PM sets bar high for shrimp exports
The Ministry of Agriculture and Rural Development (MARD) has set a shrimp export target of US$10 billion by 2030.
However, Prime Minister Nguyễn Xuân Phúc disagreed with this, saying the target is too low and can be reached by 2025.
He went on to say that Việt Nam should become the world’s shrimp production base.
But analysts are divided on this.
Some said reaching $10 billion even in 2025 would be difficult since the agriculture sector faces many challenges like the small, household scale of production, climate change and international integration.
Besides, global seafood exports now are worth around US$130 billion, with shrimp accounting for only around 10 per cent or $13 billion, they said.
According to the Food Agriculture Organisation of the United Nations, the exports are growing at an average rate of around 15 per cent a year.
But in reality, it will not be easy to achieve the 15 per cent growth rate.
Even if it is achieved the global trade in shrimp will only reach $30 billion by 2025.
For Việt Nam to achieve the $10 billion export value by 2025, it would have to both increase shrimp output and value addition of shrimp products.
Experts calculate that if the added value of shrimp is doubled by 2025, the country would earn $6 billion from exports.
For the $4 billion remainder, it would have to produce an additional 1 million tonnes of shrimp.
Last year shrimp exports were worth $3.1 billion. To achieve this, the country had to produce 650,000 tonnes.
Việt Nam might be able to produce an additional 1 million tonnes of shrimp, but almost certainly cannot double value addition because its companies already process shrimp using advanced technology.
Lê Văn Quang, chairman of the Cà Mau-based Minh Phú Seafood JSC, said his company has set a target of exporting $2 billion worth shrimps by 2021.
It is a feasible plan since the company plans to make major changes to production, marketing and technology application, according to the chairman.
PM Phúc said if Minh Phú alone could export $2 billion, Cà Mau Province’s total exports could be $4 billion and the remaining $6 billion could be managed by other provinces and cities, and the $10 billion target could be achieved by 2025.
Some analysts concurred with Phúc, saying Việt Nam’s shrimp industry has all the conditions necessary to develop and become the world’s shrimp production hub.
But they hastened to point out that the country needs to step up investment in infrastructure for shrimp farming and processing to boost productivity as well as value addition.
Now a full 70 per cent of costs in shrimp production goes towards feed and medicines, most of which are imported.
Moreover, processors import 17 per cent of the shrimp they require.
Banks plagued by bad debts, continue to pay low dividends
Trần Thiện Nguyên, who owns shares in a joint stock bank based in HCM City, hopes this year it will pay higher dividends than in previous years.
In recent years banks had been paying very low dividends or even nothing, he said.
As a result, dividend payments have always been a hot topic at lenders’annual shareholders meeting in recent years.
Analysts blame the low dividends on banks’ high bad debt levels and their slow recovery.
The chairman of a HCM City-based bank with a chartered capital of VNĐ5 trillion (US$220 million) said last year pre-tax profits were VNĐ484 billion, or 10 per cent higher than the target.
But it only intends to pay a dividend of around 5 per cent, the same as the 2015 rate.
He explained that the bank had to set aside a considerable amount of money for risk provisioning since the market was still beset by many difficulties.
The banking sector still has non-performing loans worth about VNĐ200 trillion (US$8.8 billion) bought by the Việt Nam Asset Management Company (VAMC) but remaining unresolved.
To settle bad debts, banks are having to use considerable sums of money for their risk provision accounts, which has a big impact on their bottom line.
Eximbank for instance had to set aside VNĐ1.2 trillion last year for provisioning, or 82 per cent of its net interest income. In the event, its pre-tax profit was only VNĐ300 billion.
Therefore, Eximbank’s after-tax profit was only VNĐ202 billion, 70 per cent down from 2015.
VIB Bank’s provisioning was VNĐ532 billion, or 56 per cent of its net interest income.
At the same time banks are also struggling to adopt international bank management standards prescribed under the Basel II accord as required by the central bank.
Basel II requires minimal capital requirements, regulatory supervision and market discipline.
To achieve this goal, banks must increase their capital to meet capital adequacy ratio (CAR) norms. Under Basel II standards, they need to have CAR of around 9 per cent.
State giant BIDV is one of the lenders that would have to mobilise more capital to meet the 9 per cent norm.
Opportunities to invest in agriculture
The Việt Nam Rubber Group (VRG) plans to equitise along with 20 of its subsidiaries in the third quarter of this year.
The valuations of the targeted companies have more or less been completed.
VRG is working with auditing firms to check the legal provisions on valuations, and has outlined concrete plans for converting its member companies into shareholding businesses. The company is also looking for strategic investors after equitisation.
The Việt Nam Southern Food Corporation (Vinafood 2), whose plan to equitise was approved by the Government, is set to equitise in the fourth quarter.
VRG and Vinafood 2 are among several large companies under the agriculture ministry due to go public this year.
Others include Agriculture Materials Company, Vinafood 1, Việt Nam National Coffee Corporation, and Hạ Long Fisheries Company.
In the first quarter the ministry will disinvest from several companies: Việt Nam Fisheries Corporation, Sugar and Sugarcane Company, and Việt Nam Maize Development and Investment Company.
It is planned that around VNĐ2.19 trillion worth of disinvestments will be carried out in the agriculture sector in 2017-20.
Market observers said the fact that several major agricultural companies would be equitised this year and the Government would disinvest from many large companies would provide several opportunities for those who want to invest in the agricultural sector.
By Thiên Lý, VNS
Chủ Nhật, 19 tháng 2, 2017
Mellowing out in the Mekong Delta in Vietnam
A man and woman fish in the Mekong River.
On the peaks of the Himalayan Mountains, springtime warmth melts abodes of snow, sending icy water on its 4,500 kilometer journey south, to the Mekong Delta, known as or the southwestern region of Vietnam. The water brings an abundance of growth, so much so that it’s overflowing with locals set to reap its benefits.
Sitting on a rickety wooden motorboat, my friend Nancy and I playfully splashed water on each other, mesmerized by the vast expanse of green foliage on this riverway, verdant trees shading the path, and floating lotus lily pads resting on the water’s surface. It was like entering a different world, where life moves slower.
It was nice for both of us to escape the hustle and bustle of Ho Chi Minh City. My friend was working for a seafood export company and brought me along to the city of Long Xuyen for a few days. Though my visit to the Mekong back in 2011 was short, the place, people and culture still hold a warm place in my heart.
After our boat trip, Nancy introduced me to some of her friends. They are a generation older than us and I was shocked that I could address them as and even though it’s not socially or culturally correct. They wanted to place importance on the friendship and not the typical hierarchy of seniority inherent in Vietnamese culture. Without a doubt, my new friends were the coolest people ever.
