BUSINESS IN BRIEF 30/8 Deputy PM visits Van Don, talks institutions      Vietnamese Deputy Prime Minister Vuong Dinh Hue has asked ministries, agencies and localities to build strong insitituions to help Van Don Special Economic Zone retain investors, businesses and visitors. The Deputy Prime Minister, along with other ministerial and provincial leaders visited the northern coastal province of Quang Ninh’s Van Don Island District on Saturday to inspect constructions. Van Don has attracted nearly US$2 billion of domestic and foreign private investors to build infrastructure in the past few years. Van Don Airport’s construction of a 3,600-metre runway is almost finished after two years of construction. According to Sun Group, the project investor, the international airport is expected to be operational in the first quarter next year. Apart from airports and logistics port, Sun Group also invests in resorts and entertainment areas. Visiting Van Don, Deputy Prime Minister emphasised the island’s unique position and its role in the development of the northern region. This area is located in the area of Viet Nam - China economic co-operation, is part of the Gulf of Tonkin inter-regional co-operation and can also be a bridge between ASEAN and China. Van Don also has the potential to build deep-water ports, which are located in Hai Phong-Quang Ninh-Fangcheng (China) international port complex. Despite being an isolated island, Van Don is connected with the Red River Delta (National Highway 10 and 18), the northwest through Lang Son and southern China. Hue also asked ministries, Quang Ninh Province and investors to co-ordinate and continue to research and make full use of the economic values of Van Don. He also asked them to study the experiences of building special economic zones in other countries in the fields of management, financial service provision, economics, tourism and cultural services with high quality and diversity to attract businesses and tourists. The Deputy PM also asked investors to ensure the progress of approved works and projects to quickly bring into play the value of Van Don when the Law on Special Administrative-Economic Units is passed by the National Assembly later this year. Conditional businesses in special administrative-economic zones The Ministry of Planning and Investment is consulting ministries and sectors on the list of conditional businesses in special administrative-economic zones. The list includes 69 conditional businesses in special administrative-economic zones. Domestic and foreign investors and people are not free to do business in these zones but must meet certain conditions. There are some typical industries such as duty-free shops, petrol and oil, gold, money printing, foreign exchange and electricity. Conditional businesses also include rice exports, multi-level sales, airports, urban railways, pipeline transport, fisheries, telecommunications services and pay TV. Other conditional businesses include discotheques, karaoke; national relics purchase; minerals mining and exploring; water resource exploitation and use services; seal manufacturing, domain name registration and those related to national security. The Ministry of Planning and Investment has submitted to the Government a draft law on special administrative-economic units. In this draft, the ministry proposed a series of mechanisms to attract investment and foreign experts to live and work in the Phu Quoc economic zone. Other special economic zones such as Van Don (Quang Ninh), Van Phong (Nha Trang) also have preferential policies. Thaco to export bus parts to Kazakhstan      Truong Hai Auto Corporation (Thaco) will export 230 sets of parts and components of the County bus to Kazakhstan from now to 2018. Thaco did not disclose the export value. This is the second batch to be exported to Kazakhstan – part of the contract on exporting bus components and parts to Kazakhstan and the Commonwealth of Independent States (CIS). The first batch of 30 sets of County bus components and parts, which were manufactured by Thaco Bus Manufacturing Company Limited, was shipped to Hyundai Trans Auto (HTA) in Kazakhstan as authorised by Hyundai Motor Company. Thaco quoted its partner as saying that demand for the use of public vehicles in central Asian countries was rising, however the region’s products were unable to match the demand. The situation was challenging local automakers in Kazakhstan, along with opening cooperation opportunities for foreign businesses in meeting the demand of the local market and exports. Thaco said its County bus components and parts will be installed with car chassis imported from South Korea. The completed built-up buses were being distributed in the local market and would be exported to other countries, including Russia and Belarus. Director of Thaco Bus Nguyen Quang Bao said Thaco