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“VIETNAM BUSINESS NEWS” The Economic Mirror Indochina’s

August 2015

Economy, International Cooperation, Business, Investment, Markets & Prices

We report about the latest prime business news from various fields, as well as the economic environment. We publish the informations, news and reports of the leading news sources. Our theme of the month shows the topic. All what appears of special interest for "Western Business People".

INDEX: Subjects after Country marked: V = Vietnam. C = Cambodia. L = Laos. M = Myanmar. O = Other Country's.

Topic of the Month V - Vietnam get’s new High-Tech Manufacturing Hotspot in Asean

Economy & Business O - Business Development + Market Entry for European SME in Vietnam Asia V - Vietnam remains among world’s top optimistic markets, despite confidence decline: Nielsen O - The Trans-Pacific Partnership V - Vietnam to benefit from RCEP market region O - India jumps on TPP bandwagon in Vietnam V - Financial Times: VN leads in FDI Intelligence O - The Chinese economy V - ANZ: VN’s economy shows signs of recovery C - Seeing Cambodia as a Regional Hub V - Beach project loses license for missing capital deadline in Vietnam’s Nha Trang V - Economists warn against Vietnam becoming world’s factory V - TPP Helps Vietnam Restructure Economy V - VN predicted to become world’s factory

Int'l Cooperation O - Israel supports high-tech agricultural development in Ho Chi Minh City O - Vietnam, France seek cooperation opportunities in energy O - Ha Tinh forges trade affiliations in Germany O - Vietnam, Germany seek to boost trade

Investment O - ASEAN investments help fuel economic development V - FTAs promise new FDI inflows O - Japanese group invests in real estate in HCM City V - FDI mainly poured in manufacturing, processing V - Much more to come: Indochina Capital CEO V - New decree serves as magnet for foreign capital flow V - Clearing obstacles to business investment in agriculture O - Tariff cuts prompt new wave of Japanese firms V - Indian businesses seek investment opportunities in HCM City V - South Korea becomes largest investor in Vietnam V - Large room for attracting foreign portfolio investment in Vietnam O - US aims to become Vietnam’s top investor O - Wave of Thai investments into Vietnam O - Singapore leads ASEAN in investment in Vietnam in Jan-Jun V - Overview of ASEAN FDI projects in VN O - US makes heavy investments in Vietnam; what will Vietnam do? V - Only 1% of Vietnamese enterprises investing in agriculture: ministry M - Mandalay Sees No Foreign Investment So Far This Year – DICA

Finance & Banking O - Vietnam Indochina Asean: Unbeatable prices by R & D Production Export V - WB forecasts Vietnam’s growth rate at 6-6.2 percent in 2015 O - India finances US$300 million to promote VN’s garment C - Banking Without Borders C - First Agricultural Insurance Tested In Cambodia L - KBank, Aeon connect in Laos C - Germany considers renewables funding M - Independent firms to get more loans

Markets & Prices V - BreadTalk Vietnam to open three new bakery outlets V - Developers race to spruik properties as Vietnam opens door to foreign buyers O - Changing face of retailing in Vietnam V - Vietnam leather industry faces tough challenges C - New electronics manufacturer due at PPSEZ V - VN’s stock market attracts foreign investors V - Textile and garment exports to TPP market up 70 per cent V - Vietnam’s electronics industry heats up V - Foreign textile & garment enterprises expand as domestic firms shrink V - FTAs bear both opportunities and challenges for footwear sector V - Car sales increase 58% over last year

V - Mekong Delta farmers do well V - Shipping firms cannot go to sea because of shortage of big ships V - VN becomes cellphone production hub M - Heineken opens US$60m brewery O - Vietnam, India work toward 2020 trade goal V - Japan’s famous Hida beef to be sold in Vietnam in August O - Israel increases hi-tech agriculture cooperation with HCM City V - Labor demand in Vietnam highest for three years V - Food makers go increasingly hi-tech V - Vietnam climbs footwear ladder V - Vietnam tablet market soars M - KFC becomes first US fast-food chain in Myanmar V - Prospects of Vietnam Leather & Footwear Export with FTAs V - ys Coffee set for Vietnam debut V - Plentiful opportunities in paper packaging industry M - Myanmar’s Accelerating Automotive Aftermarket Growth V - Fast food giants licking their lips over partnership options

Export-Import V - Footwear exports up 18% in H1 V - Shrimp exports to UK show abrupt increase V - Vietnamese exporters should leverage EU trade pact to increase exports to N.Europe

Particular Reports O - Hong Kong ‘best in the world’ C - Mechanized Farming On The Rise O - World Bank sees "desirable" slowdown in China

All Fairs & Exhibitions 2015 in Indochina V - Leather, footwear products showcased in Ho Chi Minh City V - 346 exhibitors gathers at the 2015 Vietnam MTA Show O - VIETNAM - CAMBODIA - LAOS – MYANMAR Fairs & Exhibitions 2015 REPORTS:

Topic of the Month The online magazine "VIETNAM BUSINESS NEWS - The Economic Mirror of Indochina" brings every Monday, Wednesday and Friday what's important for the Western Business Leaders http://wji.at/Vietnam-News/ V - Vietnam get’s new High-Tech Manufacturing Hotspot in Asean

Compiled by Dipl.-Ing. Alex Narr, Productionservice-Vietnam, July 29th, 2015

Rocket launch: From nothing five years ago to $ 25bn of hi-tech goods now

A lot of hi-tech production is moving into Vietnam from China and telecoms companies coming from India. While the labor costs in Shanghai and Beijing are $450/month/worker, the figures are only $250 in other emerging countries in Asia and $150 in Vietnam.

Vietnam saw double-digit percentage growth in exports in each of the four years between 2012 and 2015 – the only country in the Asia-Pacific region to achieve this – with a compound annual growth rate (CAGR) of 25%, and it is forecast to achieve a 13% CAGR between 2015 and 2020, the highest growth rate in the region and far above the average forecast growth rate of 6%.

In order to encourage investment from the private sector, the Vietnamese government reduced the standard corporate income tax (CIT) rate from 25% to 22%, as of January 2014, with further plans to cut the CIT down to 20% from 2016. In addition, some CIT exemptions or reductions are available to investment projects that satisfy certain conditions, such as investment in particularly encouraged sectors (e.g. energy-saving products) or encouraged locations.

Additional Vietnam is geographically an ideal production and central starting point in the center of Asean. All major container routes from Japan and China to Australia, the Far

East, Europe and the US lead directly past Vietnam. Vietnam has lowest location costs, is politically stable and has freedom of belief. In addition, Vietnam is the biggest, and with Singapore, Malaysia and Brunei, the only TPP Member State in all Asia and ASEAN. Not only for investors the neighboring muslim states and states with self-appointed military government getting increasingly less attractive.

Now Policy opens door for new hi-tech investors

Vietnam’s relaxed criteria for granting hi-tech certification to enterprises should help foreign investors avoid the tedious “case-by-case” application process that currently prevails.

The prime ministerial Decision 19/2015/QD-TTg, issued on June 15, 2015 and taking effect from August 1, will substitute for Clause 18 of the Law on High Technology. Under the decision, businesses seeking recognition as a hi-tech firm will first have to be involved in the production of listed hi-tech products and conform to the government’s energy saving and environmental protection standards. The businesses’ average turnover from hi-tech products must be at least 70 per cent of the total annual net revenue.

For small-and medium-sized enterprises (SMEs), they must spend an average of 1 per cent of their total annual net revenue on research and development (R&D) activities in Vietnam. For those with the total equity of over VND100 billion ($4.76 million) and more than 300 labourers, the requirement is at least 0.5 per cent.

In addition, at least 5 per cent of the workforce must have university degrees or higher and be involved in R&D activities, while the rate for those with the total equity of over VND100 billion ($4.76 million) and more than 300 labourers is 2.5 per cent.

Previously, Clause 18 of the Law on High Technology stated that both SMEs and big firms could only qualify for incentives as a hi-tech firm if they spent 1 per cent of their total revenue on R&D, and employed 5 per cent of their workforce in this effort.

Hi-tech enterprises can enjoy a corporate income tax rate now reduced from 15 to 10 per cent for the first 15 years of operations with profits, according to the current regulations. As opposed to the normal rate of 22 per cent. Such enterprises can also benefit from a range of other tax breaks.

Vietnam offers high-tech fountain of youth: Every year 540,000 university graduates

The 400 Vietnamese universities and junior colleges enroll 540,000 students every year. The figure coincides with a report by the Ministry of Education and Training that 500,000 students have passed the university entrance exams each year since 2010.

Nearly 300 industrial parks (IPs) designated for the manufacturing sector.

As of June 2014, there were more than 5,000 IP-based foreign-invested projects, with accumulated FDI of US$77 billion accounting for about 80% of FDI in the manufacturing sector. Although many provinces have an industrial zone authority that offers single-window services to help investors select the IPs that best suit their needs, most of the large-scale IPs are run independently and managed by private companies. Foreign manufacturers, therefore, usually approach the specific company that manages the IP.

Examples of well-established IPs run not only by foreign developers like Singapore’s SembCorp, and Japan’s Sumitomo. Some IPs are preferred by foreign manufacturers, as they provide ready-built factories along with utilities and infrastructure, including electricity, telecommunications and sewage treatment. A number of the IPs established in the Economic Zones are classified as Encouraged Investment Locations – areas where special Investment and tax incentives are available.

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Production is booming in the tech sector as recent indications see Vietnam emerging as a major manufacturing base for Korean tech giants that manufacture TVs and other consumer electronic goods, expanding beyond the limits of mobile phone assembly.

As planned, construction on the Samsung CE Ho Chi Minh City Complex (SEHC) will kick off this year at the Saigon Hi-tech Park (SHTP) with a total investment of US$1.4 billion. “The complex will be a cutting-edge zone of high technologies, where the latest high-end TV series will be manufactured, similar to other Samsung facilities in the northern provinces of Bac Ninh and Thai Nguyen, which produce items to serve the global market”, said Nguyen Van Dao, deputy general director of Samsung Electronics Vietnam. In addition to its scope for production, SEHC will also embrace research and development (R&D) of hi-tech consumer electronics goods.

The first-phase production will focus on consumer electronic goods, such as smart, LCD, and LED TVs. Meanwhile, the second phase will focus on other electronic items.

Late last year, Samsung-widely regarded as the leading manufacturer of smart-phones in Vietnam- made efforts to source parts towards its prospective plant based in SHTP where dozens of businesses have eagerly queued up with hopes of becoming the tech giants’ devices suppliers.

Around the same time LG unveiled their plan to shift TV production from Thailand to Vietnam to raise capacity and save costs.

US-based chipmaker Intel Corporation relocate soon a part of its production facility in Malaysia to Vietnam as well as China in an effort to cut labor costs which are US$7 a day in Vietnam, in Malaysia US$15 per day, and in China even US$28 per day.

The relocation of the Intel plant in Kulim to facilities in Ho Chi Minh City and Chengdu (China) will result in the layoff lots of Malaysian workers.

The possibilities were never as extensive as cheap to start a high-tech production facility in Vietnam

For example, by means of a matching state enterprise, which are currently to be sold in "favorable" sales. Vietnam is becoming the go-to-destination for the manufacturing and assembly needs of high-tech companies.

The international corporations since years take advantage of this unrivaled site conditions. Also European SMEs should take full advantage of these unique opportunities.

Source: Vietnam News – The Economic Mirror of Indochina, Dept. for FDI, AmCham, VOV.

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TUOI TRE NEWS, 07/28/2015

Vietnam remains among the top ten most optimistic markets globally, despite a strong decline in consumer confidence in the second quarter of this year, a consumer insight firm said.

Vietnam’s consumer confidence dropped eight points, the biggest quarterly fall in Southeast Asia, to 104 points in the April-June period, according to Nielsen’s second quarter Consumer Confidence Index released Monday.

Malaysia posted the region’s second largest drop in consumer confidence, going from 104 in the first quarter to 89. Vietnam, the Philippines, Indonesia, and Thailand are among the top ten most optimistic markets globally, despite their index declines, according to Nielsen. The Philippines and Indonesia’s consumer confidence index both scored 120 in the second quarter, and Thailand, 111.

The Nielsen consumer confidence index measures perceptions of local job prospects, personal finances and immediate spending intentions. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism, respectively.

The survey for the second quarter was conducted between May 11 and 29, polling more than 30,000 online consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East/Africa and North America.

“Consumers from Southeast Asia continue to show the highest optimism globally in the second quarter with an index score of 112, far-surpassing the global consumer confidence score of 96 points,” Nielsen said in a press release on Monday. However, Regan Leggett, Nielsen client service director in Southeast Asia, North Asia and Pacific, remarked that some “signs of vulnerability” have emerged in certain markets in Southeast Asia, where optimism remains high.

“Vietnam [is] starting to face headwinds such as declining foreign direct investment and a struggling retail environment,” he said. Besides being the most optimistic, Southeast Asian consumers continue to be among the world’s most conscientious savers, with seven in 10 funneling their spare cash into savings, according to the report.

Consumers in Vietnam are the biggest savers globally, with 73 percent putting aside cash for a rainy day. Fifteen percent of Vietnamese consumers are channeling their spare money into building their retirement fund. As the general cost of living continues to increase across Southeast Asia, 86 percent of consumers in Vietnam have adjusted their spending habits over the past 12 months in a bid to reduce household spending, according to the report. In the meantime, 60 percent of Vietnamese consumers are spending less on new clothes. Increasing fuel prices are the biggest concern of Vietnamese consumers in the next six months, the Nielsen report shows. “The Vietnam retail environment has evolved from one of the fastest growing markets in 2012 to one that’s struggling to remain in growth,” said Vaughan Ryan, managing director with Nielsen Vietnam. “Consumers are feeling less optimistic about their immediate future, but they are confident in the longer term, as most expect the economy will improve in the year ahead.”

Nielsen is a global performance management company that provides a comprehensive understanding of what consumers watch and buy.

O – The Trans-Pacific Partnership

Jul 25th 2015 | PENANG, MALAYSIA

For all its flaws, the biggest trade deal in years is good news for the world

FIVE years of trade negotiations, 29 chapters of dense rules and hundreds of tariff lines culminate, in one corner of Asia, in whirring spools of white fabric. Negotiators are still wrangling over the text that aims to establish a new Pacific trade zone, tying together 12 countries from America to Vietnam. But Penfabric, a textile company in Penang, north-western Malaysia, is not waiting around. In one of its mills, bright yellow flags distinguish rolls of high-end fabric from cheaper cloth. Lately, these flags have started to multiply. “We need to be in tune with what America wants,” says H. S. Teh, Penfabric’s managing director.

The zone, dubbed the Trans-Pacific Partnership (TPP), is the most important free-trade agreement in years. If completed, it will be the largest regional trade deal ever, with its members accounting for nearly 40% of the world economy. The countries leading the negotiations want to set a new standard for what trade agreements cover. They are taking on the morass of regulations, such as local-content rules determining how much of a product must be made from local inputs, that have replaced tariffs as the main obstacle to the free flow of goods across borders. After repeated failures to seal big global deals—the World Trade Organisation (WTO) has turned its focus to specific industries rather than comprehensive agreements (see article)—the TPP actually has a good chance at success. A meeting of trade ministers in Maui from July 28th to 31st is expected to put the final touches on the deal.

Gauging the exact benefits of the TPP is tricky, not least because the trade talks are still confidential. Critics have bemoaned the lack of disclosure but conducting negotiations in the open would have been a sure way to undermine them. Governments will have several months to review the final deal before deciding whether to give their assent.

Even when the details are known, it will still be hard to assess the impact. The most authoritative study, published by the Peterson Institute for International Economics, reckons the TPP will enlarge the economies of the 12 member states by $285 billion by 2025. But, as with any economic model, reality is more complex. Benefits could be smaller if exemptions on tariffs blunt its impact—Japan, for one, is still trying to protect its “sacred” food, such as rice, wheat and beef, from imports. But through knock-on effects—if, say, Vietnamese industry becomes more efficient—the gains could also be larger.

Trying to pin down the exact value of the deal misses the point, though. First, the TPP is not at its final destination. It is supposed to expand, drawing in more countries. The Philippines, South Korea, Taiwan and Thailand have expressed interest in joining. The hope is that it will eventually also attract China. If the initial 12-country zone is expanded to 17, the benefits could be much

bigger (see chart). Second, TPP is not mainly about cutting tariffs (these are already low after years of trade liberalisation) but rather about setting new rules for global commerce.

By leaving China out, America has, to a certain extent, rigged the talks in its favour. Much as state-owned companies in Malaysia or Vietnam want to defend their fiefdoms, they do not have the clout to push back as strongly as their peers in China might have done. But if the TPP gets under way and proves successful, China may yet be compelled to join, or at least to agree to pacts with similar standards. “If China doesn’t promote its own ideas for trade, it will be influenced by those of others,” says Zhou Mi, a researcher in a think-tank under China’s commerce ministry.

The rules that America is pushing have faced criticisms, some valid, some not. Particularly controversial has been a demand from big pharmaceutical firms for a 12-year freeze on sharing data on a group of new medicines called “biologics”, which they say is necessary to spur more innovation. Groups such as Médecins Sans Frontières say that this would go too far and hinder the development of the cheaper alternatives needed for poorer countries. People familiar with the negotiations say the data-exclusivity term is likely to be pared back, perhaps to seven years.

Other rules are more welcome. Some economists have noted the TPP’s focus on intellectual property and its mechanism allowing investors to sue states, and concluded that it is more a political agenda than a free-trade agreement. But such provisions are not unique to TPP. And its boldness in tackling the rules gumming up the gears of global trade is laudable. Firms that straddle borders know that local-content rules can be just as distortionary as tariffs. “In South-East Asia, you basically have to build cars in the country in which you want to sell them,” says Matt Hobbs, vice-president of government relations at General Motors.

The TPP talks have dragged on since 2010 and there could be drama yet in the final weeks. Some think Canada could quit the group if its dairy farmers are not insulated. Malaysia might be pushed out because of American concerns about human trafficking. In America, Congress could scupper the deal, though goodies for beef farmers, carmakers and drug companies should tip the balance in favour. Japan will also face domestic blowback if it opens its door to agricultural trade. But as a hub of innovation, it has a strong interest in TPP. It has been a crucial ally for America in demanding more rigorous trade rules, says Matthew Goodman of the Centre for Strategic and International Studies.

The China syndrome

Ultimately, for TPP to really make a mark, it has to be bigger. Leaving out China is an expedient to get the deal done but, if kept that way, it would be a huge gap. China is the world’s biggest manufacturer. Any Asian trade zone without it faces one of two sorry fates. Either, because of China’s centrality to Asian supply chains, the deal is so riddled with exemptions that it becomes worthless. Or, if the zone gains traction, the effect is to divert trade away from the most efficient Chinese companies and hurt the global economy.

The TPP is likely to face both problems. In textiles, for instance, Vietnamese and Malaysian mills expect to be allowed to continue to source fabric from countries such as China or India that those inside the trade zone cannot produce. This exemption may be vast. Meanwhile, Vietnamese and

Malaysian garment makers admit the exclusion of Chinese finished goods will help shelter them from their toughest competition—hardly the ideal of free trade.

In other areas, though, TPP could make waves of a good kind. Rules to protect labour rights, strengthen environmental safeguards and limit subsidies to state-owned companies should go further than any previous trade deal. Officials in China, who previously viewed TPP as a gambit to isolate it, now drop hints about wanting to join the club. “It won’t be the gold-standard deal they’ve been talking about, and they will be lucky to get a silver. Perhaps it will be a bronze,” says Jayant Menon of the Asian Development Bank. With other ambitious trade talks gathering dust, however, even a bronze would glitter.

V- Vietnam to benefit from RCEP market region

The Hanoitimes - 22 Jul 2015 Vietnam will be able to access a huge market of 3.4 billion people when it joins the Regional Comprehensive Economic Partnership (RCEP). Countries in RCEP will have a combined GDP of 21 trillion USD, accounting for 29 percent of the world's GDP, said Nguyen Anh Duong, Deputy Director of the Central Institute for Economic Management (CIEM). Speaking during a workshop held in Hanoi on July 17 on the impact of RCEP on Vietnam's economy and the opportunities and challenges it would pose, Duong said regulations on origin in RCEP would be simpler and more liberal than in other economic pacts. In addition, the parties would make more commitments on freedom of trade in goods and services and investment. Negotiations on RCEP officially began in 2012 with six countries: Australia, China, India, Japan, the Republic of Korea and New Zealand. The pact aims to build a regional free trade area. The RCEP states' total GDP will be higher than the combined GDP of countries in the Trans-Pacific Partnership (TPP), which will account for 26 percent of the world's GDP, and it will have a rapidly growing middle class. According to Duong, RCEP is expected to offer major opportunities to Vietnam by improving its access to investment and export markets in the member states of the Association of Southeast Asian Nations (ASEAN), as well as partners with demand for diverse goods. At the same time, it could make imports of technology and machinery cheaper, thus creating opportunities for Vietnam to join the region's production value chain, Duong said. The pact could also help Vietnam reduce transaction fees, create a friendly business environment and enhance its role in resolving trade and investment disputes, he said. Sectors such as seafood, agriculture, construction, garments and textiles, as well as leather footwear, would have additional opportunities for growth, he added. For example, the country would have major opportunities in distribution and in the hotel and restaurant business in the countries in RCEP, especially in Japan and the ASEAN states, besides opportunities in providing services to Australia, Duong said. However, Vietnam would also face challenges in banking services as the RCEP countries in the region, such as Singapore, Japan, the RoK and Australia, have highly developed banking sectors. Vo Tri Thanh, CIEM's deputy director, said RCEP and TPP would not clash but support each other to help Vietnam integrate further into the world economy. "The two pacts have a common feature of commitment to freedom in trading goods and services, and in investment. Talks on both RCEP and TPP are expected to end this year," Thanh said. In RCEP, ASEAN is looking for cooperation and equal development. The TPP is a free trade agreement aimed at resolving the issues of labour standards, a competitive environment, State-owned enterprises, State purchases and intellectual property. Some people thought that TPP and RCEP will compete with each other and overlap. However, n my view, the two pacts could supplement each other," Thanh added. ietnam would have more benefits than challenges by joining RCEP, he noted. Earlier, an ANZ Bank report said that Vietnam and Thailand would be the countries to benefit the most from RCEP. Vietnam's GDP is expected to grow 8 percent in five years after signing the RCEP, while Thailand's GDP is expected to grow 13 percent. The RCEP states will account for 85 percent of the world FDI flow. Thanh suggested that Vietnam should take advantage of RCEP by improving the competitiveness of domestically produced items and focusing on some industries that could benefit from the deal.

O - India jumps on TPP bandwagon in Vietnam

Thoai Tran/Tuoi Tre News, 07/21/2015

That the Trans-Pacific Partnership (TPP) trade agreement, of which Vietnam is a member, will come to a conclusion late this year has turned the Southeast Asian country into a so popular destination for investment for export.

The TPP is a proposed regional free trade agreement aimed at eliminating tariffs and lowering non-tariff barriers that is being negotiated by 12 countries throughout the Asia-Pacific region, which collectively contribute almost half of global output and over 40 percent of world trade.

The 12 countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

Many other countries outside of the TPP have already poured billions into the group to grasp the chances for exporting to the remaining eleven members, especially the U.S., which almost every country in the world wants to sell their goods to.

India is the latest to signal that it will take seriously the opportunities to invest in Vietnam for export to the other TPP member countries. he Indian government last week launched a preferential credit package worth US$300 million for investments in the garment and textile sector of Vietnam over ten years, according to the Vietnam Textile and Apparel Association (VITAS). ccordingly, India will support investment projects in the garment and textile sector using Indian-made equipment and service up to 75 percent of the total funding estimated for a single project.

The entire credit package, with an interest rate of two percent per annum for a 10-year term, is conducted through Vietnamese Eximbank under the guarantee of the Ministry of Finance, the VITAS said.The package will help Indian businesses develop new factories in Vietnam, as well as promote cooperation between Vietnamese and Indian partners in the same field. his is also an opportunity for businesses to gain more advantages after Vietnam joins the TPP trade pact, the VITAS said, citing a document from the Indian government. With the huge credit support from the Indian government, Vietnamese textile enterprises will have a golden opportunity to access Indian capital and technology, the association commented.

