BUSINESS NEWS 2/3
Opportunity arises for orange exports to Indonesia
Indonesia will become an important market for Vietnamese orange exporters as Indonesian oranges have fallen out of favour in the domestic market, according to the Vietnam Trade Office in Indonesia.
Indonesian oranges are less sweet and their skins are paler compared with foreign oranges, the office said.
In addition, imported oranges are sold at the competitive price of 28,000 rupiahs (2.09 USD) per kilogramme while consumers have to pay 24,000 rupiahs (1.79 USD) for one kilogramme of domestic oranges.
Vietnamese orange exporters were recommended to research exporting to Indonesia.
Vietnam’s total fruit and vegetables export value reached 2.4 billion USD in 2016. The value is expected to increase to 3 billion USD this year.
Vietnamese fruits and vegetables have been exported to 60 countries and territories worldwide. Indonesia is among major importers of Vietnamese fruits and vegetables.
Bao Viet signs co-operation agreement with SeABank
Bao Viet Insurance Corporation (Bao Viet) and the Southeast Asia Commercial Joint Stock Bank (SeABank) signed a comprehensive co-operation agreement in Ha Noi on Wednesday.
Leaders of the bank and the corporation said the agreement, which was signed by Viet Nam’s two leading financial institutions, aimed at strengthening the partnership and making the most of the two parties’ advantages, experience and professional capacity.
Under the agreement, the two sides will implement insurance partnership programmes, prioritising the use their products among customers while enhancing cross-selling products and services and developing co-operation in marketing.
Also under the deal, the firms will soon introduce SeACar Care, an integrated package comprising of SeaBank’s lending services applicable for auto products, along with Bao Viet’s insurance services to provide customers with a new financing insurance solution.
In 2016, Bảo Việt saw a growth rate of above 12 per cent against the same period of 2015. Its 2016 revenue was estimated to reach VND6.8 trillion (US$297 million), accounting for nearly 20 per cent of the total insurance market share.
SeABank is currently a strategic partner providing financial, banking and lending services for many leading auto brands, such as Mercedes-Benz, Thaco Truong Hai, Hyundai Thanh Cong and Kia, as well as Mazda and Toyota.
HMD launches new Nokia phones
HMD Global, the home of Nokia phones, late last week unveiled a new generation of Nokia smartphones including the new Nokia 6, Nokia 5 and Nokia 3 in Spain.
Nokia 6 delivers performance and immersive entertainment in a premium and extremely robust design, while Nokia 5 is an elegant smartphone that fits perfectly in your hand. The Nokia 3 has unprecedented quality at an affordable price point.
The new range of Nokia smartphones all run Android™ Nougat and offer a pure, secure and up-to-date experience and will all feature Google Assistant.
The company also announced the return of a modern classic, the iconic Nokia 3310, reborn with a modern twist on design.
The families of products demonstrate a belief that every consumer should have access to premium quality, not just those with high-end flagship devices.
The company also announced the Nokia 3310 – a modern classic reborn. It is a head-turning modern twist on one of the best-selling feature phones of all time.
Boasting an incredible 22-hour talk-time and month-long stand-by, the Nokia 3310’s fresh, colourful and modern design brings it up to date.
The Nokia 3310 is available in four distinctive colours – warm red and yellow, both with a gloss finish, and dark blue and grey, both with a matte finish.
The Nokia 3310 will sell at an average global retail price of 49 euros.
March gas price down
From Wednesday, cooking gas price is down by VND4,500 (US$0.2) per 12kg canister compared with February 2017, distributors and retailers in HCM City said.
Accordingly, the retail price for end consumers from large companies, such as PetroVietnam Gas JSC, Liquefied Gas Company Limited Vietnam, Saigon Petro Co Ltd. and Vietnam National Petroleum Group, will fluctuate at some VND330,000 to VND340,000 per 12kg canister.
According to distributors, the reason for a drop in domestic March gas price is the recent announcement of a decrease in world gas price in March, down by $15 per tonne to $540 per tonne compared with February 2017.
To ensure consumers benefit and market regulations are followed, domestic businesses have adjusted the gas price in line with the decrease in world gas price.
The new price will take effect on Wednesday.
Distributors, retailers and consumers in HCM City and other southern provinces and cities have been informed of the decrease in price.
Mobile World Congress debuts cool stuff
Viettel Group has sent a delegation to get an up-close look at all the Android phones, more Internet of Things and other cool stuff debuting at the annual Mobile World Congress tech conference in Barcelona, Spain.
An estimated 100,000 industry professionals and journalists have invaded the capital of Spain’s Catalonia region to see these new product launches, do business, and weigh in on topics such as the next generation 5G networks.
This is the second time Viettel has attended the event, which annually attracts just about every important company in the business.
At this year’s event running February 27-Marrch 2, Viettel has set up a booth showcasing its latest information technology solutions such as V-Wallet, E-government and its Distribution Management System.
