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Message from the Board of Directors

Dear staff members of Fukken & Minami Consultant Co., Ltd.,

In this message, first of all, BOD would like to share with you about the recent happenings in the world, along with the general situation of Vietnamese economy, and the course that we have to choose to develop our business.

First of all, as you may know through the mass media recently, countries around the world tend to apply the "trade protection" policy, which aims to get more and more benefits to their national economy when implementing trade and foreign policy toward other countries.

The "America First" policy of the United States of America is an example. After the inauguration of President Donald Trump in early 2017, the USA Government began a policy aiming to limit trade deficit against a number of countries, by restraining import from these countries, and requiring these countries to ease their regulations to allow more imports of products and goods from USA. This policy became one of the main causes of the trade war between USA and China since the beginning of 2018.

In addition, in South America, the economy of Venezuela - a wealthy nation at one time in the past due to oil exports - is considered bankrupt. The Venezuelan people are forced to a tough and scarce life, depending on food aid from other countries.

In France, the "yellow vest movement" has attracted many people in Paris and local provinces to join in a protest against the government's tax policy, increase in fuel taxes, etc.

Besides the above economic fluctuations, there were also many remarkable happenings such as the Hong Kong protest against the extradition bill; the wave of people in Central America (Honduras, El Salvador, and Guatemala) trying to cross the territory of Mexico to enter the United States, etc.

Meanwhile, in Vietnam, in 2019, the growth of gross domestic product (GDP) is expected to be at the level of 6.7%. In particular, the value of export of goods to the US market in the first 4 months of 2019 increased nearly 30% compared to the same period in 2018. The value and the number of foreign direct investment (FDI) projects in Vietnam in the beginning of the year were also increased remarkably, showing that foreign investors are looking at Vietnam as an attractive investment alternative to the Chinese market, especially in the areas of manufacturing/ processing, real estate, and retail/ restaurant. In particular, there are a number of foreign investors worrying about the US-China trade war, and trying to relocate manufacturing facilities such as textile factories, etc. from China to Vietnam.

However, in recent years, the projects for infrastructure development, which are considered necessary for Vietnam to maintain the economic growth, are in a state of stalling. As an example, all metro projects in Ho Chi Minh City and Hanoi City are suspended for a number of reasons, including the delay in payment for contractors and construction supervision consultant. A loan agreement to implement the Ben Tre Water Management Project has been signed by representatives of governments of Vietnam and Japan in May 2017, but the project has not been implemented yet. The main reason is attributed to the fact that public debt has nearly reached the ceiling set by the National Assembly (public debt must be under 65% of GDP) along with the complicated budget approval procedures at central and ministerial levels.

The constraint of Vietnam’s public investment budget for socio-economic infrastructure development would be continued in the next few years. Therefore, we should try to expand our scope of activities, and should aim to involve in the projects which are not relying to public investment budget.

Currently, a number of our company staff members in Geotechnical Department are actively working for the projects to construct factories in the industrial parks in Vietnam, and for the infrastructure development projects in other countries (such as Indonesia, Kenya). This shows how serious we are to try to expand our business activities.

In addition, we also need to expand our scope of activities to access to the PPP projects which are financed by public sector and private sector including domestic and foreign investors. This is a fairly new field for us, and we need to gradually get used to these PPP projects. In last year (2018), the Environmental Department had an opportunity to participate in a project in Hanoi to collect information and study about PPP regulations in Vietnam. The Environmental Department will continue to study more about PPP, and will find opportunities to share with you the experiences and knowledge gained.

At the end of this message, the Board of Directors expects that you always make effectively use of your daily time, try to learn, accumulate knowledge in the work, so that the company's intellectual property will be continuously accumulated and become deeper and wider. It is the best way to help our company grow more and more sustainably.


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