India is the world's second largest supplier of garment and textile materials, second only to China, so the credit package also means guaranteed supply for Vietnamese enterprises, according to the VITAS.The Indian garment and textile industry earns $100 billion annually, of which exports, mainly cotton, silk, cloth and cotton cellulose, account for $40 billion

The Consul General of India in Ho Chi Minh City last week also recommended that Indian enterprises, apart from expanding trade with Vietnam, should invest in the Southeast Asian country to make use of future trade agreements.Vietnam will soon sign many large-scale free trade pacts with important partners like the EU and the U.S., which will make the country more

attractive as a destination for investment to serve ASEAN and other big foreign markets, Smita Pant, Consul General of India, said at a trade promotion and investment event held in the city on July 14.

In April, Vinod K. Ladia, chairman of the Synthetic and Rayon Textiles Export Promotion Council of India, said India is planning to establish a $300 million industrial park specializing in garment and textile material production near the southern Vietnamese economic hub of Ho Chi Minh City. "It is important for Indian companies to take the initiative on the Trans-Pacific Partnership trade deal, which will offer a boost to the Vietnamese garment and textile industry,” Ladia said.

Attraction of foreign direct investment (FDI) in the first half of 2015 dropped sharply by nearly 20 percent year on year, but FDI inflows to the garment and textile industry saw a spike, with $1.12 billion out of the total new and expanded capital worth $5.85 billion, according to the Vietnamese Ministry of Planning and Investment. The newly registered FDI projects in the garment and textile industry included the $660 million Hyosung fiber processing project of a Turkish investor in the southern province of Dong Nai, the largest-ever of its kind in Vietnam. In addition, there was the $300 million Worldon garment plant of British investors in Ho Chi Minh City and the $160 million Lu Thai fiber plant of an investor from Hong Kong in neighboring Tay Ninh Province.

In late June, Binh Duong Province licensed a $274 million project by Far Eastern Polytex Ltd Vietnam to build a factory producing fibers, knitted fibers and synthetic fibers.

V - Financial Times: VN leads in FDI Intelligence VGP – 17/07/2015

Viet Nam ranked first in a study on greenfield FDI carried out by Foreign Direct Investment (FDI) Intelligence, according to the UK’s Financial Times.

Viet Nam scored 8.14 in the index, far ahead of next placed including Romania, Hungary, Malaysia and Thailand.

Viet Nam’s economy has been growing quickly, fuelled by investment and exports. In the phase from 2003-2014, the country attracted more than 2,000 greenfield FDI projects. Almost half Viet Nam’s inward FDI is in manufacturing, attracted by abundant and relatively low-cost labor.

The Southeast Asian country has also taken steps to improve its business environment, reducing its corporate tax rate from 25% to 22% as well as establishing a new credit bureau to improve its credit information system.

With a score of 8.14, the nation is attracting more than eight times the amount of greenfield FDI that might be expected given the size of its economy.

Viet Nam scored the highest rank of all developed and emerging economies that attracted more than 100 greenfield FDI projects in 2014.

O - The Chinese economy

by S.R. | SHANGHAI, Jul 15th 2015

Whether to believe China's GDP figures

IT ALL seems a little too perfect to be true. The Chinese government set a growth target of “about 7%” this year. And for a second consecutive quarter, despite ample evidence of stress in its industrial sector, it managed to hit that right on its head. In the three months from April to June, the economy expanded 7% compared with the same period a year earlier. Cue the chorus of scepticism: Chinese data just cannot be trusted, goes the usual refrain. Yes and no. There is a difference between smoothing data and totally fabricating it. Evidence suggests that China is guilty of the former (the lesser charge) but not the latter (the more serious allegation).

China has a history of ironing out the ruffles in its growth figures. No less an authority than Li Keqiang, now the premier, once said that local GDP data were "man-made and therefore unreliable". The most notorious case of manipulation came in 1998 in the aftermath of the Asian financial crisis. Many Asian countries suffered recessions but China claimed to grow by a hefty 7.8% that year. Looking at other indicators, many economists concluded that growth was in fact closer to 5%. The manipulations can occasionally work in the opposite direction. In the early 2000s, when China reported growth of 8-9%, some reckoned that it really expanded by closer to 10%. Why would China understate its growth? One possibility is that statisticians missed big parts of the economy. Another is that the government downplayed its strength to avoid arousing anger at a time when its export juggernaut was beginning to rev up.

As China’s economy has become more crucial to rest of the world, its data have also come under closer scrutiny. The theory was that this would make it harder for its boffins to play with GDP numbers. In the first quarter, though, major doubts resurfaced. Industrial production fell to its weakest growth since the depths of the global financial crisis, while the property market, a pillar of the economy, slumped. When China reported real growth of 7% year-on-year in the first quarter, economists noted that this did not stack up with its nominal growth of 5.8%. The only way to arrive at the higher real figure was to record a GDP deflator of -1.1%, implying that the economy suffered broad-based deflation, a bizarre development when consumer prices rose by more than 1% at the same time. Had the GDP deflator been accurately estimated, Chang Liu and Mark Williams of Capital Economics reckoned, real growth in the first quarter would have been about one or two percentage points lower.

China’s new data, published today, appear to be more credible. In nominal terms, growth rebounded strongly from 5.8% year-on-year in the first quarter to 7.1% in the second quarter. The corollary is that the GDP deflator went from deflation of 1.1% to inflation of 0.1%, a reading that is much more consistent with rising consumer prices and falling producer prices. Still, there were signs of some tampering. Without providing any explanation, the national bureau of statistics lowered the quarter-on-quarter growth rate of the second quarter of 2014 to 1.9% from 2%. The effect was likely to lower the base of comparison for the second quarter of 2015, flattering the year-on-year growth rate. The impact, though, would have been relatively small: a few tenths of a percentage point, not a few percentage points.

What’s more, the sources of Chinese growth in the second quarter were less mysterious than in the first quarter. While investment continued to slow, services accelerated. The industrial sector

grew 6.1% year-on-year in the first half, down from 6.4% in the first quarter. By contrast, the services sector jumped to 8.4% growth from 7.9% in the first quarter. That matters since services now occupy a larger share of Chinese GDP than industry. There is reason to doubt the sustainability of the services strength. It was predicated to a large extent on financial services benefiting from the stockmarket bubble that popped last month. But the gains for financial services, whether transient or not, were real. China’s statisticians did not invent them.

V - ANZ: VN’s economy shows signs of recovery VGP – 13/07/2015

Viet Nam’s economy has drastically recovered as the indexes witnessed year-on-year increases, stated the Australia and New Zealand Banking Group Limited (ANZ).

According to the ANZ Business Outlook, the ANZ maintained the forecast for Viet Nam’s GDP growth in 2015 at 6.5%.

The bank stated that recent indexes showed that the nation’s domestic demands continue to be consolidated and the increases in consumers’ belief set a new record in June. The inflation rate was controlled at low level and the average growth of the total retail sales and consumption revenues reached 8.4% in the first half of 2015.

The industrial production rose 11.3% in the first two quarters of the year, two times higher than the same period in 2014. The GDP growth in the second quarter of 2015 attained 6.44%, much higher than the forecasts.

The ANZ supposed that as the economy recovers, the imports will put up to support the investment growth and expand manufacturing.

The Vietnamese Government loosening room for foreign investors from this September will accelerate foreign investments into Viet Nam.

O -US economic ties a turnaround

VNS, July, 06 2015

National carrier Vietnam Airlines has bought its first Boeing 787-9 Dreamliner from the US plane maker as part of its expansion plans. — Photo Hoang Ha

HCM CITY (VNS) — It took less than 20 years for Viet Nam, which had been saddled with an embargo by the US, to turn that country into a leading economic partner. In the period since

diplomatic ties were normalised in 1995, trade between them has risen consistently and rapidly, especially after a Bilateral Trade Agreement was signed in 2001.

Just two years after the BTA, the US became Viet Nam's top export market and the status continues, according to Minister of Planning and Investment Bui Quang Vinh. Viet Nam has also become the biggest ASEAN member in terms of exports to the US, overtaking powerhouses Thailand and Malaysia. In 1995 bilateral trade was worth US$450 million. It reached $36 billion last year, with Viet Nam's exports being worth $25 billion.

The US is ranked seventh out of 101 countries and territories investing to Viet Nam. It has invested $11 billion in 735 projects, though the actual figure may be higher since many US companies like Intel, Coca Cola, Procter & Gamble, and Chevron invest in Viet Nam through their subsidiaries in third countries. US FDI has contributed to Viet Nam's social and economic development, enhancing the effectiveness of domestic resources, Vinh said.

Peter Ryder, general director of Indochina Capital, was quoted by Vietnam Economics Times as saying that FDI flows from the US to Viet Nam are set to soar, especially after the country becomes part of the Trans Pacific Partnership. Since 1995 Viet Nam enjoyed dramatic economic growth, and the impact of trade with and investment by the US was a catalyst, he said.

The US's development aid to Viet Nam has increased every year since 1995, reaching $120 million recently. The assistance focuses on the economy, education, health, including $89 million for HIV/AIDS prevention programmes, combating climate change, and tackling the consequences of the war. The US has also launched a $72 million programme to clean Da Nang Airport of Agent Orange.

The TPP involving 10 other countries apart from Viet Nam and the US is a great opportunity for further cementing economic ties between the two countries.

Of the 10 ASEAN economies, Viet Nam is thought to be fourth or fifth most important for US companies, but the success of the TPP negotiations could change that, creating a new structure for trade and investment between them. Exports are likely to rise in both directions while US companies will be easily able to invest in new areas in Viet Nam. There are a number of new industries that will grow much faster in Viet Nam if the TPP is signed. For instance, the government is trying to encourage the manufacture of medical devices, and the trade deal would help attract investment in this area. The TPP will also promote investment in agricultural processing.

C - Seeing Cambodia as a Regional Hub

News by Khmer Times/Igor Kossov 5.7.2015

Already one of the Kingdom’s biggest names, the Worldbridge group of companies continues to diversify, with new ventures and acquisitions in logistics, e-commerce and call center support. Earlier this month it broke ground on its most recent venture, a special economic zone and bonded warehouse 17 kilometers south of Phnom Penh that it will develop in partnership with Hong Kong-listed Kerry Logistics.

Rami Sharaf, CEO of Worldbridge International (Cambodia) Ltd, is optimistic about Cambodia’s growth prospects and sees opportunities to leverage the country’s geographical position between Thailand, Vietnam and Laos. He spoke to Khmer Times about the drive for better logistics and Cambodia’s place in the regional manufacturing value chain.

KT: Worldbridge has beefed up its investments in logistics recently. Why is this a growth sector for you?

Sharaf: Cambodia is coming into the bigger picture of regional integration and we want to attract as much foreign direct investment as we can. No business can survive without a proper logistics system in place. Strategically, having our joint venture with Kerry Logisitics, which combines a listed company with a local company, [to create a special economic zone] is the right step.

KT: How does Worldbridge’s recent acquisition of a controlling stake in courier company Cambodia Express support your new e-commerce venture, MAIO Mall?

Sharaf: Growing our [logisitics services] goes hand in hand with our e-commerce business. We already deliver to many different places, even very rural areas. E-commerce has been maturing in many of our sister Asean countries. It’s new in Cambodia, but with accessibility, pioneer entities in Cambodia can grow in synergy with other e-commerce ventures.

KT: What role do you anticipate your new SEZ will play in developing Cambodia’s manufacturing sector?

Sharaf: When looking at the SEZ, we look at what we can produce in Cambodia, not only for the domestic market, but also for Asean. We can attract FDI to make, for example, products like refrigerators in our SEZ where the logistics warehouses and bonded warehouses are in place. The [central] location and geography of Cambodia plays a major role. Investors are coming to build these goods not just for the 15 million-strong domestic market, but also the 600 million-strong Asean market.

KT: Where do you see Cambodia in the regional production chain?

Sharaf: One of the fields we hope to attract is high-tech. If a Samsung Note 4 or the latest smartphone can be built fully in Vietnam, why not in Cambodia? This is the kind of ambition that we have – we want to upgrade into more sophisticated industries.

Another important field is automotive, which is limited in Cambodia. We can be the suppliers of certified components that support the strong automotive industry in Thailand. Flooding [in 2011] badly affected the automobile factories [in Thailand] and many of the component factories that were there. One of our ideas is to [attract] some of these factories and [to diversify] into certain relevant industries. A good, inspiring example – two weeks back we visited the Tiffany’s jewelry factory in the SEZ in Phnom Penh. It’s amazing to see 1,000 young Cambodians dealing with such a sophisticated industry, doing it up to the standards of New York, Paris, London and Milan. A platform for the global market exists in Cambodia today. We believe it can be done and all gaps can be bridged. We are firm believers that Cambodia is on the right track and its phenomenal growth year over year is a sustainable one.

KT: Do you see a critical mass of skilled labor here?

Sharaf: Vocational training is another venture that our group has in the pipeline. When the time comes, we will be sharing some more information. We know [the skills gap] is there and we want to play a role in bridging it. For us, it’s a strategic venture that we are exploring very seriously.

KT: Where will Cambodia be with regards to Asean integration?

Sharaf: Integration is a process that involves capacity building, regulation and registration. [The question is] how welcoming and attractive we are to FDI when we are in Asean. We aren’t playing alone. There are other players, so we have to brand Cambodia as the right destination for whoever wants to penetrate this market of 600 million consumers. Without the sincere cooperation between a proactive private sector and a very cooperative public sector, this integration can’t happen.

KT: How cooperative is Cambodia’s public sector?

Sharaf: Certain ministries are showing reform. We have a new spirit, in terms of the ease of doing business. One example is the Ministry of Commerce launching a good number of reforms that aim for a better ease of doing business, better accessibility and less bureaucracy. All that surely reflects on attracting more FDI. We saw in some latest resolutions how Cambodia took the leading role among neighboring countries in terms of setting up a business, going online, etc.

V - Beach project loses license for missing capital deadline in Vietnam’s Nha Trang

TUOI TRE NEWS, 4.7.2015

A megaproject criticized for being environmentally unfriendly in the south-central Vietnamese province of Khanh Hoa has lost its investment license for failing to raise enough capital on time as committed.

The provincial administration has pulled the plug on the Phoenix Beach project, located east to Tran Phu Street in the province’s resort city of Nha Trang, spokesperson Huynh Ngoc Bong said on Friday. The VND26.25 trillion (US$1.25 billion) project, developed by India’s Dewan International Vietnam, consists of more than 60 construction units and spans 74 hectares along the famed Nha Trang beach. According to its investment license, Dewan International Vietnam has a registered capital of VND2.1 billion ($100 million) and is required to find that sum by June 30, otherwise it will face a license revocation. But the developer failed to meet the deadline, which results in its losing the license, according to the spokesperson.

Dewan International Vietnam previously missed the capital deadline twice, on January 7 and May 11, according to Khanh Hoa administration. The company was thus requested to return its investment license and stopped all activities related to the Phoenix Beach project. The Indian firm was licensed in October 2014 to carry out the project, consisting of many resort facilities and skyscrapers on the Nha Trang beach and on a land plot running south to Tran Phu Bridge.

The project is also expected to cover part of the surface of Nha Trang Bay, a national attraction that is supposed to be kept intact. The project, scheduled for completion in 2020, is included in an approved zoning for development east of Tran Phu – Pham Van Dong, two main streets in the resort city known for its beautiful beaches.

Dewan International Vietnam had erected signs claiming its ‘sovereignty’ over the beach area earmarked for its Phoenix Beach project, but had to remove all of them in May following an order from the province’s administration.

Khanh Hoa Chairman Nguyen Chien Thang said in May the Phoenix Beach project, as well as the scores of skyscrapers constructed on several streets in Nha Trang in recent years, will enable the beach city to “become even more beautiful than Hawaii.” He said Nha Trang is “a municipality, not an ecotourism area,” and thus needs to be developed in a different way from what “a shortsighted minority” wants it to be.

V - Economists warn against Vietnam becoming world’s factory VietNamNet Bridge - 02/06/2015 Becoming the world’s factory thanks to a cheap labor force is not a good outcome for Vietnam, according to Vietnamese economists. They say a “cheap labor force” implies a “low-quality labor force”.

ANZ has predicted that South East Asia would become the new world factory in the next 10-15 years. ASEAN is a vast market with the total population of 630 million. The region ranks second in economic growth with an average growth rate of over 5 percent. While the labor costs in Shanghai and Beijing are $450/month/worker, the figures are only $250 in other emerging countries in Asia and $150 in Vietnam. However, Do Thien Anh Tuan, a lecturer at the Fulbright Economics Teaching Program, said that low labor costs must not be seen as the outstanding strength of Vietnam, saying that low costs could be a “double-edged knife”. “Low labor costs mean low productivity and low-skilled workers,” he explained. “The economies trying to develop by taking full advantage of their cheap labor costs will fall into the development trap,” he said. “They will find it difficult to escape from the labor-intensive production model and they will not squeeze into high-value global supply chains,” he said. Tuan went on to say that if ASEAN tries to attract foreign investors with its cheap labor costs, it will see investors leaving in five or 10 years, when they can find other markets that offer lower labor costs. An analyst noted that becoming the world’s factory is somthing Vietnam should be proud of. “When other countries are building up knowledge-based economies, Vietnam is trying to attract labor-intensive manufacturers which use outdated technologies and make low added value products,” he said. According to Tuan, the enterprises leaving China because of increasingly high labor costs are those without high competitiveness, or second or third-tier businesses. “This means that Vietnam could only attract second or third tier companies or enterprises which do not need highly skilled workers,” he said. “China is keeping calm amid the deparute of many foreign investors. I think China is trying to restructure its economy by setting up higher requirements for investors, thus forcing incapable investors to leave,” he said. Dr. Luu Bich Ho, a renowned economist, said that Vietnam would not become the world’s factory. Vietnam is striving to develop an economy based on high technology and developing supporting industries to ease reliance on import materials, he said. “Vietnam still has to do outsourcing for foreign partners and for some more time. However, this needs to change once Vietnam successfully reshuffles its economy,” Ho said.

V - TPP Helps Vietnam Restructure Economy

VCCI, July 02, 2015

The Trans-Pacific Partnership (TPP) Agreement is a hot topic of discussion during the 20th anniversary of the normalisation of Vietnam - US diplomatic relations. Not only Vietnam and the United States (US), but all negotiating countries are also making every effort to conclude it in the shortest time. Reporters have an interview with economist Nguyen Tran Bat, Chairman and General Director of InvestConsult Group.

How can TPP’s role and Vietnam - US relations within TPP be interpreted? The US has a very important role and impact on Vietnam’s economic progress. Therefore, any agreement with commercial quality and economic relations with the US is very important. When it negotiated WTO entry, Vietnam easily concluded with most countries but it had to undergo 13 rounds of hard negotiations with the US. This time, the TPP Agreement has a higher quality, more stringent requirements, and more important pressures on Vietnam’s economic restructuring. In restructuring an economy, it is important to define the new way the economy will go. TPP comes when Vietnam is forced to restructure the economy after its economic construction failures. TPP helps Vietnam introduce economic restructuring standards. TPP is a difficult challenge to Vietnam. For the time being, Vietnam does not conduct any study before it joins TPP because it is certainly determined to join. The matter is Vietnam studies TPP for socioeconomic restructuring to join it and grasp opportunities that it brings. I think that this is the highest achievement that the 20 years of normalised relations has brought. During those 20 years, Vietnam has gained experience in economic restructuring to integrate into the world effectively. This is the basic, important and best achievement of the 20-year Vietnam - US relations. If TPP is successful, it will be the peak of those 20 years. According to VCCI’s surveys sent to businesses, up to 70 percent respondents, private and foreign-led enterprises, know TPP, but not many understand it or closely follow the negotiation process. Is this because of a lack of interest, or lack of knowledge? Vietnamese people are smart enough to embrace opportunities and flexibly utilise those opportunities. As for knowledge equipment, Vietnam should have introduced it in schools. For example, TPP should have been discussed for long and taught at the Foreign Trade University, National Economics University, and Economic College - Vietnam National University of Hanoi. In general, the educational system of Vietnam has actively disseminated knowledge of international institutions that Vietnam has participated and planned to participate. That is the downside. However, this is not a big problem for businesspeople because they will learn to overcome this shortage. They will study on their own and tap international agreements in their own way. I think the Government needs to be prepared for this. Governmental agencies must understand international agreements to prepare technical barriers to restrict their negative aspects. Vietnam has no technical barriers other than traditional remedies it introduced at the time of founding the nation. So far, I don’t see any curricula on WTO issues at economic universities The WTO is a chapter in scope and a subject in the United Kingdom but Vietnam does not have it. BTA is an extremely important agreement for Vietnam in trade with the US. Nevertheless, BTA has not been taught at universities after 20 years the two countries normalised relations. So, what should Vietnam do now? Vietnam is not a factor of terrifying quality among TPP-joining countries. The leading factor of this process is the relationship between the Americans and the Japanese. I think that Vietnam should get prepared when the world is negotiating TPP. What can Vietnam export to TPP? One of strategic aspects that VCCI should advise the Government of Vietnam is how to open up investment to tap TPP benefits. Vietnam will impossibly build up an economy or industry tailored for TPP but it may become a transit economy for TPP. So, how will Vietnam become a transit point and who will become long-term allies of Vietnam when the TPP agreement is enforced? Perhaps, it is China. Thus, TPP may pull China closer. V - VN predicted to become world’s factory VGP | 3.Q.2015

International organizations forecasted that Viet Nam’s GDP growth in 2015 may reach from 6-6.5% and the nation will become the world’s factory.

Thanks to achievements in exports, Foreign Direct Investment (FDI), overseas remittances and the business environment, foreign organizations released positive evaluations of the Government’s efforts in improving the business environment. Maintaining the macro-economy, controlling inflation, stabilizing exchange rates and increasing belief in Vietnamese Dong have created a firm foundation for development and gained benefits from trading.

The International Monetary Fund (IMF) appraised the nation’s efforts in stabilizing the macro-economy and economic restructuring, especially in terms of banking.

The World Bank supposed that actively negotiating and signing Free Trade Agreements (FTA) will help Vietnamese businesses expand markets for exports and imports and people get access to various kinds of commodities.

Bloomberg acknowledged that political stability, favorable location, young population and competitive prices in workforce are advantages for Viet Nam to attract more foreign investment in the future.They suggested that Viet Nam should bring into full play its development forces in the whole society by improving the business environment and competitiveness and giving priority to the quality of growth. In addition, the nation needs upgrading infrastructure, public services and administrative procedures.

During his working visit to Viet Nam, IMF Deputy Managing Director Mitsuhiro Furusawa proposed the nation continue to reform the banking system, State-owned enterprises, stabilizing the macro-economy and sustainable development. Viet Nam should improve the business and investment environment, facilitate domestic enterprises' approaches to increase competitiveness, strengthen production capacity and create value-added products to expand markets as well as communicate advantages and disadvantages of the FTA in service of the whole business community and people.

Int'l Cooperation O - Israel supports high-tech agricultural development in Ho Chi Minh City VNA, 15/07/2015

The automatic milking system at the Israeli support dairy farm in HCMC NDO – Deputy Chairman of the Ho Chi Minh City People's Committee Le Thanh Liem held a meeting with Deputy Head of Israel's Agency for International Development Co-operation in the Ministry of Foreign Affairs (MASHAV) Ilan Fluss on July 14 to review operation of the Israeli supported demonstrative and experimental dairy farm (DDEF) in the city.

Speaking highly of Israel’s high-tech agriculture, Liem said that the sector is a priority area that HCM City is focusing on in international co-operation. The city has currently invested heavily in its high-tech agriculture zone and biotechnology centre. According to Liem, after two years of implementation, the joint DDEF project with technical support from Israel has brought about initial

results and attracted many farmers to participate. The city will facilitate specific targets to improve the effectiveness of the project, while removing obstacles during project implementation.

