BUSINESS IN BRIEF 29/5
Govt: Put BOT power projects on fast track
The Government has called on relevant ministries and agencies to speed up implementation of and negotiations over build-operate-transfer (BOT) power projects to meet rising demand and ensure energy security for the country.
A report of the Government Office said Deputy Prime Minister Trinh Dinh Dung has told ministries and agencies to accelerate the licensing of BOT power projects involving capable investors and at the same time consider invalidating the investment certificates of delayed projects.
Dung has assigned the Ministry of Industry and Trade to cooperate with relevant agencies in finding ways to handle power projects that have fallen behind schedule and take back the licenses of projects whose investors have failed to fulfil their investment commitments in line with the Prime Minister’s instruction specified in the Government Office’s announcement in November 2015.
The ministry is tasked with reviewing the licensed BOT power projects and reporting to the Prime Minister about solutions to deal with delayed ones. Based on demand and the number of power projects in the revised Power Master Zoning Plan VII, the ministry should propose a suitable proportion of BOT power projects in the country’s power structure.
The Government tells the ministry to play a key role in contract negotiations over projects to be implemented under the BOT format and with Government guarantees, and conclusion of talks for power projects Nghi Son 2, Vung Ang 2, Vinh Tan 3 and Van Phong 1 this year.
Meanwhile, the Deputy Prime Minister requests the Ministry of Planning and Investment to work with the Ministry of Industry and Trade over contract negotiations for Government-guaranteed BOT power projects and the issuance of licenses for viable projects.
He also wants close collaboration between the ministries of finance and industry-trade in mapping out an appropriate payment mechanism for the projects under negotiation.
Earlier, the Prime Minister approved the revision of the master zoning plan for national power development in 2011-2020 with a vision towards 2030, which is better known as the Power Master Zoning Plan VII.
To meet increasing demand for electricity in the years to come, the country needs to develop an additional 90,000 MW in output, including 22,000MW from 16 BOT projects. This is why the Government urged ministries and agencies to speed up the implementation of such projects.
The BOT nightmare
Despite high growth, the competitiveness of Vietnam’s economy is still lower than that of others in the Southeast Asian region given a slew of factors, especially exorbitant transportation costs. Transportation costs in Vietnam are among the highest in the region, making local producers less competitive at home and abroad.
There are a lot of reasons for the high transportation costs but one of them is the mushrooming of BOT road toll stations in many parts of the nation. Transporters have complained about all sorts of fees on the road, which have pushed up domestic goods prices and thus eroded the competitiveness of the economy. They say they have to pay the annual road fee while they find themselves besieged by tollgates at the same time.
Bui Danh Lien, chairman of the Hanoi Transport Association, told a seminar in Hanoi last week on toll fees at build-operate-transport road development projects that investors of such projects have the right to recoup their investment capital. But the high concentration of tollgates on certain roads has delivered a blow to transportation firms, manufacturers and the general public.
HCMC now has six toll stations and will build four more in the 2016-2025 period. Moreover, around HCMC area, there will be 10 more. Up in the north, there are four toll stations between Hanoi and neighboring Thai Binh Province.
Take a 42-seat sleep bus for example, Lien says. The bus running from Hanoi to Nghe An through Ben Thuy Bridge will have to pay return toll fees totaling VND24 million a month, plus VND21 million in monthly bus station fees if it makes a round trip a day. He says this is a heavy financial burden because the bus is not always full.
Deputy Minister of Transport Nguyen Hong Truong told the seminar that financial plans for BOT road projects are carefully crafted to ensure the benefits of the investor, the lender bank and the road user.
But Lien said BOT road construction contracts mostly protect the interests of developers. He called for BOT road developers to weigh the interests of individual and corporate road users. Otherwise, the Vietnamese economy will continue lagging behind others in the region.
Dutch company named most sustainable in Vietnam
FrieslandCampina Vietnam best known for its Dutch Lady brand of dairy products received top honours at the second edition of the BeNeLux Business Awards ceremonies held recently at the Novotel Saigon Centre Hotel.
“We are extremely happy with receiving the award for Best Sustainable Company,” said Arnoud van den Berg, managing director at FrieslandCampina Vietnam in accepting the award on behalf of the company.
We have operated in Vietnam for 18 years and during that time we have always took great pride in conducting our business in a socially responsible, sustainable and environmentally friendly manner, said Mr Berg.
Our company has firmly established itself as the top choice for dairy products, providing more than 1.5 billion servings of milk on an annual basis to consumers in Vietnam under trusted brands such as Dutch Lady, YoMost, Friso and Fristi.
The BeNeLux Business Awards are the result of a collaboration between the Dutch Business Association Vietnam and the Belgian - Luxembourg Chamber of Commerce in Vietnam.
Da Nang to host first start-up fair in June
The Da Nang Start-up Fair 2016 will be held on June 18, as part of a plan to make the locality a start-up city, Ly Dinh Quan, Deputy Director of the Entrepreneurship Support Company Ltd., the organiser of the event, told the press on May 26.
The fair, the first of its kind held in the beach city, will see the participation of international partners, investment funds, entrepreneurs, investors, local firms, communication agencies and the start-up community as well as start-up business people from Viet Nam, Germany and Singapore, Quan said.
Within the event, a series of conferences will be held, along with a start-up exhibition. The conferences will discuss the start-up ecosystem and Da Nang 's support policies, along with a dialogue between the government and businesses, partners, investment funds and start-up business people.
Proposals and strategic orientations in developing start-ups in Da Nang and Viet Nam in general are also expected to be gathered during the events.
Meanwhile, the exhibition will draw 26 start-up projects and 9 schools. Eight standout projects will be presented in front of Vietnamese and foreign investors. Two successful start-up projects from Germany and Singapore will also be introduced.
Participants to the fair will also enjoy a city tour to a number of local start-up projects and beauty spots.
