reducing 500kV power; 220kV and 35kV transmission lines were also put into operation. The project, invested in by the Electricity of Vietnam’s National Power Transmission Cooperation (EVN NPT), has been handed over to Power Transmission Corporation 3 (PTC3) for management and operation. Vietnam state shipping line seeks to downsize fleet amid losses Vinalines, the state-controlled shipping company which has made losses and piled up debts for many years, is seeking the government's permission to sell off six cargo ships in a new attempt to pull itself out of financial trouble. In its letter to the Ministry of Transport, Vinalines proposed to sell the ships, most of which have been in use for over 20 years and were bought from overseas, at around 10% of their original prices. The company was quoted as saying that with sea freight seeing a sharp decline since 2008, it has been struggling to cover the "huge" costs of operating and maintaining the big and old ships. It said the fact that the ships could not compete with the modern fleet of other companies has too adversely affected revenue. In fact, all the ships have been suffering losses between 2012-2015. For instance, the Vinalines Star is expected to be sold at VND34.4 billion (US$1.51 million), after accumulating around VND186 billion in losses over the years. It was bought in 2009 for around VND378 billion (US$16.69 million). Vinalines said the sale will help it reduce losses and focus resources on developing newer ships. The ships are among 73 used vessels Vinalines bought for a total of more than VND22.85 trillion (US$1 billion) in 2005-2010, mostly from overseas, official data showed. Vinalines began to overhaul its business in 2012 as ordered by the government, after its financial problems came into light. In the years earlier, the company kept posting impressive profits, even as skepticism grew about its real performance. After being audited in 2011, the group reported huge losses. A government report last year showed that Vinalines had accumulated losses of over VND20.68 trillion (US$913.54 million) by the end of 2014. Early this year the government ordered Vinalines to sell its entire stakes in nine seaports around the country after selling a stake of 65% in an initial public offering sometime this year. It was also required to sell part of its shares in another five ports, including three foreign-invested ones at the complex Cai Mep-Thi Vai in the southern province of Ba Ria-Vung Tau. Property market set for growth: experts The Vietnamese real estate market is poised for strong growth in the next 15 years, but the Government should prevent speculation to avoid a bubble and improve human resources and infrastructure to attract foreign developers as the country integrates, a foreign expert has said. Sigrid Zialcita, managing director of Cushman & Wakefield, Asia – Pacific, told the recent Property Report Congress Vietnam 2016 in Ho Chi Minh City that the Asia Pacific real estate market will grow the highest globally at 5.2% this year, and Vietnam, Indonesia and the Philippines will lead ASEAN’s growth. Foreign investors are looking at Vietnam with interest as its exports [by foreign companies here] increase significantly and are looking for a place to produce to replace China and Singapore, where costs are too high, according to the expert. Recent improvements in infrastructure have taken Vietnam to the next level of development, but the country must work hard to compete once FTAs and the TPP come into effect. In the office segment, Ho Chi Min City and Hanoi have much less space than neighbouring countries, and Vietnam must speed up supply. The 542,000 square metres of space under construction cannot meet the demand and office investment is set to double by 2020. The hospitality industry would need more than 120,000 rooms by 2030 to meet tourist demand. “We have witnessed strong development by the retail industry with the entry of many foreign groups from Japan and Thailand and the country will need another 4.3 million square metres for the industry by 2030.” Marc Townsend, managing director of CBRE Vietnam, said resorts are seeing significant development in Nha Trang, Danang and Phu Quoc. “Two years ago we did not pay attention to that kind of real estate but now everything has changed. International direct flights to these destinations have boosted the real estate market.” He said land prices have increased by 30%-40% recently while apartment prices are steady. "The secondary market is steady and there is no more opporunity for speculators," he warned. The size of the country’s real estate market has grown many times thanks to the entry of huge international capital. "However, the market is still driven by housing demand from locals," he said, pointing out that the number of foreigners who want to buy a house in Vietnam accounts for only 5% of demand. "Industrial