manufactured bus components and parts according to modern technologies, which had high level of automation, with facilities imported from Japan, Italy and South Korea. The manufacturing line coincided with international standards, meeting Hyundai Corporation’s global quality standards. After shipping bus components and parts, Thaco will send its engineers to HTA to train local engineers to install bus parts and control quality under the technology transferring contract signed between the two sides early this year. Thaco has exported several components and parts, which were manufactured at the Chu Lai-Truong Hai Auto Manufacture and Assembly Complex, to South Korea, Malaysia, Russia, Kazakhstan and Colombia for several years. These products are seat covers of Kia cars, components for specialised vehicles and semi-trailers, composite components and industrial molds.  August CPI up 0.92 percent     The consumer price index (CPI) in August rose 0.92 percent from the previous month and 3.35 percent over the same period last year, according to the General Statistics Office (GSO). An upturn was seen in 10 out of 11 goods and service groups. Medicine and health care services posted the highest increase with 2.86 percent, followed by transportation with 2.13 percent;food and catering services, 1.06 percent;housing and construction materials, 0.93 percent; education, 0.57 percent; and other goods and services, 0.10 percent. Post and telecommunication was the only group that reported a drop of 0.04 percent. Do Thi Ngoc, Vice Director of the Price Analysis under the GSO, attributed the rise in the August CPI to the increase of foodstuff after pork price recovered. In addition, recent floods and storms pushed vegetable price up by 3.89 percent over the previous month, contributing to the CPI increase. In August, gold price fluctuated in accordance with the world gold price, with an average increase of 1.11 percent to reach around 36.4 million VND (1,601 USD) per tael. Meanwhile, the USD price fell by 0.03 percent thanks to the management of the State Bank of Vietnam on the reference VND/USD exchange rate and the abundant foreign currency reserve. Current exchange rate is around 22,700VND per USD. The GSO also assessed that the core inflation in August was up 0.1 percent over the previous month and 1.31 percent year on year. The average inflation in the first eight months of this year was up 1.47 percent, lower than the set target of 1.6-1.8 percent, which showed the stability in themonetary policy. The GSO also forecastthat CPI in September will continue increasing following rises in pork, vegetables, fuel, health care services and education fees. Vietfish 2017 kicks off in HCM City The 2017 Vietnam Fisheries International Exhibition (Vietfish) opened at the Saigon Exhibition and Convention Centre in Ho Chi Minh City on August 29 with seafood producers and exporters from 15 countries in attendance. The expo, themed “Asia’s Home of Seafood", features over 350 booths showcasing seafood products and machinery and equipment for aquaculture by over 200 exhibitors from Vietnam and foreign countries, for example, Japan, China, Thailand, Singapore, Malaysia, Germany, and Denmark. Opening the event, Deputy Minister of Agriculture and Rural Development Vu Van Tam highlighted the significance of Vietfish over the past 18 years, saying it has been an effective marketing platform to promote Vietnamese aquatic products to international consumers. A series of activities will also take place on the sidelines of the exhibition, including a cooking show, launches of new products and an aquaculture seminar. The annual event is held by the Ministry of Agriculture and Rural Development and the Vietnam Association of Seafood Exporters and Producers until August 31. Seafood exports have contributed to 6-7 percent of Vietnam’s total export revenue and 4-5 percent of the country’s Gross Domestic Products over the past few years. Exports of seafood hit 3.5 billion USD during the first half of 2017, up 14.1 percent from the same period last year.  Vietnam is now on the world’s Top 5 seafood producers with products brought to 165 countries and territories worldwide. Vietnam kicks off first security expo in Hanoi The Homeland Security Expo 2017, the first of its kind in Vietnam, was launched at the International Centre for Exhibition in Hanoi on August 29 to introduce latest and modern technologies and products for defence and public security. The exhibition is hosted by the Ministry of Public Security’s General Department of Logistics and Engineering, featuring 80 booths showcasing technologies and products by 50 exhibitors from leading countries in security and defence, including Russia, the US, France, India, Singapore, the Republic of Korea, and more. On display are personal protective equipment and safety wear, communication