The project is part of the co-operation programme between MASHAV and the city’s Department of Agriculture and Rural Development with a total cost of VND 70 billion (US$3.21 million), of which US$1 million is non-refundable official development assistance. The project was initiated in 2011 and went into operation in August 2013 across an area of 9.8 hectares. It targets enhancing milk production, reducing production costs, transferring technology and expanding models for livestock and animal husbandry.

Ilan Fluss said that the agency considers HCM City as a focus of Israeli co-operation with Vietnam. MASHAV will evaluate the project in detail and will work closely with the city in the field of high-tech agriculture, as well as seeking the most appropriate direction for effective bilateral co-operation, he affirmed. According to Ilan Fluss, MASHAV plans to invite experts from HCM City to take field trips to high-tech agricultural farms in Israel for experience exchanges in the field.

O - Vietnam, France seek cooperation opportunities in energy

VNA - 13/07/2015

Vietnam and France have had a number of cooperative activities in energy, including oil and gas exploration, exploitation and processing as well as technology transfer, said Deputy Minister of Industry and Trade Cao Quoc Hung at a forum in Paris on July 7.

Deputy Minister of Industry and Trade Cao Quoc Hung at the forum (Photo:Vietnam+)

However, Hung noted that cooperation has yet to meet its potential, as French companies have advantages in science and technology, management capacity and finance and Vietnam’s energy demand is increasing. At the forum, representatives from Vietnam Electricity and Vietnam National Oil and Gas Group introduced the country’s energy demands and projects. They also discussed cooperation possibilities with French partners. Attending the event, jointly held by the Vietnamese Ministry of Industry and Trade and the Business France were representatives from French management agencies and enterprises eyeing business and investment opportunities in Vietnam. Business France’s Deputy CEO Henri Baissas highlighted the significance of the forum in creating favourable conditions to intensify cooperation and partnerships between the two countries’ energy businesses and their great contributions to each country’s economic development. Today, France’s leading enterprises operating in this field, such as Alstom, EDF, ENGIE, AREVA and Technip, are present in Vietnam and have participated in many projects, including the Dung Quat oil refinery plant and the Son My 1 thermal power plant, he stated. At the forum, representatives from the French Development Agency and Bpifrance Export

introduced tools supporting exports and investments of French enterprises to help them study markets and carry out investment projects in other countries, including Vietnam./.

O - Ha Tinh forges trade affiliations in Germany NDO/VNA – 08/07/2015

Five cooperation agreements have been signed between Ha Tinh province and its German partners as a result of a trade promotion conference held in Berlin on July 7.

Under the pacts, Germany will support the central Vietnamese province in manpower training, labour export, technology transfer and machinery provisions. Meanwhile, a flow of agricultural produce from Ha Tinh is set to enter the European country’s market. At the conference, Dieter Ernst, a Board Member of the German Asia-Pacific Business Association (OAV), acknowledged Ha Tinh’s important position in Vietnam’s north-central coastal region, recommending the province simplify administration procedures and develop human resources.

Vo Kim Cu, Chairman of the Ha Tinh People’s Council, gave details of the local investment climate, mentioning the Vung Ang Economic Zone that has thus far received US$12 billion in capital and is calling for further investment. Moving forwards, Ha Tinh will prioritise the advancement of science, technology and energy; improving procedures; and creating favourable conditions for foreign investors, he said.

Cu went on to urge German companies and Vietnamese expats living in the country to seek investment opportunities in Ha Tinh, particularly in seaport logistics, industrial production, vocational training and the agricultural and medical sector.

The function, according to Vietnamese Minister Counsellor to Germany Pham Viet Chien, is part of activities to celebrate the 40th anniversary of the Vietnam-Germany relationship. Chien stated that trade ties formed between Vietnamese provinces and German businesses and localities are key to helping the two nations’ strategic partnership, established in 2011, realise its full potential.

The conference gathered 100 business people and official participants

O - Vietnam, Germany seek to boost trade

VNA, 04/07/2015 The delegation, headed by President of the Vietnam Fatherland Front (VFF) Nguyen Thien Nhan, met with German parliamentarians with a view of deepening the two countries’ strategic partnership. At meetings with Vice President of the Bundestag Edelgard Bulmahn and Chairman of the CDU/CSU parliamentary group in the Budestag Volker Kauder, the two sides affirmed the relationship between Vietnam and Germany has progressed over the past four decades, especially after the formation of the strategic partnership in 2011.

Measures to boost trade between Vietnam and Germany were discussed during a Vietnam Fatherland Front delegation’s working visit to Germany by that ended on June 30.

The Germans appreciated Vietnam’s socio-economic achievements in the past 40 years as presented by the Vietnamese delegation, including progress in economic development, education and health as well as improvements to the political system with the VFF gaining increased supervision and social criticism. The two sides also discussed measures to boost bilateral trade, including how to increase Germany’s investment into Vietnam. They said they believed that the total trade volume, currently reaching nearly 8 billion USD and accounting for three percent of Vietnam’s total trade, will continue rising in the future. They admitted that Germany’s investment into Vietnam is still modest and falls short of its potential as does the bilateral political relationship. Vice President Bulmahn raised concerns of German enterprises causing them to hesitate to invest in Vietnam, which Nhan pledged to report to the Vietnamese Government in order to seek suitable solutions to increasing confidence in pouring capital into Vietnam. Another aspect discussed during the meetings was cooperation in culture and mutual understanding between the two countries. They also touched on human rights, freedom of religion and the East Sea issue. Vietnam and Germany agreed to coordinate to promote each country’s role and increase German participation in the development of the Association of Southeast Asian Nations (ASEAN) in particular and Asia in general. The German side expressed their hope that the Vietnam-European Union (EU) Free Trade Agreement (EVFTA) would be signed this year, facilitating Vietnam’s participation in the EU market. During the meeting with Rolf Rosenbrock, Chairman of the German Federation of Social Equality, the same day, the two sides talked about welfare services, especially for vulnerable groups. Germany currently has a high demand for a workforce to care for the elderly. Vietnam and Germany had initially strong cooperation on the field with Vietnam sending 100 orderlies to Germany; the two sides agreed to ensure the workers are well-trained to expand the cooperation.

Investment

O - ASEAN investments help fuel economic development

The Hanoitimes - ,28 Jul 2015 Twenty years after joining the Association of Southeast Asian Nations, Vietnam has become an attractive destination for investors from the region, the Vietnam Investment

Review reported, adding that ASEAN investments have greatly contributed to fueling the country’s economic development. According to the newspaper, the country has so far lured over 54.6 billion USD from regional investors, with the majority coming from Singapore, Malaysia, and Thailand, which respectively rank 3rd, 8th, and 10th among the 103 countries and territories with investments in Vietnam. Currently, Singapore is the largest investor in Vietnam amongst ASEAN member nations, with a total registered capital of 33.2 billion USD, followed by Malaysia (10.9 billion USD), Thailand (6.8 billion USD), and Brunei (1.7 billion USD). Industry insiders attributed Singapore’s ranking to huge investments from its leading groups, such as Sembcorp, Keppel Land, VinaCapital, Mapletree, and Banyan Tree. Singapore’s firms also contributed capital to Samsung’s billion dollar projects in Thai Nguyen, Bac Ninh, and Ho Chi Minh City.

Sembcorp has expanded its investment in Vietnam by partnering with Becamex Binh Duong to develop industrial parks, urban areas and service centres in Binh Duong, Bac Ninh, Hai Phong, Quang Ngai, Hai Duong and Nghe An. Meanwhile, Malaysia is acknowledged for its investments in the Berjaya Vietnam International University Township project worth 3.5 billion USD, as well as the 1.84 billion USD Hai Duong thermo-power project. Notably, Vietnam has seen a wave of Thai investments in recent times, as many major and small- and medium-sized enterprises from Thailand have expanded operations in Vietnam. In particular, Thailand’s Siam Commercial Bank (SCB) has been allowed to establish its branch in Vietnam on the acquisition of VinaSiam Bank (VSB), a joint-venture between Vietnam Bank for Agriculture and Rural Development (Agribank), Thailand’s Siam Commercial Bank (SCB) and Charoen Pokphand Group. In addition, Thai giant Berli Jucker (BJC), owned by billionaire Aswin Techajaroenvikul, announced that it had held a controlling stake in Phu Thai Group since 2013, and bought stakes in Japan’s Family Mart in a joint venture with Phu Thai to operate 95 BJC Mart outlets. The Vietnamese market also witnessed the advent of another Thai retailer - Central Group. The company bought one of the largest electronics shopping centre operators in Vietnam, Nguyen Kim Trading JSC, through its subsidiary and leading Thai electronics store operator Power Buy. In 2013, Siam Cement Group (SCG) spent a huge sum on acquiring Prime Group, a Vietnamese tile manufacturer. SCG also joined the development of the 4.5 billion USD Long Son refinery project in Ba Ria-Vung Tau province. Another famed Thai firm is Amata, the investor of the Amata industrial park in Bien Hoa city, located in the southern province of Dong Nai. Amata also has plans to invest in projects in Quang Ninh and Binh Dinh provinces. Recently, industry insiders are keeping a close eye on PTT, Thailand’s largest oil and gas conglomerate, and its partner Saudi Aramco, who have been seeking a Vietnamese partner to take the next steps toward investing in the Victory refinery and petrochemical project, worth 22 billion USD in the central province of Binh Dinh. If the project is approved, Thailand’s total investment in Vietnam would increase significantly. It is forecast that when the ASEAN Economic Community (AEC) is established at the end of 2015, FDI inflows into ASEAN nations will increase greatly, and Vietnam will benefit from the

trend, the newspaper said. However, Vietnam might have to face fierce competition with Thailand, Indonesia, Myanmar, Cambodia, and Laos in attracting foreign investors. V - FTAs promise new FDI inflows VGP | 28/07/2015 A series of high-tech FDI projects in Viet Nam have increased investment capital and extended production scale with a view of seizing every opportunity offered by the “new generation” of FTAs. Viet Nam is negotiating more FTAs bilaterally and regionally.

Besides the Trans-Pacific Partnership Trade Agreement (TPP) with a combined population of 800 million (accounting for 38% of the global GDP), the EU-Viet Nam FTA would open up a plenty of opportunities when 90% of made-in-Viet Nam products enjoy zero percent tax. Benefiting mostly from FTAs would be agriculture, aquaculture, garments and textiles, and footwear and exports, accordingly, would likely surge by 30-40% and imports, up 20-25%. The newly-signed FTAs have created sizeable values.

The Viet Nam-RoK FTA generated more export opportunities for garment, textile, furniture and agricultural products. Meanwhile, the Viet Nam-Eurasian Economic Union (EAEU) is expected to bring the two-way trade volume from US$ 4 billion to US$ 10 billion within the next five years.

FTAs, especially TPP, as well as the upcoming ASEAN Economic Community (AEC), are expected to boost exports, FDI inflows, generate more jobs, and spur added value, said Dr. Le Dang Doanh. According to the economist, the Vietnamese economy would be able to quickly access new technologies and broaden market shares. Meanwhile, enterprises would join deeply into the global value chain. He predicted that TPP would help the garment and textile sector pocket US$ 30 billion in export turnover by 2020 and US$ 55 billion by 2030. Mr. Doanh also forecast that Viet Nam and Japan would enjoy huge opportunities for cooperation in agriculture and aquaculture.

Dr. Tran Dinh Thien, Director of the Viet Nam Institute of Economics, underlined that Viet Nam would benefit largely from TPP, especially increasing her trade linkages with the U.S. (the biggest market in TPP), absorbing increased FDI inflows, driving economic growth, and having remarkable tax cut. In the first half of 2015, total newly-registered and additional capital in the country touched US$ 5.49 billion, accounting for 80.2% of the same period last year. However, the amount of FDI disbursed hit US$ 6.3 billion, a significant year-on-year surge of 9.6%. The manufacturing and processing industries were the most attractive sectors by absorbing US$ 4.18 billion (76.2% of total investment) with 338 newly-registered FDI projects and 190 added capital ones.

New wave of FDI inflows

Lately, Bel Vietnam, the manufacture of Laughing Cow-brand cheese on July 8 broke ground for a US$17-million cheese factory in the southern province of Binh Duong with a total area of 17,000 meters. The new factor would initially come into operation in mid-2016 and run fully in 2020. The output would grow almost nine-fold. Bel Vietnam CEO Chafiq Hammadi affirmed that the new factory serves the company’s long-term development strategy to become a product supply hub in Viet Nam and Southeast Asia. “The company would take advantage of skilled labor force and preferential policies of the ASEAN Economic Community to serve the whole region. In the short term, Bel Vietnam would focus on the Philippines, Cambodia, Thailand, Singapore, Malaysia, Laos, then Indonesia and Myanmar”, said Mr. Chafiq Hammadi.

A spate of big Korean names also decided to expand their operation in Viet Nam.

Especially, Samsung, the largest Korean investor in Viet Nam poured around US$ 12 billion in four projects namely Samsung Electronics VN (SEV) in the northern province of Bac Ninh; Samsung Electronics Viet Nam Thai Nguyen (SEVT); Samsung Vina Electronics (SAVINA) in HCM City; and Samsung Electronics Ho Chi Minh City Complex (SEHC). According to the Ministry of Planning and Investment, in 2014, the RoK giant earned US$ 26.3 billion in export turnover in Viet Nam. The figure was projected to hit about US$ 32 billion this year.

Other FDI projects on high-tech and added value also selected Viet Nam as a gateway to penetrate into the region when the country would join FTAs like TPP and AEC.

LG Electronics invested US$ 1.5 billion in its largest facility in Southeast Asia at Trang Due Industrial Park which manufactures and assembles such hi-tech products as TV sets, mobile phones, washing machines, air conditioners and digital equipment for automobiles for domestic consumption and export.

Meanwhile, other big foreign players have also quickly flocked in in hope of benefiting from TPP as 12 countries negotiating the TPP don’t include China, India and Thailand.

Japan-based Itochu, for example, spent US$ 9.25 million to own 3% of the VietNam National Textile and Garment Group (Vinatex) and invested in a large-scale project in Viet Nam./.

O - Japanese group invests in real estate in HCM City

VNA , 26/2015

Japan’s Creed Group, a real estate firm specialising in principal investment and property development, signed a US$200 million contract on July 26 with An Gia Investment and officially becoming a player in Ho Chi Minh City’s property market.

Under the contract, the Creed Group will purchase shares of An Gia and in the company’s housing projects with the aim to provide “Japan quality” houses within the city. An Gia Investment CEO Nguyen Ba Sang said the contract will offer the company a strong financial source to implement real estate projects. An Gia plans to build 2,000 superior apartments each year towards having 10,000 units by 2020 with a total investment of US$1 billion. The company is currently implementing four projects worth nearly VND3 trillion (US$137.4 million) and negotiating the purchase of 10 land lots at the centre of the city. Founder and Managing Director of Creed Group Toshihiko Muneyoshi said this is just the first step in the bilateral cooperation. If the Vietnamese property market grows well, the Creed Group will pump additional hundreds of millions of USD into An Gia, he stated.

V - FDI mainly poured in manufacturing, processing

22/07/2015

The Foreign Direct Investment (FDI) are being poured mainly into processing, manufacturing, real estate and retail sales in Viet Nam.

Accordingly, total newly-registered and additional capital reached US$1.19 billion in June, bringing the total figure in the first half of the year to US$5.49 billion, as much as 80.2% of the same period last year.

Of the figure, the newly-registered FDI attained US$3.83 billion while the additional FDI achieved US$1.65 billion, equal to 79% and 83% of the same period last year. The total FDI disbursement was estimated at US$6.3 billion, a year-on-year increase of 9.6%.

According to the statistics of the Foreign Investment Agency, under the Ministry of Planning and Investment, the processing and manufacturing industry attracted 338 newly-registered FDI projects and had 190 ones added capital, worth US$4.18 billion, accounting for 76.2%. The real estate sector ranked second with 18 FDI projects, valued at US$465.5 million, making up 8.5%. The retail sales occupied the third place with total newly-registered and additional capital of US$276.5 million in 145 projects, accounting for 5%.

V - Much more to come: Indochina Capital CEO VIR, 19.7.2015

Mr. Peter Ryder, CEO of Indochina Capital, shares his thoughts on relations between the US and Vietnam since normalization.

■ As one of the most successful American investors in Vietnam, what is your view of investment from the US in Vietnam since the two countries normalized relations?

Since the US and Vietnam normalized relations in July 1995 Vietnam has experienced tremendous economic growth and social change. Direct interaction in investment and trade between the US and Vietnam has been one of the prime catalysts in Vietnam’s development. The lifting of the US trade embargo in 1994, the normalization of US-Vietnam diplomatic relations in 1995, and the implementation of the US-Vietnam bilateral trade agreement in 2000, accompanied by various other bilateral and multilateral political, financial, and trade arrangements, have deepened the relationship between the two countries.

Over the last 20 years US-Vietnam relations have experienced positive and sustainable growth, quantitatively and qualitatively. On the quantitative front, the US is Vietnam’s largest trade partner, with over $30.5 billion of goods exported to the US and nearly $5.7 billion of goods imported from the US in 2014. In terms of FDI, the US is the seventh largest investor in Vietnam among 101 countries. However, if one counts investments flowing through US subsidiaries in Singapore, the Cayman Islands, the British Virgin Islands and other jurisdictions, the US would be within the top three or four largest investors. On a qualitative basis, the two countries continue to exchange dignitaries, students, tourists, and intelligence. With the mutual interest of maintaining regional stability, the two countries will continue to move closer together.

■ Do you think Vietnam is a market of potential for US investors?

Vietnam has made considerable progress in opening and reforming its markets over the last 20 years. As such the country is consistently ranked as one of the region’s most attractive destinations for foreign investors in general and US investors in particular.

Vietnam offers “fertile ground” for investment, boasting abundant natural and human resources. And the country is well-located within Asia-Pacific. On the demographic front, Vietnam has a large, young and educated population. In particular, the rapidly expanding consumer class will be very attractive for US investors who are looking to cater to this large consumer base. According to Boston Consulting, Vietnam’s middle and high class will be the fastest growing in Asia through 2020. It is expected to triple from 12 million in 2012 to 33 million in 2020.

US manufacturers have also been attracted to Vietnam’s low-cost and highly-literate labor force. Many have been relocating their factories from China, Thailand and other countries in the region to Vietnam. As an example, Intel’s largest chip plant in the world is located just outside of Ho Chi Minh City.

Given the attractiveness of the market, cross-border transactions between US investors and local companies have increased significantly over the past few years and the quality of investors has also improved. This trend is headlined by the US-based Texas Pacific Group, who is a large investor in a local consumer company, and Warburg Pincus, who is a large investor in a local real estate company.

■ What are the challenges for Indochina Capital when doing business in Vietnam?

Over the past 16 years Indochina Capital has established a well-deserved reputation as Vietnam’s premier investment company. We have been involved in high-end real estate development, real estate services, investment banking, strategic advisory, and renewable resources. Despite the challenges of doing business in Vietnam we maintain a long-term positive outlook on the country and are here for the long term.

During our time in Vietnam we have witnessed extreme market cyclicality, from the highs of Vietnam entering the WTO in 2007, when the stock market peaked at 1170, to the lows in 2009 following the global financial crisis, with the stock market losing 80 per cent of its value. We have seen two bouts of runaway inflation coupled with high interest rates, in 2008 and 2011, a period of rapid currency devaluation, from 2008 to 2011, and high trade deficits, which sent many foreign investors fleeing.

Since 2012 the macro-economic picture has improved and many investors have taken another look at Vietnam. Despite the improved macro-economic picture, investors are beset by the heavy-handed nature of the approval process for licenses and permits to carry out virtually any type of business, investment, and trade-related activity in Vietnam. Thus, approvals take longer than they should, costing investors time and money and deterring more investors from investing in Vietnam.

With a capable and experienced professional team Indochina Capital has been able to overcome different challenges to move forward. We operate based on near-term agility and long-term vision, to achieve solid growth and success over the years.

■ How do you foresee FDI from the US in Vietnam in the time to come?

One of the key drivers for FDI from the US to Vietnam will be the Trans-Pacific Partnership (TPP). The TPP between the US, Vietnam and ten other countries will bring these economies into a single trading bloc accounting for 40 per cent of global GDP. As the poorest country (on a per capita basis), Vietnam will be the biggest beneficiary of the TPP. Outside of the TPP, the government is trying to make meaningful reforms with the equitization of more State-owned enterprises, revision of investment laws, and allowances for foreign ownership of real estate.

With the continuance of economic stability, the introduction of the TPP, and structural reforms, we would expect more FDI to flow from the US to Vietnam.

V - New decree serves as magnet for foreign capital flow

VietNamNet Bridge – July 16, 2015

The strong rise of the VN Index since late June is attributed to the high hopes of a new wave of foreign capital thanks to the new policy on no-limit foreign-ownership ratio in many business fields.

The VN Index is approaching the 600 point threshold, which shows investors’ excitement about the newly released Decree 60 which sets no limitation on foreign ownership ratios in some business fields.

The government has surprised everyone with the decision to offer more room in Vietnamese companies to foreigners. Prior to that, investors heard from well informed circles that foreign ownership would be lifted to 49 percent or 60 percent only. An analyst commented that Vietnam was “too generous” when removing the cap on foreign ownership ratio.

Meanwhile, the 40 percent limit is set in the Philippines, and 49 percent in Thailand. In ASEAN, except Singapore, Indonesia is the only country with the same ‘openness’ as Vietnam. Therefore, analysts believe the Vietnamese government’s daring step will help make the Vietnamese stock market become more attractive in foreign investors’ eyes. They will have opportunities to buy FPT, REE and Vinamilk shares, which they could not do in the past because there was no more room for foreign investors, if referring to the old regulations. Thirty-one companies were reported as having no more room for foreign investors and 10 others are going to run out of room. Most of them are profitable companies which make up 30 percent of the total market’s capitalization value. Enterprises still have to wait for ministries’ circulars to find which business fields are ‘conditional’ and ‘unconditional”.

However, securities companies such as SSI, HSC and investment fund management companies will surely get benefits from the new policy, because they must not be ‘conditional’ business fields in which foreign ownership ratios are limited, according to the State Securities Commission (SSC) deputy chair Nguyen Thanh Long. Official reports all showed that foreign capital flow to Vietnam so far this year remains modest.

Market Vectors Vietnam ETF, for example, had attracted $57 million worth of capital only by June 26, up by 50 percent compared with the same period last year. According to Dr Le Anh Tuan from Dragon Capital, the Vietnamese market is very small compared with neighboring countries, with $60 billion worth of market capitalization value and a P/E (price on earning) at 12x, or 30 percent lower than other regional markets. In such circumstances, calling for more foreign capital by lifting the limitations on foreign ownership ratio proves to be a wise move to scale up the stock market.

V - Clearing obstacles to business investment in agriculture NDO, 16/07/2015

In realising the Party’s resolution on agricultural restructuring, many incentive policies have been introduced to facilitate agricultural development - a golden opportunity for enterprises eyeing investment in this sector.

Sorghum is being collected to be used as food for milk cows in Nghe An province.

Unlocking potential

Thanks to efforts of both the government and the business community, investment in agriculture has increased considerably in recent years, contributing to the sector’s overall growth. In 2014, total investment in agriculture was estimated at VND61 trillion (US$2.8 billion) and there were 3,500 enterprises operating in agriculture, forestry and fisheries. Many have seen success and have become leaders in the implementation of science and technology and market development. Companies such as Vinamilk, TH Truemilk, Lam Son Sugar Company, An Giang Plant Protection Company, Vinaseed and Hoang Anh Gia Lai are a driving force for development in many localities.

However, according to an estimate by the Ministry of Agriculture and Rural Investment (MARD), investment in agriculture is still modest and disproportionate to its potential. The proportion of companies investing in agriculture in 2014 only accounted for 1.01% of the country’s total number of enterprises, and most of the investment projects were small-scale. Except for a small number of enterprises serious about investing in agriculture, most are running their business based on extracting resources without regard for utilising modern technology and investing in processing equipment to increase added value. The cooperation between enterprises and farmers in the value chain is also limited, one of the reasons behind poor competitiveness and inefficiencies in agriculture.