Panasonic revamps showroom in Viet Nam
Panasonic Viet Nam on May 26 opened its redesigned corporate showroom, Panasonic Risupia Viet Nam, to celebrate the 10th anniversary of the company's establishment in the country.
The showroom was renovated to showcase the latest Premium Lifestyle solutions and provide a more interactive experience for visitors.
Panasonic's latest technologies, such as "Transparent Screen" – an intelligent glass display that has the ability to project images and information such as news programs and weather data – and the latest audio-visual solutions, are being exhibited at the newly renovated entrance.
On the showroom floor, the company's wide range of products and solutions, from audio-visual equipment to home appliances and beauty products, are showcased to highlight a premium living environment that centers around the concept of "safety, security, comfort, convenience and style," which Panasonic offers its Vietnamese consumers.
Viet Nam is one of the company's strategic markets in Southeast Asia. Panasonic Viet Nam has invested US$243 million and employed more than 7,500 people here over the past decade.
Viet Capital Bank offers SMEs unsecured loans
Viet Capital Bank will provide loans worth VND1 trillion (US$44.8 million) without mortgages to small and medium-sized enterprises.
SMEs and super-small firms in processing, manufacturing, and construction that have been in operation for long, achieved good business growth and satisfy the bank's requirements with regard to payment history are eligible for the loans.
They can borrow up to VND1.5 billion ($67,264) on easy interest terms and also avail many of the bank's services for free.
The loans are available at all the bank's branches around the country.
Made in Thailand Outlet in Hanoi boosts bilateral trade ties
The Made in Thailand Outlet offers a good chance for enterprises from Thailand and Vietnam to expand their trade cooperation, said Trade Counsellor at the Thai Embassy in Vietnam Ponpimon Petcharakul at the opening ceremony of the 2016 outlet in Hanoi on May 26.
As a counselor in charge of trade, she vowed to help popularise Thai products in Vietnam and made-in-Vietnam goods in Thailand.
According to the organising board, this year’s four-day event has attracted 120 Thai businesses showcasing their outstanding products at 150 booths.
The items include food, beverages, household commodities, garment and textiles, jewellery, electrical appliances, health and beauty products, and auto parts.
Statistics from the Vietnamese Ministry of Industry and Trade showed that bilateral trade doubled in the 2011-2015 period.
Thailand is one of the three largest partners of Vietnam in ASEAN. Two-way trade reached 1.6 billion USD in the first two months of 2016.
Exporting produce from Vietnam to RoK
A seminar and business meeting themed "Korean food market access", supporting Vietnamese businesses to boost farm product exports to the Republic of Korea (RoK) market, was held in Hanoi on May 24.
Attending the seminar were 12 RoK food importers, along with Vietnamese businesses and associations.
Ta Hoang Linh, Deputy Director of the Vietnam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade, said that RoK was the third largest trade partner and the fourth biggest export market for Vietnam.
The free trade agreement between Vietnam and RoK (VKFTA) took effect at the end of last year, committing to cut more than 90 percent of tariffs in order to boost opportunities for Vietnamese exports to the country, he said.
The free trade agreement would create new export opportunities for more than 500 Vietnamese products, especially agro-forestry and aquatic products like shrimp, crab and fish. Tropical fruits, garments and textiles, wood and mechanic products would also benefit from the relaxation of tariffs.
Speaking at the seminar, a representative of the RoK in Vietnam said that the Korean market had a population of nearly 50 million people and a high food consumption. Food trade between Vietnam and RoK reached 12 million USD in 2015. The two countries are also planning to increase trade value in the sector to 20 million USD by 2020.
Kim Nam Hyong, a representative from Amoje Corporation, said at the seminar that the current trend in the RoK food market is that of packed food products, which were quick and convenient for consumers to use.
The target market for these products was not only housewives but also restaurants as they could facilitate many dishes quickly with low numbers of staff, which saves on labour cost, he added. Kim also advised Vietnamese businesses to research the changing tastes of Korean thoroughly to avoid guarantee successful market penetration.
The representative also emphasised food safety as a top priority, to match the country's high standard of imports, equivalent to that of the US and Japan.
Packaging would also need to be attractive, conveying enough information about the product to customers.
Talking about the consumption trends in RoK, Woo Deok Kwan from CJ Foods said that Korean customers cared about healthy products, therefore choosing packed food, which could be cooked at home.
Simplification in cooking was a current trend in RoK, and Vietnamese businesses should understand this when thinking about exporting their own products, Woo advised.
RoK has a variety of pre-packaged products, however there are limited numbers of products containing fruit and vegetables, he said, therefore the country expects to import frozen fruit from Vietnam. These were products which are available in abundance in Vietnam, making it an attractive prospect for RoK businesses.
Ra Joohee, from Pulmuone Co, Ltd advised Vietnamese businesses to focus on tropical fruits when exporting to RoK.
"We expect to import more pineapple and mango from Vietnam as these products have higher competitive advantages compared to these of other countries", she said.
We also wanted to import frozen rambutan, passion fruit and selected dried fruit from Vietnam, she said.
Vietnam needed to diversify its products, as well as paying more attention to a product's appearance and packaging, she suggested.
A representative from a Vietnamese food exporter shared with media that the RoK standard was rather strict towards farm products as it was a country producing for its citizen. "This is a compulsory barrier that Vietnamese exporters have to overcome if they want to access the RoK food market".
Exporting produce from VN to Korea
A seminar and business meeting themed "Korean food market access", supporting Vietnamese businesses to boost farm product exports to the South Korean market, was held in Ha Noi on Tuesday.
Attending the seminar were 12 South Korean food importers, along with Vietnamese businesses and associations.
Ta Hoang Linh, deputy director of the Viet Nam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade, said that South Korea was the third largest trade partner and the fourth biggest export market for Viet Nam.
The free trade agreement between Viet Nam and South Korea (VKFTA) took effect at the end of last year, committing to cut more than 90 per cent of tariffs in order to boost opportunities for Vietnamese exports to the country, he said.