We all spent time together at the beach, coffee shop, restaurants, and spent time in the mountains as well. I loved being with them because of their hospitality and kindness. They would playfully joke around, all smiles, and showed that they cared about our well-being. After being in Ho Chi Minh City, I was accustomed to people who were more business-oriented and said things that they didn’t mean, leaving me wondering about the true message behind their words. However, with Mekong people, the message was straightforward. They are blunt, honest, and say what they mean.
People in this region are more easygoing than people from other regions of Vietnam because of the plentitude of food available. Over 50% of Vietnam’s rice production is from the Mekong Delta region. There are also lots of fish. If a person is hungry, he or she can just catch a fish and eat it. When people don't have to worry about being fed, they relax and take their mind off survival. The weather is hot all year round here so people don't have weather out the cold either. There’s always going to be enough food and warmth.
Though the Mekong Delta region is great to visit, the area has its issues. Those residing in the outskirts of cities like Long Xuyen and Can Tho live in poverty. Women and children are prone to becoming victims of human trafficking.
Pollution is another problem the region faces. One local told me that people used to be able to eat a fish the same day it is caught. Now, because of water toxicity, people put live fish in a bowl of water for a week to purify its flesh before cooking it.
In spite of the problems in the Mekong, I enjoyed my visit and have hope that things will change for the better there. There are several NGOs working towards sustainable farming practices and human trafficking prevention, among other issues.
It’s been several years since I last visited the Mekong. Though I can’t go back and visit often, I aspire to be more like the Mekong people – kind, generous, truthful, genuine, humble, and thankful. Abandon the scarcity mindset and know that there’s always going to be enough to go around. The earth, water, and rivers will provide enough resources for us all. There’s no need to worry or hurry, just lie back in a hammock under a tree and sip on some coconut juice.
TUOI TRE NEWS
U.S. carrier group patrols in tense East Vietnam Sea
Sailors man the rails as the USS Carl Vinson aircraft carrier departs on deployment from Naval Station North Island in Coronado, California, U.S. January 5, 2017.
China's Foreign Ministry on Wednesday warned Washington against challenging its so-called sovereignty in the East Vietnam Sea.
The U.S. navy said the force, including Nimitz-class aircraft carrier USS Carl Vinson, began routine operations in the East Vietnam Sea on Saturday. The announcement was posted on the Vinson's Facebook page.
The strike group's commander, Rear Admiral James Kilby, said that weeks of training in the Pacific had improved the group's effectiveness and readiness.
"We are looking forward to demonstrating those capabilities while building upon existing strong relationships with our allies, partners and friends in the Indo-Asia-Pacific region," he was quoted as saying by the Navy News Service.
Friction between the United States and China over trade and territory under U.S. President Donald Trump has increased concerns that the East Vietnam Sea could become a flashpoint.
China wrapped up its own naval exercises in the East Vietnam Sea on Friday. War games involving its own aircraft carrier have unnerved neighbors with which it has long-running territorial disputes.
China lays claim to almost all of the resource-rich East Vietnam Sea, through which about $5 trillion worth of trade passes each year.
Brunei, Malaysia, the Philippines, Taiwan and Vietnam also claim parts of the waters that command strategic sea lanes and have rich fishing grounds, along with oil and gas deposits.
The United States has criticized Beijing's construction of man-made islands and build-up of military facilities in the sea, and expressed concern they could be used to restrict free movement.
REUTERS/TUOI TRE NEWS
Thứ Bảy, 18 tháng 2, 2017
State monopoly bill deemed “regressive”
The Ministry of Industry and Trade’s new draft decree on goods, services, and localities subject to state monopolies has received barracking from local and international experts.
The Ministry of Industry and Trade (MoIT) has submitted to the government a draft decree on goods, services, and localities subject to state monopolies. The draft includes a controversial list of 20 sectors and professions subject to state monopolies (see box).
Sesto Vecchi, managing partner of the US law firm Russin & Vecchi, questioned the list. “Why is MoIT creating new monopolies? No justification is provided and the justification is not self-evident,” Vecchi told VIR.
He said that even when state participation can be justified, in many cases, the private sector may also contribute in some sectors like irrigation, hydro plants, power distribution, and the importation of cigarettes and cigars.
“The state is only one of several stakeholders. The draft appears regressive as the private sector already participates in some named sectors. Would the monopoly remove their participation?” argued Vecchi.
Tran Trong Binh, senior attorney from Hanoi-based French law firm Audier and Partners, told VIR that such a list is “irrational”, and if it is approved, it will “vex” the market, which is now required to be more transparent, with less state monopolies, especially in the context of Vietnam’s deeper international integration.
“The draft decree has gone against the Constitution adopted in 2013, which states that enterprises are allowed to do business in the sectors not banned by law, and also against the laws on Investment and Enterprises issued in 2015,” Binh said. “While the government is boosting the establishment of start-ups and restructuring state-owned enterprises (SOEs), this new document will undermine the market’s competitiveness by preventing private investors from investing in many sectors on the list.”
The Law on Commerce 2005 stipulates that the government shall specify a list of goods, services, and localities subject to state monopolies. This specific list has taken 12 years to create.
“I don’t understand why the draft decree is now being made. It should have been enacted 12 years ago. And now such a decree is unsuitable to Vietnam’s development,” said Nguyen Dinh Cung, head of the Central Institute for Economic Management. “Who will take responsibility for such a delay?”
According to Cung, many of the sectors prescribed in the list should not be banned and can be engaged in by private firms. The state should hold a monopoly over some sensitive sectors only, such as electricity transmission or railways, so that access to these services can be ensured.
MoIT responded to the negative reactions to the draft decree by stating that the decree is built to fulfil the Law on Commerce 2005, which allows the state to monopolise for a given period of time the trading in a number of goods and services in certain localities in order to protect national interests.
“The list is aimed to help enhance the systemisation and transparency of all goods, services, and geographical areas that are subject to state monopolies in commercial activities in line with Vietnam’s international commitments, and existing policies and regulations,” said an MoIT document released last week to explain the issuance of the draft decree.
“The list also acts as a foundation for state management bodies and other entities in society to perform their supervision over state monopolies in the listed sectors.”
But Dau Anh Tuan, head of Vietnam Chamber of Commerce and Industry’s Legislation Department, said that the reasoning behind MoIT’s enacting the list is “unpersuasive”.
“In the list, it is likely that some sectors will find it difficult to lure the investment of private firms, such as public goods and services,” Tuan said. “Under existing regulations, these sectors are sill engaged in by some private firms as they are not monopolised by the state.”
By Thanh Dat, VIR
Misconduct charges irk trade official
Ho Thi Kim Thoa, Deputy Minister of Industry and Trade, and her family have made headlines for owning significant stakes in Dien Quang JSC – a dominant lighting firm – as investigations began to determine if there are any conflicts of interest.
The matter of transparency in equitised Vietnamese firms has come to the public eye once again as Thoa’s family was found to possess approximately 34 per cent of Dien Quang’s shares. In fact, various members of Thoa’s family have a matrix of intertwined connections with the lighting firm.
