Thứ Hai, 30 tháng 4, 2018

BUSINESS IN BRIEF 30/4

Digiworld targets revenue of $206 million in 2018

Thaco transfers bus manufacturing technology to Kazakhstan, VIISA invests $60,000 in four startups, Businesses requested to comply with software copyright laws, Exports of textiles and garments up strongly 
   
Digiworld Corporation (DGW) targets revenue of VND4.7 trillion (US$206 million) in 2018, an increase of 23 per cent over 2017, according to a report from the company’s annual shareholders’ meeting held in HCM City late last week.

DGW targets having consumption products, including fast-moving consumption goods and healthcare products, achieve the strongest jump in revenue, at nearly 300 per cent, followed by mobilephones, with an increase of nearly 60 per cent.

At the meeting, the company approved a plan to earn after-tax profit of VND101 billion ($4.4 million) this year, up by 29 per cent year-on-year.

The shareholders said that, based on the results of the first quarter, the annual targets for revenue and profit were feasible.

DGW reported that in the first quarter of this year, total revenue reached VND1.26 trillion ($55 million), a jump of 66 per cent year-on-year. The after-tax profit was VND19.5 billion ($855,000), up by 127 per cent.

These figures represent a record amount since the company was listed in 2015, according to the company.

Digiworld said that in the first quarter, it had reached revenue growth in all categories: mobile phones, office equipment, consumption goods (including fast-moving consumption goods and health-care products), tablets and laptops.

For 2017, Digiworld achieved revenue of VND3.8 trillion and profit of VND55 billion ($2.4 million).

Digiworld was established in 1997 as a market expansion service provider in Viet Nam and authorised distributor for more than 30 world-renowned technology brands, with a distribution network of 6,000 points of sales (POS) nationwide.

More Vietnamese companies keen on Dubai market

Numerous Vietnamese companies have recently gathered at Gateway to Dubai 2018 in Ho Chi Minh City to explore business opportunities in Dubai and the Middle East.

Dubai is on the radars of both Vietnamese and foreign investors as the city has been growing rapidly in the past years. Indeed, Dubai is a potential market with many opportunities in different fields, including real estate and construction, infrastructure, fast-moving consumer goods, food and beverage, entertainment, and hospitality.

With a boom, which took population from 1.5 million in 2007 to 8.5 million in 2017, the Dubai government is also conscious of the environment and adapting infrastructure for more eco-friendly living. This opens the doors to more innovation and creative collaboration.

According to Van Tran, managing director of VANTT Consulting, Gateway to Dubai 2018 aims to foster business relationships between Vietnam and the Middle East.

The event gathers all the key decision makers in one place, which facilitates Vietnamese companies to take their first steps into the fast-growing market.

Gateway to Dubai 2018 is held as a tribute to the forthcoming Expo 2020 in Dubai. The mega expo will be an amazing opportunity for Dubai to showcase its vision for the next decades that it is already implementing today.

Haiphong boosts FDI attraction through key infrastructure connectivity

With the recent major infrastructure developments, the northern city of Haiphong has stepped up its game for FDI attraction to drive economic growth.

The information was stressed at the Haiphong Investment Seminar organised by Eurocham and DEEP C Industrial Zone with the support of KPMG and Saigon New Port. The seminar gave an insight into the investment climate and potential business opportunities at Haiphong city.

The development of Haiphong International Gateway Port, also known as Lach Huyen Deep Sea Port, is a recent key infrastructure project in the city. Haiphong International Container Terminal, a joint venture between local company Saigon Tan Cang Port and its partners Mitsui OSK Lines, Wan Hai Lines, and Itochu Corporation, pioneer the deepest seaport in the north of Vietnam.

With a draft of minus 14 metres, vessels with a capacity of 14,000 TEU will be able to make calls to Haiphong, a significant improvement compared to the existing 2,000 TEU port. Once Lach Huyen Port is in action from May this year, shipping times to Europe will be substantially reduced from 30 to 23-25 days, to the US West Coast from 35 to 27-30 days, and to the US East Coast from 20 to 13-15 days, thanks to new direct routes and the omission of transshipment. Accordingly, the incoming opening of Lach Huyen Port will bring more logistics advantages for the projects in the active city.

Substantially, the Lach Huyen port project is connected to the hinterland with other mega infrastructure projects, including highway connections to Hanoi, the coastal provinces, Quang Ninh, and China, as well as Cat Bi International Airport. These projects have turned Haiphong into the main gateway of North Vietnam to regional and world markets. In particular, they lowered the barriers to Vietnam’s major trading partners, such as Europe, America, the ASEAN, China, turning Haiphong into the new Ho Chi Minh City in the north of Vietnam.

"DEEP C Industrial Zones lies in the heart of this infrastructure network, bringing to investors advantages not only in logistics but also international-standard utilities provision, economic zone tax incentives, and support for investors to start business," stated Hans Kerstens, international business development manager of DEEP C.

The seminar also brings practical guidelines from experts of KPMG on setting up an expansion project in the north by companies that are already present in the south, while maximising the benefits of tax incentives.

The development in the region also caught the attention of European investors. This is the reason why EuroCham started its northeastern chapter last year, said Almut Roessener, executive director of EuroCham. Investment from market leaders, such as Accor Group, Hilton, Daiwa House, Fujita, and AEON have been pouring into the city to develop facilities for business.

Vinh Tan 1 thermal plant to reduce power thirst in southern provinces

The $1.75-billion Vinh Tan 1 thermal power project, the largest Chinese-invested project in Vietnam, will come into commercial operation ahead of schedule after concerns of potential power shortages in the southern provinces in the time to come.

According to the latest report of Vinh Tan 1 thermal power project, its first unit will come into commercial operation in July 2018, five months earlier than initially scheduled.

Phan Ngoc Cam Thanh, deputy director of Vinh Tan 1 told the National Steering Committee for Power Development that after 1,025 consecutive days of construction, the project is now 93 per cent complete.

“We target to push forward the date of commercial operations,” said Thanh.

On April 18, 2018, the first unit of Vinh Tan 1 was successfully connected to the national grid and met all standard requirements during the testing as well as operation.

Member of the National Steering Committee for Power Development Dinh The Phuc, deputy director of the Electricity Regulatory Authority of Vietnam under the Ministry of Industry and Trade, said Vinh Tan 1 thermal power plant’s significant generation capacity will help increase energy supply in the nation.

The 1,240MW project is the first thermal power plant applying the pulverised coal combustion technology in Vietnam. It will play an important role in supplying power to the country’s southern parts, as there are concerns over power supply risks due to delays in the Song Hau 1 and Long Phu 1 thermal power plants.

The Long Phu 1 and Song Hau 1 projects in the Mekong River Delta provinces of Soc Trang and Hau Giang are designed to produce 1,200MW each annually. However, the two plants are now years behind schedule. Both of them are invested by Vietnam’s state-run oil and gas group PetroVietnam.

Vinh Tan 1 is expected to provide more than 7.2 billion KWh per year, increasing the southern region's electricity supply and helping reduce the region's dependence on hydropower—especially during the dry season or droughts.

Electricity demand in Vietnam is expected to see an increase of more than 10 per cent per annum in the coming years due to rising population and accelerating economic growth.

Southern Vietnam, the country’s largest economic bloc which includes Ho Chi Minh City, faces a critical situation in relation to the current imbalance between existing supply and the increasing demand for electricity. There is therefore urgent need for the development of power generation infrastructure in the region.

At a recent visit to the southern provinces, Deputy Prime Minister Trinh Dinh Dung urged the acceleration of the pace of constructing power plants, especially in the south, as well as called on investors to upgrade transmission projects as a main task in the years to come.

Tran Viet Ngai, president of the Vietnam Energy Association, is also concerned over the power supply of southern provinces. He called for synchronised solutions to minimise power shortages, including ensuring progress on schedule, operational safety, quality management of power projects, as well as environmental protection and effective power usage.

Thaco transfers bus manufacturing technology to Kazakhstan

Leading Vietnamese automaker Thaco has transferred the technology for manufacturing Thaco HB73S buses to its partner HTA in Kazakhstan, under a contract signed by the two sides in February 2017.

Thaco engineers worked at HTA during all of March to complete the task following the Vietnamese company’s bus component shipment to HTA last August. The demand for public transport in central Asian countries is reported to be rising quickly but transport production by regional countries is yet to meet demand. HTA therefore decided to cooperate with Thaco to import full bus components. Fifty more sets for 29-seat HB73S buses will be shipped to the country this year.

To assist its partner in producing Thaco HB73S buses under IATF 16949 international quality management standards, Thaco sent eleven engineers to work at the HTA factory in Almaty, Kazakhstan. In addition to technology transfer, the team provided training on assembly and quality control.