The free trade agreement would create new export opportunities for more than 500 Vietnamese products, especially agro-forestry and aquatic products like shrimp, crab and fish. Tropical fruits, garments and textiles, wood and mechanic products would also benefit from the relaxation of tariffs.
Speaking at the seminar, a representative of the Korean Embassy in Viet Nam said that the Korean market had a population of nearly 50 million people and a high food consumption. Food trade between Viet Nam and South Korea reached US$12 million in 2015. The two countries are also planning to increase trade value in the sector to $20 million by 2020.
Kim Nam Hyong, a representative from Amoje Corporation, said at the seminar that the current trend in the South Korean food market is that of packed food products, which were quick and convenient for consumers to use.
The target market for these products was not only housewives but also restaurants as they could facilitate many dishes quickly with low numbers of staff, which saves on labour cost, he added. Kim also advised Vietnamese businesses to research the changing tastes of South Korean thoroughly to avoid guarantee successful market penetration.
The representative also emphasised food safety as a top priority, to match the country's high standard of imports, equivalent to that of the US and Japan.
Packaging would also need to be attractive, conveying enough information about the product to customers.
Talking about the consumption trends in Korea, Woo Deok Kwan from CJ Foods said that Korean customers cared about healthy products, therefore choosing packed food, which could be cooked at home.
Simplification in cooking was a current trend in Korea, and Vietnamese businesses should understand this when thinking about exporting their own products, Woo advised.
Korea has a variety of pre-packaged products, however there are limited numbers of products containing fruit and vegetables, he said, therefore the country expects to import frozen fruit from Viet Nam. These were products which are available in abundance in Viet Nam, making it an attractive prospect for Korean businesses.
Ra Joohee, from Pulmuone Co, Ltd advised Vietnamese businesses to focus on tropical fruits when exporting to Korea.
"We expect to import more pineapple and mango from Viet Nam as these products have higher competitive advantages compared to these of other countries", she said.
We also wanted to import frozen rambutan, passion fruit and selected dried fruit from Viet Nam, she said.
Viet Nam needed to diversify its products, as well as paying more attention to a product's appearance and packaging, she suggested.
A representative from a Vietnamese food exporter shared with media that the Korean standard was rather strict towards farm products as it was a country producing for its citizen. "This is a compulsory barrier that Vietnamese exporters have to overcome if they want to access the Korean food market".
CPI up 0.54% in May over April
The consumer price index (CPI) in May rose 0.54 per cent over the last month, the General Statistics Office (GSO) reported yesterday.
The figure represents a year-on-year increase of 2.28 per cent, the GSO said, adding that the CPI in the first five months of this year surged by 1.59 per cent on an annual basis.
Among the 11 groups of products and services, transportation services posted the highest growth in May of 2.39 per cent, mainly driven by the price hike of petrol and oil, which was adjusted on April 20 and May 5.
Increases were seen in building materials (0.88 per cent); restaurant and catering services (0.36 per cent); cultural, entertainment and tourism services (0.34 per cent); beverages and tobacco (0.11 per cent); and household appliances (0.09 per cent).
Deputy head of the GSO's Price Statistics Department, Do Thi Ngoc, said the May CPI rise was attributed to the price hike in food due to the drought and saltwater intrusion in the Mekong Delta and mass fish deaths in the central region.
Demand for food was also higher than the previous month because of the long holiday in the beginning of May.
That the demand for travel surged in the holiday also made price of domestic tours higher, up 1.11 per cent, and the price of tours abroad increased 1.01 per cent, while hotel prices went up 0.53 per cent.
The price of health insurance services hiked 4.72 per cent as the State rose the minimum wage from VND1.15 million per month to VND1.21 million per month from May 1.
The Thoi bao Kinh doanh (Business Times) quoted Nguyen Duc Do, deputy head of the Institute of Economics and Finance, as saying that this year's inflation would be lower because the increase of the index in the past months was mainly due to the adjustment of health care service prices.
Therefore, if excluding the factor of price adjustment, inflation would be maintained at a low level, he added.
HCM City's May consumer price index increased by 0.82 percent compared to April, representing a year-on-year increase of 1.6 percent, according to the municipal's General Statistics Office (GSO).
The office also announced yesterday that the city's average price index in the first five months of this year rose by 0.86 percent on an annual basis.
Rises were seen in housing, electricity, water, fuel and building materials (1.86 per cent); post and telecommunications (0.4 per cent); food and catering services (0.35 per cent); goods and other services (0.24 per cent); and culture and entertainment (0.18 per cent).
Trade surplus at $1.23 billion
As at May 15 total export and import turnover reached $117.02 billion for the year, an increase of 0.8 per cent year-on-year, with a trade surplus of $1.23 billion, Vietnam Customs reported.
In the first half of May exports were valued at $6.02 billion, down 14.5 per cent compared to the second half of April, mainly due to lower turnover in textiles, telephones, vehicles and spare parts, computers, and seafood.
Export turnover year-to-date increase by 5.4 per cent year-on-year, to $59.13 billion.
Import turnover in the first half of May was $6.59 billion, down 3.5 per cent compared to the second half of April, with the year-to-date figure being $57.89 billion, down 3.5 per cent year-on-year.
Import turnover declined primarily because of fewer imports of vehicles and spare parts, petroleum, computers, and telephones.
The export value of the FDI sector in the first half of May reached $4.24 billion, down 13.8 per cent (or $677 million) against the second half of April.
To May 15 export turnover by the FDI sector stood at $41.45 billion, an increase of 9 per cent year-on-year and accounting for 70.1 per cent of total export turnover.
The sector’s imports totaled $34.29 billion, down $1.61 billion or 4.5 per cent compared to the same period last year.
Siemens strengthens global branding
Siemens is strengthening its global positioning with new branding, whose central component is “Ingenuity for Life”, to coincide with the 200th birthday of its founder, Werner von Siemens.