Seafood export value estimated at 844 million USD early 2017
The value of seafood exports in the first two months of 2017 was estimated at 844 million USD, representing a year-on-year decline of 3.1 percent, according to the Ministry of Agriculture and Rural Development (MARD).
In February, the export value was 351 million USD.
In the two months, Vietnam imported seafood worth 196 million USD, an increase of 19.1 percent from 2016. Seafood import value in February was 99 million USD.
According to the MARD, seafood output in the first two months was 389,000 tonnes, up 1.5 percent, with tuna and anchovy producing the highest output.
Dak Lak avocado targets world market
A firm in the Central Highlands province of Dak Lak plans to bring avocado grown in the locality to the Japanese, EU and US markets after successfully entering the domestic and several regional markets.
Dakado avocado, a trademark that has been developed by Thu Nhon Ltd. in Da Lak, has been sold in China and Cambodia, along with supermarkets across the country, including Fivimart, Big C and Coopmart.
Each year, the company ships hundreds of fresh Dakado avocado abroad, becoming the biggest avocado trademark in Dak Lak.
To boost the growth of the trademark, the company has worked with 100 local farming households. The firm has sent experts to the farms to give technical support to farmers.
Along with coffee, avocado has been named as a major industrial crop of Dak Lak.
Retail sales, service revenue increase over seven percent
Hanoi’s retail and service revenue in the first two months of 2017 amounted to 365 trillion VND (16.4 billion USD), an increase of 7.1 percent from the same period last year, according to the Hanoi Statistics Office.
In February alone, the figure was 179 trillion VND (7.78 billion USD), down 3.9 percent from January.
According to the department, Hanoi’s consumer price index in February increased slightly against the previous month, citing that prices this year changed little due to the early opening of supermarkets and commercial centres, which stopped the typical post-Tet scarcity of goods.
The department said that more and more Vietnamese goods are on sale in supermarkets and commercial centres.
In terms of exports, Hanoi’s export value in the first two months of 2017 was 1.6 billion USD, up 13.1 percent.
The industrial production index for the two months posted a year-on-year increase of 5.1 percent, the department added.
Reference exchange rate stays flat
The State Bank of Vietnam kept the reference VND/USD exchange rate unchanged from the day ago to 22,232 VND/USD on March 1.
With the current /- 3 percent VND/USD trading band, the ceiling exchange rate is 22,899 VND per USD and the floor rate is 21,565 VND per USD.
In the opening hours, major commercial banks made slight changes to their rates.
Vietcombank listed the buying rate at 22,740 VND/USD and adjusted the selling rate at 22,810 VND/USD, up 5 VND from the previous day.
BIDV set the buying rate at 22,710 VND/USD, and adjusted the selling rate up by 10 VND to 22,810 VND/USD.
Techcombank adjusted up 20 VND to its selling rate to stand at 22,710 VND/USD and kept the buying rate unchanged at 22,380 VND/USD.
Saigon in need of a million affordable homes over next decade - expert
The southern hub is in the grips of a major affordable housing shortage amid a rapidly growing population.
Ho Chi Minh City is likely to need one million more affordable homes over the next 10 years, according to a real estate expert.
“Saigon’s shortage of affordable homes, social housing and low-cost rentals is expected to continue over the next 10 years when demand could grow to one million homes,” said Le Hoang Chau, chairman of Ho Chi Minh City’s Real Estate Association.
This shortage is not expected to subside in the near term with the World Bank forecasting the city’s population could reach 10 million by 2020 from 8.4 million currently.
Without citing statistics on the number of homes built annually, Chau emphasized the need for low-to-middle income properties based on the population growth rate.
About 500,000 families are currently unable to afford their own homes, and many currently share with parents or relatives.
Meanwhile, 81,000 families will need cheap houses over the next four years, the local media cited a survey by the city’s construction department and Institute for Development Studies as saying.
Migrants from other provinces who move to the city for work are the main contributors to Ho Chi Minh City’s population growth.
The southern commercial hub is now home to 3 million migrants.
According to some estimates, up to 70.6% of the 402,000 workers in the industrial parks and export processing zones on the outskirts of Ho Chi Minh City are in need of affordable housing.
The city is also faced with a serious shortage of affordable rental housing ranging from VND1 million (US$44) to VND3 million (US$132) per month, Chau said.
Japanese firm to set up medical device factory
Nipro Corporation, a medical device supplier from Japan, has received a business licence for production in Saigon Hi-tech Park in HCM City.
In the first phase, which is worth US$300 million, the factory will produce medical devices used for blood filtration in the kidney.
The medical devices will be supplied to the domestic market and exported to Japan and other Southeast Asian countries.
The factory is expected to be built this year and operational by the end of the next year.
