BUSINESS NEWS IN BRIEF 31/8 Mitsubishi plans to make electric cars in Viet Nam       Japan’s Mitsubishi Corporation plans to invest in an electric automobile manufacturing factory in Viet Nam, said Executive Vice President Hiroshi Sakuma during a meeting with Vietnamese Deputy Prime Minister Vuong Dinh Hue in Ha Noi on Wednesday. At the meeting, Sakuma said his firm was evaluating the feasibility of the project and look forward to new regulations on environmental protection taxes to promote investment in the country. Hue said Viet Nam’s National Assembly would soon discuss and pass the Law on Environmental Protection Tax. There would be incentives commensurate with environmentally friendly products. The Mitsubishi Corporation is currently investing in two BOT (Build-Operate-Transfer) projects in Viet Nam, namely the Vung Ang 2 Thermal Power Plant (1,200 MW) and Vinh Tan 3 (1,980 MW) Power Plant. The corporation and Viet Nam’s Ministry of Industry and Trade signed an investment agreement in early 2017, initiating the land lease contracts and purchasing power. In which, Mitsubishi expects the Vietnamese Government to soon resolve the ceiling limit for loans and tax incentives in order to put the project into operation soon, strengthening the electricity capacity of the Vietnamese grid. Hue asserted that power projects were important to Viet Nam. He highlighted Mitsubishi’s business investments in energy, infrastructure, trade and services. He wanted Mitsubishi to complete the necessary work for the two parties to sign the implementation of Vung Ang 2 and Vinh Tan 3 during the upcoming visit of Prime Minister Nguyen Xuan Phuc to Japan in October this year.  LienVietPostBank signs $50 mn credit agreement LienVietPostBank has signed a $50 million credit agreement with JPMorgan Chase Bank, N.A., Singapore branch, with a three-year term. The loan will contribute to enhancing the bank’s position in domestic and international financial markets, help it supplement its medium and long-term foreign currency, improve its mobilization structure, and meet part of demand for foreign currency loans from domestic enterprises. Mr. Pham Doan Son, General Director of LienVietPostBank, expressed his appreciation of the support and cooperation from JPMorgan Chase. “The $50-million loan will help LienVietPostBank integrate into the international financial market,” he said. As at June 30, 2018, the bank’s total assets stood at VND175.881 trillion ($7.6 billion), up 7.62 per cent since the beginning of the year. Outstanding credit increased 13.32 per cent to VND116.859 trillion ($5 billion) and mobilized funds 16.57 per cent to VND156.712 trillion ($6.7 billion). Non-performing loans fell to 0.98 per cent from 1.07 per cent at the beginning of the year. LienVietPostBank is present in 63 cities and provinces in Vietnam and has more than 360 branches, more than 1,000 transaction offices, and more than 10,000 transaction points, providing banking products and services at the district and commune levels. It is expected that by 2020 it will cover all 700 districts in the country and realize its goal of becoming the leading retail bank in Vietnam - “A bank for everyone” - by focusing on providing banking products and services for individuals, households, and small and medium-sized enterprises (SMEs), especially in the agriculture sector, while expanding its activities to rural and remote areas via the post office network. 2017 was a successful year for LienVietPostBank, with outstanding growth in total assets, which reached VND163 trillion ($7 billion), revenue to VND1.7 trillion ($73.9 million), and network expansion to 229 branches and transaction offices along with 1,123 postal transaction offices. After ten years of operations, it is now in the Top 10 largest private banks in terms of assets, been in Top 100 strong Vietnamese brands for four years in succession, and ranked 42nd in the VNR500 - the Top 500 largest private companies in Vietnam - in 2017. Digiworld partners with Incontech Vietnamese electronics distributor Digiworld (DGW) last week announced an official cooperation arrangement with Incontech Corporation Vietnam in order to expand the market for the PNKids brand. PNKids gummy vitamin supplements, a product of the Incontech Corporation made in the US, is now a leading multivitamin in Singapore. PNKids has many health supplements for kids, in which PNKids gummy (soft candy) for kids from three years old (who can chew), supplements the essential vitamins and minerals needed for physical and brain power growth in kids. It differentiates itself and leads in the Singaporean market by only using Pectin (which creates elasticity) rather than gelatin, which is extracted from pork skin or animal bone. Pectin is extracted from fruit, so has a natural color and flavor and helps kids absorb nutrition. PNKids gummy is diverse in shape, eye-catching, in many flavors, and soft and easy to chew, attracting kids’ attention from the first glance. PNKids gummy also does not contain soy, nuts, egg, artificial colors, artificial flavors, preservatives, gluten, or lactose sugar, as some kids are allergic to these ingredients. Depending on their children’s level of nutrition, parents can choose one of five variants for growth and two for helping digestion and increasing resistance. “PNKids Gummy is No. 1 in Singapore and we’d like to take this position