“Ingenuity for Life” sums up what Siemens has stood for since its founder Mr. von Siemens produced his trailblazing inventions: timeless engineering expertise, social values, and genius.
It appears under the Siemens logo, whose design and colors remain unchanged. “For me, ‘ingenuity’ means engineering expertise, entrepreneurial spirit, the power of innovation and the willingness to give our best for society on a daily basis,” said Mr. Joe Kaeser, Siemens President and CEO. “‘For Life’ means that, in every generation, we at Siemens create long-term value, for individual customers, employees and citizens as well as for society as a whole.”
With the strengthening of its global branding and positioning, Siemens will be emphasizing its focus on electrification, automation and digitalization.
“Our competencies in electrification, automation and digitalization support Vietnam in building up basic infrastructure and turning the megacities of Hanoi and Ho Chi Minh City into world-class cities,” said Dr. Thai Lai Pham, Siemens Vietnam President and CEO. “Together with our customers we are proud to make the lives of the Vietnamese people better. This is ‘Ingenuity for Life’.”
Growing expectations for cashew exports to US
The US press spotlight on President Barack Obama’s visit to Vietnam will help raise Vietnamese cashew shipments to the US, the Vietnam Cashew Association (VINACAS) said on May 23.
The US is currently the largest cashew nut importer of Vietnam, accounting for more than 50 percent of total market share. Vietnamese enterprises sold over 28,500 tonnes of cashew to the US and earned total revenue of more than 220 million USD in the first four months of this year, up 8.8 percent in quantity and 18.6 percent in value year-on-year.
Most cashew exports are trademarked by American enterprises, however their Vietnamese origin will be highlighted to US consumers thanks to media coverage during Obama’s visit to Vietnam, VINACAS Vice President and Secretary General Dang Hoang Giang noted.
During a working visit to Vietnam in early April this year, Secretary of the California Department of Food and Agriculture Karen Ross said that cashew exports will have great potential for growth in the US market after the Trans-Pacific Partnership (TPP) deal takes effect.
Vietnamese exports of cashew to US market will thrive as the products will take advantage of the TPP deal, Giang said.
To enhance cashew shipments to the US, VINACAS will organise a trade promotion programme when attending the International Nut and Dried Fruit Congress in San Diego, California at the end of this month.
Experts say that the Vietnamese cashew sector must focus on food safety in production and processing as this will decide whether the Vietnamese nuts can gain a stable foothold in the US market.
Vietnam Airlines targets 20 mln passengers in 2016
Shareholders of Vietnam Airlines have agreed on its business plan for 2016 in which the carrier targets carrying about 20.1 million passengers.
The goal was approved at the airline’s annual shareholders meeting held in Hanoi on May 23, a year after it officially became a joint stock company.
The firm also aims to generate 77.8 trillion VND (3.5 billion USD) in revenue and 2.3 trillion VND (103 million USD) in pre-tax profit this year.
It has earmarked 9.9 trillion VND (444 million USD) for investment with the emphasis on projects that fit its long-term goals and help improve efficiency.
At the meeting, Pham Ngoc Minh was elected as Chairman of the Board of Directors, replacing Pham Viet Thanh who was appointed Secretary of the Central Businesses Bloc’s Party Committee in April.
Duong Tri Thanh was elected as a member of the Board of Directors and the firm’s General Director.
Pham Ngoc Minh was Vietnam Airlines General Director from December 2007 while Duong Tri Thanh was deputy general director since October 2008.
During the first quarter of 2016, Vietnam Airlines operated 34,500 domestic and international flights with more than 4.6 million passengers on board, reflecting a year-on-year increase of 9.3 percent and 11.6 percent, respectively.
The firm earned over 19 trillion VND (852 million USD) in revenue and 1.07 trillion VND (48 million USD) in pre-tax profit, up 13.3 percent and 32.5 percent, respectively, compared to the same period last year.
The airline has been negotiating with ANA Holdings group of Japan, with ANA set to purchase an 8.77 percent stake for about 108 million USD. The deal will be concluded this month.-
HCM City gets hop-on hop-off tourist bus service
Hop-on hop-off, a city bus service that is popular in many places around the world, has made its debut in Ho Chi Minh City after a six-month trial period.
With a ticket that costs VND199,000 (US$8.8) and is valid for 24 hours, tourists can get off at any destination around the downtown area like Ben Thanh Market and Independence Palace, according to operator Anh Viet Media TV & Tourist.
A tour of the Cho Lon area, a.k.a Chinatown, in District 5, including Thien Hau Pagoda and Binh Tay Market, costs another VND100,000 (US$4.4) if bought in combination or VND149,000 if bought alone.
The buses, which ply from 8 a.m. to 8:30 p.m., are equipped with Wi-Fi and audio guides in English, French, Korean and Spanish. Maps of their routes can be found here.
Hop-on hop-off is the third tourist bus service to be launched in the city since March after two routes linking downtown with Tan Son Nhat International Airport.
Ho Chi Minh City expects to receive 5.1 million international tourists this year, more than 10% higher than last year.
HCM City’s CPI increases 0.82 ptc in May
Ho Chi Minh City’s May consumer price index (CPI) increased by 0.82 percent compared to April, the municipal’s General Statistics Office (GSO) announced on May 24.
The figure represents a year-on-year increase of 1.6 percent, the office said, adding that the average price index in the first five months of this year rose by 0.86 percent on an annual basis.
Among the 11 groups of products and services, transportation services posted the highest growth of 2.66 percent, mainly driven by the price hike in petrol and oil.
Rises were seen in housing, electricity, water, fuel and building materials (1.86 percent), post and telecommunications (0.4 percent), food and catering services (0.35 percent), goods and other services (0.24 percent), culture and entertainment (0.18 percent), and equipment and house appliances (0.08 percent), among others.
On the other hand, prices of some groups of products in May reduced against the previous month, including beverages and cigarettes (0.05 percent) while pharmaceutical products and health services remained stable.