Speaking with baodautu.vn, head of the Saigon Hi-tech Park Le Hoai Quoc said Nipro planned to increase its investment capital in the factory to $500 million and then $700 million by 2030.
Farming start-ups need more help
Pragmatic policies are needed for the Government to realise its goal of promoting start-ups in the agriculture sector.
During an online discussion held by the Government portal on February 24, Dau Anh Tuan, head of the Vietnam Chamber of Commerce and Industry’s Legal Affairs Department, said that the Government should consider lifting the land limit which was hampering successful agricultural business.
“Successful agricultural businesses require large-scale production,” he said. “Collecting products from multiple sources makes it difficult to ensure stable quality, trace origins and to guarantee the food safety”.
The Law on Land introduced in 2013 set the land limit for agriculture by individuals or households from two to three hectares and from 10 to 30 hectares for industrial plants like rubber, coffee beans or tea trees.
“Such land limits increase production costs and erode motivation to expand business,” he said.
The Ministry of Agriculture and Rural Development (MoARD) was considering loosening agricultural land limits, which was a positive signal, Tuan said, hoping that it was a step towards complete elimination.
He also suggested that the Government discard so-called production quotas. Citing examples of production quotas the MoARD set for tra fish and lobster in 2020 – which are hoped to reach some 1.9 million and 1,940 tonnes respectively, Tuan believed what the Government was doing was market intervention.
“The Government is amending the Law on Planning and I hope that the regulations regarding production planning will be tossed out. The Government should only do macro-planning and let the market decide product supply”.
A report titled “Enabling the Business for Agriculture” from the World Bank last year ranked Vetnam’s agricultural business environment in the lower half of Southeast Asia. The country was positioned only above Laos, Cambodia and Myanmar.
Plant businesses in Vietnam scored 62.5 points on the scale from a possible 100, lower than Cambodia’s 68.8 and Bangladesh’s 70.8, while the country ranked 37th out of 40 countries in the report for the business environment for agricultural machinery with 24.4 points.
The financial market for agriculture, meanwhile, was considered average with 45.3 points.
Former Science and Technology Minister Tran Quoc Thang agreed one of the key challenges for agricultural start-ups was accessing capital.
“There is currently a shortage of investors and venture capital funds to provide finance for start-ups,” he said. “In the long-term, the Government should set up venture capital funds and credit guarantee funds”.
How to do high-tech?
What the Government was encouraging was start-ups based on creativity and high-tech application, in which connectivity between those having business ideas and those having necessary technology played a vital role for successful start-ups, Thang said.
The Government, in this regard, should lay out an even playing field for the three parties involved.
“They are the Government with business policies, the start-ups and the science players like researchers, institutes and universities. The connectivity between them creates what we call the start-up eco-system,” he said.
“If that national eco-system of creativity is established and develops, high-tech agriculture businesses will prosper”.
Start-up company Hoa Anh Dao’s Management Board Chair Tran Le agreed, noting that some business ideologies failed to understand the real meaning of high-tech business and were threatening the environment.
He cited the increase of plastic film made-greenhouses in Lam Dong Province’s Da Lat City which was dubbed an agricultural high-tech city.
The film is a cheap way to build greenhouses, which led to mass construction of such greenhouses in Da Lat. Yet it resulted in a loss of rainwater absorbed in surface soil and to nearby streams and rivers.
“High-tech agriculture was not supposed to be like that. It should be innovative and not affect the environment,” he said.
“By and large, the definition of high-tech agriculture in Vietnam is still understood very vaguely”.
Lithuania looks to strengthen trade links with Vietnam
Lithuania's Ambassador Ina Marciulionyte today (Feb. 27) told a business forum in Hanoi that the country’s private sector is excited about strengthening trade links with their Vietnamese counterparts.
Lithuania, one of the EU Member States, looks favourably upon the prospects for enhanced trade and investment once the EU-Vietnam free trade agreement come into force in 2018, he said.
The trade pact also provides a wonderful opportunity for the two nations’ governments to develop bilateral cooperation as well. More active political relations encourage more active and smoother economic relations, he noted.
BSSC backs startups to join Tourism Day
The Business Startup Support Center (BSSC) has announced a plan to support startups to take part in Tourism Day 2017 which is slated for late next month in HCMC.
The event will feature 50 display booths of tourism startups. According to BSSC, tourism startups are those directly selling tours to customers and those providing services for travel firms such as healthcare, souvenirs and handicrafts.
Startups can register a booth at the event at only US$70 a day.
For further information, interested startups can visit http://bssc.vn/dangky-nhdl/. The event will take place from March 23 to 26 at Le Van Tam Park in HCMC’s District 1.
Can Tho to host int'l aquaculture exhibition
An international aquaculture exhibition will take place in the Mekong Delta city of Can Tho in October this year.
The International Center for Aquaculture & Fisheries Sustainability (ICAFISH), in coordination with Thailand-based UBM Asia, will be organizing the event on October 25-27.