in Vietnam,” said Mr. Cachino Thong, Managing Director of Incontech Asia Pacific. “To fulfill this ambition, we need DGW as a market expert with effective management tools, in particular consulting competency and brand building. We expect its core values will help PNKids expand its distribution channels faster, build its brand more strongly, and better meet customer demand.” “With over 20 years of experience in market expansion, chain management, and customer care, we have firm foundations to meet our partner’s objectives, from infrastructure to human resources management,” said Mr. Doan Hong Viet, CEO of DGW. “Incotech is a major corporation and has various health product lines of high quality that are suitable for Asians. This cooperation is an opportunity to bring good products to Vietnam and enhance health.” DGW marked its first footsteps into new industries last year: healthcare and FMCG. It has a core strength from five value-added services, including market analysis, marketing, sales, logistics, and after-sales service. It provides top-notch services and tailormade solutions for rapid and effective market penetration and market expansion of brands entering Vietnam. The Incontech Group is a leading wellness and healthcare company with offices in Singapore, Indonesia, Malaysia, China, Japan, and Vietnam. It started out in 1992 as a small trading firm in Oregon, US, focusing on exporting nutritional supplements and personal products. These products are now distributed to over 15,000 retail stores around Asia. Risen Energy opens Hanoi office The Risen Energy Co., a listed photo-voltaic (PV) module producer and industry leader in China, has announced the formal establishment of a branch office in Hanoi as part of its expansion overseas. It will roll out a localization plan to rapidly and efficiently serve global clients and establish a strong footprint in Vietnam. The company plans to employ upwards of ten local executives and leverage the superior resources it has developed outside of its home market over several years to be in a position to provide a rapid response to service calls. It will also continually improve service standards and after-sales services based on market expectations, in a move to build trust and credibility with local customers. Risen Energy said it has reached agreements with several leading Vietnamese firms as an initial step in staking out a presence in Southeast Asia. According to its initial roadmap, the Hanoi branch office will begin investing in EPC projects generating in the aggregate 150 MW during 2018 and expects the figure to double next year. It will also continue to invest in Vietnam, as it views the country as a GW-grade market thanks to its stable political and business environment. International growth has been a focus of the company over the last year and is in response to evolving industry trends and its commitment to meeting market demands with cutting-edge manufacturing technologies and the rich experience it has already accumulated in terms of EPC projects outside of its home market. With the aim of rapidly establishing a footprint in Southeast Asia, it plans to speed up investment in power stations as well as in the provision of EPC services in Vietnam to create new revenue streams following the setting up of the branch office. To optimize its energy infrastructure, the Vietnamese Government has undertaken efforts to shift to clean energy resources such as wind and PV power. The country plans to have PV power stations in operation with an aggregate installed capacity of 850 MW by 2020 and 10 GW by 2030. To meet this goal, the government has introduced a series of favorable policies in terms of PV-based electricity prices, taxes on PV project developers, import tariffs, and land use taxes, all of which have facilitated the expansion of PV developers in the country. Ngan Luong introduces QR PAY payment method Online payment gateway Ngan Luong has officially launched its QR PAY payment method, allowing customers to make fast payments by scanning the QR code via apps of 15 banks. Customers can easily use the service through the mobile banking app of their bank to make payment transactions without entering card information or bank account details. Transactions are conducted in seconds by means of a QR code scan, increasing the experience and saving time. To make such payments, customers need only have a smartphone with a camera to scan the QR code, log in to the bank’s mobile banking app, and follow some simple steps. Ngan Luong has expanded its cooperation with 15 banks, including Vietcombank, Vietinbank, Agribank, BIDV, SHB, ABBank, SCB, and TVB. More than 55 per cent of Vietnam’s population own a smartphone and 41.8 million are 3G subscribers. In excess of 9,000 locations accept payments at convenience stores, supermarkets, restaurants, and cinemas, and QR code payments have become part of consumption habits in the country. By offering QR code payments alongside conventional electronic payment methods such as cards, internet banking, or e-wallets, Ngan Luong provides a more convenient, faster and more secure payment channel and encourages customers to move away from using cash. For businesses using e-payment gateway services, Ngan Luong expects QR code payments to be an effective tool that helps businesses reduce investment costs and increase sales by 15-20 per