First, prior to her appointment as a deputy minister of Industry and Trade in 2010, Thoa had worked at Dien Quang for 18 years and held the highest position of chairwoman and CEO for five years. After leaving Dien Quang to serve as deputy minister, Thoa continued to scoop up shares of the firm throughout the years. She currently owns 4.91 per cent after making multiple purchases.
Thoa’s brother Ho Quynh Hung, meanwhile, became Dien Quang’s chairman and CEO in 2010 when Thoa took office. Hung currently owns 7 per cent of the firm’s shares.
Moreover, Thoa’s daughters and mother also own a substantial amount of the company. Her daughter Nguyen Thai Nga, with 12 per cent ownership, started working for Dien Quang in 2012 and has since been appointed as deputy CEO and board member. This means Nga is reporting directly to her uncle Ho Quynh Hung.
Nguyen Thai Quynh Le, Thoa’s other daughter, is also a shareholder of Dien Quang, owning 6.5 per cent of the company. Tran Thi My Xuan, Thoa’s mother, has purchased 3.83 per cent of the firm thus far.
Another curious family tie is Thoa’s other brother Ho Duc Lam, who is the chairman and CEO of Rang Dong JSC, Dien Quang’s major competitor in the Vietnamese lighting equipment market. In other words, the two brothers run their own lighting firms while their sister has significant shares in one and simultaneously serves in office.
The controversy goes deeper with Ho Duc Dung – Ho Duc Lam’s son and nephew to Thoa and Ho Quynh Hung. In 2014, Dung bought VND25.74 billion ($1.17 million) worth of Dien Quang’s shares, which were put on sale by State Capital Investment Corporation as part of the divestment plan. A year later, Dung sold the entire stake to his uncle Ho Quynh Hung.
The complexity of Thoa’s involvement in Dien Quang, all while serving as a deputy minister, has raised questions of whether she has committed any serious legal infractions.
On February 16, Nguyen Phu Trong, Party General Secretary, ordered relevant authorities to look closely into this issue.
Nguyen Hoang Hai, deputy head of the Vietnamese Financial Investors’ Association, told VIR that there is a legal gap on this matter. He urged the government to investigate whether as a deputy minister, Thoa has launched any regulations in favour of Dien Quang.
“We need to find out if any regulations or laws have given Dien Quang an undeserved edge against its competitors in the market. Moreover, Thoa has been accused of buying Dien Quang’s stocks at low prices to benefit from price surges afterwards. This also requires further investigation,” said Hai.
Truong Thanh Duc, a lawyer at BASICO law firm, noted that public officials are prohibited from setting up or running their own companies in Vietnam. However, there has yet to be any rules on the officials’ share ownership in equitised firms.
“Due to this ambiguity, the deputy minister does not seem to have broken any laws outright. That said, the Ministry of Industry and Trade, where Thoa serves, has direct control over Dien Quang, so there is the possibility of a conflict of interest,” said Duc.
By Phuong Nguyen, VIR
BUSINESS IN BRIEF 18/2
Seafood firms urged to register online
The National Agro-Forestry-Fisheries Quality Assurance Department has urged local seafood producers to apply for e-certificates through the national single window registration system.
The Ministry of Agriculture and Rural Development’s agency, known as NAFIQAD, said in a statement sent to local companies early this week that sea product processing companies must study the single-window regulations published on the websites of the Vietnam National Single Window, the General Customs Department, MARD and NAFIQAD.
In the statement, local seafood producers are required to contact NAFIQAD’s local representative offices so that they will receive instructions to apply for e-certification for sea products via the national single window registration system.
In addition, seafood enterprises need to prepare required procedures such as e-signatures and accounts and register for e-certification of product packages that are being exported to the Republic of Korea (RoK) and China from March 1 onwards. E-certification for seafood exported to other markets such as the EU will be done after the system is completed.
From March 15, NAFIQAD will stop receiving and resolving complaints and appeals over wrong information in the paper certification for sea products that are exported to RoK and China if incorrect information is provided by the companies.
NAFIQAD also asks its local offices to generalise the effectiveness of using the National Single Window registration for all seafood processing and exporting companies in the area.
NAFIQAD on May 16, 2016 asked its local offices in the Cà Mau Province, Ho Chi Minh City and Can Tho City to pilot two new administrative procedures on the national single window registration system in order to grant certifications for local prioritised and non-prioritised seafoods that are exported to China and South Korea.
Since, NAFIQAD’s local offices have processed more than 1,200 registrations on the system and have granted nearly 600 e-certifications to local seafood companies.
However, the number of e-certificates granted to Vietnamese seafood producers on the national single window registration system has been less than expected, because a number of NAFIQAD’s local offices and seafood companies have remained unwilling to use this method.
In the near future, NAFIQAD will stop receiving paper registrations and local companies will only be able to submit their registrations on the national single window system.
Vietnam, Korean businesses explore more investment opportunities
The Vietnam Chamber of Commerce and Industry (VCCI) and Changwon City, the Republic of Korea, have held an exchange meeting to introduce Changwon businesses to Vietnamese partners.
Business people from both sides introduced and studied their investment environment and Vietnam’s policies on hi-tech investment in the 2017-2020 period. They also shared opportunities and challenges and investment and export policies.
Head of the city Department of Economics, Song Seong Jea, introduced the participants to the potential and strength of Changwon – one of economic centres in the RoK and said Korean businesses want to cooperate with Vietnamese partners to further enhance trade and investment ties.
On the occasion, Changwon signed cooperation deals with the VCCI, K-DEC, Small-Medium Business Link (SMBL) and Korean Chamber of Commerce (Korcham).
Central Highlands warns about black pepper coverage expansion
Pepper coverage in the Central Highlands provinces has increased, despite prices falling by 9 - 11 percent over recent time.
According to local pepper farmers, despite pricees dropping to about 115,000 VND per kilogramme, almost half from the same period in 2016, pepper trees are still much more lucrative than coffee, cashew and rubber trees or other crops.
More households in the Central Highlands have replaced their coffee, cashew and rubber trees and crops with pepper in spite of local authorities’ warnings and poor conditions for growing pepper.
Dak Lak had nearly 600 hectares of pepper plant die in 2016 to being grown in unsuitable areas and the use of low-quality pepper varieties, causing huge losses for farmers.
According to the Central Highlands Steering Committee, the uncontrollable expansion of pepper coverage will increase the risk of spreading diseases and killing pepper crops while reducing supply of other products.
The region’s pepper coverage exceeds 71,000 hectares, including 14,400 hectares planted in 2016, much larger than limits set in government plans.
Dak Lak has the largest pepper coverage of more than 27,500 hectares, followed by Dak Nong with nearly 25,000 hectares, and Gia Lai with 15,697 hectares.
Workshop seeks to help women promote startups
A workshop themed “Build-A-Business” was held in Hanoi on February 16, offering an opportunity for female entrepreneurs to learn how to start business and improve the efficiency of their enterprises.