It is obvious that the potentials in agriculture have not received adequate attention from enterprises and investors. It is a popular argument among enterprises still reluctant to jump in the agriculture game, that investment in this sector is risky and requires large sums of capital, while it takes a long time to reach the break-even point and relevant policies are not encouraging enough. On the contrary, many big enterprises have decided to invest thousands of millions of Vietnamese dong into agricultural infrastructure, and work with the government, scientists and farmers to produce many valuable and competitive agricultural commodities. Considering this a significant opportunity, many big companies, which previously did not consider agriculture as their strength, have begun investing in search of profits. Hoa Phat General Director Tran Tuan Duong says investment in agriculture now is not a fad, but a serious profit-seeking business. This is a new field and it requires the determination of entrepreneurs, in addition to policy support from the government.

According to many managers, agricultural growth in recent years largely comes from increases in the volume of goods while inadequate attention is being paid to their quality. Production is fragmented and not closely linked. Cultivation techniques are heavily dependent on the use of synthetic fertilisers, leading to soil and environmental deterioration. One of the primary reasons for the sector’s unsustainable development is that not much importance is attached to the role of science and technology nor the connection between farmers, scientists, businessmen and the government. Moreover, enterprises have not taken a leading role in investing in agriculture, developing brands, linking with other parties in the production process and developing areas for producing raw materials.

Vietnam’s agricultural products are diverse but their quality is low and prices are not competitive, which is worsened by the lack of capital, narrow use of technology in processing and limited trade promotion activities. The potentials in agriculture and the labour market in rural areas have not been tapped, creating obstacles to economic integration and dragging down the lives of a significant proportion of farmers.

Aware of this situation, the government considers it a top priority to address issues related to institutions and policy as Vietnam has signed and is negotiating many free trade agreements with countries in the world and international organisations.

Creating a favourable investment environment

Besides making and amending a range of relevant laws to seek the National Assembly’s approval, the Ministry of Agriculture and Rural Development (MARD) has radically restructured its public investment, shifting capital to improving the irrigation systems for aquaculture, industrial-use plants and other non-aquatic plants, as well as to science and technology development and application. The ministry has also implemented a series of measures to re-organise State-owned agribusinesses, agricultural farms, and forestry farms, and supported the development of enterprises investing in agriculture and production linkage models. MARD Minister Cao Duc Phat strongly affirms his determination to bring about drastic changes to agriculture, turning it into a commodity-based sector capable of competing in the world market with better-quality and higher-value products. In order to realise restructuring goals, the ministry has introduced dozens of detailed plans with a view of improving farming quality as well as reforming relevant policies and mechanisms to encourage research and technology transfer in this area.

According to MARD Deputy Minister Ha Cong Tuan, many regulations on agriculture have been streamlined so that enterprises can enjoy more tax incentives and support for human resources training, market development and sci-tech application, among other things. Administrative procedures are being disclosed and modified in a way that makes them more simple, accessible and less discriminatory. To accelerate institutional reforms, the MARD has established a special working group with the participation of regulators and 30 leading agribusinesses to attract investment to agriculture and rural development. In keeping with the central government’s actions, relevant ministries, agencies and localities have also expressed their determination to accompany enterprises investing in agriculture by renovating their policies to create a favourable legal framework and investment environment.

According to Deputy Governor of the State Bank of Vietnam Nguyen Thi Hong, agriculture is one the sectors for which bank loans are prioritised. However, for enterprises to receive credit, they must prove the feasibility of their plans. In accordance with the government’s credit support policy for agricultural and rural development, the banking sector has taken many actions to effectively support enterprises investing in agriculture. At the same time, the Ministry of Finance has also scrapped dozens of types of fees related to agriculture and is working with other relevant agencies to review current regulations and make necessary changes so that they are more appropriate with the current reality. Similarly, administrative procedures, export-import management and tax policies have also witnessed positive changes to encourage more investment in agriculture.

O - Tariff cuts prompt new wave of Japanese firms

The Hanoitimes - 16 Jun 2015 Japanese firms have begun to shift their investments to Vietnam’s trade and service sectors, amid a recent reduction of import duties. A preferential import tariff, which began in April 2015 as part of the ASEAN-Japan Comprehensive Economic Partnership Agreement, will see over 3,200 tariff lines on Japanese imports reduced to zero percent. This tariff will specifically focus on material goods, machinery, and electronic products. Furthermore, under the ASEAN Trade in Goods Agreement (ATIGA) in the 2015-2018 period, many goods will become cheaper to import from other nearby countries than to produce domestically. The reduction of tariff barriers has prompted Japanese businesses in Vietnam to reduce production and increase the import of goods sold in the domestic market. Yasuo Nishitohge, general director of Aeon Vietnam, told VIR that the tax reduction will be beneficial for retail businesses. “The tax reduction will help Aeon diversify its products and reduce production costs to gain price competitiveness.”

Another Japanese retailer, Family Mart, affirmed that it would not withdraw from the Vietnamese market, although it previously sold its entire stake in 42 outlets to Thailand’s Berli Jucker (BJC), owned by billionaire Aswin Techajaroenvikul, which then set up a joint venture with Vietnam’s Phu Thai Group. By the end of 2015, Family Mart plans to have 100 stores operating in Vietnam, with the figure reaching 800-1,000 stores by 2020, accounting for 30% of the local market share. Tadahito Yamamoto, chairman and chief representative of Fuji Xerox, said that it plans to expand production in Vietnam by setting up a distribution centre here for export to the global market.

According to a survey by the Japan External Trade Organization (JETRO), in 2014, Vietnam licensed a total of 517 Japanese projects, with their total investment falling by 39.1% from 2013. However, the number of projects in trade and service sectors increased sharply in number. JETRO predicts that Japanese firms will boost their outbound investment in trade and service sectors, amid the depreciation of the Yen against the US dollar and competitive advantages. Recof Corporation, a leading M&A consulting firm in Japan, said that many Japanese businesses have shown interest in expanding operation in Vietnam. This corporation predicted that M&A deals on trade and service between Japanese and Vietnamese enterprises will strongly increase in the coming years. According to statistics by the General Department of Vietnam Customs, Vietnam recorded a trade surplus of US$2.14 billion in 2014, the third consecutive year. The country’s export-import turnover last year totalled US$298.24 billion, up 12.9% from 2013.

V - Indian businesses seek investment opportunities in HCM City

VoV, 15/07/2015

On July 14, a delegation of more than 20 Indian firms paid a working visit to HCM City to survey the market, learn about the investment climate and seek local partners to establish long-term and sustainable cooperation in the future.

The business delegation includes companies involved in such industries as equipment, industrial and agricultural machines, construction materials, tourism, logistics, consultancy, pharmaceuticals, agriculture and food.

Regarding Vietnam-India economic links, Andhra Chamber of Commerce President V.L Indira Dult described Vietnam as an important partner of India in South East Asia as well as a strategic partner in India’s “Act East” policy. In recent years, both nations have demonstrated strong commitments to promoting trade and investment with one another. However, they have not yet obtained positive results as expected. She urged business communities to take full advantage of favourable conditions to accelerate trade and investment between the two nations.

Vo Tan Thanh, HCM City branch Vietnam Chamber of Commerce and Industry VCCI General Director, said the ASEAN-India FTA to take effect and the establishment of ASEAN Economic Community (AEC) later this year will open up a bright prospect for cooperation between India and ASEAN including Vietnam. Vietnamese enterprises should seize this good opportunity to push up trade and investment with the Indian market.

India is now among the top ten trading partners of Vietnam, while Vietnam ranks 28th among trading partners of India, with two-way trade turnover increasing from over US$1 billion in 2006 to US$8 billion in 2014.

V - South Korea becomes largest investor in Vietnam

July 15, 2015 by tuoitrenews

South Korea has become Vietnam’s largest foreign investor, Vietnamese Deputy Minister of Planning and Investment Nguyen The Phuong said at a bilateral investment conference in Hanoi on Tuesday.

The East Asian country currently has 4,459 projects in Vietnam, with a total registered capital of US$39.16 billion, Phuong said at the Vietnam-Korea Investment Forum, jointly held by his ministry and the ASEAN-Korea Center (AKC). The conference was attended by high-profile guests including South Korean Ambassador to Vietnam Jun Dae Joo and AKC general secretary Kim Young Sun, the Vietnamese ministry said on its website. More than 240 South Korean projects, with a total registered investment of $16 billion, are in the electronics industry, greatly contributing to the Southeast Asian country’s economic growth and trade-balance stability, Deputy Minister Phuong said.

Vietnam and South Korea established diplomatic ties in 1992, and saw bilateral trade value top $30 billion in 2014, 30 times higher than the initial stage, according to the Vietnamese Ministry of Planning and Investment. The two countries are targeting to increase trade value to $70 billion in 2020. There are now more than 4,400 South Korean businesses operating in Vietnam, mostly in footwear, apparel and light industries.

“Vietnam is committed to improving its market economy institutions, developing human resources and building infrastructure to continue attracting South Korean businesses,” Deputy Minister Phuong said. Ambassador Jun also hailed the strong economic ties between the two countries, besides cooperation in social and cultural development.

Vietnam is the fourth largest outbound market of South Korea, behind the U.S., China and Hong Kong, newswire The Saigon Times Online quoted Do Nhat Hoang, head of the Vietnamese Foreign Investment Agency, as saying at the conference. Local businesses currently run 24 projects in the East Asian country, with a total registered capital of more than $10 million.

In early May 2015, Vietnam and South Korea signed a free trade agreement following eight rounds of talks, after negotiations were kick-started in August 2012.

V - Large room for attracting foreign portfolio investment in Vietnam NDO, 14/07/2015

Foreign investors at the the investment promotion conference themed 'My Vietnam - Your Investment Destination' in New York on July 1

Vietnam is fully capable of utilising foreign portfolio investment (FPI), an important form of overseas investment in an economy, helping stimulate the financial market towards efficiency, transparency and expanded size, as well as helping improve corporate management quality and fostering economic relations.

Large room for foreign portfolio investment

At the investment promotion conference themed 'My Vietnam - Your Investment Destination' held in New York on July 1, Vietnamese Minister of Finance Dinh Tien Dung talked about investment opportunities for foreign investors, saying that Vietnam is now emerging as a country with great potential for foreign investment as it boasts a favourable geographical location, political stability, and stable economic growth among others. He noted that Vietnam posted an average economic growth rate of 6.4% in the past ten years and was listed in the group of three countries with highest economic growth rate in Asia. The minister added that there was large room for FPI activities as Vietnam's market capitalisation was US$46 billion, equivalent to 25% of GDP. In addition, the recently expanded ownership limits and voting rights for foreign investors in listed enterprises on Vietnam's securities market are expected to open up new opportunities for foreign investors, he stated.

Chairman of the State Securities Commission Vu Bang said that the scale of Vietnam's stock market will rise sharply in the 2015-2020 period following the government's effort in boosting the equitisation of State-owned enterprises aligned with getting companies listed on the stock exchanges.

Along with the government's decision on raising foreign ownership limits for publicly-traded companies, the stock market will continue to be restructured by shortening the time to settle securities transactions, reducing registration procedures for foreign investors, and implementing a derivatives market among others, which will contribute to simulating Vietnam's stock market and capital market, Bang said. Bang noted that these moves demonstrate the government's determination to upgrade Vietnam's stock market status to emerging market in order to attract international investors.

Founder and Chairman of WL Ross & Co. LLC Wilbur Louis Ross affirmed that Vietnam was an attractive destination for foreign investment, particularly investment in the stock market and equitised State-owned enterprises. He pointed out two factors for foreign investors to consider: the Vietnamese government's efforts to restructure the economy, particularly the restructuring of tax policy, and the increase of foreign ownership limits. He noted that the real estate sector and sectors with advantages for export would develop strongly in the future and would be worth investing in. Wilbur L.Ross added that it was obvious that Vietnam had taken impressive economic growth steps and in his opinion, Vietnam was the safest country for investment in the world. The view was shared by Philip Falcone from Harbinger Group, saying that he believed in

the development of the economy with over 90 million people - the majority young people. After eight years, the multi-billion dollar project Ho Tram invested in by Harbinger Group in Vung Tau has proven its efficiency and would bring about benefits for parties involved, he said.

Senior Vice-President of Government Relations at Manulife Financial Corporation, Peter Levitt Wilkinson said Manulife first became present in Vietnam 16 years ago when it recognised Vietnam’s business environment with many advantages and the government's positive support for enterprises. He affirmed that Manulife would increase its investment in Vietnam in the coming time. It can be seen that US FPI in Vietnam is currently too modest compared to the potential of US investors and compared to the capital absorption capacity of Vietnam market.

Creating extra motivation for FPI

The Vietnamese government has attempted to equitise State-owned enterprises and list them on the stock market and promoting the development of the private economic sector in a bid to attract FPI from the US and other countries.

Finance Minister Dinh Tien Dung affirmed that the Vietnamese government hoped that foreign investors, including US investors, would eye investment opportunities in Vietnam, particularly opportunities raised from the equitisation process and from the stock market. He noted that the participation of foreign investors would create strong impacts on the Vietnam's stock market, making it more transparent, effective, and professional. Furthermore, foreign indirect investment would help domestic enterprises to grow and enhance their competitiveness. To absorb foreign portfolio inflows, domestic firms should make every effort to strengthen corporate governance and risk management as well as enhance transparency and the publicity of information. At the same time, management agencies must improve their management and supervision over the market to ensure market stability and attract more FPI while limiting disadvantages arising.

Deputy General Director of the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) Pham Quang Tung said BIDV was always ready to welcome investment from US financial institutions. BIDV has built a plan to sell its shares to foreign investors with 10% of its chartered capital to be sold to a financial investor and 15%-20% of its chartered capital to be sold to a strategic investor, Tung stated. Through the sale of its shares to foreign investors, BIDV hoped to gradually reduce the proportion of ownership of State shareholders at BIDV to 65%. Tung added that BIDV looked forward to a foreign strategic investor to assist the bank in implementing a model of optimal governance, risk management, product and service development and human resource development among others.

Similar to BIDV, a series of large State-owned enterprises attending the conference - Vietnam National Textile and Garment Group (Vinatex) and Vietnam National Coal and Mineral Industries Group (Vinacomin) and others - all wanted to seek foreign strategic investors and foreign indirect investment.

O - US aims to become Vietnam’s top investor

The Hanoitimes - , 10 Jul 2015 Since the normalisation of relations 20 years ago, the US has built its share in Vietnamese market towards becoming the country’s top investor, considering the huge potential of the impending Trans-Pacific Partnership agreement and the birth of the ASEAN Economic Community later this year. Just two decades ago, the US foreign direct investment (FDI) flow to Vietnam was non-existent. Several US multi-national conglomerates, though they considered Vietnam a promising market, had to do business indirectly through a third country. After US President Bill Clinton declared a full lift of the embargo on Vietnam on July 12, 1995 and the bilateral trade agreement was signed in 2000, US inflows into Vietnam have come in droves. Giants operating in beverages, information technology, software, automobiles and energy such as Coca-Cola, PepsiCo, P&G, IBM, Cargill, Microsoft, Ford, Chevron and UPS, one after another, injected huge amounts of capital into Vietnam and reaped successes.

Globally popular brands Coca-Cola and PepsiCo have been taking the beverage market by storm over the past 20 years. P&G has increased their investment three-fold in Vietnam since 1995 and recently broke ground a factory last March, which will churn out Gillette razors for export across Asia. Microsoft owns a mobile phone manufacturing plant worth over 300 million USD in the northern province of Bac Ninh. Chipmaker Intel, after relocating its Costa Rica manufacturing operations to Vietnam, is also considering moving its Malaysian main-board and microprocessor factories to Vietnam and other countries. US investments are catapulting Vietnam into a technology investment destination. As of this May, the US had 742 projects valued at over 11 billion USD in Vietnam, ranking seventh of 101 investors in the country. Sitting down with a reporter from Cong Thuong (Industry & Trade) newspaper, Chairman of the American Chamber of Commerce Gaurav Gupta said the Vietnamese government should continue regulatory reform and improving business climate and workforce quality. US firms valued the Vietnamese Government’s efforts to control exchange rates, increase gross domestic product and improve policies, saying continued progress in these fields will fuel further US FDI inflows to Vietnam.

O - Wave of Thai investments into Vietnam

VNA - 09/07/2015

Major and small- and medium-sized enterprises from Thailand have expanded operations in Vietnam in recent years, helping create an inflow of Thai investments, experts said at a business forum in Ho Chi Minh City on July 8.

Thai businessmen at the forum (Photo:VNA) Vietnam and Thailand are close partners in all fields and especially in education and tourism. The AEAN Economic Community (AEC), scheduled to be formed in late 2015, will be a platform for the two countries to further share experience and resources, expand markets, and tap into the bloc’s potential, said Malinee Harnboonsong – Director of the Commercial Office at the Thai Consulate General in HCM City. According to Tharabodee Serng-Adichaiwit, General Manager of the Bangkok Bank’s HCM City branch, Vietnam’s political stability, growing economy and improving legal system create a favourable investment and business climate for domestic and foreign firms. The country is also a large market in ASEAN with a population of over 90 million, increasingly skilled workforce, low production costs and clear regulations on personal and enterprise taxes. He suggested Thai companies boost their activities through forming joint ventures and building factories in industrial parks. The forum, held by the Ministry of Industry and Trade’s Trade Promotion Agency and the Thai Commercial Office, revealed that Thailand is currently the biggest Southeast Asian trade partner of Vietnam with trade reaching 10.6 billion USD in 2014 and approximately 4.4 billion USD in the first five months of this year. They aim to reach 15 billion USD in trade revenue by 2020. Nguyen The Hung, Deputy Director of the HCM City branch of the Vietnam Chamber of Commerce and Industry, said Vietnam still recorded a trade deficit with Thailand and is striving to ensure balance. Since the AEC will bring about dramatic shifts in trade, services and capital flows, Vietnamese and Thai businesses need to gear up to optimise opportunities, ultimately bolstering bilateral commerce, he noted. Among ASEAN business circles, Thai enterprises are considered dynamic and active in preparing for AEC integration, Hung said, asking Vietnamese firms to join trade and investment promotion delegations to promote their capacity of entering Thai markets and those in ASEAN in general.

O - Singapore leads ASEAN in investment in Vietnam in Jan-Jun

tuoi tre news - 07/12/2015

Singaporean investors topped those from other Southeast Asian countries in investing in Vietnam with 1,428 projects worth US$32.2 billion in the first half of this year, according to figures released by the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment this week.

Singaporean-owned projects accounted for 54.25 percent of the total number and 60.8 percent of the registered capital when it comes to projects run by investors from Southeast Asia by the end of June, the FIA said in a report on Monday.

Malaysia came second with 499 projects with a total investment of $12.06 billion, making up 19 percent of the count and 22.1 percent of the capital. It was followed by Thailand with 392 projects worth totally $6.8 billion, accounting for 15 percent of the number and 12.5 percent of the

registered capital. Thailand was tailed by Brunei, Indonesia, the Philippines, Laos, and Cambodia. As of June, investors from the Association of Southeast Asian Nations (ASEAN) had 2,632 operational projects totaling $54.6 billion in Vietnam. A project financed by an investor from ASEAN countries was worth $20.7 million, 48.9 percent, or around $6.8 million, higher than the average of a foreign-invested project.

The ASEAN investment in Vietnam was mostly put in manufacturing and processing industries, with 1,009 projects worth $22.2 billion, accounting for 40.8 percent of the total investment. ASEAN investors have invested in 55 out of 63 provinces and cities in Vietnam, with their funds mostly channeled into large cities that have better infrastructure.

Ho Chi Minh City was the top destination in the first six months, with 1,144 projects worth $15.07 billion, representing 27.6 percent of the total investment. The southern economic hub was followed by Hanoi (417 projects, $8.58 billion, and 15.7 percent of the total investment) and the southern province of Ba Ria - Vung Tau (67 projects, $6.19 billion, and 11.3 percent of the total investment).

ASEAN is currently transforming itself into a new stage of development, aiming to form an EU-style ASEAN Economic Community by the end of this year.

V - Overview of ASEAN FDI projects in VN VGP – 07/07/2015 As of June 20, ASEAN member states had 2,632 valid projects in Viet Nam with a total registered capital of US$ 54.6 billion, or an average value of US$ 20.7 billion each, according to the Foreign Investment Agency(FIA).

The FIA announced that the average value of ASEAN FDI projects is US$ 6.8 million higher than that of other FDI projects in Viet Nam.

Singapore took the lead with 1,428 projects worth US$ 32.2 billion accounting for 60.8% of the total registered capital. Malaysia and Thailand followed with 499 and 392 projects.

The processing and manufacturing sector lured the biggest amount of FDI inflow with 1,099 projects which registered a total capital of US$ 22.2 billion (making up 40.8% of register capital).

Real estate and construction absorbed US$ 16.6 billion (30.4%) and US$ 3.24 billion of the registered capital. According to the FIA, ASEAN enterprises were mostly interested in Ho Chi Minh City, the country's biggest economic hub. The city attracted 1,144 projects with a total registered capital of US$ 15.07 billion.

Ha Noi and the southern province of Ba Ria-Vung Tau ranked second and third with US$ 8.58 billion and US$ 6.19 billion of the registered capital, respectively./.

O - US makes heavy investments in Vietnam; what will Vietnam do?

VIR, 5.7.2015 It is clear that the US has been increasing its investments in Vietnam and that Vietnam needs to grab the great opportunities brought by the capital flow. Dr Vu Chi Loc from the Hanoi Foreign Trade University noted that Vietnam’s deep integration into the global economy in recent years, plus the signing of a series of free trade agreements, makes Vietnam a fertile land for US investors to cultivate. The US will not spend money just to do politics.From the political view, this is the implementation of the US pivot to Asia policy. From the economic viewpoint, Vietnam, with its natural conditions and political certainties, deserves to be a destination for any investor. Do Nhat Hoang, Director of the Foreign Investment Agency (FIA), noted that he can see a new investment wave from the US. Dr. Tran Thanh Phuong from the Hanoi Foreign Trade University, noted that investors, including the US, have been heading for Asia, including Vietnam, for a long time. Intel, when entering Vietnam years ago, stated that it did not aim to take full advantage of Vietnam’s cheap labor force, but wanted high-quality technical workers. More recently, Intel has decided to relocate its factories from Costa Rica to Vietnam, which analysts said shows its high expectation of the changes to be made in Vietnam. By setting up more production in Vietnam, Intel wants to take full advantage of investment incentives and the free trade agreements. Phuong said that Vietnam should follow the way of Malaysia. Malaysia in the 1990s, like Vietnam now, successfully attracted foreign investment, but foreign-invested factories only did the assembling which created low added value. Later, the government of Malaysia applied measures to improve the situation. It asked Intel to help train the labor force by setting up an Intel school and sending high ranking officials to the US for training. After a short period, Intel began transferring technologies to Malaysia, while outsourcing simple work to Vietnam. An analyst, agreeing with Phuong, noted that Vietnam is going the same way as Malaysia some years ago. Samsung has set up production lines in Vietnam, but it cannot use components and accessories provided by Vietnamese manufacturers. However, the situation is hoped to improve in the future as Vietnam has asked Samsung to help train Vietnamese enterprises. Phuong noted that when preparing to receive the investment from the US, Vietnam also needs to fight against transfer pricing, saying that 83 percent of the top American businesses conduct transfer pricing.

V - Only 1% of Vietnamese enterprises investing in agriculture: ministry

tuoi tre news, 07/01/2015

Only one percent of Vietnamese firms are investing in the agricultural sector although Vietnam is often assessed as a country with a lot of advantages in agriculture in Southeast Asia, the Ministry of Agriculture and Rural Development said at a conference in Hanoi.

Given the current situation, there are three bottlenecks barring the sector from developing, the ministry remarked at the event held on Sunday.They include the lack of capital for large-scale agricultural projects, the absence of agility and market connectivity for agro-products, and the low value added status of almost all agro-products of Vietnam due to the insufficiency and inefficacy in applying science and technology in planting and processing, according to the ministry. By the end of last year, there were only 512 FDI projects in agriculture, forestry and fishery, with a total registered capital of US$3.39 billion, accounting for 3.03 percent of the total number of projects and 1.4 percent of the total registered FDI capital, according to a report the Foreign Investment Agency (FIA) released earlier this year.