cent. Ngan Luong.vn is a leading online payment gateway and telecommunications portal in Vietnam, in terms of products and services, market coverage, and payment flows. Developed by the NextTech Group (formerly the PeaceSoft Group) in 2009, it allows individuals and businesses to send and receive payments online quickly, safely and conveniently. Ngan Luong was ranked in the Top 10 outstanding payment solutions in Vietnam by Forbes magazine, with a total of 15 million transactions, a total transaction value of up to $200 million, and 1.3 million users. AAM in danger of listing cancellation Mekong Fisheries JSC shares have been included on the southern bourse’s warning list from August 31 and the company is facing the risk of a listing cancellation. According to the HCM Stock Exchange (HOSE), the decision was made because Mekong Fisheries had reduced its charter capital to below VND120 billion (US$5.3 million) based on the firm’s audited financial report for the first six months of 2018. Mekong Fisheries’ six-month financial report showed the company’s charter capital had been cut from VND126.36 billion in early 2018 to VND99.36 billion, which is below the VND120 billion required by HOSE. HOSE also said Mekong Fisheries would have one year to increase its charter capital, otherwise the company’s listing would be cancelled. Mekong Fisheries JSC has more than 12.6 million shares on HOSE under the ticker AAM. Its shares edged down 0.4 per cent to close Tuesday at VND11,150 ($0.49). At the firm’s general meeting on March 16, shareholders approved the cancellation of 2.7 million treasury shares and to cut the charter capital. In the first six months of 2018, Mekong Fisheries JSC posted a year-on-year decline of 14 per cent in revenue to VND110.2 billion but its after-tax profit jumped five times to VND6.66 billion. In those six months, Mekong Fisheries fulfilled half of its full-year revenue target of VND220 billion, while the company has beaten its pre-tax profit goal of VND5 billion. Russian GAZ brings truck manufacturing to Danang In addition to giving priority to high-tech and environmentally friendly projects,  Danang has been opening its doors for heavy industrial projects, with Russian vehicle manufacturer GAZ Group expected to open a factory in the central city. Last week, in Russia, Chairman of the Danang People’s Committee Huynh Duc Tho had a working session with Gorkovsky Avtomobilny Zavod (GAZ Group), one of the largest truck manufacturers in Russia, to discuss a project to develop an assembly and manufacturing factory for its vehicles in the central city. The leader of GAZ Group was impressed with the incentives and business environment in Danang, and affirmed that this is the right time to expand the group’s markets. He also stated that he will visit Danang this December. Highlighting Danang’s development potential, synchronous infrastructure system, and high-quality human resources, Tho confirmed that the city will do its utmost to create a favourable and transparent investment climate to attract businesses. GAZ has 13 modern production facilities in Russia with the rate of automation at 85 per cent, and assembly plants based in Turkey and Kazakhstan. The company produces passenger cars, trucks, buses, military vehicles, and special vehicles, exporting to more than 40 countries across the world. At the Vietnam AutoExpo 2018 in June, Kristina Dubinina, GAZ’s sales director for Asia, said, “Vietnam is a market with high potential and growth in the coming years. In a modest assessment, sales of GAZ in this market will reach 550,000 by 2024. We are studying the possibility of establishing a joint venture to begin sales in Vietnam to identify products for local manufacturing in the future.” At the end of 2017, the amendment protocol on supporting the production of motor vehicles in Vietnam was signed by Tran Tuan Anh, Vietnamese Minister of Industry and Trade, and Russian Ambassador Konstantin Vasilievich Vnukov. Russian automobile manufacturers such as KAMAZ, GAZ, and UAZ will collaborate with Vietnamese partners to establish joint ventures to manufacture and assemble automobiles and trucks, all-terrain vehicles, and some specialised vehicles in Vietnam. These joint ventures will import 2,550 completely built-up unit vehicles and 13,500 sets of automobile assembly parts to Vietnam during the 2018-2022 period completely duty-free. “I hope these Vietnamese-Russian ventures will be successful and contribute to the development of the Vietnamese automobile industry, as well as seizing opportunities to break open the ASEAN market with its population of 640 million,” the minister stated at the signing ceremony last December. In September 2017, following the Eastern Economic Forum in Russia, Vadim Shvetsov, general director of Sollers OJSC and UAZ OJSC, said that the group planned to set up a joint venture to manufacture and assemble automobiles in Vietnam in 2018, with an initial capacity of 1,000 vehicles per year. Vietnam to enhance trade and investment ties with Russia and Hungary Vietnam will further its trade and investment ties with Russia and lift its relations with Hungary to a comprehensive partnership next month. Party General Secretary Nguyen Phu Trong will pay an official visit to Russia and Hungary on September 5-12, 2018, at the invitations of Russian President Vladimir Putin and Hungarian Prime Minister