As part of activities in the Women’s Entrepreneurial Center of Resources, Education, Access, and Training for Economic Empowerment (WECREATE) project in Vietnam initiated by the US Department of State, the event was organised by the Vietnam Women Entrepreneurs Council under the Vietnam Chamber of Commerce and Industry and the International Peace and Development Organization of Spain.
Executive Director of WECREATE Vietnam Nguyen Thi Tuyet Minh said that entrepreneurs at the workshop received advice from more than 50 experts working in various fields.
Participants will present their business models and discuss measures to increase revenue after analysing the strengths and weaknesses in their ideas.
Businesswomen need support in the form of knowledge and policies from the State to aid their start-up activities, Minh said.
Sean Griffin, co-founder of WECREATE centres worldwide, presented a discourse on startup thinking at the event, which underlined the importance of effort, determination and experience sharing in the startup process.
WECREATE Vietnam is an entrepreneurial community centre for women interested in starting or expanding a business. It works to arrange training courses and business connection events.
Initiated in October last year, it helped train over 180 entrepreneurs and establish 18 startup groups. It provides tools for women to establish businesses. It plans to train about 1,400 businesswomen, set up 121 new enterprises and create more than 2,200 new jobs.
Frozen shrimp exports to RoK must undergo quarantine
Frozen shrimp exported to the Republic of Korea (RoK) from member countries of the World Trade Organisation (WTO), including Vietnam, must undergo quarantine checks before shipping to the market.
This was stated in new regulations under the country’s law on fishery disease management.
The RoK Embassy in Vietnam has delivered an announcement about these new regulations from the country’s Ministry of Oceans and Fisheries to Vietnam's Ministry of Industry and Trade because Vietnam, a WTO member country, has been exporting shrimp to the RoK for many years.
The RoK has added frozen shrimp products to the list of seafood products that must undergo quarantine checks before entering the country from April 1, 2017. At present, frozen abalone and oyster are required to undergo quarantine checks before being exported to the country.
The RoK has recognised six centres in Vietnam that qualify to undertake quarantine checks on seafood products exported to the country. From April 1, the centres must cooperate with the RoK's relevant offices to implement quarantine checks on Vietnamese frozen shrimp products, chinhphu.vn reported.
Subsequently, the centres should update local seafood exporters with the new regulations to avoid mistakes while exporting seafood to the RoK.
Industrial production in HCMC falls 13% in January
Ho Chi Minh City’s Industrial Development Index fell 13.06 per cent in January compared to December, according to the city’s industry development report for the first month of the year.
Its Industrial Development Index was up 3.82 per cent against January 2016, however, while processing and manufacturing was estimated to have increased 3.45 per cent.
The reason behind the monthly decline is that manufacturing increased sharply in December for the Tet (lunar new year) holidayent i.
Four main industry sectors were down 10 per cent month-on-month but increased 4.3 per cent compared to January 2016. Mechanical manufacturing is estimated to have increased 3 per cent year-on-year.
Vehicle production, especially the production of automobiles, is forecast by leaders of Ho Chi Minh City to grow in 2017, led by two automobile manufacturing enterprises: the Vinh Phat Motor Company, with 9,000 units, and the Daehan Motor Company, with 10,000 units.
Food processing is estimated to have increased 2.88 per cent compared to January 2016. Methods to control food origin make production costs higher but contributes to improving product quality.
Pharmaceuticals, rubber and plastics are estimated to have fallen 2.5 per cent while electricity increased 15 per cent.
Manufacturing technology and computer assembly have grown to meet demand.
The report also noted that the result is stable compared to January 2016.
Conference on developing high-tech agriculture in Hanoi
The Ministry of Agriculture and Rural Development (MARD) and the Hanoi People’s Committee co-organised a conference on February 16 to discuss their co-coordination in developing high-tech agriculture in Hanoi.
The event was attended by Politburo member and Secretary of the Hanoi municipal Party Committee Hoang Trung Hai, members of the Party Central Committee, Minister of Agriculture and Rural Development Nguyen Xuan Cuong; Deputy Secretary of Ha Noi Party Committee Ngo Thi Thanh Hang; Chairman of Hanoi municipal People's Committee Nguyen Duc Chung.
At the working session, the two sides agreed to strongly promote cooperation in the future, especially focus on developing high-tech agriculture, building a large-scale concentrated goods production area, strengthening food safety work and dealing with environmental pollution.
Hanoi proposed to the MARD to create conditions for the city in building big wholesale markets, with an investment of up to US$250 million.
At the event, representatives of the General Department of Irrigation under the Ministry of Agriculture and Rural Development also agreed with a proposal from the municipal People’s Committee to lower the level of the Red River dyke and asked local authorities to plan an itinerary.
Earlier, the municipal People’s Committee has proposed lowering a 1.1-km section of the dyke running from Thang Loi Hotel to An Duong mouth gate in Tay Ho (West Lake) District from 13.4 metres to 12.4 metres.
Connectivity crucial for success of Vietnamese investors abroad
Thorough preparations and good connectivity are among crucial factors for enterprises to be successful when investing in other countries, according to Dau Anh Tuan, head of the Legal Affairs Department at the Vietnam Chamber of Commerce and Industry (VCCI).
Addressing a workshop in Hanoi on February 17 on overseas investment, Tuan said that Vietnamese firms should also fully understand and abide by the law in the host country to ensure their effective investment.
At the same time, they should prepare themselves to deal with changes of policies in the host countries as well as cultural differences, he said.
In the last several years, Vietnam has encouraged business community to invest abroad, especially Laos and Cambodia, he noted, adding that the support of the Government has also been a significant factor contributing to success of Vietnamese firms in expanding their business abroad.
He also stressed the need for investors to share their experience and lessons.
Pham Quang Tu, a representative of Oxfam Vietnam, noted that Vietnam’s investment abroad has increased in both the number of projects and capital volume over the past years.
In 1989-2015, Vietnamese firms invested nearly 21 billion USD in 1,049 projects overseas, he said, adding that Laos and Cambodia are the two traditional markets of Vietnam with highest numbers of investment projects. Mining was the sector that attracted the largest amount of Vietnamese capital, followed by agro-forestry-fisheries, said Tu.
However, Tu cited Oxfam’s survey which showed Vietnamese firms have faced many difficulties related to policy, land, and culture when investing abroad.
He suggested that investors should consult affected community during their operation in other countries, and urged that guidance be issued regarding corporate social responsibility in various fields and stages of investment.
TCIE Vietnam to produce Nissan X-Trail model in Da Nang
TCIE Vietnam will produce the Nissan X-Trail SUV at its Da Nang automobile plant for the local and export markets, company Director Lee Jiunn Shyan said last week.
Lee said he hoped the new model would become a popular brand in the central city. The company, part of Malaysia’s Tan Chong Motor Group, started operations in the Hoa Khanh industrial zone in the city’s Lien Chieu District in 2013 with a total investment of US$40million.