Such training covered all assembly and manufacturing work, including body finishing, the painting process, and turning out the completed buses.

Thaco HB73S bus components have been researched, designed, manufactured and tested by Thaco engineers and offered at competitive prices compared to similar products from South Korea.

The technology transfer to HTA marks an initial success in Thaco mastering manufacturing technologies, quality testing, and exporting buses.

In recent years it has invested in manufacturing expansion, research, and the application of modern technologies and automation in manufacturing vehicles and components and increasing technological content and localization rates, gradually implementing its plans to join global value chains.

Thaco’s exports of components amounted to $3.8 million last year and it continues to work on researching and expanding markets and diversifying export products.

With a manufacturing capacity of 20,000 units per year, Thaco’s bus manufacturing plant is the largest in Southeast Asia. The facility boasts various bus lineups meeting Euro 4, 5 and 6 emission standards, including a Vietnamese bus lineup with a localization rate of 60 per cent that meets requirements for export to ASEAN countries.

Appworld nursery launched to support mobile startup apps

The $1 million Appworld nursery, a unique project finding ideas and mobile apps and providing support to bring ideas into reality, was launched at an event in Hanoi on April 21.

Appworld will bring tools to connect, build and deliver global mobile apps. “We expect that in the first phase of about 18 months there will be 1,000 apps deployed, reaching traffic of 50 billion,” said Mr. Nguyen Ngoc Dung, Vice Chairman of the Vietnam E-commerce Association (VECOM). “Those who have an idea for mobile apps need only present it to the Organizing Committee to seek mentoring support.”

Its Digital Content Center will provide legal support, tax registration, and the fulfillment of tax obligations. It hopes to replicate the success of the “Flappy Bird” game, developed by Nguyen Ha Dong, which found success worldwide and boosted Vietnam’s profile, Mr. Dung added.

“The Appworld project will partner with the digital content community through the Yeah1 Network and develop products to conquer domestic and international markets,” said Mr. Nguyen Anh Nhuong Tong, Chairman of the Yeah1 Group. “The goal is to create an ecosystem that helps young people start up on the internet.”

Appworld is a joint venture between the Yeah1 Group, VECOM, and the Vietnam Youth Union.

At the launch, the organizers also announced the first two projects to be officially invested: Diff Cat and Gamify.

MWG counting on Bach hoa Xanh chain

At 8.30 am on a normal day, the Bach hoa Xanh store in Le Trong Tan Street, Tan Phu district, Ho Chi Minh City, is busy serving a lot of local customers, mostly housewives. They are the store’s regular customers and previously did all their shopping at traditional markets. Though launched two years ago, the store is now one of the fastest-growing among the 300 in the Mobile World JSC (MWG)’s Bach hoa Xanh chain.

MWG Chairman Nguyen Duc Tai has kept plans for the Bach hoa Xanh chain on track over the last two years. The company identified a successful formula for the chain after completing a pilot in 2016. The chain established important foundations last year and this year is the time to boost its development. In the first stage, average monthly revenue at each store was expected to be about $22,000 but is now around $57,000. The figure at the Le Trong Tan Street store is about $100,000, Mr. Ngo Trung Duc, Manager of the Bach hoa Xanh chain in Tan Phu district, told VET. Average monthly growth per store in the district is about 20 per cent.

CEO Tran Kinh Doanh said during the pilot period that the expected profit rate was 15 per cent on $22,000 in revenue each month. The rate is low for a concern with dozens of stores but substantial when hundreds of stores are involved, as is the case with Bach hoa Xanh. As such, MWG set an ambitious target for the fast-moving consumer goods (FMCG) field, planning to blanket Ho Chi Minh City with 1,000 Bach hoa Xanh stores this year.

It’s important that Bach hoa Xanh has positioned the brand in the market and is gradually creating different values and attracting sufficient numbers of customers to its stores who previously shopped at traditional markets. “With the mini-mart model, we have made efforts to create a more modern shopping environment than at traditional markets and more interesting than at grocery stores,” Mr. Tai told local media. “We listened to the demands of consumers and the market.”

According to Mr. Tai, 30 per cent of consumption in fresh and processed products is supplied by supermarkets and 70 per cent by traditional markets. Bach hoa Xanh aims to reach 10 per cent of the 70 per cent in traditional markets. The chain, indeed, will not compete with other supermarkets like Co.op Foods and Satrafoods or convenience stores like Circle K and Family Mart. Its strategy is to focus on broad coverage and to be similar to traditional markets but with better services and a more diverse range of food and goods. “The purpose of opening the chain is to encourage customers to buy food from us for 20 days a month and from traditional markets or supermarkets for the remaining days of the month,” Mr. Tai told an analyst meeting in February.

Industrial insiders said that the successful factor in its model is it targeting low to medium-income earners and setting up stores of less than 200 sq m on small streets in order to better approach customers.

Vietnam’s retail market holds significant potential, with estimated revenue of $60 billion annually. Its promise has resulted in the emergence of tough competition, with the presence of major foreign retailers from Thailand, Japan and South Korea as well domestic counterparts like Vingroup. As a newcomer, MWG is forecast to face a range of challenges in the market, despite being the pioneer in the mobile and electronics market.

Half of all food and goods at Bach hoa Xanh stores are fresh vegetables, fish and meat, and the remainder FMCG. The challenge is how to resolve the inventory question and offload products approaching their use-by date, as well as buying safe products when needed and at cheap prices. These are, of course, issues for all retailers, not just Bach hoa Xanh.
MWG has also recorded notable results in its thegioididong.com and Dien may Xanh chains, thanks to adopting smart and flexible solutions to meet demand among local consumers while cutting operational and other costs. “The strength of the company is customer services and chain management,” said Mr. Doanh. “I haven’t seen any company in Vietnam that does this better than MWG.”

Despite only a few Bach hoa Xanh stores earning a profit, the chain will be a driving force for MWG’s growth over the years to come. Though the leading mobile and consumer electronics retailer attracted attention from local and overseas retailers and investors by completing its acquisition of the Tran Anh Digital World and Phuc An Khang pharmaceutical chains, the concern for Chairman Tai this year is the Bach hoa Xanh chain.

Understandably, growth in mobile and consumer electronics is slowing, coming in at 9.3 per cent and 15.1 per cent, respectively, in 2017 according to the ACB Securities Company (ACBS). Instead of opening “two stores every day” as MWG did before, the company plans to cease opening new thegioididong.com stores and instead open 50-100 new Dien may Xanh stores this year.

The retail market also has the most potential in terms of investment expansion. Vietnam ranked sixth among the Top 30 developing countries in retail expansion in the Global Retail Development Index, released by A.T. Kearney in 2017. There were 800 supermarkets, 150 shopping malls, 9,000 traditional markets, and about 2.2 million retailers in Vietnam at the time the Index was prepared. Convenience stores and mini-marts are the fastest-growing segments in the market. Japanese retailers like Family Mart, 7-Eleven, and Takashimaya, and South Korean retailers like Lotte Mart and GS25 are flooding into Vietnam and plan to open thousands of stores and dominate the market. Thus, Mr. Tai and MWG also plan to develop the Bach hoa Xanh chain as soon as possible, having 1,000 stores in Ho Chi Minh City this year.

Bach hoa Xanh recorded revenue of VND1.38 trillion ($60.9 million) in 2017, contributing 2.1 per cent to MWG’s total, but didn’t post a profit. It is now making greater efforts to improve operations and attract more customers. It will review its 1,000-store plan after implementation and plans to open 5,000-6,000 stores in other major cities such as Hanoi and Da Nang over the next five years. In assessing such plans, ACBS reported that expansion will not be easy in second-level cities and rural areas and the retailer needs to be cautious about the speed of its network expansion over the next few years.

Meanwhile, the Vietnam-focused private equity firm Mekong Capital expects the company will be successful in ramping up to several thousand locations. “MWG focuses on the customer experience and they do a better job of it than most of their competitors,” Mr. Chris Freund, Partner at Mekong Capital, told VET. His comments are based on solid facts and figures, as his company’s Mekong Enterprise Fund II (MEF II) completed its divestment of 100 per cent of its holding in MWG after more than a decade of investment. “It was one of the most successful private equity investments in the history of Asian private equity,” Mekong Capital has said.

While the reason MEF invested in MWG was the energy and commitment of the five co-founders and its growth potential, Creador, a South Asia and Southeast Asia-focused private equity firm that invested $43.8 million in the local retailer in February, said it sees a strong track record of growth in multiple store concepts and the opportunity for consistent growth going forward. “We think the team led by Mr. Tai is truly world-class and has tremendous capabilities to build a very large business,” Mr. Brahmal Vasudevan, CEO of Creador, told VET. “Their historical growth trend has been amazing. I see the potential for this company to record 20-30 per cent growth over the next five years.”