Viktor Orbán, according to the Party Central Committee’s Commission for External Relations. The September 5-8 visit to Russia is aimed to “further strengthen political trust, strategic attachment, and enhance the effectiveness of bilateral co-operation with Russia, and affirming Vietnam’s consistent foreign policy of placing Russia as a prioritised partner, and further promote the comprehensive strategic partnership in a more qualitative and practical manner.” The visit, which will be followed by a joint statement, also aims to create a new co-operative momentum in the economic, trade, and investment sectors, expanding the market share of Vietnamese goods in Russia, the commission said. The Party chief will meet with Russia’s leaders and witness the signing of several co-operation deals. He will also attend the ground-breaking ceremony of Vietnamese TH Group’s high-tech concentrated dairy and fresh milk production projects in Russia’s Kaluga oblast. Talking with VIR about this visit, Russian Ambassador to Vietnam K.V. Vnukov said, “This visit will be very important to the two countries’ multi-sectoral co-operation.” “At the upcoming negotiations in Moscow, both countries’ leaders will discuss very important issues in bilateral co-operation, including trade-economic co-operation, which has received the most attention. Some positive results have already been made, but I think that only half of the co-operation potential has been reached so far,” he said. “Thus, I would stress that we pin much hope on the upcoming visit by Party General Secretary Nguyen Phu Trong to Russia, which I do believe will help boost the implementation of some joint venture projects.” “Russia is expanding its investment presence in Vietnam. We have begun implementing a bilateral deal on constructing automobile manufacturing and assembling plants in Vietnam, with Russia’s famous brands like KAMAZ and GAZ. Hopefully in the near future, these automobiles will approach the majority of Vietnamese consumers,” he added. Currently, Russia has only 116 investment projects in Vietnam, registered at $940 million. Meanwhile, Vietnam has 13 projects worth about $3 billion in Russia. The biggest firms include oil and gas joint ventures Rusvietpetro and Gazpromviet, the Hanoi-Moscow multi-functional cultural and business centre, the TH true MILK agricultural-industrial complex in Moscow, Kaluga, Primorsky, and Bashkortostan. Notably, TH Group in May 2018 inked a deal worth over $630 million with RFPI in order to produce milk in Russia. After the free trade agreement between Vietnam and the Eurasian Economic Union took effect in October 2016, the two sides’ bilateral trade turnover has soared by an average 30 per cent per annum, to $3.55 billion last year. Meanwhile, during Party General Secretary Nguyen Phu Trong’s September 8-11 visit to Hungary, the two nations will lift their relations to a comprehensive partnership, with a view to creating new changes in the two countries’ co-operation and expanding Vietnam’s influence in the Central-Eastern Europe region. This visit will also be the first by Vietnam’s Party General Secretary to a Central-Eastern European nation since the nations in this region changed their institutions. The Party chief will meet with Hungary’s leaders and witness the inking of several co-operation agreements. Currently, Hungary has only 17 investment projects in Vietnam, registered at $63.56 million. The total bilateral trade turnover hit over $355 million last year. ViMariel, the first Vietnamese industrial park in Cuba Vietnam – Cuba have always sought to boost economic cooperation, brought it closer to the long-standing diplomatic relations between two countries. As the first Vietnamese company to enter the Cuban market, Viglacera Corporation has invested into its first industrial park in the country. Mariel Special Development Zone (ZED Mariel) is the first special development zone in Cuba, which is only 45 kilometres from the capital Havana. This zone has been invested by the Cuban government to become the largest industrial area in the country. The Cuban government encourages investment in the sectors of food industry, consumer goods, construction materials, packaging industry, and agriculture to provide to the domestic market and promote socioeconomic development. In the future, ZED Mariel is expected to export products and services in the region and become the leading hub for the US, thanks to TC Mariel port located within the zone. As one of the five deep-water ports in the Caribbean and Central America, TC Mariel Port is the shortest-haul and lowest-cost to the US in the region. Furthermore, enterprises will benefit from the regulatory framework, incentives, and friendly business environment. Financial Times fDi magazine elected ZED Mariel as the winner of the “Best Zone to Consider in the Future” category in the Best Global Zones of the Year 2017 competition. Situated in ZED Mariel, ViMariel IP benefits from a prime location as well as preferential policies from the Cuban government. It is very easy to access to ViMariel IP through Jose Marti International Airport (42km far), De Baracoa Airport (25km), San Antonio De Los Banos Airport (25km). The four-lane motorway from the IP joins the main eastern arterial road to the capital Havana (one hour drive), as well as the airports and seaports in the west. Viglacera Corporation