The organizing committee said the event at the Can Tho International Exhibition and Fair Center would be an opportunity for domestic and international seafood enterprises, mainly shrimp and tra fish (pangasius) producers, to build business links.
Rungphech (Rose) Chitanuwat, Asia business director at UBM, said in a statement released at a news conference in Can Tho on February 23 that participating enterprises would have a chance to gain access to innovative solutions to aquaculture such as feed and nutrition, and modern processing equipment of world’s leading corporations.
At the event, local and international experts will share experience in quality control and present advanced solutions for fish farming and processing.
M. Gandhi, managing director (ASEAN Business) of UBM Asia, said the forthcoming exhibition is expected to attract some 120 firms from 20 countries and territories.
Anh Duong told to pay settlement fee in anti-competition case
The Vietnam Competition Council has told HCMC-based production, trading, service and import-export firm Anh Duong to pay a VND50 million fee for a case in which the company was accused of anti-competitive practices in tourism services.
In 2013, AB Tours in Khanh Hoa Province petitioned competition authorities to look into Anh Duong’s practices to force its partner hotels to refuse guests from Russia, Ukraine and other Commonwealth of Independent States (CIS) who were joining tours arranged by the former and other firms though there were still vacant guest rooms. Anh Duong, a partner of Pegas Touristik which handled a majority of tourists coming from these foreign markets, had clinched exclusive contracts with stringent terms on the hotels’ sale of rooms to rival travel firms.
Anh Duong requested its partner hotels to arrange room bookings for travelers from the (CIS) markets who flew to Cam Ranh on the chartered flights arranged by Anh Duong. The hotels were asked not to sell rooms to guests of rivals who also organized chartered services for guests to travel from Russia to Cam Ranh airport in the central province.
Investigations found that Anh Duong, which was responsible for 51.6% of travelers on chartered flights from Russia to Cam Ranh airport in 2013 when AB Tours lodged the petition, had committed anti-competitive practices.
However, as Anh Duong voluntarily stopped its unhealthy competition and removed the anti-competitive contract terms, AB Tours withdrew its complaint. Anh Duong was told to pay a fee of VND50 million for the case after it was transferred from the Vietnam Competition Authority under the Ministry of Industry and Trade to the council on March 28 last year.
The chairman of the council issued a decision setting up a commission to handle the case on March 31 and Anh Duong was told to pay the settlement fee on December 30 last year.
Nguyen Quy Phuong, head of the Travel Department at the Vietnam National Administration of Tourism (VNAT), said Anh Duong no longer dominates the Russian tourist market segment in Vietnam while AB Tours is a leading firm responsible for Chinese tourists.
VN has 50 companies recognized as organic
Vietnam now has 50 producers of agricultural goods, mainly vegetables, recognized as meeting organic standards, according to data of the U.S. Department of Agriculture (USDA).
Last year saw more Vietnamese firms gaining certification for organic food products.
Data of USDA showed that the companies with organic certification are mainly located in southern Vietnam, including HCMC, Lam Dong, Binh Duong, Tay Ninh and Ben Tre.
Phuong Thao at Organica, a leading organic food distributor in Vietnam, said such certification is valid for one year from the date of issuance, and must be renewed annually.
Certification organizations in Vietnam include Netherlands-based Control Union Certifications, France's ECOCERT S.A and Germany's Kiwa BCS Oko-Garantie GmbH.
Farmers struggling with falling chicken prices
Chicken farmers in Dong Nai Province, the country’s key poultry farming area, are racking up heavy losses driven by the steep chicken price fall.
Duong Anh Tuan, director of Binh Minh Farming Company based in Bien Hoa City, Dong Nai Province, said the price of white feather chicken at the farm in the last 15 days had ranged from VND15,000 to VND18,000 per kilo, way below the production cost of VND25,000.
The previous price was VND25,000-26,000 per kilo and VND22,000-25,000 in the same period last year.
The price of chicken with color feather at the farm is VND24,000-25,000 per kilo while the production cost is VND35,000-36,000.
Nguyen Thanh Phi Long, technical director of Thanh Binh Farming Company, said the price of white feather chickens before Tet (Lunar New Year) sold for VND27,000-28,000 per kilo but their price dipped to VND22,000-25,000 shortly after Tet and VND15,000-17,00-19,000 in the last 10-15 days while production cost is VND24,000-25,000.
Nguyen Van Ngoc, vice president of the Southeast Husbandry Association, said his chicken farm in Dong Nai was closed as prices slid to VND13,000-15,000 per kilo.
Farmers have ascribed the dismal market conditions to the weak post-Tet chicken demand and the rising concern about a possible bird flu outbreak. Besides, low chicken import prices have made matters worse.
Vietnam mainly imports chicken legs, feet and by-products from the U.S., Korea and China at VND13,000-15,000 per kilo to meet the huge demand of factory and school canteens.