Besides this, domestic gold prices surged 0.84 percent and the USD price fell 0.02 percent compared April.
Loans aimed for social housing
Hundreds of trillions of dong in preferential loans will be provided for social housing development, according to Chairman of the Vietnam Real Estate Association Nguyen Tran Nam.
Nam said at an online forum hosted by Dien Dan Doanh Nghiep (Business Forum) newspaper on May 18 that commercial joint stock banks with controlling State stake-holdings would have to spend 3 percent of their total outstanding loans for developers and buyers of social housing projects.
This 3 percent would be equivalent to some 300-400 trillion VND (13.4-17.9 billion USD), Nam said, adding that there would be no deadline for this loan package.
Initial preparations are underway, with the central bank appointing four commercial banks, Vietcombank, Vietinbank, BIDV and Agribank, to provide preferential loans for developers and buyers of social housing projects, as well as the issuance of Circular 25/2015/TT-NHNN late last year on providing preferential loans for enforcing social housing development policies.
However, commercial joint stock banks have not started putting this into practice as they are still disbursing the remainder of the 30 trillion VND housing stimulus package, which was approved for a deadline extension until all the money is disbursed, Nam said.
Another source of capital for housing development for low-income earners will come from the Vietnam Bank for Social Policies, Nam said, adding that the construction ministry was co-operating with the bank to develop this loan package.
“Home-seekers should not be worried,” Nam said.
Pham Minh Tuan, Deputy Director of Hai Phat Invest, in charge of social housing project The Vestas, said capital for social housing development was very important, and he urged the Government to introduce timely measures in this regard.
Hanoi’s five-month industrial production surges 7.7 percent
The industrial production index (IPI) of Hanoi in the first five months of this year expanded 7.7 percent year-on-year, the municipal People’s Committee reported.
In May alone, the index rose by 6.1 percent compared to the previous month, and 8.9 percent year-on-year.
In the five-month period, furniture manufacturing recorded the highest growth of 139.6 percent. It was followed by the production of clothes and food processing with respective increases of 35.5 percent and 22.8 percent.
The surging index was also contributed by a significant growth in the manufacturing of transport means (21.2 percent), metal (18.6 percent) and medicine (17.2 percent).
Based on the satisfactory IPI released recently, the municipal People’s Committee has forecast that the city’s industrial production is likely to reach stable growth in the near future.
The city has devised strategies with the aim of promoting growth in many sectors. It has also simplified administrative procedures, and developed preferential policies to attract more investment, with the hope to make the city’s potential market attractive to large investors.
An investment promotion conference is scheduled to be held early next month, towards calling for more investment in the city.
Swiss-owned company unveils distribution centre in Da Nang
DKSH Vietnam Co. Ltd, a market expansion services provider, put into use a modern distribution centre in the central city of Da Nang on May 23.
The centre’s location in Da Nang is said to be conducive to distributing consumer goods and health care products to all localities in the central region.
The facility is equipped with modern equipment and satisfies strict international standards.
Jorge Martin-Martinez, DKSH Vietnam General Director, said his company has been present in Vietnam for 125 years. It now has three distribution centres in the entrepôt cities of Hanoi and Da Nang, and the southern province of Binh Duong.
The Da Nang centre with better equipment and technologies will promote the firm’s capacity to provide services across Vietnam, he added.
DKSH, founded in 1865, currently owns 770 business locations in 36 countries – 740 of them in Asia – and 28,300 specialised staff. The Swiss group, based in Zurich, generated net sales of 10.1 billion CHF in 2015.
New grouping to boost UPCoM
The classification of stocks on the Unlisted Public Company Market (UPCoM) will have a positive impact on the stock market, according to experts and analysts.
Under the new classification set by the Ha Noi Stock Exchange (HNX), ‘UPCoM Premium' will include the stocks of firms with good financial health and transparency, while the ‘UPCoM Warning' classification will hold the remaining stocks. Stocks classed as UPCoM Premium will be allowed to indulge in margin trading if they meet the conditions for such trading, as set by the State Securities Commission (SSC).
Bui Nguyen Khoa, BIDV Securities Corporation's head of Macro Economics and Markets Division, said the HNX has created mechanisms to pave the way for a considerable boost in this market.
The margin trading allowed for enhanced liquidity in capital markets and improved the convenience of borrowing capital for the short term, as well as enabling traders and investors to make better use of trading opportunities, and increasing the size of trade and eventually increasing the turnover on the exchanges, he said.
Last year and in the first months of this year, UPCoM has seen more trades and liquidity in quality stock, but not margin trading, even while the demand for margin trading by investors is quite high, Khoa added.
Besides, the loosening of the fluctuation band price from 10 per cent to 15 per cent has helped investors feel more excited to enter the market, and thus liquidity has significantly improved.
"The Premium shares will enjoy many advantages of money flow, price fluctuation and especially liquidity, while investors will be cautioned by the risks of stocks in the ‘Warning' classification", said Nguyen Xuan Binh, deputy head of Bao Viet Securities Corporation's Market Analysis.
Binh added that the UPCoM can divide stocks into two categories. The first group are fluctuating stocks, that includes stocks with sudden information changes, sharply fluctuating prices and newly listed shares for IPOs, which attract investors and speculative money. The second group are basic stable stocks, which have real money flow value from investors or investors with long-term investment strategies.
The UPCoM Premium set, that came into effect from April 26, will include businesses whose shares meet the criteria of financial situation and consciously adhere to disclosure provisions.
Additionally, the criteria for classification of stock as UPCoM Premium includes registered securities trading, which will allow margin trading if they meet the defined conditions in the regulations guide for margin trading of securities by the SSC.
Many market participants evaluate the classification on UPCoM, and this will help investors easily identify investment opportunities and focus on finding quality stocks through the UPCoM Premium set, Binh said.
So far, 300 companies have stock listed on the UPCoM. Many of them are large enterprises with charter capital worth over a trillion dong.