will invest in synchronously building technical infrastructure: electricity supply from the 110/22 KV national transformer station (25MVA), a water supply station (6,500 cubic metres per day), a separate drainage system and waste water treatment system (up to 4,800cu.m per day). Solid waste from factories will be sorted, collected, and transported to the waste disposal area. In addition, investors in ViMariel IP are supported by other services, such as restaurants, café, ETECSA telecommunications, security systems, customs systems, banking services, and cargo services by sea, rail, and road. These will allow investors to save time and money in foreign markets in general and Central America in particular. In order to attract domestic and foreign investors in ZED Mariel, the Cuban government offers special tax incentives, fast approval, a one-stop system, and support in the recruitment of local labour resources, and among others. ViMariel is shaping up to be a potential destination for investors whose products and services are aimed at the Cuban market or other export markets. ViMariel IP has a total area of 156 hectares with 119.11ha of industrial land (76 per cent), with the rest housing technical infrastructure and service and green areas. ViMariel IP expects to attract companies from the hi-tech, building materials production, and electronics sectors and other industries which are able to meet the economic needs of Cuba, aiming to become a leading manufacturing and trading hub for Central America. As the best industrial park developer in the Asia-Pacific Property Awards 2013 and 20 years of experience, Viglacera Corporation has pioneered the investment and development of ViMariel IP. This IP promises to create new opportunities for Vietnamese enterprises to enter the American market. Paradise Eco Resort: 13 years on the drawing board Expected to provide a fulcrum to foster tourism development in Quang Ngai province’s southern and northern parts, the multi-million dollar Thien Dang (Paradise) eco resort project is still far from completion, even 13 years after starting construction. The Paradise eco resort project spreads more than two kilometres along the coast crossing Quang Nam and Quang Ngai province in the central region. The developer, privately-held Paradise Investment JSC—now South Chu Lai Investment and Development JSC—, expects the project to tap into the growing visitor and investor numbers from Chu Lai Airport in Quang Nam province as well as workers, engineers, and experts working at the Dung Quat and Chu Lai coastal economic zones. In the current tourism season in the central region, the eco resort has yet to attract any visitors. In the villa area, several French-style villas have not yet been constructed yet, whereas some completed villas are already showing signs of degradation. Some buildings, once used to host meetings and banquet occasions, have been unused for a long time and local residents have been using this area to breed cattle. Doan Trung Nam, a resident living near the project, said: “When the project is entered the development pipeline, the investor said they will employ local labourers to on it. The project was then halted and left deserted, leaving the affected people struggling to make a living.” Cao Thi Hong, neighbour to Nam, added that some people have been using the unused space in the eco resort for agricultural production or cattle and poultry breeding. According to Le Tan Khanh, Deputy Chairman of Binh Thanh commune in Quang Ngai province’s Binh Son District, where the project is located, Paradise resort is set to use more than 106ha space in the commune. The project developer, however, has just completed the first phase of compensation for more than 32ha space. Regarding the remaining 74ha space, the developer did not cooperate with the commune administration, but has made compensation directly to local households. At present, 19 out of the 74ha has yet to receive compensation as the developer could not reach a consensus with the households, which is one of the reasons behind the project’s delay. At present, 19 out of the 74ha has yet to receive compensation as the developer could not reach a consensus with the households, which is one of the reasons behind the project’s delay. Another cause is the current financial distress as committed by Phan Van Hai, a developer representative The developer, therefore, asked the provincial management authorities for support in site clearance and compensation payment for the remaining space that has yet to be handed over to them. A good news for the project, as unveiled by the project representative, was that several investors from South Korea, Malaysia, and Singapore plan to cooperate to develop a mixed-use development, including condotel and casino components, at the project site. With respect to the developers’ proposals, Quang Ngai Party Secretary Le Viet Chu has recently asked the developer to soon make commitments and set the project’s targets and land requirements. The developer was also required to draw up the investment project’s revised supplemental planning that fits the actual situation and submit it to the province’s management authorities for consideration. The Paradise eco resort project was first licensed in 2005 with nearly VND200 billion ($8.8 million) in registered capital. In late 2017, the project’s total investment