Shinhan Bank partners with MoMo to launch overseas remittances

Shinhan Bank Vietnam (Shinhan Bank) has officially partnered with MoMo e-wallet (owned by M_Service) to launch the “MoMo ID overseas remittance service”.

Vietnamese who are working or studying in South Korea can transfer money from the country’s Shinhan Bank to the MoMo e-wallet app of the recipient in Vietnam.

The service is free from transaction charges from now until August 31.

Applicants in South Korea can use the Shinhan Global S Bank app to transfer money to family or friends in Vietnam, who only need the MoMo e-wallet app to receive the funds immediately.

Money in an MoMo e-wallet can be transferred to bank accounts linked with the e-wallet of the recipient or be used to pay bills, airline, train, bus, and movie tickets, insurance premiums, installment payments, and online shopping, as well as at over 4,000 MoMo-accepted points, such as restaurants, entertainment centers, and shopping centers.

“Through this partnership, Shinhan Bank and MoMo want to create an easy and transparent money transfer service for the more than 150,000 Vietnamese living and working in South Korea,” said Mr. Shin Dong Min, CEO of Shinhan Bank in Vietnam. “With a network of branches and transaction offices stretching from Seoul to Gyunggi-do, Gyeongsangnam-do, Dae-Gu, and elsewhere and an excellent digital banking platform, Shinhan Bank hopes that the partnership with the MoMo ‘transporter’ will bring customers an easy, fast and safe money transfer experience.”

MoMo now has one more practical service for users, according to Vice Chairman Mr. Nguyen Ba Diep. “We hope the service will give users an enjoyable experience, especially those in rural areas, who can receive money immediately without having to travel anywhere,” he added. “From now on, overseas workers in South Korea can send money to parents and family members in Vietnam at the lowest charges in the fastest time.”

VIISA invests $60,000 in four startups

The Vietnam Innovative Startup Accelerator (VIISA) will invest $15,000 each across four startups after five month careful selection of over 100 startups in different fields, the accelerator announced on April 23.

Vietnam’s accelerator VIISA – a partnership between Dragon Capital, FPT Corporation and Hanwha Investment & Securities – has started investing $15,000 each across four startups.

Based on set standards including having a strong team to implement business ideas, technology ideas applied in reality, ability to expand business and and grow sustainably in future, four selected startups in the fields of agriculture, banking finance, digital tech and software service are eligible for a three-month training course.

In addition to $15, 000 cash, each startup receive accommodation, office and technique expenditure. Moreover, most potential startup will have a chance to get a maximum investment $200,000.

Not only receive financial assistance and facility, selected startups in VIISA’s training course will be trained important skills such as detecting and finding potential customers, calling for contribution and sale by leading enterprises and investors like FPT, Dragon Capital Group, Microsoft Vietnam.

Dr. Le Hoang Anh, chairman of VIISA said that VIISA’s new strategy in 2018 will separate training into two parts; one named Nurture and other Accelerate. Nurture program will be for fresh startups while Accelerate will be for older startups to help them grow more.

Thanks to VIISA’s training courses, several startups have grown quickly; for instance Wisepass and Wefit was successful in calling for contribution of over $600,000 and it is calling for the new contribution. Cyfeer and Ella study has grown in sale and the number of customers. The development of startups is clear evidence for VIISA’ efforts in pushing startups in Vietnam.

These startups in VIISA’s third Accelerate program will graduate in July, 2018 as per schedule. Four startups in the program comprise Urbox.vn with it website http://urbox.vn on smart electronic gifts for individuals and enterprises ; Goalify Chat - a communication app for team work at https://goalify.chat/en/; SmartMeal specializing in designing and providing balanced meals to help customers keep fit and good body ( its website http://smartmealvn.com/); Aqua Grow Greens deigning and making products to grow vegetables as per Dutch and Japan’ technology ( its website https://aquagrowgreens.com)

Established in January 2017, VIISA has attracted 400 startup participants so far and over 18 startups have been selected into its training courses.

Businesses requested to comply with software copyright laws

A workshop on ‘Vietnamese businesses and the intellectual property right enforcement under the revised Penal Code’ was held yesterday in Ho Chi Minh City.

Belonging to the series of activities in the Action Month to commemorate the World Intellectual Property Day, the meeting discussed hot issues that have attracted much attention of the business community regarding software copyrights, especially after the revised Penal Code was effective as of January 2018.

The workshop aimed at providing businesses and managers with more detailed information on new regulations in the Vietnamese law related to the observation of intellectual property rights (IPR). It also shows how businesses can ensure their data security, intellectual property rights, while avoiding the risk of illegal activities so that they can develop healthily.

Mr. Tran Van Minh, deputy chief inspector of the Ministry of Culture, Sports and Tourism reported the task of implementing IPR in the field of computer software when the revised Penal Code was effective.

“Article No. 225 of the revised Penal Code shows the determination of the Vietnamese government in fighting against copyright piracy, including computer software copyright. Now that the severe punishments are inflicted, it is high time business leaders checked the software installation of all computers they use and adopted timely solutions in order to avoid grave damage on their finance as well as prestige or interruptions of operation once illegal activities have been discovered”, said Mr. Minh.

In this workshop, Mr. Gary Gan, Director of the Compliance Programs of APAC under BSA, presented effective solutions for businesses. He suggested that companies should make use of software asset management models to ensure employees only install and use legal software with valid licenses bought by their organization.

Computer software copyright violation is one of the most infamous IPR breaches in Vietnam. In 2017, while inspecting 2,472 computers of 63 businesses, related authorities discovered that 54 companies copied software programs without permission, with VND1.65 billion (about $72,463) in administrative fines collected.

In the beginning of 2018, relevant authorities also inspected the observation of IPR regarding computer software in 26 businesses, and collected VND750 million ($32,940) administrative fines.

The workshop was held by Vietnam Chamber of Commerce and Industry (VCCI), the National Office of Intellectual Property of Vietnam (NOIP), Vietnam Intellectual Property Association (VIPA), and BSA| the Software Alliance.

Exports of textiles and garments up strongly

Vietnam’s exports of textiles and garments are estimated at US$7.62 billion in the first quarter of this year, a 13.35% rise against the previous period last year.

Nguyen Thi Tuyet Mai, deputy general secretary of the Vietnam Textile and Apparel Association (VITAS), told a press conference in HCMC on April 20 that the textile and garment export growth rate was only 11.9% in the same period last year.

Garments alone generated around US$6 billion in export revenue, up 12.4% year-on-year. Other value-added products such as fabrics, fibers, geotextiles, and textile accessories posted rapid export growth, said Mai, who is also chief representative of VITAS in HCMC.

The United States was the largest buyer of Vietnamese textiles and garments in quarter one, accounting for a staggering 48.5%. The member countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came second, she noted.

China, South Korea, Southeast Asian nations and European Union (EU) countries were also major markets for the industry, she said, adding a majority of export products were shirts, T-shirts and jackets.

The import bill of textile and apparel materials in quarter one rose 22.8% year-on-year to an estimated US$4.6 billion. This means the trade surplus was  US$3.9 billion, up 3.6% from a year earlier.

Mai said many companies had already received orders which are enough to keep them busy until the third or fourth quarter this year. Therefore, she predicted the industry’s full-year outbound sales target of US$34-34.5 billion could be attained.

She said VITAS will further organize trade promotion programs and seminars, develop human resources, and propose changing policies and removing obstacles involving taxes, customs, charges and surcharges.

Silt buildup, high logistics costs hinder Mekong Delta’s export

Sedimentation in waterways along the Hau River and high logistics costs are causing difficulties for the Mekong Delta to export goods straight to foreign markets.

Delegates at a meeting of the Vietnam Maritime Administration, Can Tho authorities and relevant agencies in Can Tho City last week said the delta holds great export potential.

Vu Khanh Duong, director of Saigon Newport Corporation for the Southwest, said cargo transport volume in the region reached 17-18 million tons last year, including 3.3 million tons of seafood, four million tons of vegetables and 4.3 million tons of rice.

However, cargo throughput at Can Tho Port, the biggest in the Mekong Delta, just accounts for 50-60% of the port’s capacity. Last year, containerized cargo throughput at the port totaled over 99.4 million TEUs, representing a mere 1% of the total at Vietnam’s ports, said Trinh The Cuong, head of the Maritime Transport Services Division of the Vietnam Maritime Administration under the Ministry of Transport.

Silt has built up along the navigational passage to the Hau River through Quan Bo Chanh Canal, disenabling ships of 10,000-20,000 tons to come to ports in the Mekong Delta. Shipping companies often shun the delta due to high logistics costs.

Nguyen Minh Toai, director of the Can Tho Department of Industry and Trade, said Quan Bo Chanh Canal should be dredged to attract shipping firms in HCMC to the delta.