VN property firms get BCI awards
Asia's leading construction solution provider BCI at a ceremony held on Friday in HCM City gave awards to the top 10 Vietnamese architectural firms and property developers.
The portfolios of the architecture firms contain US$3.4 billion worth of property construction, which is expected to start this year. The portfolios of the top developers are worth about $2.8 billion.
The BCI Asia Top 10 Architects for 2016 were given to Alinco Ltd, Archetype Viet Nam Ltd, Baumschlager Eberle Asean Co Ltd, Viet Nam Architectural Design and Consultancy Company, DP Consulting Co Ltd, HTT Group - Ho Thieu Tri Architect & Associates, Junglim Architecture Viet Nam Co Ltd, NQH Architects Co Ltd, Sagen Constructive Design Consultancy JSC and TTA-Partners Construction Architecture JSC.
The BCI Asia Top 10 Developers Awards for 2016 were presented to BRG Group, HBCI, MIK Group Viet Nam Corporation Company Limited, Novaland Investment Group Corporation, Phuc Khang Corporation, Son Kim Land, Sun Group, Tan Hoang Minh Group, TNR Holdings Viet Nam and Vingroup JSC.
The awards aim to encourage socially responsible architecture, and serve as a platform for domestic and international networking by elite architecture firms, property developers, manufacturers, and service providers.
Around 150 architects, designers, senior executives and leading professionals in building and property development industry were presented with the FuturArc Green Leadership Award and FuturArc Prize 2016.
In its seventh year running, the FuturArc Green Leadership Award is given for eight outstanding Green projects in Asian residential architecture, including individual and multiple houses, commercial architecture, institutional architecture and interior architecture, including in Bangladesh, China, Indonesia and Viet Nam.
Five Vietnamese projects have won and two others have been given merit awards.
Currently in its ninth year, Future Prize, Asia's foremost Green building design competition, called for design that showcase the effects of eco-architecture. There were six winning designs for projects.
A merit award went to Vietnamese Nhu Le and team in the Student Category for their project Cut and Fill Strategy, where they explored the strategy of reusing local resources in water management to achieve a productive and economically efficient landscape in Viet Nam.
Ceremonies for the 12th BCI Asia Top Award were also held in Hong Kong, Indonesia, Malaysia, Philippines, Singapore and Thailand.
Da Nang-Shi Jia Zhuang air route launched
Viet Nam and China launched a direct flight linking Viet Nam's central city of Da Nang and Shi Jia Zhuang, capital of north China's Hebei province, yesterday.
The flight will be operated by an Airbus A321 of Vietnam Airlines, Xinhua quoted the Hebei Airport Management Holding Corporation as saying.
It is scheduled for every Monday, Wednesday and Saturday.
Four more international air routes will be launched starting July to link Shi Jia Zhuang with Nha Trang in Viet Nam, Phuket in Thailand, Vladivostok in Russia, and the US's Saipan island, said the airport company.
MoU on resort expansion signed
A memorandum of understanding between the Asia Coast Development Company Ltd and the Cotec Construction Joint Stock Company (CotecCons) was signed yesterday to co-operate on a US$75 million expansion of the Grand Hồ Tràm Strip’s resort complex.
Signed at an event hosted by the American Chamber of Commerce and Việt Nam Chamber of Commerce and Industry (VCCI), the MoU outlines the construction by CotecCons of a new hotel tower, which will add 559 rooms to the complex, increasing total capacity at the resort to 1,100 rooms.
With the MOU, the project’s total investment will reach $1 billion.
At the signing, Michael Kelly, executive chairman of the Grand Hồ Tràm Strip project, confirmed his commitments to “not only escalating investments in Việt Nam, but also empowering Vietnamese companies and citizens through the Grand Hồ Tràm Strip’s operations, such as our partnerships with CotecCons, Vietjet and our appointment of Vietnamese citizens to senior management positions at our resort.”
This MOU represents another step forward for US-Việt Nam co-operation, and underscores the mutual gains that can be achieved when US and Vietnamese enterprises engage, he said.
A series of agreements and MoUs were also signed during the event. They include:
Lower Mekong Research Collaboration Initiative between the US Embassy to Việt Nam and Cần Thơ University,
- MoU on Climate Change in the Mekong Delta between the US-ASEAN Business Council and People’s Committee of Bến Tre Province,
- MoU between the Việt Nam Oil and Gas Group and Honeywell International Inc
- MoU between Murphy Exploration and Production Company, and Việt Nam Oil and Gas Group,
- First Solar – Thiên Tân Solar Project Agreement,
- USTDA Bạc Liêu Phase III Wind Farm Feasibility Study between Công Lý Construction-Trade-Tourism Company Ltd and the Black and Veatch Energy,
- MoU of Minnesota Biomass Plant between Tín Thành Industrial Electricity and Steam Company Ltd and a subsidiary of Warrior Mfg. LLC,
- Nuclear Safety Training Agreement between Lightbridge Corporation and Việt Nam,
- Agency for Radiation and Nuclear Safety between UPS Việt Nam and AIP Foundation.
One million electronic invoices issued
By May 17, more than one million electronic invoices with validation codes totalling more than VNĐ5.8 trillion were issued by tax authorities.
The total value added tax was worth VNĐ286 billion, the General Department of Taxation reported.
According to Nguyễn Văn Thủy, of the General Department of Taxation, the process to apply a pilot electronic invoice with tax authorities for 200 enterprises in Ha Noi and HCM City has been basically successful. Most of the tax-payers accepted using e-invoices thus bringing practical efficiency and cost savings for businesses.
In HCM City alone, 116 enterprises were approved and in Hà Nội 121 businesses were approved.
Thủy said that the usage of the application of e-invoices with validation code of tax authorities helped accelerate the application of information technology in business management. Thereby, it also helped increase the efficiency of production, business, service quality and the competitiveness of enterprises.