Meanwhile, there were over 17,000 licensed FDI projects with an investment capital of $245 billion, according to the FIA, which is under the Ministry of Planning and Investment. FDI in agriculture has dropped by 30 times within 15 years, according to the FIA report.

Investors are now only directing their FDI projects toward short-term fields, including the processing and manufacturing of agricultural and livestock products, rather than long-term areas. Another issue is that most investors come from less developed Asian markets like Thailand, Taiwan, and Indonesia, while those from markets with developed agriculture and industry like European countries, Japan and the U.S. show less interest in the Vietnamese agricultural sector. Another barrier is that there are only a few high-quality FDI projects using high technology, most of which are small-scale. It is estimated that while the average size of an investment project is $14.7 million, the average size of FDI projects in the agricultural sector is only $6.6 million.

According to the agriculture ministry, there are currently around 30 leading enterprises engaging in attracting investment in agriculture. Many big Vietnamese firms operating in many areas have begun to pour money into agriculture in an effort to leverage their cash-rich budget and the advantages of the tropical country, like Vingroup, Vietnam’s top realty developer; Hoa Phat Group, one of the country’s biggest names in steel production and real estate; and Hoang Anh Gia Lai, which previously concentrated on real estate.

Speaking at the conference, Deputy Prime Minister Hoang Trung Hai stressed that with a series of free trade agreements either having been signed or to be signed, there will be more challenges for the development of the agricultural sector. To help agriculture move up the ladder to a new development stage, the government will focus on investing in rural infrastructure such as irrigation and roads to serve agricultural production, Deputy Prime Minister Hai said. However, businesses need to stimulate creation and actively find a way or new model for growth, such as the model in which many firms are linked together to make a closed cycle from production to consumption of agro-produce, he added. Deputy Prime Minister Hai also proposed a pilot project which would assign many agricultural associations to do what has been regarded as the state’s tasks. If successfully implemented, the project will be expanded to various fields, he said. Along with that, there is a need for better market management to ensure the interests of businesses investing in agribusiness, he added.

M - Mandalay Sees No Foreign Investment So Far This Year – DICA

Moh Moh Kyi | 1 July, 2015

While there was over $700 million in foreign investment in Mandalay in 2013-14 and 2014-15 fiscal years, this fiscal year is yet to see any foreign investment, a Directorate of Investment and Company Administration (DICA) official said. Foreign investment in 2013-14 fiscal year was about $87.75 million and 2014-15 saw about $647 million. “Ten business firms have been allowed to invest in Mandalay region during these two years. However, there has been no investment for this fiscal year,” Daw Nwe Ni Oo, a director at DICA, said.

However, one Chinese company has expressed interest in opening a garment factory this year, she added. “It is still in discussion. We still have not received final permission to do it.” DICA said is preparing policies to allow investments below K10 billion to proceed without streamlined oversight. Business firms from nine countries have invested in construction, transport, hotels and tourism and agriculture sectors in Mandalay region.

Foreign investment largely began in Mandalay region after 1988. The top three investors are Hong Kong with $399.22 million, China with $264.19 million, and Singapore with $158.85 million. Local investment has amounted to about K160 million from 2013-14 fiscal year until now.

Mandalay region has failed to attract any investment in 2015-16 fiscal year as of now, a Directorate of Investment and Company Administration (DICA) official said.

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V - WB forecasts Vietnam’s growth rate at 6-6.2 percent in 2015

The Hanoitimes - 21 Jul 2015 The World Bank (WB) expects Vietnam’s economic growth to hover around 6-6.2 percent in 2015, underpinned by further recovery in domestic demand, robust private consumption and investment growth.

In its updated report on Vietnam’s recent economic developments released on July 20, the WB said the outlook for the country’s economic growth is positive, adding that the Purchasing Managers’ Index (PMI) computed by HSBC has remained above 50 for 22 continuous months while the consumer confidence index stayed at 140.2 in May, well above its long-term average of 135. Despite recent loosening of monetary policy, this year’s inflation will remain low, fluctuating at 2.5 percent on account of low global energy and food prices, the WB said. The fiscal deficit is forecasted to be adjusted by cutting spending to avoid further increases in public debt. The bank also expects the trade surplus to narrow significantly in 2015 due to a combination of weakening exports and sustained import growth stoked by stronger domestic economic activities and investment demands.

The World Bank expects Vietnam’s economic growth to hover around 6-6.2 percent in 2015 Meanwhile, emerging trade agreements will provide opportunities for Vietnamese enterprises to attract more foreign investment, and diversify and promote trade through reaching larger and richer markets, the biannual report says. However, WB Senior Economist Sebastian Eckardt underlined certain problems in Vietnam’s economic growth, including the rapid increase of public debt in recent years and weakening external trade balance causing the current account to move into a deficit in the first quarter of 2015 . Progress on structural reforms has been mixed, especially with regards to the restructuring of State-owned enterprises (SOEs) and reform of the banking sector. SOE equitisation progress has slowed down in 2015, with only 29 SOEs being equitised of the set target of 289 SOEs this year. Lead Economist of the WB Office in Vietnam, Sandeep Mahajan said, despite banking reform advances, especially in mergers and acquisitions, efforts to resolve bad debts have been hampered by the absence of an enabling legal framework. Meanwhile the capital base of the Vietnam Asset Management Company is too small to actually resolve bad debts. In a section on Vietnam’s labour market, the WB report says the job landscape in the country has shifted dramatically over the last 25 years. Jobs in Vietnam were once characterised entirely by family farming, collectives and SOEs. Over time, employment has shifted towards industrial production and services, household businesses outside agriculture, and private domestic and foreign-owned firms. WB experts also urged the country to boost labour productivity to improve its competitiveness amidst the context of international integration.

O - India finances US$300 million to promote VN’s garment VGP | 20/07/2015

The Indian Government officially started the preferential credit of US$300 million to boost its garment cooperation with Viet Nam, according to the Viet Nam Textile and Apparel Association (VITAS).

India will finance textile and apparel projects in which its equipment and services make up 75% of the value of the projects. The loan will be extended to 10 years with the interest rate of 2%.

The credit is aimed at assisting Indian businesses to develop their factories in Viet Nam as well as enhance Vietnamese enterprises to expand cooperation with Indian partners.

The move creates an opportunity for businesses to take more advantages when the Trans-Pacific Partnership negations conclude.

C - Banking Without Borders

Khmer Times/Cam McGrath, 19 July 2015

The Asean Economic Community (AEC), slated to come into effect at the end of the year, aims to integrate 10 diverse economies of Southeast Asia, creating a single market of 600 million people and a combined GDP of $2.4 trillion. The new economic bloc will offer opportunities – and challenges – for Cambodia.

In this second segment of an interview with Canadia Bank CEO Michael Lor, the prominent banker spoke to Khmer Times about the Cambodian banking sector’s readiness for regional integration.

KT: The creation of the AEC is less than six months away. How important is regional economic integration, and is it a realistic goal?

Lor: If one wants to be [skeptical,] the AEC is a distant dream. The full implementation of all aspects will take time – between three to five years – but I believe the AEC will start. The Asian economy does not have a choice with the likes of economic superpowers such as China, Japan, the US and the European Union. I think the region has no choice but to come together. Having

said that, in a pragmatic manner you’ll realize that the economic growth age of the 10 different [Asean member] countries are very different. You have far more developed economics like Singapore and Thailand, and those in the middle like Indonesia, Vietnam and Brunei. Then there’s Cambodia and Laos. So there are three different segments of Asean, and there is no way anybody is going to catch up to speed immediately. It will take some time, but I’m very confident that eventually the destination will be reached.

KT: If Cambodia is lagging now, how will it fare under the AEC?

Lor: Because of their individual economic growth situations, [the Asean countries] may take different timelines. Cambodia has a very open economy, and openness is one of the cornerstones of the AEC. When AEC does happen, we will take to it like ducks to water and it will be beneficial for us.

Having said that, there are many sectors of the Cambodian economy that won’t match those of some of our more established peers in Asean. It will take a little time to do something about it. But otherwise, the AEC is fantastic for Cambodia as an open economy that encourages direct investment and that has few controls on investments and investment ownership. This encourages lots of wealth and FDI to come into the country and, in the process, leapfrogs the country’s [development].

KT: Is Cambodia’s banking sector ready to compete in a single-market economy?

Lor: Banking in Cambodia today is very basic and traditional, with services such as current/savings accounts and telegraphic transfer services. But if you look forward to the next five years, financial services will proliferate – assuming full-blown implementation of the AEC. Then it will be critical for the country to develop its expertise, which is important. I think this is one area where the banking industry needs to work harder and bring players together.

[Banks] need to realize that they can no longer be sustainable with a single-branch presence. They need to compete against the bigger boys, so they can either merge in or merge out. And that will happen. But right now the [central bank] has basically left the industry to find their own square pegs and round holes. It has not come out and said you must [merge] – and rightfully so, as it balances both development and prudency.

But in the next few years you will see this happening. You will see institutions that have weaker financial ratios, deposit bases and capital ratios... look for good partners who can bring in both resources and technical know-how.

KT: How does Canadia Bank fit into this?

Lor: We are very happy with our three-year strategic plan, and feel we are of a reasonable size. We have a bank franchise that is strong and sustainable, that is able therefore to generate ammunition to expand into other areas of business. We’ve pursued this strategy rather than domestic mergers.

For us, it is different because we’re really big. We are one of the few banks in Cambodia that has the ability and the balance sheet to support the top-end of customers in Cambodia. Our huge deposit, customer and loan base allows us to grow and develop new businesses in the way we’ve been doing for the last few years: finding good partners, setting up new businesses and letting them run the business with their knowledge and expertise. We provide the local know-how, reach and customers. That’s our strategy.

KT: What challenges does the AEC pose to Cambodia’s banking sector?

Lor: One of the things that will be a little difficult for Cambodian institutions, Canadia Bank notwithstanding, is our ability to go out into some of the more developed Asean markets, which is not surprising. Many financial institutions come to a particular country because they follow their customers. Thai banks come here because there are lots of Thai investors and customers, Chinese banks do the same. So in the same vein, Cambodian banks will go to where Cambodian customers are investing, but I think that will be a little difficult for Cambodia.Today, we don’t see a lot of Cambodian institutions sufficiently big enough to go out aggressively into the region. Of course, we have Cambodian companies that buy and sell things in the region, and invest in small presences in the region, though not a significant presence. That will have to take place before local banks start to move up in the region.

So I think for investment into Cambodia, it is a very good [opportunity] for Canadia Bank. We are poised and ready, and we have fine-tuned ourselves over the past four years. We’ve also learned to work with Singaporean, Thai and Vietnamese partners. To be fair, it’s not easy as they have different standards and expectations. We thought we were there, but they are there. It brings us up, and it is important as we need to really prepare ourselves. I think AEC will be great for Cambodia and just as great for Canadia Bank.

C - First Agricultural Insurance Tested In Cambodia

Khmer Times/Un Raksmey and Igor Kossov, 14 July 2015

Cambodia’s first pilot program to insure farmers against rice crop loss launched last week in five provinces.

The Cambodian Center for Study and Development in Agriculture (CEDAC) started the initiative by creating the Cambodian Agriculture Cooperative Insurance Company (CACIC), with a $96,000 investment from Achmea Foundation from the Netherlands. The insurance aims to address looming droughts and floods caused by climate change.

“It is the first agricultural micro-insurance in Cambodia and it’s a very important program to help farmers,” said Mr. Him Noeun, the project manager.

The test period will run for another year and a half. In that time, CEDAC will try to iron out many obstacles facing the program, including farmers’ poor understanding of insurance, lack of ability to pay premiums and a high amount of risk. “[This program] is really needed by people in the countryside but it’s very risky,” said Solene Favre, the CEO of health micro-insurance company PKMI, which serves many poor farmers.

Enrolling In the Program

To get people on board, CEDAC will work with farmers’ associations and recruit representatives to market the insurance to their neighbors. Beneficiaries will pay directly to CACIC representatives once per season. The program has already signed up 63 people, collecting total premiums of about $650. The insurance is currently available in Takeo, Kampot, Kampong Chnang, Prey Veng and Kampong Speu.

Premiums will depend on the type of rice. Short duration varieties will cost about $25 per hectare per season. Medium duration will cost between $7 and $20 and long diration will cost about $5. Farmers who practice rice intensification techniques will need to pay a little more, said Mr. Him.

The Benefits

Farmers will be compensated based on the amount of damage to their crops. Farmers can get up to 35 percent of the value of their crops, depending on the amount that gets destroyed. If less than 20 percent of their crops are destroyed, there is no payout.

In addition to the insurance payouts, farmers will receive training on responding to climate change improving their farming skills.

Risky Proposition

As climate keeps changing, Cambodia is in for longer dry seasons and shorter, more violent, rainy seasons, weather experts say. Both droughts and floods will increase, greatly exacerbating uncertainty for farmers. These conditions make crop insurance vitally needed but incredibly risky for insurance providers. Ms. Favre estimated the insurance risk to be close to 100 percent.

Mr. Him acknowledged the possibility that the insurance fund may run out of money during an especially bad season. He said that the pilot program will give his organization the opportunity to study the pitfalls before expanding it beyond rice, to other crop types and livestock. If CEDAC can figure it out, other insurers may follow. “I would be very interested in the result of this pilot,” said Ms. Favre. “In two years, we will look at this kind of insurance.”

Poor Understanding

The program will face other difficulties. Mr. Him said that it will take a long time to explain the program’s benefits to Cambodia farmers. There is a limited number of experts that the organization can harness, which will require more people to be trained. “It’s going to be extremely difficult to convince farmers to buy into the idea,” said Chan Sophal, director of the Centre for Policy Studies.

L - KBank, Aeon connect in Laos

THE NATION, July 14. 2015

KASIKORNTHAI Bank in Laos has extended loans and offered financial management services to Aeon Leasing Service (Lao) to support its retail and motorcycle-financing business there.

Both parties are also ready to jointly develop payment channels and other innovative services in a bid to assist Thai investors in Laos. Suwat Techawatanawana, KBank's first senior vice president, said Aeon Leasing Service (Lao) had been granted kip-denominated loans by the bank's Laotian unit to be used for its retail and motorcycle-loan businesses. Aeon Group is a successful financial conglomerate in Thailand, offering personal-loan and credit-card services. Given the promising trends in Laos, the group's business expansion into this marketplace is expected to bring fruitful results. Aside from financial support, KBank will cooperate with Aeon to develop products and services such as innovative payment channels to facilitate its customers in Laos. Shiro Kitano, managing director of Aeon Leasing Service (Lao), said this cooperative effort with KBank would be supportive to the company's business, making it more flexible in its operations. Aeon Group now centralises its business management of the Asean region in Thailand. After branching out into the Laotian market, the conglomerate may contact KBank. The one-stop service will help reduce the number of relevant procedures and time needed. The cooperative endeavour between the two companies to develop complete payment channels will not only provide greater convenience to customers in Laos, but also assist in modernising transactions in this market. Having its headquarters and first branch in Vientiane, Aeon Leasing Service (Lao) is now expanding its services in other major cities in that country. Amid slowing economic conditions, loans extended during the first half of 2015 accounted for 30 per cent of this year's target of 50 billion Lao kip (Bt208 million). The company plans to launch more marketing activities to boost its business during the second half of the year, wherein the overall economy is expected to benefit from the advent of the Asean Economic Community. Suwat said KBank had operated its locally incorporated institution in Laos since last December, offering loans and financial-transaction services to both individual and corporate customers there,

including Thai businesses that have invested in the country. Providing credit, KBank assesses their business potential in Laos, plus their company outlook in Thailand. Such risk assessment is conducted to evaluate the entire group prospect. Therefore, the bank can better underwrite credit and give other supporting services to the businesses. Amid Laos' high economic-growth potential, some Thai operators may wish to cash in on growing business opportunities. KBank says it stands ready to support Thai businesses in advisory services, business matching activities and diverse financial services.

C - Germany considers renewables funding

Xueying Chen , 14 July 2015

Germany’s development bank is considering expanding its investments into the Kingdom’s renewable energy and agriculture sectors, a visiting German parliamentarian told the president of Cambodia’s Senate last week.

Thomas Gambke, chairman of the ASEAN Parliamentary Group in the German Parliament, met with Cambodian Senate President Say Chhum on July 6 and touted the potential for growth in both industries, according to Senate spokesperson Mam Bunneang. “As they see our economic growth is in the fast track, they want to get support from the government for their investment in the hydro dam and agriculture sector because he knows that we have huge potential in the sector, especially power,” he said.

Herbet Jaegar, vice president of DEG, a subsidiary of KfW, a German government-owned development bank, confirmed that his firm is currently looking at the feasibility of three agriculture and sustainable energy projects that are in the early stages of development. “We would be interested to provide more financing for investments in agriculture projects and renewable energy projects in Cambodia, preferably solar power or power from biomass,” Jaegar said in an email yesterday.

DEG has backed local banks and microfinance institutions in Cambodia with over $100 million to fund SME projects in the past. It recently funded a local rice mill with $15 million to expand production capacity and to process energy from rice husks. Jaegar said, however, that DEG can only fund hydro dam projects that comply with the International Finance Corporation’s social and environmental requirements that are set by the World Commission of Dams, which Cambodian hydropower projects struggle with. Solar and biomass energy, on the other hand, have greater potential for investment because of the large amounts of sunshine and land in Cambodia, according to Jaegar. “Energy prices in Cambodia are still quite high so we feel that there should be some development. If we know some companies that are looking at Cambodia to develop solar power, we feel that this is a very good idea,” he said.

M - Independent firms to get more loans

Eleven Myanmar, 6.7.2015

The Small and Medium Industrial Bank (SMIDB) says it will grant a further Ks20 billion to small- and medium-sized enterprise (SMEs).

“We will lend out our remaining funds to SMEs. The loan disbursement in the previous fiscal year amounted to Ks14.75 billion. With the aim of ensuring the development of SMEs, the SMIDB will scrutinise entrepreneurs who apply for the loans,” said an official from the SMIDB. The bank was largely established to serve SMEs. With the assistance of the government, the SMIDB is disbursing Ks90 billion taken from the Myanma Economic Bank to SMEs.

The SMIDB plans to disburse, at an 8.5 per cent interest rate, Ks2 billion each to Yangon, Mandalay, Ayeyawady and Sagaing regions and Shan State and Ks1 billion to other regions and states, including Nay Pyi Taw. The SMIDB loans are only handed out when entrepreneurs have a recommendation from their regional governments. They range from Ks10 million to Ks100 million, based on the collateral. Firms are expected to repay loans within three years. The availability of capital and technological assistance are crucial to SME development.

According to the Ministry of Industry, there are more than 120,000 registered SMEs across the country, making up 99 per cent of the economy.

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V - BreadTalk Vietnam to open three new bakery outlets

VoV, 29/07/2015

BreadTalk Vietnam has planned to open two new bakery outlets in Ho Chi Minh City and Bien Hoa City, Dong Nai province, this August.

The company is also scheduled to open a store in Aeon Mall, Hanoi this September for the first time as part of activities marking its fifth anniversary of establishment in Vietnam.

The chain of bakery outlets now consists of 15 stores in Ho Chi Minh City, Binh Duong province, Vung Tau province and Nha Trang City.

BreadTalk Vietnam is a branch of BreadTalk Group Limited, which is a listed Singaporean bakery, founded in July 2000. It operates a chain of retail outlets through its subsidiary BreadTalk Pte Ltd, selling a wide variety of bread, cakes, buns and pastries.

V - Developers race to spruik properties as Vietnam opens door to foreign buyers

TUOI TRE NEWS, 07/27/2015

With foreign ownership of houses and apartments now allowed in Vietnam, international customers and brokers have begun frequenting real estate showrooms in Ho Chi Minh City, while realty developers are boosting promotional campaigns to attract the new category of buyers.

Foreign property brokers currently join their Vietnamese counterparts in examining apartment projects which are under development or on sale in the southern metropolis, as foreigners are now allowed to buy houses and apartments in the country, following a new rule which took effect on July 1.

While Salvatore Passari, an Australian broker, visited Vietnam to observe the realty market only a few times last year, he is coming more frequently this year, since foreign ownership has been approved. Passari is slated to bring around ten Australian customers to Ho Chi Minh City to choose and buy apartments, he told Tuoi Tre (Youth) newspaper on Saturday, while attending the inauguration of the Landmark 81 project in Binh Thanh District. Another broker from Australia, Mark Builksol, has also attended many ceremonies showcasing new realty projects in Ho Chi Minh City recently. Builksol said around 30 of his customers are eying apartment ownership in Vietnam. The Aussie is confident that many foreigners will buy houses and apartments in the Southeast Asian country, both for living or reselling, as prices are reasonable and the realty market is growing.

Choi Seok Hwan, general director of HanViet Invest Co., said many South Koreans also have plans to buy houses and apartments in Vietnam, at a time when the housing market in their home country is stagnant. In the meantime, Vietnamese realty developers are offering various programs to lure foreign buyers.Tuyet Hang, a salesperson at a realty exchange in District 2, said her company will grant a round trip ticket to travel to Ho Chi Minh City for any foreign customer who places a deposit for a project she is selling. The company also offers many other preferential treatments, including allowing buyers to get a full refund if they want to return their apartment within one month of purchase, to appeal to foreign homebuyers. Patrick Ferneini, a Lebanese customer, examined the project four times before deciding to place a deposit for a 98.75 square meter, three-bedroom apartment on Friday, apparently attracted by such incentives.

Unclear regulations

According to the new rule, foreign ownership is valid for 50 years, and can be extended by the same term only once. A foreign individual must have a valid passport with an immigration stamp to be eligible to buy a house or an apartment in Vietnam, whereas an organization must have an

investment license or a permit for their operations in the country. The documents must be valid at the time a home purchase is conducted.

Nguyen Trong Ninh, deputy head of the department for housing and realty market management under the Ministry of Construction, said foreigners only need a valid visa for immigration to buy houses or apartments in Vietnam. “Even a visa with only one day of allowed stay is eligible for house and apartment purchases,” Ninh told a meeting on July 18. But many foreign homebuyers say there are still many issues they find unclear.

Builksol, the Australian broker, and Nguyen Nhat Hung, the legislative consultant for a realty project, both said many of their customers are in the dark about what kind of visas they must have to be eligible for foreign ownership. “For instance, is a tourist visa accepted?” Hung asked.

While it is easy for foreign customers to place a deposit for a project, preparing and finalizing the purchase contracts is more complicated.

Ardis Gaetano, an Italian national, said a project developer told him that they could only prepare the apartment leasing contract for him, as they do not know how to create a trading contract due to the lack of legal guidance. “We have to wait for instructions from a relevant decree and circular regarding the new law on foreign ownership,” Le Thi Thuy Nga, a salesperson at the Estella Heights project in District 2, explained.

O - Changing face of retailing in Vietnam VET, 27/07/2015

Vietnam’s retail market is set to grow by 8.4 per cent by 2020, making it one of the fastest-growing markets in Southeast Asia, according to InsideRetail.asia, Asia’s leading authority on retail industry news and trends.

InsideRetail.asia took a look at five trends defining the marketplace for pan-Asian retailers right now.

Confident investment January 2015 marked the first time non-domestic retailers could take full ownership of commercial property in Vietnam, following commitments made to the WTO. New trade agreements with Japan, South Korea and countries that make up ASEAN are set to support further growth for international retailers in Vietnam, such as AEON, emart and BJC Metro.

Tailoring the best of international retail Domestic retailers may have the advantage when it comes to local shopper knowledge but international retailers are drawing on their own strengths to help them compete, InsideRetail.asia reported. Dairy Farm, FamilyMart and Aeon have brought their expertise in loyalty schemes, private labeling and innovative marketing to their stores in the region. Other points of difference include appealing to busy office workers with fast food counters (as seen at Family Mart and B Mart) and bringing an international flavor to in-store hot food offerings (as seen at Aeon Mall).

Alternative store concepts Many retailers have established themselves in Vietnam with a hypermarket presence in one of the major retail hotspots, such as Hanoi or Ho Chi Minh City. Lotte and hypermarket chain Aeon are appealing to families and experimental shoppers with department store formats that act as wider shopping and entertainment destinations. Aeon is also making its mark with a loyalty scheme that includes tailored offers for mums, such as birthday treats or discounts on baby care products.