The automobile plant has provided the domestic market with two sedan models – the Nissan Sunny XV automatic transmission and XL manual transmission – with 2,000 units manufactured during the first year. According to TCiE, the Nissan Sunny XL manual transmission model accounted for 60 per cent of sales in 2015.
The factory is the first and only Nissan Sunny assembly plant in central Viet Nam, with an annual capacity of 6,500 vehicles.
The company has invested in new production lines to diversify its car models in 2017. As scheduled, it will operate a new plant of vans and trucks at the Da Nang-based factory from 2017, with a total investment of $15 million. The new automobile plant will produce 500 Nissan vans and 2,000 Nissan trucks per year.
The city’s administration also asked the company to join as a supplier of buses for the city’s Bus Rapid Transit (BRT) development project.
In 2016, the city held a promotion event in Malaysia to call for investors in the fields of automobile electronic equipment, solar power cells, tourism and food processing, in addition to industrial parks.
Malaysia is the eighth biggest investor in Da Nang with 13 foreign direct investment projects worth $102 million.
Nipro starts work on new $300 million facility in Vietnam
Nipro Pharma Corporation – Japan’s biggest prescription drug contract manufacturer – is expanding its operations in Vietnam with a new project worth $300 million in the Saigon Hi-Tech Park (SHTP).
The $300-million plant is meant to increase the company’s capacity to meet the growing demand for medical equipment and build a more stable supply system.
According to Nipro’s announcement, the company targets a consolidated net sales of JPY500 billion ($436 million) by 2020 and JPY1 trillion by 2030. The wholly-owned subsidiary called Nipro Vietnam Co., Ltd. found an ideal location in Ho Chi Minh City, due to its suitability for export-import activities and abundant young workforce.
Nipro Vietnam will be established with a chartered capital of $70 million and is planned to start operation on October 30. As mentioned before, the total investment value will be $300 million including the plant that will look to produce for domestic and international customers.
Information published on Nikkei Asian Review claims that the facility will produce catheters, blood tubing, and other products for dialysis. Previously, Nipro has relied on a Thai subsidiary in this business line, but has decided to sate the growing demand for dialysis treatment products via a new facility in Vietnam.
In late 2016, Nipro got a license for the $300 million project in SHTP, after investing $150 million in the first plant in northern Vietnam.
"The project will focus on research and development (R&D), and medical equipment production. If everything goes smoothly, the project is likely to be kicked off in 2017," said Le Bich Loan, deputy chairwoman of the park’s (SHTP) Management Board.
The Osaka-based company said Monday that within three years, it will build the factory and install production equipment for around $190 million. Output is to begin in October 2018. Plans call for investing another $110 million or so through 2025 in additional capacity at the plant.
The factory will make catheters, blood tubing and other products for dialysis for sale mainly in Japan and to a lesser extent Southeast Asia. Nipro has relied on a Thai subsidiary to produce for these markets.
The new project at SHTP is not Nipro's first project in Vietnam. In 2012, the firm kicked off its first plant in the northern port city of Haiphong, and began operation in 2015. The Japanese firm is also planning to enlarge its production activities in the city in the near future to serve the growing domestic demand.
According to VIR source, the Haiphong site of Nipro Pharma Vietnam has an area of approximately 150,000 square metres, equivalent to 18 football fields. The firm has so far used just 30,000sq.m, and will develop the rest soon for domestic sales.
Nipro made the move following the expansion of the global healthcare group Sanofi and B.Braun, Germany's biggest pharma and medical equipment producer.
In late 2015, Sanofi inaugurated its third plant worth $75 million in Vietnam. Its other two plants, also in Ho Chi Minh City, are now running at maximum capacity, but they have not been able to keep up with demand. Currently, 80 per cent of Sanofi’s products manufactured in Vietnam are sold in the domestic market, and the rest are exported to other Asian countries.
Seeing the potential of the local medical equipment market, B.Braun plans to invest an additional $270 million in some new projects in Vietnam in the next years.
B.Braun Vietnam began operating the first phase of its medical equipment production in Hanoi in 2011 with the total investment capital of $54 million. After three-year operations, the firm's revenue reached $72 million in 2013.
In 2014, the German firm decided to invest an extra $50 million in the second phase of the project to meet local growing demands.
Japanese survey acclaims improving business conditions
The number of profitable-making Japanese firms in Vietnam in 2016 increased 4 per cent from 2015, contributing to make Vietnam an attractive investment destination in the future.
The Hanoi office of the Japan External Trade Organization (JETRO) today announced the result of the annual survey on the business activities of Japan-affiliated companies in Asia and Oceania, including Vietnam in 2016.
The survey conducted from October to November of 2016 covering nearly 11,000 Japanese firms investing in 20 countries and territories, of which 4,642 produced valid answers. In Vietnam, 1,285 Japanese firms joined the survey, of which 639 gave valid answers.
According to the survey, 62.8 per cent of Japanese firms in Vietnam answered that they made a profit in 2016, up 4 per cent from 2015. Specifically, those in the manufacturing sector, the percentage of export processing enterprise (EPE) and non EPE answered to have a profit was 59 per cent and 62 per cent, respectively.
In comparison to other regional nations, this rate in Vietnam was higher than Thailand (61.9 per cent) and Indonesia (59.8 per cent), but lower than the Philippines (77.5 per cent), and China (64.4 per cent).
The survey also showed that 25.1 per cent of Japanese companies in Vietnam said that they incurred a loss in 2016, up 1.1 per cent from 2015.
Regarding the risks in doing business, many Japanese firms (60 per cent) are still worried about risks in doing business in Vietnam, with increasing labour cost, imperfect legal system and unclear performance, underdeveloped infrastructure (electricity, logistics...), and complicated tax procedures being the top concerns.
According to the survey, compared with 2015, Japanese firms' sentiment about risks in doing business in Vietnam improved much in 2016. In particular, 48.4 per cent included imperfect legal system and unclear performance among the risks, down from 63.3 per cent in 2015. Meanwhile, 38.5 per cent complained about complicated tax procedures, down from 53.9 per cent in 2015.
Remarkably, in terms of favourable business climate conditions, Vietnam ranked fourth among 15 countries in political stabilisation with 63.4 per cent. Over 50 per cent of Japanese firms also highlighted Vietnam's market scale and growth, as well as cheap labour cost.
With increased revenue, and growth prospects, 66 per cent of Japanese firms tend to increase their business operations in Vietnam, up from 63.9 per cent in 2015. This rate was higher than the Philippines (54.4 per cent), Indonesia (51.6 per cent), Thailand (50.1 per cent), Malaysia (44.1 per cent) and China (40.1 per cent).
Showa Denko set up new $44 million facility in Vietnam
On February 14, 2017, Japanese Aluminium Can Corporation (SAC), a consolidated subsidiary of Japanese Showa Denko (SDK), announced establishing its second Vietnamese production plant.