systems, detectors, surveillance and tracking systems, equipment and technology for maritime and salvage management, among others. In his opening remarks, the department’s director Lt Gen Le Van Minh said the event is an opportunity for security and military officers to get updates on latest security technologies and meet with the world’s leading experts in the field. It is also a platform to enhance international cooperation, experience exchange and technological transfer between firms from Vietnam and overseas. The event will run through August 30. Poultry firm imports top-notch chickens Hoa Phat Poultry Company Limited has imported the first batch of Hy-Line Brown chicken breed, the world’s most balanced brown egg layer, from the UK-based Hy-Line International. According to the company, the cooperation between Hoa Phat Poultry and Hy-Line International, a world leader in poultry-layer genetics, will help step-by-step realise the target of Hoa Phat in the hi-tech poultry sector. A Hy-Line Brown chicken produces over 355 brown eggs over a period of 80 weeks, peaks well and begins laying early with opimum egg size. These traits combined with unrivaled feed efficiency, interior egg quality and classy livability give the Hy-Line Brown the perfect balance, which means more profit for the poultry producer. Ba Ria-Vung Tau takes action on delayed projects      The People’s Committee of Ba Ria-Vung Tau Province on Monday warned that certificates granted to delayed projects would likely be withdrawn if their investors fail to seek solutions to continue implementing them. The provincial Department of Planning and Investment said that currently there are four slow-moving projects that need to be revoked. These projects have been going on for three to seven years since the issue of investment certificates. Among the reasons for delay are that investors cannot finance the project, compensation and clearance are not complete, and detailed construction plans (at 1:500 scale) have not been approved. At the meeting, the Department of Agriculture and Rural Development also proposed handling 12 snail-paced eco-tourism projects, including 10 projects in Xuyen Moc District, one project in Tan Thanh District and one in Dat Do District. Nguyen Thanh Long, vice chairman of the provincial People’s Committee, requested the steering committee handling the province’s delayed projects, to review each project and discuss with investors of the 16 delayed projects (12 eco-tourism projects and four ones in other sectors) to find appropriate solutions. For those that have no viable solution, the investment certificates must be revoked, he added. According to the Department of Planning and Investment, in August, the People’s Committee revoked 17 investment projects, which include five foreign and 12 domestic ones and terminated the legal effect of 12 investment proposals as investors have delayed the implementation of these projects. As per the province’s plan on handling slow-moving projects from 2014 till date, it has terminated the operations of a total of 101 projects, including 23 projects in industrial zones, 39 housing projects, six industrial cluster projects and 33 other projects in industrial parks. After revoking these projects, agencies reviewed their construction and land-use planning. As per the review, land use purposes of 68 plots covering over 2,148ha were still maintained while those of four land plots covering an area of 100ha have been changed and one land area of 132ha has been assigned to the Department of Construction for review.  Vietnam to export dragon fruit to Australia Australia recently announced that it would permit the import of Vietnamese dragon fruit, making Vietnam the first country to get licence to export fresh dragon fruit to the country. Dragon fruit is one of Vietnam’s key export fruits, and saw export sales worth 895.7 million USD in 2016, accounting for 50.3 percent of the country’s total fresh fruit exports and 36.1 percent of its total fruit and vegetables exports. The Ministry of Industry and Trade said that in order to export goods to the Australian market, exporters must comply with stringent regulations. Specifically, businesses must have a valid licence issued by the Australian Department of Agriculture and Water Resources as well as a certificate of no-insect infection in the area of biological safety control by Vietnam’s Plant Protection Department (PPD). The fresh dragon fruit must originate, be produced and exported from Vietnam, in accordance with relevant conditions and programmes.  