capital was scaled up to nearly VND8 trillion ($354 million). The project consists of five components: Paradise in the Fall, Paradise in Summer, Paradise in Winter, Paradise in Spring, and Four Seasons Paradise. At present, work has only been completed at the Four Seasons Paradise component that takes up more than 32ha space, while the other four components are sitting on the drawing board. Sojitz to become major shareholder of PAN Group Once the transaction between PAN Group and Japan’s Sojitz Corporation, who spent around $91 million on acquiring a 95 per cent stake in Saigon Paper Corporation, Sojitz will become a large shareholder and strategic partner of PAN Group. The Board of Directors of PAN Group is seeking shareholders’ approval to issue 14.86 million individual shares, equalling 11 per cent stake. If the shareholders approve, the transaction will be completed in either the third or the fourth quarter. PAN Group will negotiate with Sojitz the selling price of the shares, but it will not be lower than VND55,000 per share. The individual share issuance is expected to help PAN Group to attract more strategic shareholders, while simultaneously providing additional financial potential for investment and M&A activities. Established in 1998, PAN Group is one of the leading agricultural companies in Vietnam with the total assets of VND7.6 trillion ($327 million). Singapore’s GIC, The Asian Entrepreneur Legacy (TAEL) Partners, PYN, NDH Invest, SSI, and CSC Vietnam are the major shareholders of the agricultural firm. Last year, International Finance Corporation (IFC) proposed to invest up to $10 million (VND 230 billion) into a $28 million project of Pan Group to support its expansion plans. Sojitz, on the other hand, in June completed the purchase of 95.24 per cent of the stakes in Saigon Paper Corporation, which is the largest tissue paper and industrial paper producer nationwide, for $95 million. Sojitz is one of the first Japanese corporations to invest in Vietnam. This corporation focuses on airport infrastructure, power, oil and gas, fertilisers, industrial park infrastructure, agricultural products (high-quality rice), and animal alimentation. Sojitz entered into a collaboration with Indian partners to develop a $180 million paper mill in Dung Quat of Quang Ngai provinces in 2013. However, the project faced difficulties and has not been granted an investment certificate. In 2015, the corporation moved on to Quang Ninh and proposed to develop a paper mill in Viet Hung Industrial Park with the total production capacity of 150,000 tonnes per year. The acquisition of Saigon Paper enables Sojitz to set foot in the Vietnamese paper market quickly, capitalising on the fast-rising demand for industrial paper in the country and in China. Masan swimming further downstream Masan Resources had just announced the acquisition of H.C. Starck’s 49 per cent ownership at Nui Phao-H.C.Starck Tungsten Chemicals Manufacturing LLC. This is a major step to making Masan Resources the “Pride of Vietnam” in possession of state-of-the-art downstream processing technology through mergers and acquisitions (M&A). M&A activities in the past 10 years have been growing more prominent in Vietnam, with the total transaction value of $48.8 billion. In 2017 alone, the value was $10.2 billion, 10 times of what it was in 2009. It has been the norm for multinational companies to acquire Vietnamese businesses due to the acquirers’ sheer size, financial capability, and clear strategy to expand their businesses in Vietnam. Despite all that, there were a small number of M&A deals involving Vietnamese companies gaining ownership in foreign ones. These rare cases usually make headlines and serve to demonstrate Vietnamese companies’ “coming of age” as they begin to expand beyond the borders and become global players. Some of the most noteworthy deals in the last decade include FPT’s purchase of a 90 per cent stake in an American consulting company, Vinfast’s acquisition of GM Vietnam’s entire local business, and Vinamilk’s purchase of Australia’s Driftwood Dairy. Likewise, Masan Group is no stranger to the use of M&A to expand its businesses and create the most value for consumers, partners, as well as shareholders. Masan Group’s acquisition of Nui Phao – the world’s largest tungsten mine – in the northern province of Thai Nguyen is a prime example of this strategy. In 2010, Masan Group broke the news that it had acquired Nui Phao from Dragon Capital through the purchase of full ownership in the mine. As a result, a Vietnamese company officially retained control of the world’s single largest open-pit mine. Since 2010, Masan has invested heavily into Nui Phao mine with the intent of turning it into Vietnam’s “tungsten capital” and unlocking Nui Phao’s untapped potential. In 2013, Masan Resources (MSR), the parent company of Nui Phao Mining, formed a 51:49 joint venture with H.C.Starck (Germany) known as Nui Phao-H.C.Starck Tungsten Chemicals Manufacturing LLC in order to downstream process tungsten. Just recently, on August 13, 2018, Nui Phao Mining Company, a subsidiary of MSR, acquired H.C. Starck’s 49 per cent stake in the joint venture for the total cash consideration of $29.1 million. The transaction was fully funded by Masan Resource’s cash and equivalents. The joint venture is now a 100 per cent wholly-owned subsidiary of MSR. Craig Bradshaw, CEO