Duong said Saigon Newport Corporation has suspended shipping commodities directly from the Mekong Delta to foreign destinations.

The Government has allowed the dredging of Quan Bo Chanh Canal to make it possible for container vessels to enter ports inside the Mekong Delta, Cuong noted.

Meanwhile, Toai suggested cutting logistics fees in Can Tho City to attract more shipping companies.

Duong shared Toai’s view, saying the Vietnam Maritime Administration and relevant agencies should lower fees for shipping firms to directly export the Mekong Delta’s commodities, instead of through ports in HCMC or elsewhere.

New incentive policies for agriculture and rural development projects

The Government has issued Decree 57/2018/ND-CP on a series of incentive mechanisms and policies to stimulate investments in agriculture and rural area development.

Accordingly, beneficiaries shall be businesses which are established, operate in line with the Law on Enterprises and have agricultural projects encouraged by the State.

Beneficiaries shall be entitled to a wide range of State support in terms of land, credit access, high-tech application, workforce training, market development among others.

Specifically, projects eligible for investment incentives  shall be exempted from land and water surface rents in the first 15 years since the State allocates land/water surface to the owners of the projects. The rents shall be reduced by 50% in the following seven years.

Projects eligible for investment promotion shall be exempted from land and water surface rents in the first 11 years and shall be offered 50% reduction of the rents in the following 5 years.

Countries plan Asia-Europe railway system

Members of the Organization for Cooperation of Railways (OSJD) have plans to develop a railway transport system running from Vietnam to Russia through other Asian and European countries.

The plan is part of a memorandum of understanding signed on April 19 at OSJD’s conference of general directors in Danang City.

Directors pledged to promote logistics development through rail, expand research cooperation and supply locomotives and machinery.

Deputy Minister of Transport Nguyen Ngoc Dong said that if the aforementioned railway takes form, there would be both opportunities and challenges for Vietnam’s railway.

According to Dong, Vietnam Railways (VNR) has recently cooperated with Chinese and Russian firms in freight transport. However, Vietnam needs to concentrate on improving transport networks and logistics facilities.

In addition, Vietnam’s railway is making plans to enhance investments and connections with railways in Laos, Cambodia and other ASEAN countries to increase its transport market share, Dong told the Daily.

The conference of general directors of the OSJD approved 16 resolutions, including cooperation in infrastructure and human resource development. The resolutions will be presented in the coming ministerial conference.

OSJD was founded in 1956 with members having around 227,000 kilometers of railway at the time. Now its members possess 281,215 kilometers of railway and transport four billion passengers and six billion tons of freight per year.

Business environment still needs further improving

Vietnam’s efforts to improve the business environment and competitiveness have yielded remarkable results but they are not equal among sectors, leading the country to lag behind neighboring countries, head a meeting in HCMC on April 19.

The outlook of upcoming business environment reforms is unpredictable, according to the Central Institute for Economic Management (CIEM) and enterprises participating in a seminar titled “Improve the quality of the business environment: reform business conditions, specialized management and administrative procedures.”

CIEM deputy president Phan Duc Hieu said the biggest challenge is the unpredictability of administrative reforms. Other neighboring countries have reached their targets in reforming the business environment while Vietnam has issued Resolution 19 annually to improve the business environment without much progress seen.

Nguyen Minh Thao, head of the Business Environment and Competitiveness Committee at CIEM, said the Government’s Resolution 19 has helped Vietnam improve the business climate leading to a 14-notch leap to 68th in the world ranking last year. Electricity access, investor protection and tax payment indicators have improved.

However, many other business spheres have barely made a move, such as in asset use, ownership registration and bankruptcy handling indexes that remain unchanged.

In addition, only the Ministry of Finance has sought to improve the cross-border trade regulations under its jurisdiction while 12 other ministries have failed to do the job as required. If the time for the cross-border trade is cut by a day, US$1 million could be saved, Thao said.

CIEM president Nguyen Dinh Cung said Vietnam’s ranking in the business starting index was low and kept decreasing steadily from 2014 to 2017 despite the availability of Resolution 19 in as many years.

As for the abolishment of business conditions for specialized management, ministries have reported a reduction of hundreds of business conditions, such as the Ministry of Industry and Trade having scrapped more than 650 conditions. However, they have also added new conditions in replacement.

As for customs clearance, informal fees have become a new normal. If the informal fee is VND300,000 for each customs manifest, enterprises would end up paying VND10 trillion a year to the customs sector, Thao said.

Nguyen Dinh Tue, director of the Center for Supporting Small and Medium Enterprises of the HCMC Union of Business Association, noted the lack of the consistency of legal documents has resulted in more power for customs agencies.

Nokia cuts deal with Thegioididong to boost phone sales

HMD Global, the maker of Nokia-branded mobile phones, signed a strategic cooperation agreement with electronics retailer Thegioididong on the occasion of the launch of two new products, Nokia7 Plus and New Nokia 6, in Hanoi on April 18.

HMD Global’s representative said at the event that sales of Nokia phones via the retailer are expected to reach 500,000 units this year. They initiated the cooperation by marketing the two new smartphone models Nokia 7 Plus and New Nokia 6 (2018).

Thegioididong for its part is also optimistic to achieve sales of 500,000 phones this year as its annual sales exceed nine million units of various brands, said Nguyen Duc Tai, board chairman of Thegioididong. Together with the cooperation, the retailer will seek to boost its sales by partnering with Home Credit to offer interest-free installment plans for buyers, while Nokia buyers have to make a down payment of 30%.

Addressing the event, Kyler Tan, CEO of HMD Global in Vietnam, said the corporation and its partner will efficiently collaborate to promote consumption of all Nokia products, including the two latest smartphones, Nokia 7 Plus and New Nokia 6 (2018).

The recently released members of the Nokia family run on Android One, the latest phone operation system by Google, which allows users to enjoy a highly qualified software experience. Their devices will continue to run on the latest version along with innovations of artificial intelligence, and top security features from Google.

Talanx eyes controlling stake in PVI

Germany’s Talanx Group owning a stake of over 47% in PetroVietnam Insurance Joint Stock Company (PVI) wants to hold a controlling stake in the latter, Christian Hinch, vice president of Talanx Group, said in a meeting with Deputy Prime Minister Vuong Dinh Hue on April 19.

Christian Hinch said the group invested in Vietnam in 2011 with a stake of 25% in PVI and that to date Talanx has raised the figure up to 47% while the majority stake is still held by PVI. Now his group wants to buy more shares to hold a controlling stake, the Government news website reports.

To acquire a controlling stake in PVI and have a chance in developing the company in the ASEAN market in line with the shareholders’ wish, the vice president proposed the Government support raising foreign investor’s ownership in PVI.

In response, Deputy PM Hue said the life and non-life insurance market size in Vietnam is growing faster but its scale is quite small compared to Vietnam’s GDP, and the Government will restructure the sector to bolster its efficiency. The Government has agreed to allow PetroVietnam as the parent firm of PVI to divest all State capital from the insurer.

Being a big shareholder, Talanx has helped PVI improve governance and manpower resources. The Government will allow the group to buy more shares of PVI, Hue said.
VNN
BUSINESS IN BRIEF 29/4

VN firms cosy up to Asia-Pacific partners 

 Vinafood II starts trading on UPCoM, VN firms cosy up to Asia-Pacific partners, Foreign-invested firms’ disbursement up 7.2 percent, Steel sector has potential for 22% growth, Sotrans to cancel listing on HOSE 
 
Vietnamese enterprises must band together with their Asia-Pacific partners for stronger growth.

Said conclusion was reached at yesterday’s conference on strengthening the connection and partnership between Viet Nam’s firms and members of the Confederation of Asia-Pacific Chambers of Commerce and Industry (CACCI).

Speaking at the conference, Doan Duy Khuong, Vietnam Chamber of Commerce and Industry (VCCI)’s Vice Chairman, appreciated the important cooperation between the VCCI and the CACCI, and between Viet Nam and regional countries.

Khuong emphasised the importance of such regional collaboration, especially in the context of increasing international economic integration.

Jemal Inaishvili, President of the CACCI, noted the Vietnamese business community’s effort in recent years, with significant economic development progress.

He believed such growth has demonstrated the government’s efforts to create a smooth and favourable business environment for both local and international firms.

Seeing how the Asia-Pacific region can be considered the largest consumer market in the world with a multitude of rising powers such as Japan, China and South Korea, and a total GDP accounting for 60 per cent of the world’s, the area is full of potential, added Khuong.

He also mentioned that since the signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), cooperation with major economies and markets would soon be virtually unlimited for Vietnamese businesses, in order for them to accelerate operations, trade, while gaining access to advanced production technology and improved management and administration.