To be located in Quang Nam province in Central Vietnam, the facility will produce aluminium cans. According to the company press release, the new production line will have a capacity of 700 million cans a year.
In addition, SAC will install new production lines in its first factory, Hanacans JSC in Bac Ninh province, to bring total production to an annual two billion cans by October 2018. The total investment in the two facilities is expected to be JPY5 billion ($44.04 million).
Mother company SDK’s long-term plans in Vietnam has been stressed in its medium-term business plan “Project 2020+”, where already in 2015 it expressed intent for a capital expansion in its Vietnamese aluminium can factory (Hanacans), aiming to produce for existing and new domestic and international markets.
After the 2014 acquisition of the first production line Hanacans, SAC has been continuously increasing sales, mostly in Northern Vietnam, to the point where operation rates have been pushing the limits of production capacity since the second half of 2016.
Picking Quang Nam province for the new plant aligned comfortably with strategic considerations. On one hand, the Vietnamese government and the provincial authorities offer favourable conditions, due to the initiative to enhance industrial infrastructure and attract businesses to the location.
On the other hand, SAC’s Hanacans has already started expanding shipments to Central Vietnam and establishing a new facility closer to its newest customers is only logical.
Infrastructure boosts Dong Nai property market
The property market is booming in the southern province of Dong Nai of thanks to its excellent infrastructure.
The local Department of Construction said 250 property projects were developed recently, 15 by foreign investors and involving a minimum investment of US$10 million.
Some that had stalled in 2008 have been revived, it said.
Land and ‘ecological’ villas are the most popular developments, especially near the proposed Long Thanh International Airport.
The projects here include Thac Giang Dien (Giang Dien Fall) Resort, Sakura ecological urban area targeted at expats and The ViVa, another urban area.
Tri Thuc Tre newspaper reported that LDG company plans to develop several projects on a combined area of 150ha, including Premium Eco Village, Diamond Valley, EcoLife Village, and expand Suoi Mo Tourism Area.
This year the company will also begin construction of The Viva Square, a shopping mall.
Other developers like Kim Oanh and EximRS plan to continue investing in the province. Last year Kim Oanh developed RichLand City and EximRS Company was a seller of the Long Hung urban area project.
Amata Group is completing procedures for two projects in Long Thanh District.
In Long Hung District, an urban area called Waterfront will be developed jointly by Vietnamese and Singaporean investors at a cost of $750 million.
VinaCapital Group and DIC have resumed the 200ha, $400 million Hoa Sen Dai Phuoc project in Nhon Trach District.
The booming market has also sparked off M&A deals. Thanh Thanh Cong Group for instance has bought a 35 per cent stake in Tin Nghia Company, one of the biggest real estate players in the province.
With the market gathering momentum, prices are rising.
Brokers said the prices of land and houses in Bien Hoa city and the districts of Long Thanh, Nhon Trach and Vinh Cuu have risen by 10-20 per cent depends depending on how close they are to the developing infrastructure.
Developers expect prices in places close to infrastructure construction to keep increasing.
Furthermore, the economy has been recovering for the last two years and bank interest rates are steady, meaning demand for property is rising quickly, they said.
Nguyen Thanh Lam, chairman of the Dong Nai Property Association, said the market in Bien Hoa, Trang Bom, Long Thanh, Nhon Trach would continue to boom through this year.
The Dong Nai property market got a boost with the construction of the HCM City – Long Thanh – Dau Giay Highway, which has cut the distance to the south-eastern provinces.
Besides, National Highway 1A connecting Dong Nai with HCM City has been widened.
In 2015 the market began to react to the information that Long Thanh International Airport will be developed, and it was approved last year.
Last July the HCM City People’s Committee petitioned the Government to build the Cat Lai Bridge 2 between District 2 and Nhon Trach in Dong Nai, which will help reduce the distance by 10km.
Nam Kim JSC implements Microsoft solution to boost business success
Microsoft Vietnam, Nam Kim Steel JSC and Votiva Vietnam- a leading Microsoft Dynamics implementation service provider- today joined “Microsoft Dynamics AX ERP Implementation Kick-off Project” ceremony at Nikko Saigon Hotel.
Microsoft Dynamics is a line of easy-to-use, integrated and adaptable ERP and CRM applications that enable business decision-makers to quickly respond to market shifts, take advantage of new trends, increase their competitive edge and drive business success.
“With the objective to empower the information technology systems of Nam Kim Steel in order to standardise and easily expand our business in the future we chose Microsoft Dynamics AX because this system meets our expectations,” said Pham Manh Hung, general director of Nam Kim Steel.
“This is the first Microsoft Dynamics AX project for steel industry in Vietnam. With our solid experiences in manufacturing segment and more than 10 years of experience in consulting and implementing this solution in Vietnam, we are very confident to deliver this project successfully,” said Dinh Tien Dung, Votiva’s managing partner.
Named among top 50 enterprises in Vietnam, Nam Kim Steel is one of the country’s leading steel producers.
Nam Kim Steel was established in 2002. It is headquartered in An Thanh Production Zone, Thuan An district, Binh Duong province in an area more than 43,000 sq.m.
Nam Kim 2 Steel Factory was located in Dong An 2 Industrial Park, Thu Dau Mot town, Binh Duong province in an area more than 65,000sq.m.
Equipped with six modern production lines, Nam Kim 2 Steel Factory reports a total capacity surpassing 400,000 tonnes per year.
To meet the demand for high quality products in domestic and foreign market, the company has invested in Nam Kim 3 Factory with latest production lines imported from Germany.
When the factory goes into operation, Nam Kim Steel’s capacity will touch 1.2 million tonnes per year.
The core business of Nam Kim Steel is manufacturing and distributing hot-dip 55 per cent zinc-aluminum alloy coated steel sheet in coil (NAKI ZINCALUM), hot-dip zinc coated steel sheet in coil (NAKI ZINC), color coating steel sheet in coil (NAKI COLOR), NAKI PIPE, and other industrial products.
These products are mainly applied in the field of industrial and civil construction, interior – exterior decoration and handicraft goods, electro mechanics manufacturing, precision engineering and stamping steel products.
After six months of system evaluation, analysing and testing of system factors, industry factors between several major ERP systems in the world and implementing partners, based on the criteria of the international norm ISO/IEC 25010, Votiva Vietnam has been chosen by Nam Kim Steel to consult and implement the enterprise management system using Microsoft Dynamics AX platform.
The complete and comprehensive solution Dynamics AX for manufacturing process will support Nam Kim Steel to standardide all business processes and functions including finance, sales, supply chain, production, transportation, human resource management (HRM), enterprise asset management, Business Intelligence (BI), inventory mobility and integration with other operating systems.
The deployment is expected to finish within 10 months and about 250 employees from four production sites will fully operate in one centralised system.