Product innovation for a changing market A new concept in Vietnam, private labeling is appealing to young, experimental shoppers thanks to their lower prices and alternative products.

Aeon has introduced its TopValu private label range, which taps into the popularity of Japanese culture by offering authentic Japanese ingredients and home cooking kits. The retailer is now working with local suppliers to explore domestic production. An increasingly affluent middle class is also supporting demand for exclusive and imported novelties. Dairy Farm is well-known for attracting these shoppers with its packaged food, household, health and beauty ranges.

Expanding national coverage A priority for most retailers is to create a nationwide presence. Lotte has built a network of ten hypermarkets spanning six big cities in Vietnam, making them the first pan-Asian retailer to achieve such a spread of coverage. Meanwhile, Ministop (Aeon), Guardian (Dairy Farm), and Shop&Go are pushing their convenience format in retail hotspots. Major retailers are seeing good growth from their franchise models, making partnerships and mergers and acquisitions become hot topics.

V - Vietnam leather industry faces tough challenges

VOV, 26/2015

After a few difficult years brought about by the global economic recession, Vietnam’s leather and footwear industry has been a key factor underpinning the resilience of the nation’s economic growth and employment.

Vietnam is now the fourth largest leather and footwear manufacturing country based on volume behind China, India and Brazil, shipping products to more than 800 customers in 50 countries, and the third largest in terms of value after China and Italy. Manufacturers ship more products to the US, EU and Japanese markets, second only to China and in addition have gained a solid footprint in many other key markets around the globe.

In the six months leading up to July of 2015, export revenues for the industry expanded 18% year-on-year to US$7.10 billion, of which leather accounted for US$1.45 billion, up 27%, and footwear accounted for US$5.70 billion, up 16%, according to the General Department of Vietnam Customs. However, competitiveness of domestic manufacturers in the industry remains weak and they face innumerable but not insurmountable problems reports the Vietnam Leather and Footwear and Association (LEFASO).

“The leather and footwear industry is facing more challenges than ever before,” said Diep Thanh Kiet, vice president of LEFASO.

On the one hand, global consumers are demanding in terms of expecting new experiences through product development, design and functionality, and domestic manufacturers are weak in these areas. On the other hand, the lack of a well integrated supply chain and all of the problems associated with sourcing and procuring raw materials is a critically important problem holding the industry back, Kiet said.

As it relates to the availability of raw materials, the industry has access to only a small fraction, about 20% of their needs and must rely heavily on imports from other countries in the region to fill the gap, which adds significant cost and reduces profits in the industry.

Domestic manufacturers are also noticeably lacking in their trade promotion and marketing activities and they must pick up the slack to tap into new markets and get more competitive in this area.

The Vietnam government has also signed free trade agreements (FTAs) with ASEAN, China, Japan, the Republic of Korea, India, Australia and New Zealand and is actively negotiating

others. Deciphering or determining the exact requirements of these FTAs and complying with them poses tremendous challenges for those in the industry, Kiet said.

Most of the FTAs are not expected to have any discernable impact on total exports for 2015 but as they take effect over the next one to two years and tariff reductions are phased in, hopefully things will pan out and the industry will see profitable growth.

Last but not least, the ASEAN Economic Community (AEC) is currently on track to come into existence by December 31, 2015, and its formation may pose the greatest challenge for the industry. Other ASEAN member countries are currently strong rivals for domestic manufacturers and the tariff reductions brought about by the AEC will augment their competitiveness. The leather and footwear industry could lose out on their home turf as manufacturers from other ASEAN nations seek to tap into and compete in the domestic market, Kiet underscored.

C - New electronics manufacturer due at PPSEZ

Xueying Chen, 23 July 2015

Thai-listed electronics manufacturer, SVI Public Limited, will be next in line to join Cambodia’s emerging light-manufacturing industry.

SVI will build a factory in the Phnom Penh Special Economic Zone (PPSEZ) where Cambodian workers will assemble security cameras for export to Europe. The plan was revealed during a meeting on Monday with representatives from SVI, the Ministry of Commerce and Thailand’s Embassy in Cambodia, the Ministry of Commerce confirmed yesterday.

“The RGC welcomes the Company’s interest in establishing a high-tech manufacturing [company] in Cambodia as it is in line with the policy of the government in moving forward to producing skilled labour forces in the country,” Ken Ratha, spokesperson for the Ministry of Commerce, said in an email yesterday. “This company will help Cambodian people to become qualified engineers and technicians, and then also provide them opportunities to have good jobs with their skills,” he added.

According to the ministry, SVI is currently training 200 Cambodians in their factory in Bangkok to work at the Cambodian subsidiary once it’s completed. SVI could not be reached for comment yesterday to confirm a date for construction or the cost of the factory build, but a June 9 company statement on Thailand’s stock exchange said a subsidiary in Cambodia was approved with a registered capital of 35 million Thai baht ($1 million).

Hiroshi Suzuki, chief economist at the Business Research Institute for Cambodia, said that the movement of low-skilled manufacturing from Thailand to Cambodia was a natural progression, due largely to lower labour costs. “So far, some Japanese manufacturing companies, such as Minebea, have developed this trend,” Suzuki said in an email. “It is very good that the Thailand companies are joining.”

V - VN’s stock market attracts foreign investors VGP | 22/07/2015

Viet Nam stock market has increasingly attracted international investors and absorbed over US$ 233 million of bonds in the first half of 2015, higher than the amount of US$ 128 million in 2014, according to ETF Daily News.

The ETF Daily News reported that the new regulation on foreign ownership of property is expected to stimulate the domestic stock market in the next few months.

Last month, Viet Nam decided to remove foreign ownership limit at stock market except for some sensitive sectors. The decision shall take effect since September, 2015 and made foreign investors surprised. They predicted that the Government would probably loosen the limit from only 49% to 60%.

The move was regarded as a sound step and was expected to accelerate liquidity in the stock market and upgrade Viet Nam from a potential market to a new emerging one in the short term.

More importantly, the move would help the Government speed up the progress on SOEs restructuring. Private investment inflows would also assist SOEs in operating more efficiently.

The stock market has responded positively since the beginning of July when domestic investors massively bought holdings in a bid to catch up with the new wave of international investment. VN-Index has jumped around 10% since the decision was made.

V - Textile and garment exports to TPP market up 70 per cent

HA NOI (VNS) — 22 2015

Viet Nam's garment and textile export turnover to countries taking part in the Trans-Pacific Partnership (TPP) negotiations increased by 69.66 per cent in the first five months compared with the same period last year, according to the latest report from the Viet Nam Textile and Apparel Association (Vitas).

Exports to this market also accounted for 66.8 per cent of the sector's total export turnover.

Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Viet Nam are members of the TPP.

Exports to the US ranked top with US$4.05 billion, accounting for nearly 50 per cent of the export value to the countries joining the TPP agreement, a 53 per cent increase on the year. Viet Nam's textile and garment export turnover to the US is expected to reach $11 billion by the end of the year, Dang Phuong Dung, Vitas deputy chairwoman told Hai Quan (Customs) newspaper. Textile and garment export turnover to the US has increased dramatically in the past 20 years from zero to $9.8 billion in 2014.

The turnover could be doubled once the TPP is signed, she said, adding that it would benefit local enterprises. Garment products' import taxes would be reduced by 7 to 8 per cent, replacing the current 15 to 16 per cent. However, the TPP would also require information about the goods' origins, which is difficult for domestic firms. Viet Nam's textile and garment sector needs improvement when it comes to naming raw material sources.

The chairwoman called for ministries, society and the Government to help attract foreign investment, and encourage relationships between domestic producers and raw material producers. Only by doing those things could Viet Nam satisfy the requirements on goods' origins, she said.

According to the newspaper, US Fashion Industry Association President Julia K Hughes said many US companies were willing to seek supply sources from nations joining the TPP agreement once it took effect. Viet Nam was ranked highest in terms of its ability to draw new businesses, Hughes said, so she advised Viet Nam utilise its new opportunities.

Vitas forecast that the country's textile and garment export turnover could reach $27.5 to $28 billion this year.

V - Vietnam’s electronics industry heats up VietNamNet Bridge - 21/07/2015

A number of electronic manufacturers have come to Vietnam to develop multi-billion dollar electronics production projects.

Ten years ago, Vietnam was only a small link in the global electronics supply chain. today, it is a big electronics production base with $38 billion worth of electronic exports in 2014. Exports are produced by factories bearing the world’s most famous brands. In late May 2015, Samsung started the construction of SEHC, a household-use electronics complex in the HCM City Hi-Tech Park capitalized at $1.5 billion. SEHC, covering an area of 70 hectares, is expected to become operational in the second quarter of 2016 and make high-end television sets and household-use electric products. As such, Samsung has poured $12.6 billion into its projects in Vietnam so far. This includes $8.9 billion injected into electronics projects – one in Thai Nguyen province with investment capital of $5 billion, the second in Bac Ninh with $2.5 billion, and the remaining in HCM City with $1.4 billion. In 2013, Samsung’s electronics in Bac Ninh alone brought huge export turnover of $23 billion, which helped Vietnam gain a trade surplus in the year. In late March 2015, LG inaugurated the LG Technology Complex in Hai Phong City, capitalized at $1.5 billion. This is the biggest LG complex in South East Asia which makes all the products of the group. According to LG Vietnam’s CEO Ko Tae Yeaon, in the first phase of the project, it will make TVs, mobile phones, washing machines, air conditioners and digital devices for cars. In the first five years, 70 percent of the products to be churned out by the complex will be exported to 35 countries. It is expected that by 2020, the factory will put out 41 million phones, 2.3 million TVs and 2.2 million washing machines. Maseco Group has recently announced the building of its third electronics factory in Nhon Trach District of Dong Nai province. The manufacturer of Ariang karaoke player is following an ambitious plan to join the TV market, planning to launch an LCD TV into the market by 2016. Market potential Tien Dat was a well-known electronics brand to Vietnamese. Its TV products were once available in both rural and urban areas. However, the fame could not help Tien Dat continue its prosperous business after Vietnam joined

the WTO and had to open its market to foreign products. Tien Dat’s products have disappeared from the domestic market, while the latest information on its official website was posted in 2008. Sony, a big manufacturer, also had to give up the game. In 2008, after a long period of taking losses, Sony shut down its production factory in Vietnam, which employed 200 workers. V - Foreign textile & garment enterprises expand as domestic firms shrink VietNamNet Bridge -21/07/2015 The demand from Vietnam’s key export markets has decreased significantly, while the dollar has appreciated sharply, causing textile and garment export growth to slow down.

Vietnam’s textile and garment export turnover has reached $12 billion this year, which represents a modest increase of 9 percent in comparison with the same period last year, a 3-year low, and much lower than the 19 percent growth rate last year. More foreign owned factories Vinatas reported that the number of foreign invested garment & textile factories has been increasing dramatically as foreign investors have been flocking to Vietnam to take full advantage of the free trade agreements (FTAs) of which Vietnam is a member.The Foreign Investment Agency (FIA) has confirmed that most of the large foreign direct investment (FDI) projects registered this year are in the textile & garment sector. These include the project registered by Hyosung Dong Nai which has investment capital of $660 million, one by Worldon Vietnam at $300 million and one by Lu Thai Vietnam at $160 million. In late June, Binh Duong provincial authorities licensed Polytex Far Eastern Vietnam which plans to make synthetic fiber with capital of $274 million. Textiles & garments are the key export item of Vietnam, with $24 billion worth of export turnover in 2014 and an expected $27-27.5 billion in 2015. However, there is a big problem that while foreign invested enterprises are expanding, Vietnamese firms have shrunk. According to Vinatas, Vietnamese enterprises made up only 27.5 percent of the $12 billion worth of export turnover, while the remaining was created by foreign invested enterprises (FIEs). Vietnamese companies Vinatas has confirmed that the number of orders from Vietnam’s key markets such as the EU and Japan is on the decrease.Vinatas’ deputy chair Pham Xuan Hong said though garment companies still have enough orders until the third quarter of the year, there are not many ‘attractive jobs’ and most of the orders are small. Hong said though demand from the US has recovered well, the recovery cannot offset the decreasing demand from the EU and Japan. “The problem sounds really serious,” Hong said. “While the export prices remain unchanged, the input costs have increased sharply. Meanwhile, more and more foreign manufacturers have come to Vietnam where they compete fiercely with Vietnamese enterprises.” Le Quang Hung, chair of Garmex Sai Gon, said the stronger dollar has badly affected Vietnam’s exports to the EU and Japan. “As the dollar gets stronger, Vietnam’s exports are more

expensive,” he explained. Hung also thinks the current difficulties will last until next year at least and the situation will heavily depend on the financial crisis in Greece.

V - FTAs bear both opportunities and challenges for footwear sector

The Hanoitimes - 18 Jul 2015 The signed and pending free trade agreements (FTAs) will not only provide benefits for the Vietnamese footwear and bag sector, but also a number of challenges due to export goods now requiring clear information on product origin, a conference in Ho Chi Minh City heard on July 15. In the past five years, the Vietnamese Government has actively negotiated FTAs with numerous countries, with most of them impacting significantly on the development of the footwear sector, including the Trans-Pacific Partnership agreement and FTAs with the European Union and the Eurasian Economic Union. According to the Deputy Head of the Ministry of Industry and Trade’s Import-Export Department Tran Thanh Hai, the footwear sector will be a priority during the negotiation process since it is one of Vietnam’s three key exports to the EU and the US. In 2014, these two markets accounted for 67 percent of Vietnam’s total exports. However, the export tax currently imposed on footwear by the US remains high at 60 percent, and 3-17 percent in the EU. Once the agreements are signed, export tax could be eliminated entirely, opening up more opportunities for the sector to increase its exports and expand its market shares, Hai said. Additionally, the Association of Southeast Asian Nations (ASEAN), which includes Vietnam, has also signed FTAs with China, Japan, the Republic of Korea, India, Australia and New Zealand, and is currently negotiating a Regional Comprehensive Economic Partnership (RCEP) with the six aforementioned countries. This will establish a free trade area comprising 16 states and a total population of over 3 billion. As such, Vietnam will also have the chance to boost its exports to these countries. Deputy Minister of Industry and Trade Ho Thi Kim Thoa suggested businesses anticipate and grasp the opportunities provided by the signed and pending FTAs to expand their export markets. Furthermore, Vietnamese footwear businesses should observe the domestic market, since supply only meets 50 percent of demand at present.

According to the ministry, the sector’s export turnover is estimated at 7.35 billion USD in the first half of 2015, up by 18 percent compared to the same period last year. Vietnam’s footwear export value totalled 5.9 billion USD and bag exports accounted for the remaining 1.45 billion USD. Vietnam is the world’s third largest exporter of leather and footwear products, following China and Italy. Vietnamese products are available in more than 50 countries and territories throughout the world. The ministry approved a master plan on the development of the sector until 2020 with a vision to 2030, with a focus on developing the support industry. Accordingly, several footwear and material processing industrial zones and complexes will be built with the purpose of providing materials and increasing the sector’s competitiveness.

V - Car sales increase 58% over last year

HA NOI (VNS) — July, 20 2015

Sales of automobiles rose in most segments during the first half of the year in comparison with the same period last year.

In its latest report, the Vietnam Automobile Manufacturer' Association said that some 103,500 vehicles were sold in the Vietnamese market during the period, an increase of 58 per cent period-on-period. Sales included 45 per cent from small cars, 75 per cent in commercial vehicles and 136 per cent from special-purpose vehicles.

In June, the sale of passenger cars reached the highest volume in every segment with 9,796 units, a growth rate of 9.2 per cent compared with the previous month. Meanwhile, commercial car sales saw an increase of 0.5 per cent to 7,834 units, while special-purpose autos lost 8.1 per cent to 1,083 units.

As the purchasing power of passenger cars depended upon VAMA members, that of commercial and special-purpose vehicles increased for car importers. The month also saw an unbalanced growth rate between locally-assembled complete knock down (CKD) and imported complete built units (CBU). It was further reported that domestic sales reached 14,448 CKD units and 4,238 CBUs in June, increasing by 3 per cent and 9 per cent, respectively.

According to Toyota Motor Vietnam (TMV), a member of the VAMA, the company's total sales volume reached 4,289 units in June, increasing by 25 per cent compared to the previous month. This is also the highest sales volume of TMV in 2015. Of note, the all-new Vios continued to lead in sales with 1,106 vehicles sold in the passenger car segment, 42 per cent higher than the same period last year.

For CBU models distributed by TMV, in the first 6 months, the total sales volume increased by 72 per cent, compared with same period last year with 2,782 units. Figures showed that Hilux leads in CBU models with 744 sold units.

V - Mekong Delta farmers do well VNA, 19/07/2015 | The Mekong Delta is harvesting a bumper summer-autumn rice crop though the weather has been unfavourable, according to the Ministry of Agriculture and Rural Development. More than 9 million tonnes are expected to be harvested, 143,000 tonnes higher than a year ago because of increased yields. The country's rice bowl planted rice on more than 1.6 million hectares, fractionally down from last year's summer-autumn crop. But farmers are likely to be hit by unstable demand and low prices. Speaking at a seminar in Kien Giang Province last week, Deputy Minister of Agriculture and Rural Development Le Quoc Doanh said despite some achievements, rice production in the delta faces many problems like unstable rice demand that need to be resolved. The region should focus on improving rice quality and increase export value, he said. In the summer-autumn crop, average-quality rice varieties are grown on 25 percent of the area, according to statistics from local agriculture departments though the ministry's Plant Cultivation Department has warned it should not exceed 10 percent. Next the delta plans to grow the autumn-winter rice crop on 827,000ha, 12,256ha more than a year earlier, mostly high-quality varieties. In Vinh Long Province, for instance, high-quality varieties will make up 80 percent of the output. The autumn-winter crop is sown during the rainy season and harvested in mostly dry weather, meaning its quality is superior to that of the summer-autumn rice. It is also easier to sell because the output is not large. But the crop faces risks like the annual flooding in the Mekong River. Mai Van Nhin, deputy chairman of the KienGiang Province People's Committee, said the delta provinces should schedule their sowing properly to avoid the floods. Upstream provinces should

carefully calculate the release of flood water to avoid losses in downstream provinces, he said. All provinces should regularly consolidate their dykes and irrigation works to ensure safety for the autumn-winter rice. Doanh said the Plant Protection Department should improve its forecast of rice diseases. The National Agriculture Extension Centre needed to propagate farming techniques on the media, he said. V - Shipping firms cannot go to sea because of shortage of big ships VietNamNet Bridge – 19.7.2015

Since Vietnamese shipping firms have not made appropriate investments to develop container fleets, they have had to concede the container transport market to foreigners.

Sea transport is the fastest-growing transport industry in Vietnam, thanks to the advantageous geographical position and a long coastline of over 3,200 kilometers. According to the Vietnam Maritime Bureau, the volume of goods shipped by sea increased sharply from 290 million tons in 2011 to 500-600 million in 2015, while the figure is expected to reach 1,000 million tons by 2020. However, Vietnamese exports are carried by foreign shipping firms instead of Vietnamese. Clinker, a key export item of Vietnam, is mostly carried by shipping firms from Bangladesh, China and Hong Kong. Vietnamese shipping firms cannot obtain contracts on shipping Vietnam’s rice exports, about 12,000-50,000 tons a year. Vietnam’s plywood exports to China, about 10,000-20,000 BDMT (bone dry metric tons) per order are also carried by foreign firms. Sliced cassava and sand exports to Singapore are carried by Chinese firms. Foreign companies also have the contracts on shipping import products such as coal, animal feed and materials for animal husbandry. Analysts say Vietnamese shipping firms fail to obtain shipping contracts because they don’t have big vessels. Many vessels have been leased to foreigners, while others have been put up for sale. However, it is not easy to sell the vessels. As most of the shipowners are finance companies, they don’t want to sell at low prices. But no one wants to buy the vessels with low quality at high prices. Small ships Lacking big container ships, Vietnamese shipping firms focus on carrying bulk. However, even in this field, they are inferior to foreign competitors. Cement and clinker exports in small quantities fitting 3,000-8,000 ton ships are carried by Vietnamese ships. However, most of the products are exported through intermediary parties – Singaporean trade companies. Singaporeans, who are very experienced in the international market, always set clauses disadvantageous to Vietnamese shipowners in transport contracts. For example, they require CQD (customary quick dispatch) under which goods owners retain 5-10 percent of the ship chartering fee. In fact, Vietnamese shipping firms can obtain contracts to carry rice exports to Malaysia, Indonesia and the Philippines under government-to-government agreements, implemented by Vinafood 1 and Vinafood 2. However, the contracts often contain

load/discharging clauses unfavorable to shipowners. The major jobs obtained by Vietnamese shipping firms are carrying some kinds of goods in small quantities within ASEAN countries, such as gypsum, feldspar, coal, steel, equipment and ore.

V - VN becomes cellphone production hub VGP | 18/07/2015 Japanese Nikkei Newspaper recently called Viet Nam as a production hub for cellphones as manufacturers expand operations in the country to grasp its low-cost labor and government incentives.

To attract manufacturers, the Vietnamese Government reduced corporate tax and land rent by half. The Southeast Asian country is also home to young skilled people who are looking for work, Nikkei said.

Microsoft of the U.S. has transferred production lines to a plant in Northern Viet Nam. Meanwhile, LG group opened a new factory worth US$1.5 billion in Viet Nam last March. Samsung of the Republic of Korea said it will invest US$4 billion to upgrade its production capacity in Viet Nam by the end of 2015. At present, Samsung has two factories in Bac Ninh and Thai Nguyen provinces. After projected expansion, the total exports will increase to US$ 32 billion in 2015.

In the first half this year, Samsung produced 107.3 million smartphones and cellphones, an increase of 68.8% against the same period last year. The majority of the products were exported. Samsung, Microsoft and LG account for 99% of smartphone and cellphone exports from Viet Nam.

M - Heineken opens US$60m brewery

Eleven Myanmar 16.7.2015

Yangon – Dutch brewer, Heineken, has opened its first brewery in Myanmar in Hmawbi Township, Yangon region. The company has invested US$60 million in the plant and labelled its beer the “Regal Seven”. “It is an exciting opportunity for Heineken. We are investing in recruitment, training and finding locals to run the business. Our investment is helping to increase economic development in Myanmar,” said Heineken’s CEO Jean Francois Van Boxmeer. The company has introduced a “Better World” programme to create job opportunities and improve training. “We are very glad that the factory is running. It will start making a profit shortly,” said Aung Moe Kyaw, chairman of Alliance Brewery Co Ltd, a business partner of Heineken in Myanmar. The company said the price of Regal Seven would match domestic beers.

O - Vietnam, India work toward 2020 trade goal VietnamPlus, 16.7.2015 Vietnam and India are working closely together to achieve their bilateral trade target of 15 billion USD by 2020, a Vietnam Chamber of Commerce and Industry bigwig has said.

Garment-textile for exports (Photo: VNA) Speaking at a Vietnam-India business meeting in Ho Chi Minh City on July 14, Vo Tan Thanh, director of the VCCI's HCM City office, said trade between the two countries had increased sharply in recent years, going up from 1 billion USD in 2006 to 8 billion USD last year.Vietnam's key exports to India include mobile phones, rubber, cashew, porcelain, iron and steel, and wooden products, while it imports cars, drugs, garment and textile feedstock, chemicals, machinery, building materials, and others. India is now one of Vietnam's top 10 trading partners while the latter ranks 28th for India. As of June, India ranked 30th among 103 countries and territories investing in Vietnam, with nearly 380 million USD in 100 projects. Vietnamese companies have invested around 26 million USD in India. Smita Pant, the Indian consulate general in HCM City, said there was great potential for cooperation in many sectors, including tourism, between the two countries. "There is an increasing interest in holiday tourism from India to Vietnam and in medical and spiritual tourism from Vietnam to India." A delegation representing more than 20 Indian companies seeking business opportunities in Vietnam took part in the event held at the VCCI. They operate in the cement, property, power, infrastructure development, bio-technology, jewellery, agricultural machinery, tourism, and consultancy sectors. "When we think of Vietnam we must look into a market of ASEAN economic community of over 600 million, TPP, FTA with number of countries and regions including EU and Custom Union. Therefore our advice is to move beyond trade and look into investment," Pant said. "Vietnamese also need to look at India's vast market," she said. At the event, the VCCI and a business group from an Indian state called the Andhra Chamber of Commerce signed a memorandum of understanding to enhance exchange of knowledge and information. V.L Indira Dutt, Chairwoman of the ACC, said: "India now ranks among the most attractive investment destinations and the investment activity is grounded on stronger footing. "With such a positive prevailing economic environment, I am sure, investors from Vietnam would be nothing but enthused to travel to India. There has been a boom in retail, e-commerce and a great advancement in technology."