Coupled with collaboration from Asia-Pacific’s enterprises, Khuong was certain that Viet Nam’s firms will gain competitiveness and the whole economy will be significantly improved.

Organised by the VCCI, yesterday’s event aimed to create a bridge between and to help both sides’ businesses find suitable cooperation and investment opportunities.

At the same time, the VCCI hoped to reach out to senior members of CACCI’s, one of the largest organisations representing the Asia-Pacific region’s business community.

The event was part of Inaishvili’s visit to Viet Nam, along with over 30 representatives from CACCI’s member corporations, most notably from Australia, India and Nepal, specialising in textile, garment, cosmetics, consumer goods, food distribution and processing, pharmaceuticals, chemicals, industrial products distribution, construction, IT, and tourism.

Inaishvili expressed his wish to invite representatives from the VCCI and other Vietnamese business delegations to join the CACCI Summit later this year in Istanbul, Turkey.

Earlier in April, VCCI had worked with the CACCI and the General Department of Customs of Vietnam on a project to update the 2010 Incoterms, or International Commercial Terms, and a 2020 draft, in order to update and discuss previous experiences and mistakes in the fields of import, export, insurance, banking and finance.

Construction begins on TAFiCO’s second production line
   
Fico Tay Ninh Cement Joint Stock Company (TAFiCO) started construction of the second production line of Tay Ninh cement plant in the southern province of Tay Ninh on Tuesday.

Located in Cay Cay hamlet in Tan Hoa Commune, Tan Chau District, the plant’s second phase has a total investment of some VND4.8 trillion, covering an area of 11.5ha. The construction work includes mining of raw material and grinding of cement and other supporting items.

According to TAFiCO’s leaders, the second production line uses advanced European technology, including a clinker kiln with a designed capacity of 4,000 tonnes of cement per day, equivalent to 1.26 million tonnes per year (capable of upgrading to 5,000 tonnes per day) and a cement grinding mill with a capacity of one million tonne per year.

The project is expected to be completed in 2021, taking the total annual production capacity of TAFiCO to over three million tonnes of clinker and 4.5 million tonnes of cement.

Advanced technology will allow the production line to use a variety of solid and liquid fuels and produce new types of cement to meet the increasing demand for construction.

To meet the goal of sustainable development and environmental protection, the second line integrates a power generation system utilising the residual heat of the entire plant, reducing electricity consumption and dust emissions. The clinker kiln is capable of processing various types of waste.

TAFiCO aims to become one of the leading cement companies in Viet Nam in the next five years by investing in human resources, optimising operational efficiency, expanding the market and building trust with partners and customers.

Deputy Minister of Construction Bui Pham Khanh underlined the necessity to use resources optimally and asked TAFiCO to work closely with the Department of Natural Resources and Environment along with local authorities to protect the environment and ensure the health of people in the area.

At the commencement ceremony, TAFiCO donated VND1.05 billion to the Social Security Program of Tan Chau and Duong Minh Chau districts and VND300 million to support the “Fund for the Poor” in Tay Ninh Province.

Duong Van Thang, vice chairman of Tay Ninh Province’s People’s Committee, acknowledged and praised TAFiCO’s achievements in production and business activities as well as its contribution to local budgets and community development in the past.

Maybank Kim Eng Securities ups capital
   
Maybank Kim Eng Securities Limited has added US$10 million to its charter capital to VND1.06 trillion ($46.38 million).

John Chong, CEO of Maybank Kim Eng Group, said the decision to hike the capital is in line with Maybank Kim Eng Group’s business strategy and clearly demonstrates the firm’s long-term commitment in Viet Nam.

Viet Nam is one of the fastest growing economies in the region and a key component of Maybank Kim Eng’s ASEAN strategy.

“Being the first 100 per cent foreign-owned securities company in Viet Nam, we are deeply invested here; we strongly believe in the potential of the country’s economy and want to ensure that its capital markets continue to grow.”

Kim Thien Quang, CEO of Maybank Kim Eng Vietnam (MKEV), said: “Since we started our operations in Viet Nam in December 2007 with a charter capital of only VND200 billion, we have increased our capital four times and by more than 400 per cent.

“This additional capital will give us a strong foundation to enhance our competitiveness and increase our product offerings. In particular, with a capital of more than a trillion dong, we will now be able to enter a new market to offer covered warrants."

The company has had a successful first decade, he said.

“To maintain our leading position, we will continue to focus on strengthening our retail brokerage, particularly online brokerage.

“Currently 86 per cent of our brokerage transactions are via online trading. Our target is to grow it to 90 per cent. We are also looking to grow our institutional brokerage by tapping on MKE Group’s regional footprint and strong presence in ASEAN.

“As the gateway to ASEAN, we will continue to give Viet Nam’s corporates access to global investors, and bring global investors to Viet Nam.”

Masan Group shareholders approve ambitious sales targets
   
Shareholders of the Masan Group Corporation approved many ambitious targets for 2018 at the company’s annual general meeting on Tuesday.

The company expects to achieve revenues of between VND45.15 trillion (US$1.99 billion) and VND 47 trillion ($2.07 billion) this year, over 20 per cent higher than last year.

The net profit after tax attributable to equity holders of the company is targeted to increase by 55-85 per cent to VND3.4-4 trillion ($149.8-176.2 million).

Speaking at the meeting, the company’s chairman, Nguyen Dang Quang, said the ambitious goals had been set based on the positive results achieved last year and in the first quarter of this year thanks to changes in business strategies.

Last year the corporation’s after-tax profit attributable to equity holders was VND3.103 trillion, a year-on-year increase of 11.1 per cent.

In the first quarter of this year, though net revenues remained at a rather steady VND8.274 trillion, EBITDA rose by 39.9 per cent year-on-year to VND2.606 trillion.

The net profit attributable to equity holders increased by 3.4 times to VND816 billion during the period.

To achieve those results, Quang said member companies had made several drastic changes to their business strategies, and cited Masan Consumer as a typical example.

He said the company stopped trade promotions and spent the first half of the year clearing out stocks with distributors and retailers.

The company started communicating to customers again by revitalising power brands through effective communication, and scaled up its technological platform so as to be able to track inventories with distributors, he said.

“More importantly, we stopped wasting our time reading market research and guessing what out consumers want and need, and spent most of our time in the field and market to understand first-hand out consumers’ big unmet needs instead.”

To realise the double digit growth targets set for this year and the years to come, member companies of Masan Group would continue their own renovation strategies, he said.

Indeed, Masan Resources would seek strategic partnerships to accelerate transformation from a ‘miner’ into a value-added, global downstream tungsten industrial player, he revealed.

This would de-risk the business and enable the company to produce stronger cash flows across commodity cycles, he said. Its turnover is projected to be VND8 trillion this year.

Masan Nutri-Science seeks to focus on increasing the diversity of products made to meet the demand of consumers at home and abroad, to expand its market share and, together with the Masan Group, to achieve US$10 billion in turnover and $800 million in pre-tax profit by 2020.

Techcombank’s strategic plan this year is to further invest in technology in order to offer its services to everyone. This investment is expected to position the bank to grow efficiently for the foreseeable future on the back of financial inclusion.

At the meeting, Masan executives said the company had earned VND1 trillion from selling Techcombank stocks before the bank launched initiative offerings, and explained that it had sold the stocks because the corporation’s ownership rate at the bank must be reduced from 31 per cent to under 20 per cent as required by the State Bank of Viet Nam.

Masan shareholders also approved several other important proposals, one of which was an employee stock ownership plan (ESOP) for staff of the company and its subsidiaries to recognise their contributions last year.

The money raised from the issuance will be used to increase charter capital, for business requirements and supplementing working capital.

Other proposals like payment of dividends to shareholders for 2018, making certain amendments to the Company’s Charter and issuance of internal regulations on corporate governance were also approved by shareholders.

Masan said it also plans to develop healthcare products through the acquisition of companies in the industry.

Honeywell opens first Asian cyber-security centre in Singapore
   
US-based technology company Honeywell opened its first industrial cyber-security centre of excellence in Asia at Singapore’s Changi Business Park on April 25.

The centre has been developed with the support of Singapore Economic Development Board (EDB) and is designed to help defend the region’s industrial manufacturers against evolving cyber-security threats.

“The only way manufacturers can reap the benefits of digital transformation, such as increased uptime and reduced maintenance, is to make sure their industrial environments are cyber secure,” said Jeff Zindel, vice president and general manager, Honeywell Industrial Cyber Security.

“Today marks another important step forward in Honeywell’s leadership in industrial cyber security, further strengthening our ability to secure and protect assets, operations and people. The centre’s state-of-the-art capabilities and managed security services improve cyber security protection, detection, management and response for customers, which are key enablers for successful digital transformation in the industrial sector,” Zindel said.