HCMC set to tax stores on social networks
The HCMC Tax Department will work with the departments of trade-industry, information-communications and other relevant agencies to gather information on online stores to ascertain whether they are complying with tax rules.
An official of the tax department put forward a proposal for looking into tax payments by online stores at a meeting on Wednesday.
Pham Thanh Kien, director of the Department of Industry and Trade, said the department would coordinate with the departments of tax, information-communications, and public security to inspect e-commerce. There are currently around 80,000 e-commerce websites registered in the city, with half of them proving efficient, he said.
Regarding sales tax collections from stores on social networks like Facebook, he said taxes could be collected if authorities work with the operators of social networking sites to enforce tax regulations.
The municipal authorities have given priority to e-commerce development as demand for online shopping is on the rise, said Tran Vinh Tuyen, vice chairman of the city, on the sidelines of Wednesday’s meeting.
The tax department has found it challenging to force online stores to strictly observe tax regulations. Identifying online stores subject to business registration is vital for tax offices to collect taxes from them.
At a press briefing last month, Tran Ngoc Tam, head of the tax department, said the agency had found it almost impossible to determine exact revenues and profits of online stores as a majority of online shoppers prefer paying in cash on delivery, leaving no trail for tax collectors to determine the value of a transaction.
Dung Quat, Chu Lai EZs cooperate for further growth
The Dung Quat Economic Zone in Quang Ngai and the Chu Lai Open Economic Zone in Quang Nam have attracted a large number of Vietnamese and foreign investors.
10 years ago, the two provinces signed a cooperation agreement to support the growth of the two economic zones.
The 10km coastal route connecting the two Economic Zones has facilitated transportation between them while National Highway 1A, the North-South railway, and the Da Nang-Quang Ngai Expressway connect the region with other provinces and cities in Vietnam.
Quang Nam and Quang Ngai province have focused their investment in seaports and have agreed that Quang Nam’s ports will receive small cargo ships while big container ships will dock at the deep sea ports of Quang Ngai.
The 3,400 ha Chu Lai airport in Quang Nam province is being used by Vietnam Airlines, Vietjet Air and Jetstar Pacific offering 34 flights per week to and Hanoi and Ho Chi Minh city.
Do Xuan Dien, Director of the Chu Lai Open Economic Zone’s Management Board, says that the two provinces agreed the sectors of investment to avoid overlap.
He said, “The sectors that have proved to be effective in Quang Ngai are not invested in Chu Lai and vice versa. This keeps investment in Quang Nam from overlapping in Quang Ngai or Da Nang.”
The Chu Lai Open Economic Zone and Dung Quat Economic Zone have been chosen as the location for Vietnam’s first oil refinery center. Mr. Le Viet Chu, Secretary of the Quang Ngai Provincial Party Committee, says close cooperation will boost local economic restructuring.
He said, “The Prime Minister has asked the two provinces to strengthen cooperation in extracting gas from the Blue Whale gas field which spans Quang Nam and Quang Ngai province.”
The number of investors in the two economic zones has increased in recent years thanks to incentives in land rent and human resource training.
World loses its appetite for pricey Vietnamese rice
Slowing overseas demand is putting the brakes on Vietnam's rice exports this year, industry players say.
Indonesia, one of the country's key export markets, has said it has no plans to import any of the grain from Vietnam this year, and a government agreement with the Philippines to supply three million tons is unlikely to remedy the situation.
The agreement with the Philippines is not a contract, and can be subject to negotiations with importers. Last year, Vietnam shipped only 396,000 tons of rice to the Philippines, a plunge of 65% from 2015, based on government data.
The Philippines is forecast to import 1.4 million tons of rice in 2017, a jump of 75% from last year, the US Department of Agriculture (USDA) said in a February report.
"Vietnamese rice prices are very high now, making the grain uncompetitive against Thai rice," a Vietnamese trader with a European firm based in Ho Chi Minh City said.
Vietnam's 5% broken rice stands this week at US$350-US$355 a ton, free-on-board Saigon Port basis, up nearly 4% since the end of 2016, while Thailand offers a similar grade for US$353-US$355 a ton.
Buyers, mostly in Asia, followed by Africa and the Middle East, would only consider the grain if it is offered about US$10 a ton below Thai rice of the same variety, traders said.
Indonesia, Vietnam's fourth-biggest rice market last year, will not import rice this year given an expected surplus and efforts to stabilize rice prices by increasing local procurement, the Jakarta Post reported.
Indonesia is projected to produce 80 million tons of paddy, or unhusked rice, this year, above its demand of 60 million tons, the newspaper cited Indonesia's Agriculture Ministry as saying.
But Indonesia's decision not to import rice this year remains questionable. The USDA still projects Indonesia will import 1 million tons of rice this year, down from 1.1 million tons in 2016.