Before shipment, the fruits must undergo vapour heat treatment (VHT) for 40 minutes at 46.5 degrees Celsius at a minimum of 90 percent humidity at a processing facility approved by the PPD. The produce must be free of insects and diseases and must not have contaminant pollutants. Packaging must be done using synthetic materials or highly processed materials of plant origin; unprocessed materials such as straw cannot be used. The cartons or individual packages must be tied firmly and labelled with unique identifier to facilitate traceability. The treated products must be protected from harmful insects during and after packaging, while handling, storing and transporting between locations. Products that have been inspected and certified by a competent authority from Vietnam must be maintained in a safe condition so as not to be mixed with fruits exported to other markets, or for consumption in the domestic market. The PPD must inspect containers prior to loading and ensure there are no insects, and all vents must be covered to prevent insect infiltration. The Australian Department of Agriculture and Water Resources can review the import policy at any time after trade commences, or when pest and quarantine control rules in Vietnam are altered. Fresh dragon fruit is one of Vietnam’s priority agricultural commodities for the Australian market. Australia is also speeding up the approval process for other fresh fruits from Vietnam. Vietnam looks to increase exports to the Middle East A conference on Vietnam-Middle East business cooperation was held in Hanoi on August 28, drawing more than 40 leading Vietnamese export firms. Addressing the event, Minister of Agriculture and Rural Development Nguyen Xuan Cuong said that the Middle East is a huge market and a gateway to the European market. Vietnam eyes high hope for exporting many agricultural products, including rice, tea, coffee, peppercorn, rubber, cashew, fruit, aquaculture products, to the 400-million market of Middle East with 16 countries. However, Cuong pointed out that trade revenue between the two countries remains low due to difficulties in payment as the two sides mostly pay via intermediary banks in Dubai, China and Singapore or some European countries with high cost. Vo Quang Huy, Director of Huy Long An company, said that the Middle East is a promising market for Vietnamese bananas. He asked for more effective measures to support exporters in payment as well as building standards for goods exported to the market. Le Thanh, head of the Organic Agriculture Institute, asserted that vegetable export growth to the Middle East is high at 24 percent, which shows that this is a promising land for Vietnamese firms. However, logistics and payment have hindered Vietnam’s exports, he said, suggesting cooperation among firms. Meanwhile, Tran Van Tri, Chairman of the Vietnam-Iran Business Council, proposed that the Government should speed up banking cooperation to facilitate payment between the two countries, along with preferential policies in tax. Saleh Adibi, Iranian Ambassador in Vietnam, said that the major obstacle hindering bilateral cooperation is banking. He suggested that Vietnamese firms can use Iran’s banks as Iran is linking with many banks around the world. He said he hopes Vietnam and Iran will soon sign a preferential trade agreement. Statistics from the Ministry of Industry and Trade show that trade between Vietnam and Middle East countries reached 10.887 billion USD, a rise of over 100 percent from 2011. Vietnam exported 8,059 billion USD worth of goods to and imported 2.82 billion USD worth of goods from the market. Vietnam looks to increase exports to the Middle East A conference on Vietnam-Middle East business cooperation was held in Hanoi on August 28, drawing more than 40 leading Vietnamese export firms. Addressing the event, Minister of Agriculture and Rural Development Nguyen Xuan Cuong said that the Middle East is a huge market and a gateway to the European market. Vietnam eyes high hope for exporting many agricultural products, including rice, tea, coffee, peppercorn, rubber, cashew, fruit, aquaculture products, to the 400-million market of Middle East with 16 countries. However, Cuong pointed out that trade revenue between the two countries remains low due to difficulties in payment as the two sides mostly pay via intermediary banks in Dubai, China and Singapore or some European countries with high cost. Vo Quang Huy, Director of Huy Long An company, said that the Middle East is a promising market for Vietnamese bananas. He asked for more effective measures to support exporters in payment as well as building standards for goods exported to the market. Le Thanh, head of the Organic Agriculture Institute, asserted that vegetable export growth to the Middle East is high at 24 percent, which shows that this is a promising land for Vietnamese firms. However, logistics and payment have hindered Vietnam’s exports, he said, suggesting cooperation among firms. Meanwhile, Tran Van Tri, Chairman of the Vietnam-Iran Business Council, proposed that the Government should speed up banking cooperation to facilitate payment between the two countries, along with preferential policies in tax. Saleh Adibi, Iranian Ambassador in Vietnam, said that the major obstacle hindering bilateral cooperation is banking. He suggested that Vietnamese firms can use Iran’s banks as Iran is linking with many banks around the world. He said he hopes Vietnam and Iran will soon sign a preferential trade agreement. Statistics from the Ministry of Industry and Trade show that trade between Vietnam and Middle East countries reached 10.887 billion USD, a rise of over 100 percent from 2011. Vietnam exported 8,059 billion USD worth of goods to and imported 2.82 billion USD worth of goods from the market. 