V - Japan’s famous Hida beef to be sold in Vietnam in August

TUOI TRE NEWS, 07/16/2015

A special kind of Japanese beef that is a dozen times more expensive than Vietnamese meat will be available in the Southeast Asian country early next month, a Japanese official said Wednesday.

Hida beef, slaughtered from the famous black-haired cattle raised in the Japanese prefecture of Gifu, will enter the Vietnamese market in early August, the region’s governor, Furuta Hazime, on a Vietnam visit, told Tuoi Tre (Youth) newspaper.

The specialty recently won the top prize at the Kinki Tokai Hokuriku Beef Cattle Exhibition in Japan, fetching around 18,000 Japanese yen (US$145) a kg in its home market, Hazime said. Hida beef is thus even costlier than its Kobe counterpart, which is a popular deluxe meat for affluent Vietnamese consumers, according to the governor. Normal beef is selling at VND250,000 ($12) a kg at most in Vietnam.

Hida beef will be mostly distributed to luxury Japanese restaurants in Vietnam to serve the increasing number of middle-class consumers in the country, Hazime said. The beef, called Hida-gyu in Japanese, is taken from the black-haired Japanese cattle breed, which should be raised in Gifu Prefecture for at least 14 months. It is known as one of the finest quality varieties of beef, with the highest quality marbling, luster, color, texture and smell.

O – Israel increases hi-tech agriculture cooperation with HCM City 15/07/2015 |

Vice Chairman of Ho Chi Minh City's People's Committee Le Thanh Liem (centre) receives Israeli officials (Photo: VNA) Ilan Fluss, Deputy Director of Israel’s Agency for International Development Cooperation under the Israeli Ministry of Foreign Affairs (MASHAV), said the agency considers HCM City as one of focuses in Israeli cooperation with Vietnam. Fluss made the remark in his meeting with Le Thanh Liem, Vice Chairman of the HCM City People’s Committee, on July 14 to review activities of the experimental demonstration project on raising dairy cows using high technology in the city. The project is part of the cooperation programme between MASHAV and the city’s Department of Agriculture and Rural Development with a total cost of 70 billon VND (3.21 million USD), one million USD of which is non-refundable official development assistance. The project, which aims

to cut costs, increase productivity, transfer technology and expand models, was initiated in 2011 and went into operation in August 2013 across an area of 9.8 hectares. HCM City is seeking international cooperation in hi-tech agriculture and has already heavily invested in its hi-tech agriculture park and bio-technology centre. V - Labor demand in Vietnam highest for three years VET | 15/07/2015 In the first half of the year demand for workers rose 34 per cent compared to 5 per cent in 2013 and 25 per cent for 2014 as a whole, making it the highest growth in the last three years, according to the Online Recruitment Market Report released on July 3 by VietnamWorks, an online recruitment company.

Job categories with traditionally high recruitment demand like IT - Software and Accounting all grew rapidly, CEO of VietnamWorks Mr. Gaku Echizenya said. “Jobseekers today have more options than ever for their dream jobs,” he said.

Recruitment demand has been growing since 2013, the report noted. Most job categories with traditionally high recruitment demand have all grown by at least 20 per cent. IT - Software added 1,200 more jobs compared to 2014, making it one of the highest growing job categories. Meanwhile, architecture and interior design grew by 600 jobs in the first half, an unexpected result compared to 758 jobs last year as a whole. Overall, job categories where demand grew the most were architecture and interior design (98 per cent), consulting (95 per cent), retail and wholesale (58 per cent), advertising, promotions, and PR (51 per cent), and product and processing (49 per cent). Recruitment demand was spread across job levels, with the experienced level having the greatest demand (66 per cent). Meanwhile, manager level, team leader and supervisor level, director level, and new graduate and entry level accounted for 16 per cent, 12 per cent, 3 per cent and 3 per cent, respectively, of all recruitment demand in the first half.

Some job categories were extremely competitive. The “hottest” category was, as usual, Accounting, with a very high competition rate of 1/85, or 85 applications on average for every position. Meanwhile, other job categories such as education and training, pharmaceuticals and biotech, arts - design, agriculture and forestry, medical - healthcare, and airlines, tourism and hotels had relatively less competition.

The competition rate among the cities and regions did not vary much, with the leader being Ho Chi Minh City, as expected. In the first half the city saw the second largest number of job openings and the largest number of job applicants, making it the center of recruitment and job hunting activities in Vietnam.

In the first half of the year demand for workers rose 34 per cent compared to 5 per cent in 2013 and 25 per cent for 2014 as a whole, making it the highest growth in the last three years, according to the Online Recruitment Market Report released on July 3 by VietnamWorks, an online recruitment company.

Job categories with traditionally high recruitment demand like IT - Software and Accounting all grew rapidly, CEO of VietnamWorks Mr. Gaku Echizenya said. “Jobseekers today have more options than ever for their dream jobs,” he said.

Recruitment demand has been growing since 2013, the report noted. Most job categories with traditionally high recruitment demand have all grown by at least 20 per cent. IT - Software added 1,200 more jobs compared to 2014, making it one of the highest growing job categories. Meanwhile, architecture and interior design grew by 600 jobs in the first half, an unexpected result compared to 758 jobs last year as a whole.

Overall, job categories where demand grew the most were architecture and interior design (98 per cent), consulting (95 per cent), retail and wholesale (58 per cent), advertising, promotions, and PR (51 per cent), and product and processing (49 per cent).

Recruitment demand was spread across job levels, with the experienced level having the greatest demand (66 per cent). Meanwhile, manager level, team leader and supervisor level, director level, and new graduate and entry level accounted for 16 per cent, 12 per cent, 3 per cent and 3 per cent, respectively, of all recruitment demand in the first half.

Some job categories were extremely competitive. The “hottest” category was, as usual, Accounting, with a very high competition rate of 1/85, or 85 applications on average for every position. Meanwhile, other job categories such as education and training, pharmaceuticals and biotech, arts - design, agriculture and forestry, medical - healthcare, and airlines, tourism and hotels had relatively less competition.

The competition rate among the cities and regions did not vary much, with the leader being Ho Chi Minh City, as expected. In the first half the city saw the second largest number of job openings and the largest number of job applicants, making it the center of recruitment and job hunting activities in Vietnam.

V - Food makers go increasingly hi-tech

VOV News - 14/07/2015 09:21

Foreign governments and modern-day food manufacturers are increasingly imposing requirements that take a lot of investment in high-tech agriculture said attendees to a July 13 conference in Hanoi.

Obscure land lease laws, income tax regulations, inadequate infrastructure, and overly burdensome administrative procedures are just a few of the obstacles to attracting higher levels of foreign investment.

The adoption of new technology is going to be critical for Vietnam to maintain its competitiveness in the global arena of high-tech agriculture but that takes large amounts of investment, one representative said. The representative added that if Vietnamese agriculture doesn’t find the funds to invest in modern technology then the nation may as well forget the ambitions on becoming a food bowl in Asia. The unclear land lease laws are causing much trepidation by investors, a representative from Nestle Company said, indicating that there are just too many unanswered questions. The representative also raised a number of queries regarding the future of high-tech agriculture in relation to governmental and administrative policies adding that the lack of clarity makes it difficult, if not impossible, to attract funds. Meanwhile, a representative from Syngenta Vietnam Co, Ltd also emphasised the need to devise a policy for foreign companies to establish research and development subsidiaries and improve intellectual property laws.

A Vietnam Chamber of Commerce and Industry (VCCI) representativeTran Thi Thanh Tam in turn said Vietnam has signed several free trade agreements (FTAs) which have opened up huge opportunities for farm produce to access foreign markets. However, many of these nations have set up strict requirements and technical barriers in terms of product quality and significantly higher levels of investment are needed to purchase the technology and equipment needed to comply. She underscored the importance of especially encouraging more investment in post-harvest processing as well as hi-tech agriculture.

A representative from the Japan International Cooperation Agency said Vietnam’s farm produce have not entered the Japanese market yet as they have not met requirements of food safety and hygiene, which again is directly related to lack of investment./.

V - Vietnam climbs footwear ladder

VNA - 13/07/2015

Vietnam is now the third largest exporter of footwear in the world, and it can increase its exports further by using opportunities provided by free trade agreements.

Workers produce shoes for export at My Phong Shoe Company Limited in the southern province of Tra Vinh. Viet Nam is currently the third largest exporter of footwear in the world. (Photo: VNA)

Association (Lefaso), said Vietnam was the world's fourth largest footwear producer, after China, India and Brazil, but it had the third largest value of exports, after China and Italy. Vietnamese footwear has been shipped to 50 overseas markets, and the country is the second largest footwear exporter to the United States, the European Union and Japan, Xuan said. Also, Vietnamese handbags have been exported to 40 countries and territories. According to the General Department of Customs, the value of the leather, footwear and handbag industry's exports reached 5.84 billion USD in the first five months this year, up 16.8 percent from the same period last year. The association expected the industry to achieve year-on-year growth of 18 percent in the first half of this year, with total export value reaching 7.15 billion USD - 5.7 billion USD from footwear and 1.45 billion USD from handbags. Xuan said existing and future free trade agreements (FTAs) were expected to have a positive impact on the development of the industry. These agreements include the Trans-Pacific Partnership (TPP) agreement, the Vietnam-European Union FTA, the agreement with the Eurasian Economic Union, and the Association of Southeast Asian Nations Economic Community agreement. When the TPP deal is signed, Vietnam expects import tax rates to drop from between 3.5 percent and 57.4 percent to zero. Xuan said that would be a breakthrough for the industry, enabling it to increase its exports in both volume and value. This year, the FTAs had had no direct impact on the industry's exports, but they had created favourable conditions for the industry to attract investments in production of material and finished products for export, she said. Vietnam needs to develop its production of raw material for the footwear and handbag industry to reduce its dependence on China in this regard, according to Xuan. The industry expects foreign investors to bring production technology to improve the quality of products and upgrade the technology here. The industry and Lefaso would work with the Vietnam Trade Promotion Agency to hold a conference on trade promotion for the leather, footwear and handbag industry on July 15 with the aim of attracting more foreign investors, Xuan said. She noted that some 200 local and foreign companies would take part in the conference to promote cooperation in investment, production and trade. The participants would discuss opportunities and challenges faced by the local footwear and handbag industry in production and export, as well as ways to improve the competitiveness of the industry by 2020, the Thoi bao Tai chinh online reported.

V - Vietnam tablet market soars Inside Retail Asia , July 7, 2015

The rapid growth of the Vietnam tablet market is boosting the potential of eCommerce in the fast-maturing Southeast Asian nation.

New figures from GfK this week show the growing number of lower priced entry level tablets has seen a double digit growth in sales in first five months of this year – or 149,000 extra units – to reach 582,000.

GfK projects the media tablet market will achieve even higher sales in the third quarter of the year with the anticipated back to school promotions, with annual sales estimated to hit 1.9 million for the year. Yet the total amount spent on tablets has fallen by about five per cent, due to the greater contribution of those lower value media tablet models.

“Over three in every four (76 per cent) media tablets sold so far in 2015 cost less than US$300, as compared to just one in two (50 per cent) in 2014; signifying a strong shift in market trends towards the low-end segment,” observed Tran Khoa Van, MD of GfK in Vietnam. “The result of more media tablets being sold at lower prices brought about a shrinkage in the total market value in spite of strong consumer demand for the gadget.”

On the other hand, high-end media tablets priced above US$500 which accounted for 29 per cent of the total market’s sales volume had reduced by half to make up only 14 per cent share in the first five months of this year. A similar trend is seen in the US$300-500 segment, where its 22 per cent share last year was reduced to 11 per cent in 2015.

According to GfK findings, the average price of media tablets declined by 30 per cent from US$367 last year to US$259 this year. Although the number of brands catering to the Vietnamese market reduced from 56 to 49, the remaining players have introduced 20 more new models – from 278 to 298. Another emerging trend is the rising popularity of smaller screen sized media tablets, specifically the 7.9” and below segment. Over seven in 10 (71 per cent) of media tablets purchased this year were of this size, up from its 62 per cent market share last year. On the other hand, it was the 9-10” segment which reported a dwindled market share by half – from 26 to 13 per cent. “Price erosion is a natural progression of a tech product’s lifecycle and the average price of media tablets will definitely be drifting down further from the low of US$250 reported in the latest tracked month of May,” said Van.

M - KFC becomes first US fast-food chain in Myanmar

Eleven Myanmar. 3.7.2015

KFC – an American fast food restaurant best-known for its fried chicken – opened its first outlet in Myanmar yesterday.

“Yoma Strategic Holding Limited (Yoma) and KFC signed a bilateral agreement in October 2014, making Yoma the country’s first authorised franchiser for KFC,” said Yoma spokesperson Ann-mon San.

JR Ching, the managing director of KFC Myanmar, said the company is planning to open more restaurants across the country this year. "Myanmar can now taste KFC," he said. The new KFC outlet is located on Bogyoke Aung San Street in downtown Yangon. Ching said future locations will be in busy areas.

V - Prospects of Vietnam Leather & Footwear Export with FTAs

Dr Nguyen Minh Phong, July 02, 2015

The free trade agreements (FTAs) that Vietnam has signed, or will sign, will reach most of Vietnam’s major leather and footwear export markets. That has created two-side effects on Vietnam’s export prospects. Confident on larger playgrounds The leather and footwear industry accounts for 8-10 percent of Vietnam’s exports and is the third largest export after garment - textile and telephone and parts. The sector’s export turnover was US$8.764 billion in 2012, US$8.4 billion in 2013 and US$10.3 billion in 2014. In 2015, the value is estimated to climb to US$13.5 - 14 billion and the localisation rate will reach 65-70 percent, a very high rate, as leather and footwear exporters have now signed contracts for full operations until the end of the third or even the fourth quarter of the year. Its export prices to the US, Japan, Australia and South America are stable or even slightly higher due to higher minimum wage increase in Vietnam.

Vietnam is the fourth largest footwear producer in the world by output and the third largest exporter by value after China and Italy. With about 10 percent market of global market share, Vietnam ranks second to China by market share, also in three largest markets of the US, the European Union (EU) and Japan. Vietnam’s leather and footwear products are now present in 45 countries, mainly the US (earning US$3.3 billion in 2014, up 26.9 percent year on year), the EU (US$3.6 billion, up 24.1 percent), Japan (US$533 million), China and South Korea. The US imports 98 percent of sneakers for its domestic demand, mainly from China and Vietnam. According to the Footwear Distributors and Retailers of America (FDRA), Vietnam’s footwear shipments to the US have increased 20-21 percent annually on average since 2001. Currently, with about 10 percent of footwear market share in the US, Vietnam stood behind China with 80 percent of market share and before Indonesia with 4 percent, Italy with 0.8 percent and India with 0.7 percent. Vietnam’s footwear market share in the US is projected to climb to 12 percent in 2018. According to the FDRA, the competitiveness of Vietnam’s exported footwear is potentially positive thanks to economic, monetary, political and social stability, numerous human resources, cheap and skilled labour, a golden-age population with 42.1 percent of labour force aged under 25, and a weekly working time of 48 hours (compared with 40 hours in China). Vietnam is taking the wave of leather and footwear restructuring in the region. Vietnam is being chosen by Japan as a production base, with its footwear output increased from 27 percent in 2010 to 30 percent in 2013. Nike, the largest shoemaker in the US, produces 42 percent of its products in Vietnam in 2013, compared with just 30 percent in China and 25 percent in Indonesia. In the coming time, Vietnam will have more footwear producers than the current 550. Large-scale footwear producers (currently accounting for 20 percent of businesses, mainly foreign-led, and 75 percent of export value) will have greater opportunities as they can form closed production chains. The signing and enforcement FTAs with South Korea, the Customs Union of Russia - Belarus - Kazakhstan, blueprint FTAs with the EU and TPP and the planned formation of the ASEAN Economic Community in late 2015 will open up new export opportunities for the Vietnamese footwear industry thanks to the rapid reduction of import tariffs to 0-5 percent (with 95-97 percent of tariff lines affected), convenient access to technologies and reduced import input costs. According to specialists, if the FTA with the EU is signed, Vietnam’s export tariffs from Vietnam into the EU will be slashed from current 12.4 percent to 0 percent. When the TPP is inked, the tax reduction even more dramatic, from 14.3 percent to 0 percent for most of Vietnam's footwear exports to the US. Only 17-19 categories of sensitive shoes will take a longer time for tax reduction like protective shoes and boots. Additionally, Vietnam’s footwear will also have more advantages when it has been granted EU’s generalised scheme of preferences (GSP) tax since early 2014 in this market. Meanwhile, Vietnam’s footwear industry is still a beneficiary of EU assistances like the Multilateral Trade Assistance Project (MUTRAP) with EUR1.7 billion, Unido, Switch- Asia, CBI Project on capacity building for staffs of the Trade Promotion Association. The expansion into a market with the least barriers is an opportunity for Vietnam to boost exports to 27 EU member countries with a population of 499 million people, with a strong purchasing power and high per capita income. ASEAN will become a potential consumer and production market with 615 million people, young workers and low-paid labour. Vietnam will be provided with an opportunity to deeply involve into international value-added fashion chains. In ASEAN, Thailand, Vietnam, Indonesia and Malaysia have developed footwear industries and have a lot of similarities. But, compared with the other three countries, Vietnam holds many competitive advantages in workmanship and labour costs and thus has greater chances to expand into the ASEAN Economic Community (AEC). Besides, Vietnam has the opportunity to cooperate with ASEAN countries to develop raw material sources. Cooperation among countries will help reduce investment rates, produce and supply in a large quantity, reduce imported raw materials, and enhance added value of products. Particularly, as AEC countries make footwear for export, they will be able to form a stable supply source and maintain market shares in major export markets such as the US, the EU and Japan. Entering into FTAs, Vietnam also has more chance to upgrade its machinery and equipment, attract investment capital for the leather and footwear sector, and create a strong infrastructure foundation for the leather and footwear sector to expand its access to time-honoured high-grade shoe technologies, strengthen the linkage of businesses based on supply chain model, help businesses more easily approach partner nations and take part in global value chains. More new momentum needed However, FTA "playgrounds" also place new requirements for exports in general and footwear in particular, especially requirements on product quality, nationally branded products, global

competitiveness, trade dispute settlement, global market information support and domestic market development. Stricter FTA requirements on quality and technical standards pose enormous pressures on Vietnam’s footwear businesses to develop technological infrastructure, modernise machinery and equipment and train technical and managerial workforce, comply with commitments to intellectual property, consumer protection, small and medium enterprises, skilled labour, capital and financing; and reduce costs and improve product quality beyond technical barriers and customer requirements. Materials make up for 68-75 percent of footwear price value. However, leather and footwear businesses of Vietnam only take on outsourcing and take part in only some stages of global footwear value chains; thus, the localisation rate reaches just 40-45 percent. They have to import the most important materials like leather, leatherette, canvas uppers, PVC plastic, PU paint, fabrics and glues, while depending on contractors from input materials to design, marketing and branding. As a result, Vietnamese firms find it hard to build up their own brand names. Reliance on foreign materials reduces the added value of exports. In the 2009-2013 period, although domestic production capacity reached 350 million sq ft a year, nearly trebling the output in 2006. 60 percent was allocated to export production but this was only enough for 40 percent of export production demand. In 2015, the leather output is hoped to reach 700-750 million sqft and will increase in the following years. Without proper investment for expansion or upgrading, Vietnam’s leather production output to export demand will decline. Leather and footwear businesses are standing before growing pressures and demands for setting up leather and footwear industrial parks with standard environmental remedy and wastewater treatment facilities and building material zones when more FTAs take effect. To sharpen competitive edges and win competition, the leather and footwear industry must increase effective and well-prepared investments for marketing, designing, product development and market development; and enhance corporate social responsibility and environmental protection towards cleaner production and green sustainable development. With 20 years of successful experience, a team of over 550 producers, and 700,000 workers (75 percent are female), the leather and footwear industry hopes to have a decree on supporting industry development where necessary tax incentives (corporate income tax, import tax, value added tax), infrastructure, credit access and SME development support will be increased. By 2020, Vietnam will produce 1.69 billion pairs of shoes, 311 million backpacks and handbags, 63 million tonnes of hard skin, and earn US$24.5 billion from leather and footwear exports.

V - ys Coffee set for Vietnam debut

Inside Retail Asia, July 2, 2015

Hollys Coffee, the Korean cafe chain with a distinctive Parisian decor, will open its first outlet in Vietnam on July 9.

The flagship store will be located in Ho Chi Minh City and will be the first of three to be trading in Vietnam by the year’s end.

Hollys Coffee’s local franchise partner is TNC Holdings, which recently won the local franchise rights for Cold Stone Creamery ice cream cafe chain. Director of franchising with TNC, Vercy Luu, told Inside Retail Asia the first two Cold Stone Creamery stores will open this calendar year. As previously reported, TNC plans 30 Cold Stone stores in Vietnam, the first in Ho Chi Minh City.

TNC also has the Incito Coffee franchise and operates five cafes in Ho Chi Minh City and Vietnam’s capital Hanoi. And it operates two Mizuchi Japanese hot pot restaurants in Hanoi, with plans to open five in Ho Chi Minh City over the next six months. TNC has a vision to be one of the top 10 consumer and retail companies in Vietnam, grossing US$1 billion by 2020.

“Cold Stone Creamery is a premium American ice cream concept and the product will be very inviting to the Vietnamese people,” Phan Duc Binh, CEO of TNC, said at the time of the awarding of the Cold Stone rights.

TNC specialises in branding, distribution and manufacturing of fast moving consumer goods, including beverages, specifically coffee and tea, and personal care products. TNC also owns retail brands and franchises, including convenience stores, supermarkets and F&B chains.

V - Plentiful opportunities in paper packaging industry VietNamNet Bridge - 02/07/2015

Three major foreign investors poured capital into paper-packaging projects in the second quarter of the year. Existing paper plants, both domestic and foreign invested, have been scaling up their production.

Thai SCG’s Q1 finance report showed that Vina Kraft (VKPC), a joint venture between Siam Kraft Industry, a subsidiary of SCG, and Japanese Rengo Company Ltd, plans to spend VND2.75 trillion to increase its production capacity by twofold from the current 243,500 tons per annum. Siam Kraft Industry holds 70 percent of capital in the joint venture. Kan Trakulhoon, president and CEO of SCG, said the expansion aims to increase the production capacity to satisfy the increasingly high market demand in Vietnam. The majority of the demand has been fed by imports. With the total investment capital of VND6.1 trillion, SCG believes VKPC would become the largest paper packaging manufacturer with 90 percent of its output to be consumed in Vietnam. Prior to that, in March 2015, Lee & Man, a subsidiary of Lee & Man Paper Hong Kong, started construction of a $1.2 billion paper and pulp plant in Phu Huu A Industrial Park in Hau Giang province.The plant is expected to become operational in the first phase of the project, capitalized at $350 million, by the end of the year, to churn out 600,000 tons of paper a year. Meanwhile, Nine Dragons Paper, the Chinese paper manufacturer, which holds 60 percent of stakes in Cheng Yang Company Ltd, announced its plan to relocate machines and equipment from China to Vietnam to help Cheng Yang Vietnam raise its capacity from 100,000 tons per annum to 500,000. Cao Tien Vi, general director of the Sai Gon Paper JSC, a 100 percent Vietnamese owned, noted that the VKPC production expansion is foreseeable because the manufacturer has completed the first phase of the project and it has been running at full capacity for the last two years. Vi said when Vietnam joins the ASEAN Economic Community and integrates more deeply into the world, it will receive more and more paper manufacturers from different countries and territories. However, Vi, the owner of the paper manufacturing company which holds 10 percent of the market share, is not worried about SCG’s expansion. He thinks the expansion is good news, because this would allow Vietnamese companies reduce the imports of alternative materials. A report from Rong Viet Securities Company shows that there is not much competition in the paper packaging industry. Domestic production can only satisfy 76 percent of domestic demand, which means that the market is still large enough for more manufacturers. While foreign invested enterprises focus on making high-end products, Vietnamese target the lower-cost market segment.