of MSR, said: “I hope Vietnam can be proud of Masan Resources’ ambition and ability, which we will combine with Vietnam’s potential and international execution capability to become a dominant player in the global industrial sector. We embody the “Vietnam Can Do” spirit, and we are strongly positioned not only to significantly increase shareholder value, but more importantly to enhance social economic value as a global representative of Vietnam.” To date, the joint venture’s tungsten chemicals (Ammonium Paratungstate – APT, Blue Tungsten Oxide – BTO, and Yellow Tungsten Oxide – YTO) annual capacity is 9,000 tonnes, with expected sales volume in 2018 at about 7,000 tonnes. The tungsten chemicals are value-added products of Tungsten Concentrate (TC) – a product of Nui Phao Mining Company. Out of the aforementioned 7,000 tonnes of sales in 2018, approximately 6,500 tonnes were manufactured from TC produced at Nui Phao Mine. MSR aims to procure more TC from outside sources to satisfy the growing demand for tungsten chemical products. From the acquisition, MSR now owns the largest tungsten downstream processing plant in the world by capacity. Growing from the world’s largest tungsten chemical (APT, BTO, YTO) producer with 36 per cent market share (excluding China), MSR is now on track to proceed deeper into the global tungsten value chain aided by full ownership of the downstream processing plant and technology. MSR is continuing to explore opportunities in an effort to achieve its vision of becoming a fully-integrated downstream industrial chemical and metal business of global scale. The management is currently in discussions with carefully selected downstream partners that are strategic in nature and with upstream suppliers as it looks to further secure its supply chain. Danny Le, head of Strategy and Development at Masan Group, said, “The acquisition is also consistent with the five-year strategy that we have outlined for MSR to develop an integrated business model to generate strong cash flows and profits through commodity cycles. In addition, this will better position Masan Resources for strategic partnerships in the near future and pursue an international IPO to unlock shareholder value.” MSR posted revenue of VND3.239 trillion ($143.3 million) in the first half of 2018, a 26.6-per-cent increase over the VND2.559 trillion ($113.2 million) recorded in the first half of 2017 as the tungsten prices upside persisted. MSR delivered an attributable net profit of VND300 billion ($13.27 million) in the first half of this year, up 376.2 per cent on-year. With favourable first half business results and higher tungsten realised prices, MSR is expected to yield an improvement in NPAT Post Minority Interest (MI) margin of 5 per cent in the second half of 2018 against the first half, achieving the expected NPAT Post MI of over VND1 trillion ($44.25 million) for the full year of 2018. This deal in particular as well as foreign acquisition by Vietnamese leading companies in general serve as motivation for Vietnamese businesses to further utilise M&A as a tool to acquire the best technology and practices in order to enhance business and better serve Vietnam and its people. Huobi OTC marks entry into Vietnam Huobi OTC has marked its foray into Vietnam by supporting peer-to-peer (P2P) transactions denominated in Vietnam dong (VND). OTC, which stands for “over-the-counter”, will help onboard new users looking to invest in digital assets by offering a P2P fiat-to-coin marketplace. Aside from offering a platform for users to freely exchange their VND for digital assets such as USDT, BTC, ETH, and HT, Huobi helps to reduce counterparty risk by requiring merchants place security deposits with the exchange. These deposits will be released to users if the merchant is unable to release the purchased coins in a timely fashion. As part of its initial efforts to carve out a niche in Vietnam, the Huobi OTC exchange is offering zero transaction fees as opposed to an average fee at other exchanges, which is about 1 per cent. In addition, by leveraging its sister trading platform, Huobi Global, Huobi OTC is able to remove fees such as OTC deposit fees and withdrawal fees. Huobi OTC supports 17 countries and territories: Singapore, India, Canada, Australia, South Korea, Switzerland, the Netherlands, Taiwan (China), Russia, the UK, Hong Kong (China), Nigeria, Indonesia, the Philippines, Cambodia, China, and Vietnam. Aside from being cheaper and relatively hassle free, Huobi OTC also provides the same support Huobi is known for: its trusted branding and five-year security and reliability track record, as well as its 24/7 customer support. Huobi OTC is an affiliate of Huobi Global and a platform devoted to over-the-counter trades of digital assets. It offers an aggregated display of buying or selling data and the actual payment is transferred and completed offline through escrow accounts provided by Huobi OTC. MoMo & Home Credit partner in consumer finance Vietnamese fintech MoMo Wallet and consumer finance company Home Credit Vietnam signed a strategic partnership agreement on August 22 that marks a milestone in their bilateral cooperation. The first two features are payments via MoMo, which help customers of both partners enjoy a seamless, fast, convenient and time-saving service, and the ability to have Home Credit cash loans disbursed