70-million-USD MDF factory opens in Binh Phuoc VRG Dongwha JSC, on August 28, put into operation a 70 million USD medium-density fibreboard (MDF) plant in the southern province of Binh Phuoc.  The facility, the second phase of a project by the company, spans 6.4 hectares with an annual capacity of 180,000 cubic metres of MDF.  The entire project, with a total investment of 4.85 trillion VND (213.4 million USD), is now capable of producing 480,000 cubic metres of MDF per year. VRG Dongwha is a joint venture between the Republic of Korea’s Dongwha Group, Asia’s biggest MDF manufacturer, and the Vietnam Rubber Industry Group. Firm willing to pull golf course to facilitate Tan Son Nhat expansion The developer of a golf course adjacent to Tan Son Nhat International Airport in Ho Chi Minh City is willing to scrap its investment in exchange for compensation for the expansion of the overloaded aerodrome. Long Bien JSC (Lobico) is ready to transfer back the land the golf course is currently situated on at the government’s request, so long as it receives compensation for the huge investment earmarked for the project, company deputy chairman Tran Van Tinh has said. Tinh currently owns a 48.5% stake in Lobico, the owner of the 36-hole Tan Son Nhat Golf Course. The facility is said to occupy a huge space that should otherwise have been allocated to the overloaded Tan Son Nhat International Airport which is to be expanded. The airport currently receives 32 million passengers per annum, compared to its design capacity of 25 million. “If the government wants to revoke [our] project to serve eco-social development or national defense, any business should comply to the request, and we will do the same with the Tan Son Nhat Golf Course,” Tinh told Tuoi Tre (Youth) newspaper. Even though Lobico has channeled investment worth trillions of dong into the project, Tinh said that he would not be upset if the golf course was withdrawn. (VND1 trillion = US$44.05 million) “I do not feel anything abnormal,” he said. “Businesses have to be ready to take risks, especially policy risks, on every investment and this is the case here.” Tinh added that some of the Lobico shareholders may be sad, “but things will be alright.” The Lobico deputy chairman claimed that he had nothing to worry about as the golf course has been developed in accordance with the law. “The project was approved by the government before implementation, so it is certain that [we] will be properly compensated if it is revoked,” he said. Tinh said the compensation may not cover ‘immeasurable damages,' such as the time spent on developing the golf course and its opportunity costs, but the company would have to accept it, because “the interest of society must be ahead of the investor.” Tinh rejected rumors that the company had insisted that the government compensate them by offering another piece of land to relocate the golf course to. “We will never make such a request,” he underlined. “The compensation will proceed as per the law. “The government shall decide the form of compensation, but in any case, the rights and interests of the developer must be ensured.” The golf course sits on an enormous 157-hectare piece of military land, with one side separated by a single row of trees from one of Tan Son Nhat’s runways. Tinh denied allegations that there were group interests in the development of the golf course. “In 2005, some defense ministry officials realized during their overseas business trips that in countries such as Singapore, Thailand and India, there are golf courses next to local airports, which attracted many tourists,” he recalled. “At that time, there was unused land next to the airport, so the defense ministry decided to make use of that space to host a golf course for multiple purposes: not wasting the land, but creating a new source of revenue and attracting foreign tourists.” Tinh said the golf course project was initially developed by a military-run company, the Truong An Development and Investment construction JSC. “However, the company later proved to be financially incapable of continuing the project, prompting the defense ministry to call for private shareholders,” Tinh