"Even if Indonesia does decide to import rice this year, it will not focus on Vietnam," a Ho Chi Minh City-based trader said.
Rice exporters say they are facing problems with mounting stockpiles, while the Mekong Delta's winter-spring crop harvest is expected to peak from next month. The crop is the largest of three crops planted in the delta every year, with grain mostly used for exports due to its high quality.
Rice export firms had nearly 1 million tons in stock at the end of January, while sales abroad were slowing, the Vietnam Food Association said.
Rice exports fell 32% last month from January 2016 to 325,000 tons, according to data from the agriculture ministry.
The association projects Vietnam's rice exports this year will reach around 5 million tons. Last year, the volume fell to 4.8 million tons, the lowest level since 2008.
In contrast, the USDA has forecast a rebound in Vietnam's rice shipments this year to 5.8 million tons, leaving the country in third place behind India and Thailand.
"This is based on improved prospects to Asian markets such as the Philippines, where quantitative restrictions are set to expire later this year," it said in its February report.
Late last year, the Philippine government said it would not seek a further extension of the so-called quantitative restrictions on rice due to expire in June 2017 and will allow higher rice imports, Reuters reported.
Vietnam’s e-commerce: opportunities for online trade
The Vietnam Online Business Forum opens in Ho Chi Minh City on February 24. Vietnamese and foreign businesses attend the forum to discuss trendy online trade, technology, and business innovations.
Several big retailers in Vietnam like FPT, Hapro, Vingroup, Viettel, and Nguyen Kim have had success in online trading.
Trinh Van Hoa, Director of the Nguyen Kim Online Trading Center, said to increase their revenue, they have diversified sale channels to give customers more purchasing options.
“Nguyen Kim has focused on shopping via smart-phone. Revenue in 2016 increased two or three hundred percent. Our plan is to diversify shopping options for customers in urban areas as well as people in rural areas who can’t travel to the city to shop,” he said.
Revenue from online trading will increase sharply from now until 2020.
Dinh Thi My Loan, Chairwoman of the Vietnam Retailers Association, said, “Multi-channel trade such as markets, shops, and websites is increasingly popular. Online trading is a trend with many advantages.”
The Vietnam Online-Trading Association reports that about 60% of Vietnam’s population use the Internet and a large number of them have smart-phones. It’s a lucrative market for online trading.
Expert: Don’t set great store by FTAs
The signing of free trade agreements (FTA) has helped Vietnam’s economy cushion the negative impacts of its international integration, instead of maximizing benefits, so there should not be excessive optimism, an expert said at a conference in HCMC on February 27.
Tran Toan Thang, deputy director of the Business Environment and Competitiveness Department of Central Institute for Economic Management (CIEM), said Vietnam has inked 15 FTAs so far while its neighboring countries such as Indonesia, Malaysia, Thailand, and Singapore have signed 17, 21, 21 and 32 FTAs respectively.
The free trade agreement between Vietnam and the European Union (EVFTA) may not bring as huge benefits to Vietnamese enterprises as expected.
He explained a majority of Vietnamese goods to the European market are essential consumer items. If tariffs of such products were reduced, their selling prices could be lowered but this would not have strong effects on demand.
This is a difference between essential and luxurious goods. Even if the agreement takes effect next year, Vietnam’s total shipments to the EU might not skyrocket, he reasoned.
The prerequisite for Vietnam’s products to the EU is that they must meet the market’s technical requirements.
He analyzed these enterprises are inclined to have short-term investments rather than long-term ones. Thus the improvement of competitiveness is more challenging.
Once the agreement comes into force, some sectors would suffer negative growth. This means a certain number of workers would be made redundant. However, this factor has not been taken into careful consideration by enterprises to have contingency plans in a timely manner.
HCMC seeks ways to make budget homes affordable
How to bring down prices of budget homes with their size unchanged and all same utilities as commercial ones is a matter of concern for the HCMC government and enterprises.
The seminar themed “Development of low-cost and affordable commercial homes” was held by the HCMC Real Estate Association (HoREA) in the city on February 27.
Nguyen Van Duc, deputy director of Dat Lanh Real Estate Co Ltd, said the city should allow for construction of commercial apartments of 20-30 square meters each for low-income people and workers in outlying areas, industrial parks and university campuses.
With a unit of 20 square meters, the lowest construction cost is VND5 million per square meter. With investment, design and sale costs included, each unit must cost VND160-180 million, said Le Huu Nghia, director of Le Thanh Company.
However, he believed such apartments should not be sold since it would easily lead to some sort of slum.
“Small homes should be only for rent, and could be taken back when tenants failed to satisfy the conditions of the investor. In the long term, investors may dismantle them for reconstruction, or merge 2-3 apartments together to create bigger units,” he suggested.
Homes for sale in HCMC should be 35-50 square meters each in 12-15 storey buildings and priced at VND12 million per square meter, or VND400-600 million a unit, said Nghia.