The cyber-security centre will be used to conduct proprietary research, develop new security technologies, provide hands-on training and certifications as well as test and validate actual solutions deployed at customer sites. In addition to serving as a research and development lab, it will also deliver managed security services to help customers reduce the risk of security breaches and proactively improve their security posture. These services include continuous security and performance monitoring and alerting, threat detection and risk management, security device management and incident response with 24-hour expert support throughout the year.

“Cyber security is vital not just for the technology industry, but also our industrial sector and critical infrastructure, which are being increasingly digitalised,” said Gian Yi-Hsen, executive director, cities, infrastructure and industrial solutions, EDB.

“We are excited that Honeywell has chosen Singapore as the base for its new industrial cyber-security centre to leverage our world-class infrastructure and vibrant talent pool to develop security innovations and reinforce the security within the industrial space.”

The centre is the third Honeywell facility of its kind in the world. Earlier this year, the company had opened a new centre in Dubai to serve customers in the Middle East and Europe. Honeywell’s initial cyber-security centre is located in Atlanta, Georgia, United States.

Starting operations in Viet Nam in 2005, with offices in Ha Noi and HCM City, Honeywell provides cutting-edge technologies and solutions in the fields of aerospace, home and building technologies, safety and productivity solutions and performance material and technologies. Technologies from Honeywell UOP are being used in PetroVietnam’s Dung Quat and Nghi Son Refinery plants, Vietnam Airlines, Jetstar Pacific and Vietjet Air as well as in several universities in Viet Nam.

Vinafood II starts trading on UPCoM

Vinafood II was officially started trading on unlisted public company market (UPCoM) and registered to list 114.8 million shares with the code VSF, yesterday.

Reference price on the first trading day was VND 10,100 per share, yesterday.

In 2018, Vinafood II said it plans to speed up trade promotion program to food products, exploit large-scale trade markets such as China and Africa.

Vinafood II’s representative affirmed this year sees its strong demand for exports.

As per plan, Vinafood II will try the diversification of rice export markets, not to depend on the existing ones.

It targets to reach post-tax revenue of VND 5,127 million and dividend payout ratio at 1.9 percent.

Trade promotion programmes improved to boost exports

The Vietnam Trade Promotion Agency (Vietrade) will enhance supervision over the implementation of trade promotion programmes to improve their efficiency and provide training to associations and local agencies in organising trade promotion activities.

Trade promotion programmes helped generate more than 200 billion USD from exporting goods and commodities in 2017, according to Vietrade.

At a conference in Hanoi on April 24 on promoting Vietnam’s exports in 2018, Vu Ba Phu, Director of Vietrade said in 2017, for the first time, Vietnam’s exports surpassed 200 billion USD.

The country earned more than 214 billion USD from exporting goods and commodities, up 21.2 percent compared to 2016.

“Increased export had significantly contributed to growth of  Gross Domestic Product, improving trade balance, stabilizing the macro-economy, fostering production while creating jobs and incomes for millions laborers,” Phu said.

“Developing the domestic market was also important, with trade promotion programmes organised in border, mountainous and remote areas in line with the campaign of Vietnamese prioritizing Vietnamese goods.”

The national trade promotion programme helped export companies to enter new markets of significant potential and expand exports to major markets.

Vietrade’s 2017 statistics showed that exports to ASEAN markets rose by 24.2 percent, reaching 21.68 billion USD. It saw a surge of 61.5 percent to 35.46 billion USD in China, and a rise of 14.8 percent to 16.8 billion USD in Japan.

At the forum, the delegates were oriented to focus on two key export groups, including agro-forestry-fishery with the focus on cocoa and cassava, and industrial products with the focus on garment and textile and steel products.

Besides expanding new markets, exporters were advised to work to improve the quality of Vietnamese goods.

Vietnam earned 55.56 billion USD from exports in the first quarter of this year, a rise of 24.8 percent year on year.

Maybank Kim Eng Securities increases capital

Maybank Kim Eng Securities Limited has added 10 million USD to its charter capital to 1.06 trillion VND (46.38 million USD) in Vietnam.

John Chong, CEO of Maybank Kim Eng Group, said the decision to hike the capital is in line with Maybank Kim Eng Group’s business strategy and clearly demonstrates the firm’s long-term commitment in Vietnam.

Vietnam is one of the fastest growing economies in the region and a key component of Maybank Kim Eng’s ASEAN strategy.

“Being the first 100 percent foreign-owned securities company in Vietnam, we are deeply invested here; we strongly believe in the potential of the country’s economy and want to ensure that its capital markets continue to grow.”

Kim Thien Quang, CEO of Maybank Kim Eng Vietnam (MKEV), said: “Since we started our operations in Vietnam in December 2007 with a charter capital of only 200 billion VND, we have increased our capital four times and by more than 400 percent.

“This additional capital will give us a strong foundation to enhance our competitiveness and increase our product offerings. In particular, with a capital of more than a trillion dong, we will now be able to enter a new market to offer covered warrants."

The company has had a successful first decade, he said.

“To maintain our leading position, we will continue to focus on strengthening our retail brokerage, particularly online brokerage.

“Currently 86 percent of our brokerage transactions are via online trading. Our target is to grow it to 90 percent. We are also looking to grow our institutional brokerage by tapping on MKE Group’s regional footprint and strong presence in ASEAN.

“As the gateway to ASEAN, we will continue to give Vietnam’s corporates access to global investors, and bring global investors to Vietnam.”

Hoa Phat Dung Quat steel complex to be operational in Q3

The process of the Hoa Phat Dung Quat iron and steel production complex project is on schedule with the first line expected to be operational in the third quarter of this year, meeting demands of the central and southern regions. 

According to Hoa Phat Group, other items are projected to be completed from the fourth quarter of this year to 2019. It aims to put both phases of the project into a trial run in late 2019.

By the end of the first quarter of 2018, Hoa Phat Group reported revenue of 13 trillion VND (572 million USD), and a post-tax profit of 2.2 trillion VND (96.8 million USD), up 25 percent and 14 percent year-on-year, respectively. The steel sector remained the driver of Hoa Phat during the reviewed period, the group said.

The busy construction market in the first months helped Hoa Phat grow nearly 10 percent against the corresponding time last year, with an output of 542,000 tonnes. With the yield, the group has maintained its leading position in the domestic construction steel sector with its market share exceeding 24 percent.

Between January and March, the group exported 73,000 tonnes of steel sheets, a rise of 40 percent year-on-year, earning more than 42 million USD. Its major markets included Australia, ASEAN member nations, the US and Canada.

Of note, Hoa Phat Group has shipped wire-drawing steel to the Republic of Korea (RoK) and Laos for the first time.

Other products like interiors, refrigeration and building equipment have also maintained their market shares.

In the sphere of real estate, the group is speeding up the hand-over of its Mandarin Garden 2 housing project and Hoa Phat 70 Nguyen Duc Canh apartment building, and infrastructure projects at several industrial parks.

Thanks to its outstanding performance, Hoa Phat has been named in the list of the strongest Vietnamese brand names, and taken the lead among the top ten prestigious construction material businesses in the country.

Foreign-invested firms’ disbursement up 7.2 percent

Foreign-invested enterprises disbursed 3.88 billion USD in the first quarter this year, up 7.2 percent annually, according to the Ministry of Industry and Trade’s Foreign Investment Agency (FIA).

The country attracted 618 newly-licensed projects with registered capital of 2.12 billion USD, up 25.4 percent in volume, proving that Vietnam remains attractive to foreign investors.

Among 76 countries and territories investing in Vietnam in the first quarter, the Republic of Korea took the lead with 1.84 billion USD, accounting for 31.6 percent of the total. Hong Kong (China) ranked second with a registered capital of roughly 689 million USD, equivalent to 11.9 percent while Singapore poured 649 million USD, or 11.2 percent, coming third.

FDI firms invested in 19 out of 21 sectors, mostly in manufacturing and processing with 188.52 billion USD (58.5 percent). It was followed by real estate with 53.56 billion USD (16.6 percent) and electricity, gas and water supply with 21 billion USD (6.5 percent).

Their projects now cover all the 63 cities and provinces nationwide. Ho Chi Minh City attracted the most FDI with 44.25 billion USD, accounting for 13.7 percent of the total. The southern province of Binh Duong came next with 30.67 billion USD (9.5 percent), followed by Hanoi with 27.69 billion USD (8.6 percent). However, these figures do not project a declining investment flow into the country in 2018.

According to economists, there were 618 newly-licensed projects during the period, up 25.4 percent in volume but down 27.3 percent in value. At the same time, 199 projects registered additional capital of over 1.78 billion USD, down 54.6 percent annually. The total newly-licensed and additional capital topped 3.9 billion USD, down 43 percent year-on-year.

A survey by the General Statistics Office indicated that 33 percent of businesses performed better in the first quarter while 24.6 percent met difficulties and 42.4 percent enjoyed stable production and trade.