said, explaining how Lobico became the main developer of the golf course. He said Lobico had invested more than VND3 trillion (US$132.16 million) in the project, which is now operating at a loss. “The golf course is only crowded at weekends, and used mostly by foreign players,” he said, adding that accumulated losses are estimated at more than VND400 billion (US$17.62 million). Petrolimex sell-off to come in 2018 Vietnam National Petroleum Group, the country’s state-owned biggest petroleum distributor, will see a large state divestment in 2018, paving the way for foreign investors to access the profitable business. Vietnam National Petroleum Group (Petrolimex) will see a 24.9% stake, held by the state, sold off in 2018 under the Decision No.1232/QD-TTg, signed by Deputy Prime Minister Vuong Dinh Hue on August 17.  The divestment will reduce the state’s holdings in the firm to 53.7% from the current 78.6%. “The government’s determined policy for boosting the equitisation of state-owned enterprises (SOEs) and state divestment is anticipated to increase the waves of M&A transactions involving foreign investors in a variety of sectors.  Those opportunities in the oil and gas sector and some other sectors are being assessed with genuine and strong interests,” Vo Ha Duyen, lawyer and partner at VILAF law firm, told VIR. “SOE equitisation-related regulations give more flexibility concerning foreign ownership restrictions than Vietnam’s commitments to the World Trade Organization (WTO).  Therefore, equitisation can create opportunities for foreign investors to participate in certain sectors which would not otherwise be open to foreign investment such as distribution of petrol, lubricants, and pharmaceuticals,” she added. In addition to the favourable market conditions, Petrolimex – in possession of sizeable assets and positive business results following its restructuring – will be a magnet to any multi-national corporation that wants to penetrate the Vietnamese petroleum market. The petroleum giant currently holds almost 50% of the petroleum retail market, with over 50% of its products directly sold to consumers and around 20% directly sold to industrial customers. This extensive distribution network and over 50 years of experience in petroleum trading has given the firm a market advantage. As of December 31, 2016, Petrolimex’s total assets reached VND54.2 trillion (US$2.46 billion). Its consolidated net revenue last year was VND123 trillion (US$5.59 billion), and pre-tax profits reached VND6.3 trillion (US$286.36 million), up 68% on-year. Petrolimex previously made smaller divestments. In mid-2016, Japan’s JX Nippon Oil & Energy acquired an 8% stake in the Vietnamese firm, becoming its foreign strategic partner. With the new divestment roadmap, the Japanese firm is likely to increase its stake in Petrolimex to tap into the profitable business. JX Nippon’s stake has already produced results after one year of investment in Petrolimex. The foreign strategic investor received a cash dividend of VND333.7 billion (US$15 million) for 2016. To date, Japanese oil giant Idemitsu Kosan Group and Kuwait Petroleum International (KPI), which received an investment certificate to form the joint-venture (JV) firm Idemitsu Petroleum Q8 Co., Ltd., are the first foreign participants to set up a wholly foreign-owned firm in the field. The JV will set up a domestic retail petrol station network. In addition, PV Oil – Petrolimex’s main rival – is also appealing to foreign investors. Earlier this year, as many as 30 potential investors met with representatives from PV Oil to discuss acquiring stake in the firm. PV Oil is seeking two or three strategic investors, and is slated to scrap its foreign ownership limit in the coming months. According to this firm’s CEO Cao Hoai Duong, PV Oil can only offer 52% of its shares to overseas shareholders at this stage. MoIT stake sale’s main lure: VEAM The Ministry of Industry and Trade has announced plans to divest from six firms under its management from now until 2020, most notably, in this year’s sell-off of Vietnam Engine and Agricultural Machinery Corporation stock. Last week, a list of six firms slated for partial and complete divestment was released by the Ministry of Industry and Trade (MoIT), in line with Decision No.1232/ QD-TTg signed by Deputy Prime Minister Vuong Dinh Hue on August 17. This list includes industry giants such as seafood producer Seaprodex, oil retailer Petrolimex, textile firm Vinatex and steel group VNSteel. The level of withdrawals varies from firm to firm, as noted in the accompanying table.  