Cooperation for cost reduction
HCMC Party Secretary Dinh La Thang said the city should draw on Binh Duong Province’s experience to build homes costing VND100 million per unit, but would not have to exactly follow in Binh Duong’s footsteps. The city is aiming for the housing area per capita of 19.8 square meters by 2020, thus each apartment should cover 40-60 square meters.
Thang said the city should offer low-cost housing developers favorable conditions by perfecting the mechanisms and policies and relaxing legal procedures. In particular, it is necessary to create a chain link with cost reductions in many stages such as construction, design and completion so as to lower the price of the final product.
In addition, to promote the development of low-cost housing, a market should be formed, where transfer is free, with no rules restricting home transfers within the first five years of residence, Thang said.
In response, a number of building material manufacturers said they would offer lower prices for affordable housing projects. “For low-cost housing projects, we may bring down prices by VND500,000 per ton compared to market levels,” said a representative of Ha Tien Cement Company.
Tran Phuoc Dong, director of Australia Precast Concrete Co. Ltd., said their advanced technology and design could cut the price of low-cost homes by VND5 million per square meter, equivalent to the level in Binh Duong.
In addition to one-bedroom apartments of 25-30 square meters that cost VND250-300 million each for small families and single people, the city may focus on two-bedroom units with an area of 50-77 square meters, priced at VND500-700 million per unit, said HoREA chairman Le Hoang Chau.
Also, to reduce the price of low-cost homes, large-scale projects should be developed over 50 hectares or more, combined with affordable commercial housing projects, to form new urban areas with full utilities, he suggested.
Tran Trong Tuan, director of the HCMC Department of Construction, said homes costing less than VND1 billion were acceptable under the current circumstances. This is a market with a wide range of consumers, so there should be diverse prices.
CAR does not improve in 2016
The capital adequacy ratio (CAR) of the banking system based on the latest data published by the central bank was 12.84% on December 31, 2016, meaning almost no improvement was made last year.
Joint venture and foreign banks are in the group with the highest CAR while the lowest CAR belongs to State-run banks, at 9.92%. Commercial joint stock banks have an average rate of 11.8%.
CAR is still calculated with the method determined by the State Bank of Vietnam (SBV), not in accordance with the standards of the Basel 2 and the world.
CAR is an important indicator of the health of the banking system in particular and credit institutions in general. The newly published figures suggest CAR barely improved throughout 2016, for it previously stood at 12.65% on June 30, 2016 and 13% on December 31, 2015.
It should be noted that this took place when banks in Vietnam announced positive earnings results in 2016. Many of them reported higher-than-expected profits.
Also according to the data published by the SBV, the system’s equity capital picked up 10.66% last year, equivalent to some VND639.6 trillion. Total assets grew 16.18 to more than VND8,500 trillion.
Chartered capital increases were very modest, 6.11% compared with the end of the preceding year, equivalent to about VND488.4 trillion. Fresh capital injections are currently a major concern of and a great challenge to banks.
The percentage of short-term capital utilized to make medium- and long-term loans was 34.51%, particularly 37.32% at State-run banks and 39.93% at joint stock banks.
ROA (return on assets) and ROE (return on equity) of the system, as per the financial statements for the third quarter of 2016, were 0.45 and 5.66% respectively.
Joint stock banks put their ROA at 0.26% and ROE at 3.49%, while the respective figures at State-run banks were 0.47% and 8.24%. Those credit institutions with negative equity were already eliminated when such rates were calculated.
The ratio of credit to deposits in November 2016, the latest update, was 86.72%. This ratio was particularly high at State-run banks, 94.43%, while the joint stock ones registered a rate of 79.37%.
It should be noted that the above figures are only relative and do not fully reflect the health of the system of credit organizations in Vietnam. It is because the statistics are based on account balance reports and monthly statistical reports for December 2016 that credit institutions sent to the SBV, with those with negative equity capital already excluded when such indicators as equity capital and CAR were calculated.
HCM City leader wants Can Gio District to become attractive tourism complex
Chairman of HCMC Nguyen Thanh Phong on February 27 asked the Department of Planning and Architecture to submit a plan for organizing an international planning contest to develop Can Gio District into an attractive urban area for entertainment and leisure tourism in the second quarter of 2017 at the latest.
At the meeting on February 27, Phong urged relevant agencies to speed up construction of Binh Khanh Bridge and Vam Sac Street to improve traffic infrastructure in Can Gio, which is known to have strong tourism potential owing to a 13-kilometer coastline and more than 34,000 hectares of mangrove forest.
Phong also demanded those agencies ensure that tourism projects will match the general planning and take forest preservation into account when carrying out tourism activities.
“We need to awake the potential of Can Gio,” he added.