However, the pilot implementation has also encountered some problems. Most of the small and medium-sized enterprises have limited finances, poor managerial skills and obsolete information technology infrastructure. So, the number of enterprises that are capable of meeting conditions for the application of e-invoice remain modest.
Besides, the traditional habits of people and businesses is that they still prefer to use printed invoices when purchasing goods and services. Most of them do not understand the benefit of e-invoices so that they are reluctant to use them.
In addition, the information technology infrastructure of the State-run agencies regarding is still obsolete and lacks investment, thus leading to the limited usage of electronic invoices.
According to the General Department of Taxation, it has set a target of implementing the electronic invoice and electronic invoices with validation code of tax authorities for businesses across the country.
By Decision 1209/QĐ BTC dated June 23, 2015, the Ministry of Finance decided to apply the pilot usage of electronic invoice with validation code of tax authorities for a number of enterprises in HCM City and Hà Nội, and pilot implementation period is from June 2015 to December 2016.
TH Group gets to grips with another dairy plant in Russia
Locally-owned TH Group has begun construction on its $2.7-billion hi-tech concentrated dairy and fresh milk production project in Russia.
The hi-tech dairy plant will be gigantic in scale, and will help establish TH true MILK as a household brand in Russia
In Moscow’s Volokolamsk district last week, the group broke ground on the first stage of the project, worth $500 million. Based in both the Moscow and Kaluga oblasts, the project officially marks the appearance of Vietnam’s largest agricultural and foodstuff project in Russia.
Possessing the TH true MILK brand name, TH Group will build this project with the financial consultancy of BAC A BANK.
This project will be 2.32 times bigger in capital and 3.78 times bigger in area than the group’s existing $1.2 billion, 37,000ha project in the central province of Nghe An’s Nghia Dan district.
The new project, which will cover 140,000 hectares of materials, will be deployed in three stages, until 2026.
The first stage will be focused on constructing three clusters of dairy farms, auxiliary facilities, a cow feed mill, an office area, a workers’ hostel, and a fresh milk processing mill with a daily capacity of 800 tonnes.
This stage is expected to have a herd of 45,000 cattle, of which 21,600 will be earmarked for milking.
It is expected that in mid 2017, the first milk products will be available for marketing.
The second stage will include new clusters of dairy farms, auxiliary facilities, and another fresh milk processing mill with a daily capacity of 1,700 tonnes.
With total investment capital expected to reach $796 million, this stage will likely have 100,000 dairy cows, with 43,200 milked on the group’s 40,000ha facility.
TH Group will build the third stage from 2020-2026, including new clusters of farms, auxiliary facilities, and another large-scale fresh milk processing mill. This stage, expected to cost an investment of $1.59 billion, will cover 80,000ha.
This stage will have 200,000 cows, with 86,400 being milked. This will raise the total number of cattle for the three stages to 350,000 including 151,200 milked.
The colossal fresh milk processing mill will cover 1,000ha including office buildings, warehouses, a workers’ hostel, a sports area, and a commercial display area.
The mill will have a capacity of 3,400 tonnes per day, raising the total daily capacity of the project’s three stages to 5,900 tonnes.
The project, expected to employ 6,000 workers, will use state-of-the-art technology imported from world-famous livestock production technology developers such as Israel’s Afimilk, Germany’s GEA, Sweden’s Delaval, and the US’ BouMatic.
Commending this project while attending the ground breaking ceremony, Prime Minister Nguyen Xuan Phuc said that “This project will significantly help Russia’s milk industry in particular and agricultural sector in general. It is also considered a typical agricultural project in Vietnam and Russia’s co-operation.
“The government will give the most favourable conditions to the project. I do believe that the project will be implemented effectively,” Phuc said.
TH’s chairwoman Thai Huong said that this project was given great support from Russia’s government.
“Russia is reforming its agricultural sector via a series of incentives for investors. And now we are here to help Russia further develop its milk industry. We hope that TH true MILK will become a big brand name in Russia,” she said.
ANZ wins Best Trade Finance Bank and Best Trade Finance Client Solution awards in Vietnam
ANZ has been awarded “Best Trade Finance Bank in Vietnam” and “Best Trade Finance Client Solution in Vietnam” in The Asset’s Triple A Treasury, Trade and Risk Management Awards 2016.
“This year’s awards highlight consistent and prestigious recognition for our Trade Finance capability in Vietnam, as voted by our corporate clients and industry peers ANZ,” said CEO Vietnam, Dennis Hussey. “Our connectivity and commitment to Asia, including Vietnam, is a key competitive advantage and makes us relevant to clients driven by regional trade and capital flows.”
“Our extensive network of trade specialists have adopted a solution-led approach, built close relationships with our customers and really understand their business strategy and needs. The client solution award is a strong proof point and proud achievement for the team,” Aseem Goyal, ANZ Head of Transaction Banking, Vietnam, said.
This year, ANZ was also honoured by The Asset in various product areas and client segments across Australia, Singapore and Cambodia.
The Asset Triple A Treasury, Trade & Risk Management Awards celebrate Asian corporations and banking institutions that have executed the most effective and innovative treasury, cash management, capital and trade finance and risk management solutions in the region. The results are based on the responses of over 700 chief financial officers and treasurers.
ANZ was one of the first foreign banks in Vietnam when it opened in 1993. The ANZ Vietnam franchise supports retail and wealth customers, institutional clients, financial institutions and public sector clients.
In February 2016, ANZ was named “Best Trade Finance Bank” in the World’s Best Trade Finance Providers Awards 2016 by Global Finance magazine. ANZ was named “Best Trade Finance Bank” and “Best Risk Management Bank” in The Asset’s Triple A Treasury, Trade and Risk Management Awards 2015 and has been awarded “Best International Trade Bank in Vietnam” consecutively in recent years by Trade Finance magazine. ANZ has been ranked “Best Foreign FX Provider” in Vietnam for four consecutive years since 2012 by Asiamoney magazine.