Most notably, the ministry intends to sell its entire stake at Vinatex in one fell swoop next year, while dividing its sale at Vinaincon, VNSteel, and Vietnam Engine and Agricultural Machinery Corporation (VEAM) into two blocks. Among those listed, VEAM stood out as the only firm scheduled for immediate divestment this year, aiming to slash the MoIT’s ownership to zero by 2020. Established in 1990, VEAM is a major state-owned enterprise with 22 subsidiaries and 7,000 employees. The firm produces engines and agricultural machinery, including tractors and other water and inland transportation equipment.  It conducted its initial public offering (IPO) last August, raising VND2.1 trillion (US$92.3 million) in capital from 240 investors. This transaction went down in history as Vietnam’s biggest listing of 2016, with 30 million shares purchased by foreign investors. Besides its divestment plans, VEAM is also scheduled to debut on the stock exchange in the third quarter of 2017, allowing investors to trade their shares publicly.  When listed, VEAM is likely to become the 21st-largest public company, with 12.6% of free-float shares for foreign ownership. So far, the firm is yet to find a strategic investor, even after holding four auctions post-IPO last year. In 2016, VEAM reported VND2.3 trillion (US$101 million) in revenue for the parent company, up 26% from 2015. Its profit stood at VND3.8 trillion (US$167 million), an increase of 13.4% year-on-year.  It is noteworthy that VEAM’s profit is bigger than its revenue, thanks to its holdings at various automobile firms in Vietnam. These affiliated companies have brought massive dividends throughout the years to the agricultural giant. Specifically, VEAM currently holds a 30% stake in Honda Vietnam, 25% in Ford Vietnam, and 20% in Toyota Vietnam.  According to researchers at Saigon Securities Incorporation (SSI), without massive financial earnings from these profitable firms, VEAM’s business results in 2016 would have been even. Analysts believed that VEAM’s dependence on lucrative dividend earnings, instead of its core agricultural business, may spell trouble for the firm in the long run. This can be a major concern for potential investors as they consider buying the MoIT’s stake at VEAM. “Among VEAM’s 12 subsidiaries, only five reported profits last year, while three were roughly flat and four posted losses. It could be problematic for the parent company in the long term if no serious restructuring is done,” said Lien Le, head of institutional research at Maybank Kim Eng Securities. This is more urgent as VEAM’s financial earnings from automobile firms can diminish in the coming years as these companies face stiff competition from cheaper imported cars – automobiles manufactured in the ASEAN region will enjoy zero tariffs in Vietnam from 2018 onwards. Nguyen Ngoc Thach, head of the Retail Customer Department at SSI’s headquarters, noted that the use of machinery in agricultural production in Vietnam is expected to rise from 1.6HP to 3.2HP per hectare in 2020. VEAM then, stands a good chance to raise profits from its main business of agricultural machine production in the future, minimising its over-reliance on dividend earnings. “Despite obvious opportunities for market expansion, VEAM still needs to ward off strong competitors China and Japan, so its growth prospects may be average,” said Thach. He expects VEAM’s share price to stabilise in the next three years. Further details of the MoIT’s divestments at VEAM and five other firms will be updated very soon, subject to approval from the prime minister. Hau Giang People’s Committee hosts trade investment forum The Hau Giang Province People’s Committee will host a trade and investment forum as part of activities to further strengthen the business bond between the province and foreign multinationals. The one day event will transpire September 15 and provide a platform for local domestic sector companies to forge new opportunities within the international foreign trade sector Huynh Thanh Hoang told at a press conference on Monday, August 28. Mr Hoang, who is vice director of the Provincial Department of Industry and Trade, told reporters that the forum would afford local participants the opportunity to engage with high-ranking government officials, policy-shapers and potential commercial partners. Attendees would be briefed on the economic and political prospects for the Province, followed by plenary sessions focused on the key economic segments that the Committee wishes to promote. He went on to say, Hau Giang Province is ready and open for business and we are very excited about it. Seafood exports forecast to be US$8 billion by the year end: VASEP Seafood exports in 2017 could reach US$8 billion for the whole year, up 14% over 2016, as forecast by the Vietnam Association of Seafood Exporters and Producers (VASEP). Seafood exports for the rest of the year are forecast to be positive but there are still challenges to the set target. At a conference held in Ho Chi Minh City on Monday, VASEP said that the above figure was based on export forecasts for a number of