It is forecast that 55.7 percent of firms will be opportunistic about their performance, 10.4 percent will face obstacles and 33.9 percent operate stably in the second quarter.

A representative from the Centre for Japanese Investment Promotion in Ho Chi Minh City has lauded improvements in e-government system, food sample inspection, and risk management in customs clearance stations.

Deputy head of the Health Ministry’s Vietnam Food Administration Le Van Giang said the Vietnamese government drastically asked agencies concerned to not cause difficulties for enterprises while refining e-government system from the grassroots to central level, towards improving the business climate for domestic and foreign firms.

Steel sector has potential for 22% growth
   
Viet Nam’s steel industry has high potential to reach a production growth rate of 22 per cent and expand export markets this year.

However, this will be possible only if it overcomes difficulties such as trade defence lawsuits and high imports, according to the Viet Nam Steel Association (VSA).

The sector faced 30 trade defence lawsuits from other countries in 2017, many of which have continued into 2018.

These include anti-dumping cases for cold-rolled stainless steel, steel plates and H-shaped steel as well as trade defence cases related to pig iron, long steel and colour-coated steel sheet.

By March 2018, Viet Nam had exported 446,000 tonnes of steel products for US$321 million, up 38 per cent in volume and 63 per cent in value compared to the same period last year.

The quality of Vietnamese steel has met the demand of choosy markets, such as the United States, Australia and Europe, rising to top position in regional and world markets.

However, in the first few months of 2018, Viet Nam imported 1.2 million tonnes of steel worth $808 million, a drop of 5 per cent in volume and an increase of 22 per cent in value.

VSA Vice President Nguyen Van Sua said despite a fall in imports and rise in exports, the volume of imported steel remained high.

According to him, the domestic steel industry was still dependent on imports as the domestic production process was yet to be synchronised, along with low capacity in producing steel for the mechanical manufacturing sector. Meanwhile, domestic firms are unable to produce many input material products, such as hot-rolled steel and pig iron, thus making production slow and expensive.

With the recent market recovery and extensive economic integration, especially the signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the upcoming signing of the free trade agreement between Viet Nam and the European Union, the Vietnamese steel sector has the opportunity to expand markets, making the growth target of more than 20 per cent feasible.

But the fact is when Viet Nam increases steel exports, the import market will strengthen trade defence measures.

Tran Tuan Duong, general director of Hoa Phat Group, said Vietnamese firms should maintain the domestic market, while for export activities, they should adhere to the regulations of free trade agreements and actively cooperate with other countries when faced with anti-dumping lawsuits to avoid losing markets or paying high taxes.

According to Duong, market protection solutions are not enough and businesses themselves should enhance their competitiveness and make use of all opportunities for development.

A representative of the Viet Nam Steel Corporation said obstacles to exports mostly came from trade barriers and defence measures of importing countries. Therefore, the corporation would continue to improve efficiency in production and business by enhancing market forecasts and having flexible production and business activities according to market development.

Despite the lack of capacity and experience, Vietnamese firms could still fight trade defence in the context of integration, the representative said.

VSA highlighted the need for cooperation with countries in the face of trade defence problems, along with the development of professional teams to deal with investigation and data gathering to protect steel firms in domestic and foreign markets.

PM calls for new measures to boost exports
   
Prime Minister Nguyen Xuan Phuc has affirmed that having more control over the market will help the Vietnamese economy in the long run.

He made the statement during a national conference in Ha Noi on Monday, hosted by the Ministry of Industry and Trade, while discussing comprehensive measures to boost exports.

The PM said that successful countries and businesses considered the world as a market that they could exploit to expand their reaches, and thus they sought ways to improve their competitiveness.

The domestic market, with a population of more than 90 million, was important, but it was necessary to look at the global market to achieve sustainable growth, he said.

The leader noted that while administrative procedures had improved, they remained below international standards. He expressed his wish to listen to policy feedback from localities and associations, in order to increase the value of exported commodities, and make it easier for Vietnamese firms to join the global value chain.

He underscored the need to update Vietnamese exporters about market information and legal regulations abroad, as well as potential opportunities and risks, and orientations to manufacturing and exports.

Ministers, alongside leaders of localities, are to be required to look towards exports to contribute to sustainable growth. Based on public feedback, the PM will issue a directive on measures to boost manufacturing and exports.

At the conference, Minister of Industry and Trade Tran Tuan Anh said the country’s exports grew by 15.8 per cent last year, exclusive of cell phones, computers and electronic spare parts.

In 2017, there were four new items that recorded export revenue of over US$1 billion, bringing the total number of items to 29. The number of items with an export revenue of over $2 billion was 20, while eight had an export revenue of over $6 billion.

Exported products of the processing industry continued to play an important role in export growth, accounting for more than 81 per cent of total exports, up sharply from 61 per cent in 2011. The proportion of agricultural and aquatic products decreased to 12.1 per cent. Meanwhile, export of crude, coal, petrol and minerals accounted for just 2 per cent of total export turnover.

“The export market was also expanded toward diversification and multilateralisation, especially for industrial goods,” Tuan Anh said.

In 2017, the US market accounted for 20.6 per cent of exports of industrial goods, the European Union (EU) market accounted for 17.6 per cent, while China, Japan and South Korea combined accounted for close to 30 per cent.

The leader of the MoIT said that local firms had made good use of opportunities from integration.

Exports to countries that have signed free trade agreements with Viet Nam recorded high growth rate in 2017, such as ASEAN, increasing by 24.2 per cent to $21.68 billion. Exports to China were up by 61.5 per cent to $35.46 billion, while Japan climbed by 14.8 per cent to $16.8 billion and South Korea surged by 30 per cent to $14.8 billion.

The localisation rate in export products was also gradually improved. For example, in the textile sector, the localisation rate increased from15-17 per cent in 2000 to over 50 per cent in 2017.

However, Tuan Anh said exports still predominantly relied on foreign-invested enterprises, which contributed over 70 per cent of the country’s total export value, up 23 per cent against 2016.

Though tariffs have been removed, Viet Nam’s farm produce such as milk, pork, fruits and vegetables still find it hard to enter foreign markets, he said.

The MoIT proposed three major measures to sustainably step up exports, including restructuring agriculture, closely controlling supply, and gradually improving the quality of agricultural and aquatic products.

It will also work to maintain stable export markets, improve the efficiency of trade promotion, and cope with trade defence and protectionism that are not in line with international commitments.

At the same time, the ministry will step up institutional reform, refine legal corridors for export activities, accelerate administrative reform, and clear barriers to payment and credit to ensure there is sufficient capital for manufacturing and export, the minister added.

BIDV plans to raise chartered capital by 28% this year
   
The Bank for Investment and Development of Viet Nam (BIDV) has proposed a plan to its shareholders to increase its chartered capital this year by 28 per cent, compared to the end of 2017.

In the plan which was unveiled at the bank’s annual general shareholder meeting on April 21, BIDV proposes to add VND9.45 trillion (US$418.2 million) to its chartered capital, so the figure would reach VND43.65 trillion by the end of 2018.

Specifically, BIDV will issue 965 million ordinary shares with a face value of VND10,000 per share. Of the total, more than 171 million shares will be sold to the public through an initial public offering or private placement, 603.3 million shares to be sold to foreign strategic investors under private placement, and over 171 million shares sold under the Employee Stock Ownership Plan (ESOP).

The increase in chartered capital is part of BIDV’s plan to increase its equity to meet the minimum capital adequacy requirement set by the State Bank of Viet Nam, which is aligned with Basel II.

The move is also expected to help the bank improve the credit rating results of international institutions, enhance prestige in its business operations, and improve its financial capacity and competitiveness, in both domestic and international markets.

Also, the bank commits to use added capital in the business areas of BIDV, with reasonable guidance to ensure the capital is used with efficiency and maximises benefits to shareholders.

Regarding the profit distribution plan in 2017, the Board of Directors has submitted to shareholders to approve the cash dividend payment plan at the rate of 7 per cent. The total amount of dividends is nearly VND2.4 trillion. The remuneration of the Board of Directors and Board of Supervisors in 2018 will be, at maximum, 0.44 per cent of the profit after tax in 2018.

In 2018, BIDV sets the target of credit growth of up to 17 per cent; before-tax profits of VND9.3 trillion; a bad debt ratio below 2 per cent; and a dividend payout ratio is expected to range from 5 to 7 per cent.

At the meeting, BIDV General Director Phan Duc Tu said that in 2017, BIDV continued to be the market leader, maintaining its position and market share in the industry. Accordingly, its total assets reached over VND1.2 quadrillion, up 19.5 per cent, compared to 2016. Total deposits of the bank reached VND 1.12 quadrillion, up 19.7 per cent over the beginning of the year.