Taking Thailand for example, Phong said tourists often choose to visit Pattaya which requires a two-hour drive from Bangkok. Meanwhile, it just takes 50 minutes to drive from downtown HCMC to Can Gio. This is a big advantage and Binh Khanh Bridge and the axis street of Vam Sac will be the first impression for tourists entering the region.
Besides calling for businesses to invest in more tourism projects, the city’s authorities will focus on adding tourism products in Can Gio to make the most of its potential like seafood, yacht tours, and hiking in mangrove forests and on the island of monkeys.
Can Gio is 60 kilometers southeast of downtown HCMC. The district has a coastline of more than 13 kilometers, a maze of canals and rivers, and lush mangrove forests which were recognized as a world biosphere reserve by UNESCO.
Can Gio attracted one million visitors and obtained tourism revenue of VND400 billion last year. It targets more than one million tourists this year.
At a conference on February 27, Bui Ta Hoang Vu, director of HCMC’s Department of Tourism, said the city is expected to welcome 7.5 million foreign visitors in 2017.
Foreign visitor arrivals in HCMC this month have surged 15% compared to the same period of last year, reaching nearly 525,000 passengers. The city has seen a 20% rise in tourism revenue, at nearly VND9,000 billion.
Vietnam enterprises seek to build business links with Dubai
A Vietnamese business delegation is visiting the Gulfood Fair 2017 held in the United Arab Emirates (UAE) city of Dubai to sound out business cooperation opportunities there.
Thirty-three agricultural and food enterprises of Vietnam are showing their products at the trade fair. The traditional domestic items on display include rice, coffee, pepper, tea, cashew nuts, and other processed and canned products such as milk, fruit juice, and functional foods.
In a press release on February 27, the Embassy of Vietnam in the UAE said the number of Vietnamese booths for product display is double the country’s first attendance four years ago.
Apart from brands such as Vinamilk, Hapro and Lotus Rice that have been found at the previous Gulfood fairs, two new brands, Vinamit and VinEco, are present at the fair.
Pham Binh Dam, Vietnam’s ambassador to the UAE, said Vietnam’s farm produce, food and beverages have captured international attention and Vietnamese booths are frequently crowded with visitors during the fair.
Many local firms have been equipped with modern production lines, and therefore, the quality of domestic farm products has much improved and received high appreciations from foreign partners, Dam said.
Enterprises tapping into the Dubai market have registered sales growth of around 20% to 30% per year. For example, Vinamilk’s dairy products are already present there, Dam added.
Featuring 120 national booths the fair kicked off on Sunday and will wrap up on March 2. It is expected to welcome around 95,000 guests from over 170 countries and territories.
An Giang sees tourist growth in religious sites
The Mekong Delta province of An Giang received more than 1 million tourists to its religious sites in February, up 200,000 from the previous month, according to the provincial Department of Culture, Sports and Tourism.
The number represented 26 percent of the local yearly target.
Religious tourism has been developing in An Giang in recent years. The locality is famous for a complex of historical and religious sites, including Temple of Ba Chua Xu Nui Sam in Chau Doc city, Cam Mount in Tinh Bien district and That Son, a range of small mountains located in Tri Ton and Tinh Bien districts.
The province has been stepping up promotion campaigns for these tourist attractions and worked to stop local service providers from illegally soliciting travellers and overpricing.
Chau Doc city, where most tourist sites are located, has offered free wifi at Basa Fish Park, Bo De Dao Trang Pagoda Park and Ba Chua Xu Nui Sam Temple while Tourist.ONE, a mobile application that offers travel guide in the province and helps travellers book tickets, has been also developed by the department and a local mobile operator.
This year, An Giang province aims to welcome over 6.8 million tourist arrivals, earning the revenue of more than 3.5 trillion VND (153.8 million USD).
It plans to launch a Month for Tourism in An Giang 2017 event in Chau Doc city in May alongside a wide range of other tourism promotion events and festivals throughout the year.
Crowne Plaza West Hanoi has new director of sales and marketing
Crowne Plaza West Hanoi has announced the appointment of Mr. Park Ryan as new Director of Sales and Marketing of the hotel and residences.
Mr. Park brings a track record of 19 years in Sales and Marketing and possesses a wealth of international experience in Corporate, MICE and Travel. Prior joining InterContinental Hotels Group (IHG), he has worked for different properties such as Walkerhill Seoul and Ritz-Carlton Seoul and Lotte Hotels & Resorts in Seoul, HongKong and Bejing.
“We are excited to welcome Mr. Park to IHG’s family and expect his next success” said Barry Pitman, General Manager of Crowne Plaza West Hanoi. “He will be an integral part of our hotel. We are confident that he is the right person to further elevate the sales and marketing strategy and all of us are looking forward to his leadership and collaborations in accomplishment of overall results.”
In this new role, the Korean Director of Sales & Marketing will be leading the Sales and Marketing team as well as overseeing all revenue and distribution management.