Votiva is appointed by Microsoft as a trustworthy partner to distribute and implement diverse Microsoft Dynamics applications in Vietnam and other South East Asian markets.
FPT's 2016 business results and 2017 plans approved
FPT has announced the approval of resolutions on its business results for 2016 and business plans for 2017 by its Board of Directors.
It also set business strategies for the period from 2017 to 2019.
Total revenue reached VND40.5 trillion ($1.78 billion) last year, an increase of 1.5 per cent compared to 2015.
Pre-tax-profit was VND3.1 trillion ($132.9 million), up 5.7 per cent, and after-tax profit VND2.5 trillion ($110.25 million), up 6 per cent.
FPT set a target of 2016 revenue reaching VND45.796 trillion ($2.01 billion) and pre-tax profit VND3.1 trillion ($136.7 million). Though 2016 revenue was up compared to 2015, it still fell short of targets.
The revenue target for this year is VND 46.6 trillion ($2.05 billion), with pre-tax-profit of VND 3.4 trillion ($149.9 million), increases of 15 per cent and 13 per cent, respectively.
2016 profits from overseas markets grew 40 per cent and contributed one-third of its total profit.
The corporation’s overall goal is to become a global conglomerate and a pioneer in the digital world from 2017 to 2019.
It will issue preferential shares prior to June 30 to employees making noteworthy contributions last year.
Recipients of these preferential shares are staff from Level 5 upwards and a number of officials, with the total amount not to exceed 0.5 per cent of charter capital. The shares cannot be sold for three years.
FPT is expected to finalize its list of shareholders on March 1, for its shareholders meeting on March 31 at the Daewoo Hotel in Hanoi.
Toyota expands network in Vietnam
Toyota Motor Vietnam (TMV) has expanded its dealer/branch network and authorized service stations in the south of Vietnam in order to meet increasing demand and bring better quality products and services to customers.
Toyota Ly Thuong Kiet Co., Ltd - Tay Ninh branch (Toyota Tay Ninh) officially began operations on February 14 at 50 Hoang Le Kha Street, Tay Ninh city, 85 km from Ho Chi Minh City. Toyota Tay Ninh has total investment of VND59 billion ($2.65 million) and sits on an area of 3,655 sq m.
In the first period, it will follow 2S operations (Service and Spare Parts). Beside its favorable location, Toyota Tay Ninh also possesses all the latest standards and requirements of Toyota Global regarding human resources, workshop equipment, and infrastructure.
The dealer has two main areas: a 540 sq m Showroom area and a 2,010 sq m Service & Maintenance workshop and consists of 12 General Repair stalls and 18 Body and Paints stalls. The paint stalls follow Toyota Global standards, with advanced paint mixing technology to ensure environmental friendliness. Toyota Tay Ninh’s service workshop is expected to be able to service approximately 23,000 vehicles a year.
With professionally trained staff and modern infrastructure and facilities following Toyota Global standards, Toyota Tay Ninh will provide high-quality services and spare parts and bring the greatest satisfaction to customers.
Currently, besides its headquarter in northern Vinh Phuc province and branches in Hanoi and Ho Chi Minh City, TMV has 47 dealers/branches and authorized service stations in 22 cities and provinces throughout the country. It has 15 outlets in the north, 22 in the south, and ten in the central region. With the opening of Toyota Tay Ninh, it has strengthened its determination to bring its sales and service network closer to customers.
Mekong accelerators launched
The Mekong Innovative Startup Tourism (MIST) Initiative has announced two new accelerators designed to make it easier and faster for innovative tourism businesses to get underway in Cambodia, Laos, Myanmar, and Vietnam.
The MIST Startup Accelerator will take entries from early stage companies with either travel technology or traditional tourism business plans. The MIST Market Access Accelerator, meanwhile, welcomes applications from mature international tourism startups needing assistance entering the region. Applications for both accelerators will close on March 19.
“The MIST accelerator programs give a leg up to tourism investments that create jobs, help local communities, and support entrepreneurship, especially for women,” said Mr. Dominic Mellor, senior Asian Development Bank economist and head of the Mekong Business Initiative.
Applicants must demonstrate how they will create jobs, generate a positive community impact, and contribute to sustainable tourism growth in Cambodia, Laos, Myanmar, and Vietnam.
Founders accepted into the MIST Startup Accelerator will attend mini bootcamps to further develop their business plans. The top business plans for each country market will win MIST Innovation Grants, with the best overall receiving $10,000 and the three runners-up receiving $7,000.
MIST Market Access Accelerator participants will join familiarization tours of relevant Mekong Region markets. Through these tours, they will receive coaching, custom market insights, and introductions to supplier networks and relevant stakeholders.
Participants in both MIST accelerators will pitch their plans to investors, global acceleration programs, and tourism leaders at the Mekong Tourism Forum held in June in Luang Prabang, Laos, and the APEC Summit in November in Da Nang. In-country teams will provide additional advisory services tailored to participants’ business needs.
“The Great Mekong Sub-region is among the fastest growing tourism destinations on earth,” said Jens Thraenhart, Executive Director of the Mekong Tourism Coordinating Office. “Startups can disrupt traditional practices to adapt to changing consumer behaviors, but let’s also encourage responsible innovation that enhances the region’s appeal for future generations.”
MIST is a joint venture between the Mekong Tourism Coordinating Office and the Mekong Business Initiative. It receives regional funding and advisory and technical support from the Asian Development Bank (ADB), the Australian Government, Amadeus Next, the Pacific Asia Travel Association, and Village Capital. It has been endorsed by young entrepreneur associations and startup groups in Cambodia, Laos, Myanmar, and Vietnam.
MBI is an advisory facility that promotes private sector development in Cambodia, Laos, Myanmar, and Vietnam. It fosters the development of the innovation ecosystems by supporting business advocacy, alternative finance, and innovation. It is supported by the Asian Development Bank and the Australian Government.
HCMC, Taichung join hands to lure tourists
Travel firms in Taichung (Taiwan) and HCMC have signed agreements to promote tourist attractions, build tourism products and assign staff to support each other in an effort to lure travelers visiting the two destinations.
Speaking to the Daily on the sidelines of a signing ceremony in HCMC on February 13 Nguyen Thi Khanh, vice chairwoman of the HCMC Tourism Association, said this cooperation is meaningful as there are detailed plans to boost tourism growth in both sides.
She said the association wants to draw on experience from Taichung in product development and organization of events to lure travelers.
According to the association, around 330,000 Taiwanese visited HCMC and the number of HCMC travelers to Taiwan was estimated at 20,000 last year.
Taiwan has emerged as a tourist attraction to Vietnamese in the past two years. The number of Vietnamese visitors to Taiwan is small but it is increasing strongly compared to other nations like South Korea and Japan. Prices of package tours are much lower than in previous years.
Taichung City’s Tourism Office told the signing ceremony on February 13 that the city expects Vietnamese travelers to this city would be equivalent to half of the Taiwanese visitors to HCMC.