The consolidated profit before tax was VND8.6 trillion, up 13 per cent year on year, exceeding the target set by the General Meeting of Shareholders in 2017, with a return on assets reaching 0.63 per cent and a return on equity (ROE) of 5 per cent.

Sotrans to cancel listing on HOSE
   
South Logistics Joint Stock Company (Sotrans) will cancel its listing on HCM Stock Exchange and move to the Unlisted Public Company Market (UPCoM) by the end of this year.

This was revealed at the company’s annual shareholders’ meeting in HCM City on Monday.

Since December 2017, two largest shareholders of Sotrans – Viet Nam Electrical Equipment Joint Stock Corporation and Indo Trans Logistics Corporation (ITL) – have increased their holdings to over 88 per cent of Sotrans’ charter capital.

As per the regulation of HCM Stock Exchange, Sotrans’ shares, traded with the code STG, are no longer eligible to be listed on the southern exchange because the total number of voting shares held by non-large shareholders fall below the required threshold of 20 per cent.

“We will terminate the listing after one year as per regulation, so around December this year, Sotrans will cancel the listing and transfer to UPCoM,” a representative of Sotrans said at the meeting.

ITL now has 28.4 million shares, equivalent to 33.28 per cent of Sotrans’ capital. The company wants to lift its ownership rate here.

Sotrans has submitted a plan to faciliate ITL’s share purchase to increase its holding here to a maximum of 43.2 per cent without having to make a public tender offer. The plan will be implemented after receiving shareholders’ approval.

Sotrans’ shares are being traded at some VND20,600 (US$0.90) per share on HCM Stock Exchange. ITL is expected to spend some VND176 billion for the planned purchase. Transactions will be carried out via order matching or put-through methods.

UPCoM is a minor stock exchange under the management of Ha Noi Stock Exchange with lower requirements for listing standards or information disclosure. With more listing of State-owned enterprises after equitisation, the market’s profile has risen significantly, with over 730 listed companies.

Sotrans’ business improved last year with total sales of VND1.46 trillion, up by 115 per cent year-on-year, thanks to the launch of the Phu My warehouse project and development of a new agent system.

Its consolidated net profit reached VND521.3 trillion, 4.7 times higher than 2016.

The company has decided to pay dividends at the rate of 15 per cent in the form of stocks. It will finalise the shareholders list for the payout in May.

It has targeted a revenue growth of 12 per cent in 2018 to earn VND1.66 trillion, but the net profit is projected at just VND171.4 billion, down 67 per cent from 2017, due to the absence of large dividend earnings like in 2017.

Q2 earnings, high dividend will attract investors
   
Listed companies with positive second-quarter earning prospects, as well as high dividend payment, are likely to attract investors in the future, after the effect of the Q1 result has cooled.

In the latter half of April, over 20 companies will finalise the lists of shareholders for cash dividend payout at the rate of 5 per cent to 35 per cent. Many companies have seen their share prices soar in recent sessions.

Vnsteel – Vicasa Joint Stock Company, which trades shares on the Unlisted Public Company Market (UPCoM) under the code VCA, will pay cash dividend at a rate of 30 per cent on May 15.

After the dividend announcement, the shares climbed over 20 per cent from VND16,400 per share on April 11 to VND20,000 (US$0.88) per share on April 16 before falling to nearly VND19,000 by the end of last week. The steel shares were also among the most active stocks on the market thanks to a surge in demand.

The increase of cash dividend to 24 per cent, a half rise compared to the old rate of 16 per cent, also helped boost shares of Tuong An Vegetable Oil Joint Stock Company (TAC). Its 2017 net profit result was also good at VND166 billion, up 98 per cent against last year.

TAC price rose 12 per cent in one week, from VND53,500 per share on April 12 to VND59,800 each on April 20.

Earlier, shares of Ben Tre Aquaproduct Import and Export Joint Stock Company (ABT) also increased from VND36,000 per share in early April to VND38,500 on April 16 before falling to around VND37,000, after the company reported good business results and a dividend rate of 30 per cent for 2017.

According to statistics from the two main stock exchanges in HCM City and Ha Noi, listed businesses on these two exchanges have enjoyed profit growth in the six consecutive quarters ending December 2017.

Growth expanded across almost all sectors thanks to favourable macroeconomic conditions, low lending rates, as well as rising consumer demand.

Such encouraging results have already reflected in their share price increases from last year. The sectors with the highest investment returns included financial services, real estate and banking.

As the effect of Q1 earnings has faded, many analysts have predicted that Q2 prospects will have a stronger impact on share prices in the coming time, especially in the latter half of the second quarter.

According to Bao Viet Securities Company (BVSC), promising sectors in the medium term include banking, real estate, information technology and thermal power. Many of these businesses reported good results in the first quarter.

However, BVSC’s analysts have also warned that positive earnings impact may be modest, and risk is rising as many shares in these sectors have seen a prolonged rally.
Nawaplastic acquires majority interest in Binh Minh Plastics

Nawaplastic Industry Co., Ltd., a subsidiary of Thailand's SCG, has completed the purchase of an additional 185,970 shares in Binh Minh Plastics JSC (BMP), taking the Thai investor closer to dominating BMP.

Notably, the transactions were conducted on April 6-9. After the deal, Nawaplastic increased its holdings in BMP to from 19.89 to 50.12 per cent, equalling over 41 million shares, according to Bizlive.

At the date of the transactions BMP’s shares were valued at VND70,900 ($3.11), thus, Nawaplastic spent approximately VND11 billion ($483,115) on the deal.

The deal is part of Nawaplastic’s plan to buy an additional 818,000 BMP shares to increase its holding to 50.89 per cent. The transactions are expected to occur between April 4 and May 3 this year.

Thus, by May 3, the Thai investor will buy the remaining 630,000 shares.

If the plan comes true, Nawaplastic will secure its hold in BMP, although it has already achieved a majority interest.

Previously, Nawaplastic bought 99.9 per cent of the shares BMP offered at an auction organised on March 9.

According to information published by the Ho Chi Minh City Stock Exchange (HSX), two investors joined the auction: Nawaplastic and a domestic individual. As a result, Nawaplastic spent approximately VND2.329 trillion ($102.33 million) buying 24.139 million of the 24.159 million shares on offer at the initial price of VND96,500 ($4.24).

Nawaplastic, a wholly-owned subsidiary of Thai Plastic and Chemicals PCL (TPC), specialises in manufacturing and distributing PVC.

Through the acquisitions in BMP and Tien Phong Plastic, Nawaplastic would seize their advantages in manufacturing and distribution systems as well as their brands to realise SCG and Nawaplastic’s target to control the construction materials market in Vietnam.
Vietnam vegetable and fruit exporters heavily reliant on China

 Vietnam’s vegetable and fruit exporters are increasingly dependent on China as the neighboring country accounts for 77.3% of their shipments this year, up from 73.6%  last year, news website Vneconomy reports.

Vegetable and fruit exports in the first three months of this year generated revenue of US$649.6 million, up 54.3% year-on-year. China was the biggest importer of Vietnamese vegetables and fruits with US$502.1 million, up 62.1% against the year-ago period.

The U.S., Vietnam’s second largest vegetable and fruit importer, purchased US$18.4 million worth of vegetables and fruits from Vietnam. Japan came in third with US$17.4 million.

South Korea, Thailand, Malaysia and the Netherlands are also in the top ten list of Vietnam’s vegetable and fruit importers.

In related news, as from April 1 Vietnamese vegetable and fruit shipments bound for Guangxi province of China are made traceable.  A representative of the Ministry of Industry and Trade said the new rule would help ensure food safety for customers.

Danang eyes sustainable tourism development

The central coast city of Danang has drawn up a plan to maintain the competitiveness of its tourism services and ensure the sustainable development of the sector.

Tran Chi Cuong, deputy director of the Danang Department of Tourism, said the plan would include bolstering cooperation between Danang and its two neighboring provinces, Thua Thien-Hue and Quang Nam.

Cuong said the city would ask the central Government to adopt preferential policies for the three localities to further develop tourism.

The city government will work with the Vietnam Tourism Association and other tourism management organizations in the city to carry out promotion programs, improve tourism service quality, and develop human resources for the sector this year.

The department plans to open a representative office in South Korea and set up representative offices in Japan, China and even Europe to bring in more international tourists.

Until 2020, Danang will convert Tien Sa and Thuan Phuoc ports into tourist ports, develop tourism products and services at night along the bank of the Han River, upgrading and building boat piers and boat fleets to foster waterway tourism, and launch services at Cat Vang Beach, K20 historic site and La Huong vegetable farm.

Last year, the tourism sector contributed 24.4% to Danang’s gross regional domestic product (GRDP), above 23.72% in the previous year.
VNN