Rice exports in Q2 fall
Rice exporters expected to ship 1.5 million tonnes of grain abroad in the second quarter of this year, 100,000 tonnes less than the previous quarter, said the Vietnam Food Association (VFA).
As of May 18, rice exports reached over 2 million tonnes with US$875 million in (free-on-board) FOB value and nearly US$912 million in Cost, Insurance and Freight (CIF) value, up 15% in both volume and value from the same period last year.
The increase was buoyed by the surge gained in the first quarter thanks to several pending purchase orders under government-to-government (G-to-G) contracts with Indonesia, the Philippines and China signed in 2015.
In April, rice exports exceeded 453,000 tonnes, earning US$212 million in FOB value, down 20.5% in volume and 7.5% in FOB value from the previous month.
The figures also presented a drop of over 30% in volume and 21.33% in FOB value compared with the same period last year due to a lack of collective contracts.
VFA forecast rice exports will increase in the second half, mostly in the three key export markets of the Philippines, Indonesia and China and at a higher price.
This increasing trend in price is stemming from falling output due to the impacts of the El Nino phenomena hitting major rice suppliers, namely Thailand, Myanmar, Cambodia, and Vietnam, according to VFA.
DKSH opens distribution centre in central Viet Nam
DKSH, a leading Swiss market expansion services provider, officially put into operation its first international-standard distribution centre in central Viet Nam on May 23.
The centre serves the Central and Central Highlands regions and is located in the Hoa Cam Industrial Zone in Da Nang.
The Da Nang distribution centre, which covers an area of 3,600sq. m.with total investment of VND17 billion (over US$750,000), is DKSH's third-largest international standard distribution centre in Viet Nam after Binh Duong and Ha Noi to serve the country's distribution needs in the central area with high-quality consumer goods and healthcare products.
DKSH has also developed a 1,600sq. m. drugs warehouse, the first of its kind to meet international standards, at the centre for a local pharmaceutical company and includes a cold storage facility for vaccines.
"The opening of DKSH's new Da Nang distribution centre is a significant milestone for DKSH Viet Nam. It allows us to provide a comprehensive, integrated and tailor-made service portfolio along the entire value chain in central Viet Nam," Jorge Martin-Martinez, head of the country's management, said.
"We have been in Viet Nam for more than 125 years and are constantly striving to introduce world-class standards to industries in Viet Nam and to promote the development of local communities," he said.
He added that DKSH had created 3,500 jobs nationwide.
Jorge said the introduction of the Da Nang contribution centre will ensure the smooth and timely distribution of consumer goods and healthcare products all over Viet Nam.
The centre utilises an efficient transport system, including National Highway No. 1, the Da Nang-Quang Ngai Expressway, the Da Nang - Cam Lo Expressway, the economic zones and the existing refinery in Quang Ngai, as well as the proposed ones in Phu Yen and Binh Dinh.
The location also connects the East-West Economic Corridor, which links Myanmar, Thailand, Laos and Viet Nam, and a system of deep sea ports at Tien Sa and Lien Chieu, as well as airports.
Da Nang aims to become a centre of hi-tech industries, logistics services and tourism in central Viet Nam.
Consumer prices edge up slightly in Hanoi this month
Hanoi recorded a slight increase in the consumer price index (CPI) in May compared to the previous month, the municipal Statistics Office said, but it did not provide the exact figure.
The Office said the main reason for this month’s CPI expansion is petrol price hikes.
The global petrol price surge was followed by the augmentation of domestic petrol retail prices. Petrol, diesel and kerosene prices rose by 640, 650 and 550 VND per litre, respectively, on May 5.
As a result, it cost more when buying building materials such as rock, sand and gravel due to higher petrol prices.
Gas retail prices increased by 5,000 – 7,000 VND to 280,000 VND (12.5 USD) – 300,000 VND (13.4 USD) each 12kg cylinder, caused by the growth in global gas prices.
The Office noted that the impacts of El Nino have led to a grain food supply shortage which in turn fueled rice prices in recent months. The forecast prolonged and widespread hot weather will continue affecting rice crops and boosting rice prices.
Shortages of pork and prawn supplies also fanned these commodities’ prices, the Office noted, delineating that traders are buying pigs for export to China, and the new farming of prawn in the northern region has just begun.
Some summer vegetables costs are down by 10 – 30 percent since April. Summer clothing and footwear prices have also risen due to higher demand.
Meanwhile, price declines were recorded in winter vegetables, and iron and steel, the Statistics Office added.
Vietnam, New Zealand’s businesses beef up cooperation
The Hanoi Trade Corporation (Hapro) is looking to expand its business to overseas markets following its successful exports to 60 countries and territories worldwide with a turnover of 200 million USD.
Representing of the leading producer and exporter of Vietnamese handicrafts farm produce expressed the intension during a recent fact-finding trip and meetings with business partners in New Zealand’s capital city of Wellington.
On the occasion, a strategic cooperation agreement in supporting each other in market penetration, product supply, services and related activities was signed by Chairman of the Board of Directors Nguyen Huu Thang and Chairman of the New Zealand Trade Centre (NZTC) Adam Martin.
At a working session with the group’s representatives, Vietnamese Ambassador to New Zealand Nguyen Viet Dung spoke highly of the groups’ efforts in penetrating into the foreign country’s market while pledging to support the group, and Vietnamese businesses at large to intensify two-way trade cooperation, striving to lift the two countries’ bilateral trade turnover to 1.7 billion USD by 2020.
The ambassador cited that 2016 would bring enormous favourable elements to boost exports through a number of signed bilateral and multilateral free trade agreements, especially the Trans-Pacific-Partnership (TPP) agreement.
The group also met with several local import-export companies such as the NZTC, Te Mata Winery, Talleys, Ruther Ford and Meyer in an attempt to boost trade cooperation and enhance both sides’ presence in each other’s market.
Many of the group’s products have received world recognition and brought high export revenue for the company in recent years, including knitwear, farming products, rice, pepper, cashew nut, cassava and handicraft products.