M - Myanmar’s Accelerating Automotive Aftermarket Growth

Neli Lazarova, 2 July, 2015

A car service centre in Yangon.

Myanmar's automotive aftermarket is undergoing an impressive growth phase following the ease of car import regulations after decades of restrictions. Demands for spare parts and after sales services are on the rise as the car circulation is dominated by second-hand units, with more than 20 Asian brands ruling the automotive aftermarket.

In 2012, all Myanmar citizens were allowed to import cars, which led to rapid increase in car numbers over the recent years. As of May 2014, there were 4,407,741 registered vehicles in the country. However, Myanmar still relies mainly on motorcycles (accounting for 85 percent of total vehicles) for transportation, while cars remain out of reach for majority of the population due to high cost and import tax. Even the Burmese who can afford a car, often choose imported and second-hand vehicles due to lower cost, good quality, and spare parts availability.

The growth of the automotive sector is not the only factor generating the expanding opportunities in the aftermarket. According to a white paper released by Solidiance, an Asia-centric corporate consultancy firm, the dominance of second-hand vehicles leads to greater demand for spare parts and services. Moreover, the extreme climate and poor road conditions wear out automotive parts faster, accelerating vehicle spare parts replacement rates in the country. Today, the majority (79 percent) of Myanmar roads remain unpaved, despite ambitious government plans to upgrade the country’s infrastructure.

Auto aftermarket on the rise, Asian brands driving the wheel

Among automotive spare parts, battery and oil filter register the strongest growth rate in the market, followed by tyres. Leveraging a reputation for quality, Japanese tyres make up 27 percent of the passenger and commercial vehicle market, with Yokohama and Bridgestone as the leading tyre brands. Japanese brands also hold nearly half of Myanmar’s battery market. In comparison, the oil filter market is led by Indonesian, Thai and Chinese brands. Since oil filters are changed more frequently, around 3-4 times a year, car owners tend to opt for the cheaper products.

Japanese brands rule the market due to their “quality at affordable price” perception. However, recently Chinese and Korean brands have started to gain popularity because they offer new vehicles for half the price of new imported Japanese cars. Toyota remains the most popular brand in Myanmar due to its durability, a key customer preference since the country’s infrastructure is still underdeveloped outside major urban areas.

According to Mickael Feige, Partner at Solidiance Thailand, “US and European brands hold a small percentage of the market. Despite their reputation for high quality, Western spare parts remain expensive for the average Burmese consumer.”

Going beyond price

Myanmar remains a price-sensitive market where price remains the first consideration, followed by product quality. Majority of end-users are not knowledgeable about brands and products. Often, they request a product by asking for the price instead of the brand, and they expend extra time and effort to lock in the best deal.

A car service centre manager in Yangon has witnessed this numerous times: “If there is a price difference between tyre and repair in one workshop versus another, end users will often buy the tire from the cheaper workshop and go for repair and maintenance somewhere else despite the inconvenience.”

However, as the economy grows and income levels rise, other factors are coming into play as well. Burmese end-users’ purchasing choices are also driven by the car type they own, the price difference between cheap and branded spare parts, and the period of product usage.

Future outlook and opportunities

Myanmar’s automotive sector is expected to grow at 7.8 percent through 2019, driven by an emerging economy, expanding infrastructure, less stringent regulations, and rising income levels.

The country’s automotive aftermarket is also set for strong growth, tied to increase in vehicle numbers, income per capita, and credit access. Given the low car penetration rate as well as the country’s accelerating development, the future for automotive spare parts looks bright with a projected market size of $80 million by 2017.

In addition, since Myanmar's vehicle market consists mainly of used cars, the demand for spare parts and quality aftersales service will continue to rise as Burmese incomes rise in the coming years. The General Manager of Western Car Showroom in Yangon reiterated this trend, “Burmese car owners are not used to quality aftersales service. Yet, I see growing demand for it and tremendous opportunity as the country opens up further.”

Other opportunities are also available elsewhere, such as garage chains as currently, there are none of them in Myanmar and no regulation constraining it.

V - Fast food giants licking their lips over partnership options

VIR, 06/07/2015

Take-away fast food is booming at the moment as Vietnamese companies team-up with foreign fast food giants to expand their businesses.

Sean T. Ngo, managing director of VF Franchise Consulting, a leading franchising and licensing consulting company, told VIR that by partnering with larger and more experienced food companies in the region, domestic fast food brands were able to expand regionally and internationally, as local companies had the raw materials and the international partners had the global connections.

In a recent partnership of this kind, Vietnammm.com, Vietnam’s leading food delivery website, shook hands with the Philippines’ Jollibee Foods Corporation over delivery services in Vietnam. Accordingly, Vietnamese customers can order Jollibee’s full menu through the Vietnammm.com portal and vice versa. Founded in 2011, Vietnammm.com has over 40,000 order forms every month from over 1,200 restaurants. Last year, the website was acquired by takeaway.com, one of the world’s biggest food delivery websites. The deal will allow Vietnammm.com to take advantage of takeaway.com’s platform which includes iOS, Android, and Windows Phone apps. The acquisition was watched closely by Vietnammm.com’s two most significant rivals, Foodpanda and Eat.vn.

Significantly, Jollibee foods, which is known for its fried chicken, hamburgers, and pizza and pasta restaurants, outsells McDonald’s and KFC in the Philippines. By the end of last year, the company was operating 2,301 restaurants in the Philippines and 612 stores overseas-62 of which are in Vietnam. Ngo added that a few years ago, Jollibee and Highlands Group shook hands as they partnered up to expand the Highland Coffee and Pho 24 brands in the Philippines. The partnership has helped to strengthen both chains in Vietnam, allowing them to expand successfully through a very large and successful F&B partner.

Huy Vietnam, Vietnam’s largest operator of local Vietnamese food restaurant, has recently secured US$15 million in equity financing from private equity firms in Singapore and Hong Kong. Two partners are Singapore-based Templeton Emerging Markets Group and Welkin, a Hong Kong-based private equity firm. According to the information from Huy Vietnam, the Series C round of funding will be used to support the company’s network expansion in Ho Chi Minh City, Hanoi, and other cities in Vietnam. Operating since 2007, Huy Vietnam is one of Vietnam’s first international, professionally managed restaurant companies serving traditional Vietnamese food prepared from family recipes. It already runs over 70 restaurants under the Mon Hue Vietnam, Com Express, and Pho Ong Hung brands, serving affordable and authentic local Vietnamese cuisine. Huy Vietnam plans to continue opening more of these restaurants during the course of 2015. It also intends to expand its geographical footprint to include restaurants in Nha Trang, Hue and Da Lat in the second half of 2015.

Vietnam’s fast food market is expected to grow in revenue to US$670 million by 2015 according to the Business Monitor. This includes both Vietnamese and foreign fast food, shared Ngo. “We are also witnessing a larger group of small Vietnamese brands that are exploring the possibilities of franchising in Vietnam and other regions, beyond the familiar names such as Pho 24, Highlands Coffee, Wrap and Roll and Mon Hue,” added Ngo.

Export-Import V - Footwear exports up 18% in H1 VGP – 20/07/2015 Viet Nam earned more than US$7.35 billion from exporting footwear and handbags in the first half of 2015, a year-on-year increase of 18%, according to the Ministry of Industry and Trade.

Of the figure, the footwear and handbags contributed US$5.9 billion and US$1.45 billion, up 16% and 27% against the same period last year, respectively.

Viet Nam ranked fourth among the largest footwear exporters in terms of quantity (after China, India and Brazil) and took the third position in terms of value (after China and Italia).

The nation has exported footwear to 50 nations, mainly to the US, the EU, Japan and the Republic of Korea, and handbags to 40 ones, around the world.

When the Trans-Pacific Partnership Agreement and Viet Nam-EU Free Trade Agreement are inked, the tariff will be reduced to 0%, which helps increase the competitiveness and raise the export value of Viet Nam’s footwear and handbags.

As these Agreements come into effect, the footwear sector will reach an annual growth from 15-20%. By 2020, the export turnover may attain more than US$20 billion.

V - Shrimp exports to UK show abrupt increase

The UK is the only nation within the Eurozone has experienced a strong growth in shrimp imports from Vietnam, during the first five months of the year.

According to Vietnam Customs, shrimp exports to the UK surged 50.9% to US$36.2 million within the first five months of the year. In May alone, shrimp exports to the UK rose 100%, to US$9.4 million compared to the previous month.

The increase is attributable to Vietnam’s competitive shrimp prices, compared to other nations. In addition, some shrimp types from Thailand have not enjoyed the Generalized System of Preferences (GSP) since 2014, leading to a 20% tax rise. In the first four months, Vietnam’s shrimp exports to the UK grew 16.8% while shrimps imported into the UK from India, Indonesia, Thailand dipped 20%, 30% and 22% respectively.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), British consumers tend to consume aquatic products, especially warm-water shrimp, thus driving shrimp exports the EU and the UK up in the time ahead.

V - Vietnamese exporters should leverage EU trade pact to increase exports to N.Europe

Thoai Tran/Tuoi Tre News, 07/05/2015

Local exporters will earn much more if their products are put on the shelves of retail stores in Northern Europe following the expected signing of a free trade agreement between Vietnam and the European Union (EU) this year, an expert said at a conference in Ho Chi Minh City on Friday.

Once successfully penetrating the Finnish market, and then expanding into other Northern European markets, Vietnamese exporters will generate much higher export revenue than what they can earn in other EU markets, Le Ky Anh, a trade and economic officer at the delegation of the EU to Vietnam, remarked at the “Doing Business with the EU and Finland” conference.

Importers in Northern European countries, including Denmark, Finland, Iceland, Norway, and Sweden, are willing to pay high prices for quality imports, Anh said. The government of Finland has begun funding the FLC14-04 project, which will help Vietnamese enterprises with the export of agricultural and aquatic products to that specific nation and the Northern European region, he said. The FLC14-04 project will be implemented to organize activities to promote the image of Vietnamese goods in those markets and offer Vietnamese firms a chance to get into thecountries, Anh said.

Via the project, the government of Finland, in cooperation with the Vietnam Chamber of Commerce and Industry, has opened many training courses for Vietnamese companies to keep them informed of any market update. Under the project, many study tours for Vietnamese enterprises to survey the Nordic market have been organized, Anh added. The project management unit will post information on their business and capacity on its official website after finding out about potential Vietnamese exporters. The website will help Finnish importers look for information on capable Vietnamese exporters and sign cooperation agreements with them immediately with no more verification needed.

As Vietnam and the EU are complementary economies, the former’s exports to the latter will not be challenged by goods produced by the firms there, Anh said. Vietnam is good at producing and processing agricultural and aquatic products, which are contrary to the Nordic countries which have advantages in machinery and technologies, he elaborated. Moreover, because it is very cold in Northern Europe, most agricultural commodities are imported from abroad. This will be the potential markets for Vietnamese agricultural exporters, Anh asserted.

Vietnam has posted strong growth in exports to the EU market with consistent annual rates of 15-17 percent, he said. Last year, bilateral trade between Vietnam and the EU surpassed US$36 billion and the Southeast Asian country enjoyed a trade surplus of around $19 billion, the trade and economic officer cited official figures.

The EU accounted for 19-20 percent of Vietnam’s exports of key products in 2014, 36 percent of the country’s phone exports, 35 percent of its leather-shoe shipments, and 16.8 percent of its outbound apparel sales. Once the trade pact between Vietnam and the EU is signed this year, the bloc will liberalize 95-97 percent of tariffs on Vietnamese goods and thus local firms should prepare to make the most out of this opportunity, Anh said.

Particular Reports

O - Hong Kong ‘best in the world’

Inside Retail Asia, July 13, 2015

Hong Kong has been ranked the easiest and best place in the world to open a retail business, its economic archrival Singapore ranking right behind.

Retailers in Hong Kong benefit from first rate infrastructure, superior business conditions and a strong economic climate, according to the Arcadis Retail Operation Index released today. Singapore and the United States occupy second and third place in the rankings, while ongoing economic uncertainty in the Eurozone is holding many European nations back.

The index ranks 50 international markets according to the five key factors that retailers look to when choosing where to locate their stores; these include infrastructure quality, consumer demand and ease of establishing a business in the first instance. Overall, the mature Asian markets offer retailers the best conditions with Hong Kong, Singapore and Japan occupying three of the top five positions, places that reflect their burgeoning middle class and governmental willingness to encourage foreign investment. “Furthermore, in environments such as these retailers are able to turn around struggling sales with greater ease, creating a more stable base for investment,” the study concluded.

The Arcadis Retail Operation Index ranks the top 50 international retail markets in the world according to the five key factors that impact business longevity: these are infrastructure (transport and utilities), ease of getting up-and-running (business freedom, supplier quality/quantity and rules on FDI), market demand (disposable income, passenger cars, domestic market size and competitive environment), economic environment (labour cost, inflation and availability of technology) and business environment (trade/labour freedom, freedom from corruption, prevalence of foreign ownership and logistics performance).

“Combining these factors gives a good overall indication of the ease (a high ranking) or difficulty (low ranking) of the viability of large scale retail programmes from a property perspective.”

The worst ranked countries included Vietnam, Indonesia and India, with Egypt, unsurprisingly, ranked worst.

Matt Fletcher, global head of retail at Arcadis, said for retailers with international aspirations, weighing up where, how and when to expand into a new region, country or city is critical if they are to stay ahead of the competition and meet their business objectives. “On a global level, it is the Asian markets of Hong Kong and Singapore that are the stand-out places for retailers due, above all, to the quality of their transport infrastructure, ease of doing business and fewer restrictions on trade. However, increasing operating overheads such as high property costs and softening sales are currently having an impact on financial performance,” he said.

“If a business is going to operate effectively and potentially flourish, it is vital that retailers do their homework. They need to consider data and insight on their prospective markets and consider the varying factors that can impact portfolio success,” said Fletcher.

“For instance, a market that performs well in terms of its business environment allows retailers to rectify struggling sales more easily. This will not only ensure risks are successfully mitigated and managed, but will also lead to higher returns from their investment.”

Hong Kong

Hong Kong sits at the top, with the most advanced infrastructure in the world through world-class air and seaports, state of the art telecommunications and efficient local and regional transportation, while benefiting from stable and efficient business operating conditions and a strong economic climate supported by tourism with access to international and luxury brands at tax free prices. But despite the ranking, Arcadis urges retailers to exercise caution in 2015.

“Economists predict slow growth in retail sales due to a reduction in cross-border tourist numbers and a general slowdown in China, evident from a steady decline in sales volume in 2014 compared to the previous year. In addition, rents have continued to rise to unsustainable levels making portfolio flexibility more important than ever.”

Singapore

Singapore comes second globally as a country with outstanding ease of operations, business and economic environment. The highly successful urban malls have attracted international brands and created a strong platform for retailers to operate successfully. “However, Singapore is constrained by being a small island nation and the significant volume of international brands has largely saturated the market, forcing international brands to explore the suburban retail landscape with mixed results. Whilst recent retail sales have been under pressure and reducing, the overall local economic conditions are still strong.”

China

Elsewhere, despite its economic superpower status, China ranks 27th, reflective of its lower ease of doing business rating and comparably poorer infrastructure. “This is largely due to challenges associated with poorer infrastructure quality in lower-tier cities, as well as a tightening in regulations impacting those operating within the country. Nevertheless, China will surpass the US as the world’s largest retail market within the next three years and, for many, entering the Chinese market will remain a priority despite a recent slowdown in economic growth,” the report said.

C - Mechanized Farming On The Rise

Khmer Times/Igor Kossov, 13 July 2015

A farmer uses a mechanized plough. Photo: Chris Graham

Machines are steadily replacing people in Cambodian agriculture but buyers need more financial and technical support. Labor migration to the cities is making more farmers rely on heavier equipment. The growing pool of buyers mainly consists of middlemen who rent their machines out to farmers on a contract basis. “[Mechanization] is becoming more affordable - labor costs are going up quicker than machinery,” said Philip Charlesworth, director of agriculture at UCA, a farming support business. This increasing demand for equipment is hamstrung by poor access to credit and maintenance. Businesspeople see opportunities in providing both the machines and support services in Cambodia’s agricultural sector.

Labor Scarcity Drives Demand

As more Cambodians move to cities, the pool of available labor is shrinking for farmers, who must increasingly rely on equipment. “People do not have enough labor to work in the field because of the migration [to cities] and because the farmers are getting older and older, so they start using machines instead,” said Sam Vitou, executive director of agricultural support organization CEDAC. According to Mr. Vitou, the number of people who make their primary income from agriculture will fall from over 80 percent today to just 25 percent of the population over next decade.

According to the UN Centre for Sustainable Agricultural Mechanization (UN-CSAM), 73 percent of land preparation such as plowing is currently done with machinery like walk-behind tractors, while the rest is being done using farm animals. Machines also accomplish 70 percent of crop harvesting in the country. On the other hand, almost all sowing, transplanting and fertilizing is done by hand. About 90 percent of weeding is accomplished by hand as well. Nonetheless, equipment use is rising across the board in Cambodia.

Steady Growth

Equipment sales are growing 10 percent each year, according to Mike Quin, Infrastructure Division Manager at RMA Cambodia, which distributes John Deere machinery in the Kingdom. Cambodia’s tractor supply mainly consists of machines from MTZ, Kubota Corporation, Yanar Co Ltd., Mahindra & Mahindra, John Deere and Foton, according to UN-CSAM. Historical sales figures attest to the growth of Cambodian mechanization. According to UN-CSAM, the Kingdom had 3,857 tractors in 2004 and 9,467 in 2013. Power tillers grew from 20,279 units in 2004 to 151,701 units in 2013. Combine harvesters, a more recent development, increased from 947 units in 2010 to 4,580 units in 2013.

Contractors Predominate

Small and medium farmers are still the primary drivers of demand for equipment, according to Philip Charlesworth, the director of agriculture at UCA, a company which rents out machinery and provides advanced farming information. “At the moment, you see a lot of contractors buying equipment and renting it out,” he said. “There is good potential for companies who would organize like that and offer quality services.” Smaller farmers are also upgrading their tools from power tillers to full scale tractors. Some are moving into bigger pieces of land, enough to justify

the costlier equipment purchases. Others are switching from working their own land to buying equipment and contracting out their services for more money.

Land preparation costs between $20 and $50 per hectare, while harvesting can run as high as $120 per hectare, according to CEDAC and private companies. Economic land concessions still buy the bulk of the heaviest equipment like combine harvesters. But Mr. Quin said that in 2015, purchases by small and medium holders outweighed the plantations. "There's been a drop-off on big land concession work coming up - we've seen this year's [sales going to] 70 percent small farmers and 30 percent concessions,” he said. In 2014, the split was closer to 50 percent each.

Financing Challenge

Tractors of about 45-50 horsepower are some of the most demanded pieces of equipment. These are especially popular in the northwestern region, including Pailin, Battambang and Banteay Meanchey, which have large land size per household, according to UN-CSAM.

A new 45-horsepower tractor can run as high as $20,000, according to Mr. Quin, though used varieties cost between $8,000 and $10,000.

Buyers can’t put down that kind of money up front and must rely on financing, identified by businesses and NGOs as a significant obstacle. “Banks are wary of the problem of low profitability – it’s quite risky [to invest in agriculture] said Sam Vongsy, the vice-CEO of the Rural Development Bank.

Microfinance organizations aren’t a big help either – many of them are not interested in doing equipment loans because they have a poor understanding of equipment valuations in case they have to repossess it, according to Mr. Quin.

While RDA has its own financing solutions, some other equipment providers do not. This hampers sales but also creates the opportunity for dedicated financing in the agricultural sector.

Maintenance Woes

Maintenance creates another challenge – Cambodia doesn't have many mechanics qualified to repair agricultural equipment, according to Mr. Quin.

UN-CSAM identifies repair and maintenance as one of the major constraints in the promotion of farm machinery. Repair accounts for over 20 percent of a tractor's annual cost, with only about a quarter of the owners knowing how to properly maintain or repair their machines. This, too, creates a business opportunity. RDA, which sells equipment all over Cambodia, is going to invest more in equipment servicing outlets. “We’re spreading our wings in terms of maintenance outfits,” said Mr. Quin. “We’ve put one maintenance outfit in Kampong Thom and in Takeo, we will have one by the end of July. Next year, we will expand them to a few more locations.”

O - World Bank sees "desirable" slowdown in China Worldbank, 2nd Q. 2015 The economy in China is shifting, industry is giving way to a consumer-driven society. In fact, according to the World Bank over half of China's economic growth by 2017 will come from the services sector. In its report the World Bank also said that gross domestic product (GDP) growth will continue to slow during this transition. In 2014, GDP expanded by the slowest rate since 1990, at just 7.4%. This year, that figure will decline to 7.1% and will even drop further down to 6.9% by 2017. The cooling is desirable, the World Bank said, as it comes after years of immensely fast credit growth which was driven by shadow banking and borrowing. Now, the economy is looking for sustainability in its economy. "Lower growth is consistent with a gradual shift in China's growth model, from manufacturing to services, from investment to consumption, and from exports to domestic spending," wrote Karlis Smits, senior economist and main author of the report.

The past 10 years have seen the services sector gaining share in the economy, going from 48.3% to 41%. This comes on the back of lighter business regulations, as well as the smaller role industrial activity has in the game owing to an excess build-up in capacity and a deceleration in exports. To keep up the momentum, the Bank urged policy makers to focus on financial sector reform. This will only be successful and as effective as it needs to be if it eradicates the distorted incentives and poor governance structures that have affected how financial resources are mobilized and allocated. As now seen, a fundamentally reconfigured role of the state in the financial system is essential to change these incentives and structures.

All Fairs & Exhibitions 2015 in Indochina O - VIETNAM - CAMBODIA - LAOS – MYANMAR Fairs & Exhibitions 2015 Our link http://www.produktionsservice-vietnam.com/Englisch/messen.php shows all trade fairs 2015 in VIETNAM, CAMBODIA, LAOS, MYANMAR with organizer contact datas. V - Leather, footwear products showcased in Ho Chi Minh City NDO, 15/07/2015

NDO/VNA – A wide range of domestic and international leather products and footwear are on display at more than 600 booths in Ho Chi Minh City from July 15-17.

The event features more than 300 exhibitors from 25 nations and territories around the world. (Photo: vtv.vn)

The 2015 Shoes & Leather Vietnam event is being organised for the 17th time by the Vietnam Leather, Footwear and Handbag Association (Lefaso Vietnam).

It features more than 300 exhibitors from 25 nations and territories around the world, including Hong Kong (China), Italy, India, Turkey and Malaysia.

The event is expected to present opportunities for businesses to access advanced technologies, new material sources and export markets, according to the organising board.

V - 346 exhibitors gathers at the 2015 Vietnam MTA Show

The Hanoitimes - 09 Jul 2015, 09:08 346 international companies from 20 nations and territories participated the 2015 Vietnam Metrology, Tools & Automation (MTA) Show, the largest on manufacturing solutions in the country, held in HCM City from July 7-10. The 2015 Vietnam MTA Show features 10 booths from Germany, Singapore, Japan, the Republic of Korea, Taiwan (China), and India. Vietnam confirmed the investment attraction from many famous enterprises worldwide in manufacturing industry. Executive Director of the Japan External Trade Organisation (JETRO) in HCM City Yasuzumi Hirotaka hailed the development and potential of Vietnam’s manufacturing industry. The show offers a chance for businesses to seek the latest services and technologies in precision engineering, machine tools and metalworking. The exhibition showcases state-of-the-art products and machines in metal cutting and shaping and tools for Vietnam’s manufacturing industry.