parks are another strength of the Vietnamese real estate market," he said. Townsend warned that Ho Chi Minh City and Hanoi could face a supply glut because of the massive construction in the last two years. PM asks press to accompany businesses in economic integration Prime Minister Nguyen Xuan Phuc has urged the press and business circles to continue their companionship and mutual support for the common interest of the community, and for national socio-economic development. At a meeting in Hanoi on June 10 with journalists, who had partook in a programme on the press’s interaction with enterprises and business people, the Government leader described the press as a bridge linking businesses and the State. Via their channels, news agencies and press outlets, journalists have enabled the Government and State agencies to learn about businesses’ opinions on various issues, including the implementation of policies and guidelines, thus helping improve State management work, he said. The PM also emphasised the press’s role in building brand names for enterprises, promoting their products and spurring their operation. Besides this, by covering all socio-economic spheres, the press has significantly contributed to rooting out corruption and wastefulness, the leader added. Participants at the event said the press has helped businesses overcome their limitations and weaknesses during international economic integration, and underlined the need for the two sectors to increase their mutual support and understanding. It is necessary for journalists to respect the law and steer firms towards lawful business practices, they said, calling on them to play a more active role in uncovering violations of the law committed by either State management agencies or businesses in order to create an equal and transparent climate. Petroleum product imports from ASEAN increased Vietnam’s import of petroleum products from the Association of South East Asian Nations (ASEAN) countries rose sharply in the past five months, according to the Ministry of Industry and Trade. From January to May, Vietnam imported 5.41 million tonnes of petrol and oil products, up 27.6 percent against the same period last year, with the major ASEAN markets being Singapore and Malaysia. The rise was attributed to the import tariff on petrol and oil products from ASEAN that went to zero since the ASEAN Trade in Goods Agreement took effect on January 1, 2016. In 2015, Vietnam bought 3.84 million tonnes of petroleum products from Singapore and 2.28 million tonnes from Thailand, which together accounted for more than half of the country’s petroleum imports of 10 million tonnes. Unbaked brick production encouraged in Vietnam Results and experience from a project on increasing the production and use of non-fired bricks were introduced at a workshop held in the northern province of Thai Nguyen on June 10. The 2.8 million USD project was funded by the Global Environment Facility (GEF) through the UN Development Programme (UNDP) and jointly implemented by the Ministry of Science and Technology and Ministry of Construction. Kicked off in May, 2015, the project included four components: completing policies, enhancing technical capacity for relevant partners, improving financial resources for advanced unbaked brick production technology and multiplying the production technology. The project is expected to reduce the use of fossil fuel and good quality soil for traditional brick making, thus helping to cut greenhouse gas emission by at least 383,000 tonnes after five-year implementation. Speaking at the review workshop, Director of the Department of Science and Technology for Economic-Technical Branches Nguyen Dinh Hau affirmed that the project’s target is in line with the GEF’s strategy and Vietnam’s development goals on food security, effective use of energy and reduction of greenhouse gas emission. He said that the project implementation also satisfies objectives of Vietnamese environment protection strategy, including slashing sources of environmental pollution, improving polluted areas, enhancing local living environment and lessening degradation of natural resources. Under the project, an unbaked-brick production line was set up and has been operated stably in Luu Xa Cement Company, Thai Nguyen province from December, 2015. About six million standardised bricks were produced and consumed in the locality so far. Participants at the conference visited the production line and Thai Nguyen Bus Station, which were built from the non-fired bricks. 