directly to MoMo Wallet. The partnership first started in 2015, only one year after MoMo was launched on iOS and Android. Since then, Home Credit Vietnam’s customers have been able to repay their loans via the MoMo app or at MoMo’s 5,000 POS (points-of-sale) around the country. Furthermore, the partnership aims to provide customers with the greatest convenience, promote financial inclusion in Vietnam, and boost cooperation between finance companies and fintech partners. Entering the era of global digitalization and based on a business motto of customer-centricity, Home Credit and MoMo have established a strategic partnership over the last three years that uses the advantages held by both sides to enhance the customer experience in mobile payments and consumer finance. Digital transformation in consumer finance will change offline procedures to the online platform for time-saving and safety. In addition, after installing the MoMo Wallet app, Home Credit customers have the opportunity to access and enjoy a number of MoMo promotions. From September, customers who register for cash loans at Home Credit’s POS can receive the disbursed funds via MoMo, in addition to traditional channels such as bank accounts and the postal service. Customers will have more options to conveniently access cash loans and MoMo’s promotions and services by their registered phone number. In addition, more than 500 diversified services currently available on MoMo enable customers to experience consumer finance immediately. In the future, Home Credit will upgrade the service to allow customers to register for cash loans on the Home Credit app and receive disbursement via MoMo Wallet, fully transforming to an online platform in the digital era. The strategic partnership between Home Credit Vietnam and MoMo will boost the development of a technology ecosystem in the consumer finance sector, as customers can easily access financial products and services via the mobile platform, shortening processing time and offering more convenient financial transactions. It will also encourage customers to experience online platforms instead of traditional transaction methods. “We have decided to cooperate with more technology companies to create an integrated ecosystem that delivers instant benefits to customers, providing convenience when accessing Home Credit’s services,” said Mr. Branislav Vargic, COO of Home Credit Vietnam. “This is a new chapter in our partnership to enhance the customer experience, and a milestone in the accession to Industry 4.0.” “The technology platform and the dynamics of millions of existing MoMo users will provide a promising customer approach to Home Credit and consumer finance,” said Mr. Nguyen Ba Diep, Vice President of MoMo Wallet. “We believe that technology is indispensable in the development of the consumer finance market and will change the face of the financial sector in Vietnam in the future.” Smartrealtors and Partners to distribute Banyan Tree Residences Smartrealtors and Partners has signed a cooperation agreement with Singapore’s Banyan Tree Corporation on August 28 to become the sole distributor of Banyan Tree Residences. Banyan Tree Residences is part of the Laguna Lang Co project in central Thua Thien Hue province. Villas, from one to three-bedrooms, are perched from 25 to 86 meters above sea level, with the elegant Banyan Tree hill villas offering breathtaking panoramic views over the unique crescent bay with soaring mountains as a backdrop. Each villa’s living space is awash in natural light and harmonized with the tropical surroundings. Featuring a series of locally-inspired arts and furnishings, the design of each pays homage to the skills of Vietnamese artisans. Mr. Gavin Herholdt, Managing Director of Laguna Lang Co, said the collaboration between the Banyan Tree Group and SmartRealtors and Partners was set up to maximize the benefits to each and expand and improve business efficiency while enhancing the project’s competitiveness. “Smartrealtors and Partners became the exclusive distributor of the project thanks to the prestige and quality the company has built over past years,” he added. Mr. Dang Quoc Viet, General Manager of Smartrealtors and Partners, said it is committed to bringing quality projects to owners. As the first and only resort project of the Banyan Tree Group in Vietnam, Laguna Lang Co is an international-standard resort within the network of luxury resorts owned by Banyan Tree worldwide. Laguna Lang Co’s Phase 1, with investment of $285 million, comprises both Banyan Tree and Angsana hotels, an 18-hole championship golf course designed by Sir Nick Faldo, luxury private villas and residences, convention facilities, recreational activities, and beachfront land for six more hotels as part of the 280-ha project. Existing infrastructure, including transportation, electrical, water, and environmental management systems will facilitate the rapid development of Phase 2 and future phases. The project expansion from 2018 to 2022 will see investment capital increase from $875 million to $2 billion and includes international-scale casino operations. Laguna Lang Co was recently issued a casino license by the Vietnamese Government; the first to be issued in a decade. It welcomes world-class casino operators and investment partners to join in the next exciting phase of the integrated resort development.   VNN