A Taichung-based enterprise told the Daily that it is expecting an increase in the number of Vietnamese arrivals and that it is working on plans to provide new products for these customers.
David Wang, director of sales at China Airlines’ branch in Vietnam, said the carrier is operating 21 weekly flights from HCMC to Taipei and Taichung in coordination with Vietnam Airlines.
China Airlines plans to increase flights to Taipei and launch the HCMC-Kaohsiung service in the coming time.
PM okays strong tourism policy for Quang Ninh
Prime Minister Nguyen Xuan Phuc has approved many policy measures for Quang Ninh Province to attract more tourists, including schemes to allow locals to enter a casino there, develop Van Don airport into an international one, and establish a tourist police team on a trial basis.
A recent announcement issued by the Government Office highlights such measures by the Prime Minister following a meeting between the Government and Quang Ninh authorities on December 22.
The announcement does not specify when locals can entertain themselves at Van Don Casino, nor the schedules for establishing the tourist police team and upgrading the airport.
At the meeting, the Prime Minister also agreed that Quang Ninh can execute many other economic and tourist policies.
Regarding the investment and selection of investors for the service, tourism and casino complex at Van Don economic zone, PM Phuc suggested that the province and relevant agencies jointly work to finish investment procedures and assessment as stipulated.
On the scheme to establish Van Don Economic-Administrative Zone, PM Phuc assigned the Ministry of Planning and Investment and relevant agencies to draft regulations to govern this, and submit the draft to the Government at the monthly Cabinet meeting in May 2017. In addition, he agreed to hand over the land to the investors to upgrade Van Don Airport into an international one under the build-operate-transfer (BOT) format.
Last year, Quang Ninh welcomed 8.3 million visitors, up 7% against 2015, with 3.5 million being foreigners. Its tourist revenue exceeded VND13 trillion, up 23%.
In the master tourism development plan until 2020 with a vision to 2030, Quang Ninh targets to become an international tourist center and a national tourist hub.
The province expects to lure 10.5 million visitors by 2020, including four million foreigners, and earn total revenue of VND30 trillion.
FPT opens Vietnam’s biggest software export center
Vietnam’s software giant FPT Software has inaugurated its F-Ville 2 software village at Hoa Lac High-Tech Park in Hanoi.
Together with F-Ville 1 which has been operational since 2013, FPT Software’s working place has become Vietnam’s biggest software export center with 5,000 workers, said an FPT representative. The company looks to turn this center into a global hub of digital transformation services.
Truong Gia Binh, chairman of FPT Group, said his company will invest in education and infrastructure to back up the development of this center, Vietnam News Agency reports.
F-Ville 2 is part of the F-Ville project licensed in 2012 with a total floor area of 28,000 square meters, supplying working space for 3,000 people. F-Ville 1 supplies jobs for 2,000 workers.
The software company said 5,000 workers at F-Ville together with IT workers at FPT Software in Japan, Germany, France, Slovakia, Singapore and South Korea will research and develop projects for the Japanese market.
For 2017, FPT Software aims for revenue of US$300 million, up 30% from the previous year, and continues to develop digital transformation.
In 2017-2020, FPT Software will need an additional 20,000 workers at all positions of checkers, programmers, engineers, translators and project administrators.
Japan is always the most important market for FPT Software as the company fetched revenue of US$100 million from this market in 2016. In 2017, FPT Software aims to be among the top 50 enterprises in information technology services in Japan.
FPT Japan is expected to contribute half of the group’s US$1 billion revenue in 2020.
Government approves EVN financial management mechanism
The Government has issued Decree 10/2017/ND-CP on a financial management mechanism for Vietnam Electricity Group (EVN), the Government said on its news website.
According to the decree, EVN’s capital sources include State money, the firm’s mobilized capital and other sources of funding raised in line with the prevailing regulations.
EVN is allowed to use State capital and other financing sources for its operations in accordance with the prevalent rules. The enterprise must use capital efficiently and inform the State and the Ministry of Finance of its capital use, losses, solvency issues and other financial matters.
EVN is permitted to raise capital from domestic and foreign organizations and individuals to fund its business plans and take responsibility for the use and repayment of loans, if any.
The company must ensure that liabilities do not exceed its equity by over three times as mentioned in its quarterly and annual financial reports.
EVN’s capital mobilization channels include bond sales and loans from credit institutions, financial organizations, individuals, non-corporate entities and employees.
The decree says EVN is disallowed to raise money to invest in sectors like securities, banking, insurance, investment fund, real estate and finance.
According to the decree, EVN can invest in business sectors that are stipulated in EVN’s operation charter but its investment must be in accordance with the prevailing regulations and ensure efficiency.
EVN is banned from receiving capital contributions from its subsidiaries and other third-tier offshoots. The firm’s overseas investments must be approved in accordance with the law.
Lending to household businesses as usual
Individuals in search of loans for family-run business and production activities, if meeting the conditions set out by banks, can get credit without having to upgrade their operations into firms as required by new legislation, the central bank said.
In line with the 2015 Civil Code that stipulates participants in civil relations are legal entities and individuals only, Circular 39/2016/TT-NHNN specifies that borrowers from credit institutions are legal entities and individuals, says the website of the central bank.
In other words, those who are not legal entities (households and cooperatives) are not eligible for bank loans. In case they are in need of loans for business activities, individuals may take out loans to meet the capital requirements of their own, of the business households, the production establishments or the private companies which they own.
Talking to the Daily, the deputy general director of a HCMC-based bank that has launched several credit packages for traders at markets remarked the provisions of Circular 39 clearly defined the borrowers: individuals and legal entities. This does not make any difference from before, with just more specific words written on paper added.
“So far, we have been lending to traders at markets as individuals, not as household businesses or organizations. It is because household businesses are a virtual name, whereas a specific person must assume the responsibility,” he said.
Individuals can still get loans for production and business. Depending on the value of the loan, collateral may vary, he noted.
As for interest rates, this is an economic relationship between the lender and the borrower, he noted.
Loans for corporate clients do not necessarily enjoy a lower interest rate than individuals. Interest rates depend on banks, market demand, risk or loan size.
Hoang Thi Van, owner of a stone jewelry manufacturing facility in HCMC’s District 12, said she borrowed VND100 million from a bank a year ago for production.
This loan was borrowed as a personal loan, not one for a household, with Van’s house used as collateral. The interest rate for the purpose of production is lower than that for business and even lower than consumption.
Lawyer Truong Thanh Duc, chairman of Basico Law Firm, said households, household businesses or cooperatives are a virtual entity, essentially an individual or a group of ones, which has been removed from the 2015 Civil Code.
It is a right move that Circular 39 excludes “households” from the list of borrowers, Duc said. This is just a change of form, while the essence remains the same.
Households and household businesses shall operate as one or several individuals, with their owners no longer the default representatives.