140 Vietnamese firms attend Kunming Export and Import Fair Vietnam is the main guest at the 24th Kunming Export and Import Fair which is underway in Yunnan province, China, with around 140 Vietnamese firms attending the event. Addressing the opening ceremony of the Fair and the fourth China-South Asia Fair, Deputy Prime Minister Trinh Dinh Dung said Vietnam welcomes and pledges to create optimal conditions for enterprises from China and other South Asian and Southeast Asian countries to invest and operate in Vietnam. The Deputy PM said the fairs bear an important significance and serve as a bridge to promote trade and investment cooperation between China’s south western region and South and Southeast Asian nations, including Vietnam. Being one of the six emerging economies with the highest growth rate in 2015 and a market of 92 million people, Vietnam has continuously fostered economic, trade and investment cooperation with China and other regional nations, Dung said. For his part, Chinese Deputy PM Wang Yang said China is willing to connect with regional nations in developing trade, investment, infrastructure, finances, tourism, transport and environment protection. The two fairs, co-organised by the Chinese Ministry of Trade and the Yunnan province, attracted 4,000 enterprises from 80 countries and territories in South Asia and Southeast Asia and more than 8,000 booths. Vietnamese enterprises are running 250 booths at the events. Deputy PM Trinh Dinh Dung was invited by the Chinese Government and Yunnan province’s authorities to visit Yunnan and attend the opening ceremony of the fairs from June 11-13. Lotte Mart to buy more products from Khanh Hoa-based producers The Republic of Korea (RoK)’s supermarket chain Lotte Mart Vietnam recently met with more than 100 suppliers in Khanh Hoa province to discuss buying their products. The conference on supply-demand connectivity organised by Lotte and the province’s Department of Industry and Trade and Farmers Association sought to support local businesses, cooperatives and production and trading establishments by getting their products into the modern retail channel. The supermarket spelled out its procurement policies and processes and listened to suggestions from the suppliers to come up with policies. Tran Van Chuc, director of the supermarket's fresh food purchasing division, said Lotte Mart gives priority to buying locally made products that meet quality standards and regional and traditional products that meets customers' various needs. Yoon Byung Soo, product strategy director at the supermarket, said with its target of opening 60 stores nationwide by 2020 and vision to become a leading retailer, Lotte Mart would continue to connect with and support Vietnamese companies, especially in provinces. It would also offer preferential treatment to producers who want to cooperate with it in developing its own brands, he said. Lotte Mart also signed memorandums of understanding with many suppliers in Khanh Hoa to bring their products into the Lotte Mart distribution network. Lotte Mart Nha Trang is set to be opened on July 28. Central, Central Highlands eye 8.8% rise in industrial production The industry and trade sectors of the central and Central Highlands provinces are striving to raise their industrial production value to nearly VND420.8 trillion (US$18.8 billion) in 2016, a year-on-year surge of 8.8%. Pham Thai, Director of Dak Lak province’s Department of Industry and Trade made the statement at a review conference held in Buon Ma Thuot city on June 10. He said that the sector has also set the target of achieving VND570.5 trillion (US$25.5 billion) from selling goods and services and over US$8 billion from exports, up 13.5% and 13.7%, respectively, from last year. In a bid to fulfill the objectives, regional industrial and trade sectors will address difficulties, create favourable climates for enterprises to develop their businesses while effectively implementing economic restructuring and promoting exports, he noted. An equal competitive business environment, administrative reforms, high-quality human resources as well as modern infrastructure development will be given top priority. In addition, the sectors will also give support to enterprises in product consumption and reducing inventories and put local businesses up for having advanced technology applied to improve product quality. According to Deputy Minister of Industry and Trade Hoang Quoc Vuong, the central and Central Highlands regions have seen robust growth in industrial production, with an increase in proportion of industrial processing and manufacturing. The regional industry and trade sectors have also given a good performance in controlling the market and addressing violations in line with regulation, especially tackling smuggling and trade fraud, as well as ensuring food hygiene, he added. Regional industrial production value exceeded VND211.2 trillion (US$9.5 billion) in the first six months of the year, rising 6.9% from the same time last year. Meanwhile, revenue earned from selling goods and services in the period reached VND279.5 trillion (US$12.5 billion), a year-on-year surge of 13.4%. 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