key commodities, including shrimp, tra fish, tuna, squid and octopus. However, the association also raised concerns that despite positive export growth in the first seven months of 2017, the fisheries sector will need to be cautious in the last few months of the year as seafood exports will continue to face challenges, such as production uncertainty, input quality and barriers from import markets. According to Truong Dinh Hoe, VASEP General Secretary, after a slight growth of 5% in the first quarter of 2017, mainly thanks to seafood products such as tuna, squid and sea fishes, Vietnam’s seafood exports will continue to witness positive growth in the second quarter with a stronger increase boosted by exports of all major products. With export growth of over 10% in the second quarter, and continuing to grow at 30% in July, the country’s total seafood export value in the first seven months this year reached US$4.4 billion, an increase of 17.3% over the same period last year. Although forecasts suggest that export figures will continue to increase for the rest of the year, experts warn that, along with high antidumping duties, the US catfish inspection programme and competitive shrimp price pressure in export markets will be the difficulties faced by domestic fisheries sector that require concerted efforts to overcome in order to achieve the set target. Experts also suggested that businesses continuously update information and consumption needs in order to have appropriate export plans and flexible adaptations to market fluctuations. At the conference, VASEP also defined specific guidance regarding its focused programmes in the time ahead, such as policy advocacy activities to overcome trade barriers, brand developing activities for Vietnamese tra fish, international cooperation and promotion of domestic sales channels, in addition to facilitating value added products. Deputy Minister of Agriculture and Rural Development Vu Van Tam emphasised the role of his ministry in assisting seafood enterprises. According to Deputy Minister Tam, the ministry is carrying out several tasks to concretise the Government’s policy on building a national brand for shrimp and tra fish; meanwhile, the ministry also consults with experts about the amendment of the Fisheries Law to better match reality in the new context. South Korea the largest foreign investor in Vietnam South Korean investments in Vietnam this year surpassed $6.02 billion in August, accounting for 26 per cent of all foreign direct investment (FDI), making it the largest foreign investor in the country, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment. Japan ranked second, with $5.74 billion in investment, then Singapore with $3.92 billion. In the first eight months of 2017, total FDI capital reached $23.4 billion, an increase of 45 per cent year-on-year. As at August 20, projects had disbursed $10.3 billion this year, up 5 per cent year-on-year. Exports by the foreign-invested stood at nearly $96 billion, accounting for 72 per cent of total export turnover. Imports by the foreign-invested sector, meanwhile, reached more than $81 billion, accounting for 60 per cent of the total. Both exports and imports increased by about 15 per cent year-on-year. Foreign investors have invested in 18 sectors in the country, with the processing and manufacturing sector attracting the most attention, with total registered capital of $11.69 billion, or 50 per cent. Foreign investment went to 58 cities and provinces in the period. Ho Chi Minh City attracted the most, with $3.3 billion, accounting for 14 per cent. North-central Thanh Hoa province followed, with $3.06 billion, then northern Bac Ninh province with $3.05 billion. South Korean investment in Vietnam had surpassed $50 billion by the end of 2016, making it the largest foreign investor in the country to date, according to the Korean Trade Investment Promotion Agency (KOTRA). Many South Korean companies have arrived in Vietnam in recent times to seize opportunities in its developing economy. Bilateral trade between Vietnam and South Korea is expected to reach $70 billion by 2020 due to the Vietnam-South Korea Free Trade Agreement (VKFTA), which came into effect a year ago.  From this year, 18 items will be subject to tariff reductions under the agreement, with trade value between the two countries to increase and become more balanced as a result. According to Mr. Le An Hai, Deputy Head of the Ministry of Industry and Trade’s Asian Market Department, based upon the commitments made in the VKFTA, in the years to come the two countries will improve both their economic and political relationship. Vietnam is to focus on introducing preferential mechanisms for South Korea while South Korea will continue to open up its market to Vietnamese goods, according to Mr. Hai. VNA/VNS/VOV/SGT/SGGP/TT/TN/Dantri/VNEVET