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BUSINESS
IN BRIEF 9/6
Vasep asks
for decree review
The Viet Nam
Association of Seafood Exporters and Producers (Vasep) on Tuesday asked the
Government to review Decree 36 on tra fish as it had several limitations.
Vasep also asked
for an extension of the implementation date of the decree from June 20 to
July 1.
The Decree 36,
about tra fish raising, processing and export issued recently, regulated that
tra fish export contracts must be registered with the Viet Nam Tra Fish
Association. Registry of the tra fish association would become a requirement
at customs clearance.
This was regarded
as unreasonable.
In business,
economic contracts were secret and information sharing might cause
difficulties to enterprises, the association said.
The decree had no
regulations about responsibility of the tra fish association in keeping the
business information confidential, or with regard to compensation when the
information was leaked or used for self-seeking purposes.
According to
Vasep's Vice President Nguyen Huu Dung, the decree also lacks regulations
about foodstuff or feeding processes.
In addition, the
collection of a fee on evaluating tra fish commercial business might be a
burden on enterprises.
According to a report
of the Ministry of Agricultural and Rural Development , tra fish export saw a
recovery in the first four months of this year.
More than 208,455
tonnes of tra fish, worth US$521.3 million, was shipped abroad. This was an
increase of 5.6 per cent in volume and 23 per cent in volume over the same
period last year, at an average price of $2.5 per kg.
Cheaper
power to boost island prospects
The price of power
on Vietnamese islands has been slashed to the same as those on the mainland.
Previously, despite Government subsidies, they were up to five times higher.
The energy cuts are
part of a strategy to improve people's living on the islands, to boost
economic development - and, importantly, heighten security in
Electricity of Viet
Nam (EVN) started applying the new retail prices at the weekend.
The new retail
prices range from VND1,100 to 4,000 (5 to 18 cents) per kWh [In Viet Nam, the
hourly rate increases with more usage. This is an attempt to stop wastage].
The new island
prices cuts are still heavily subsidised by the Government as in the past.
EVN predicts that
the cuts will increase power consumption on the islands.
However, it also
warned that investment in power production facilities on the islands was
still limited.
Therefore it has
advised the authorities on islands that have not yet been linked to the
national grid by undersea cable to develop energy consumption and saving
plans.
Several larger
groups of islands were recently supplied with electricity from the mainland,
including Co To, Phu Quoc and Van Don. In October, Ly Son Island in central
The price cuts are
already having an effect. On central
Power prices on the
island were previously two to five times higher than those on the mainland.
This forced many
processors and manufacturers to produce a limited amount of goods - or move
to the mainland.
Nguyen Phuoc Kim,
vice director of Kim Hoa Seafood Processing Company based in the district,
said that in recent years, seafood was mostly taken to the mainland for
processing.
Tran Van Hien, head
of the district's Seafood Processors' Association, said many of the
association's 16 members now planned to resume business on the island itself.
"The price
cuts will help reduce production costs. We can process fish at the island
instead of renting frozen warehouses on the mainland," he said.
Hundreds of ethnic
minority householders in Thu Ngac Commune in northern Phu Tho Province have
been told to pay extra for meters to receive reliable power through the
national power grid, which was connected early this year.
As a result, many
are still forced to use the limited power produced by a local hydro-power
plant.
Ha Van Nguyen, a
Muong ethnic resident in Co Son 1 Zone, said last week electricians went to
his house and asked him to pay VND300,000 (US$14.20) to install a meter.
Nothing happened
because he did not have the money. His children still study under the
flickering light produced by the hydro-power plant nearby.
However, his
neighbour, Nguyen Thi Lam, paid the fee and now has bright light.
Ha Van Dai, another
resident in Co Son 2 Zone, said he was told to pay VND500,000 ($23.80) to
have a meter installed.
He paid for a total
of four meters for his family and relatives, but no one came to do the work.
Ha Van Dinh, village
head in Co Son 2 Zone, said that electricians did not inform him about the
installation fee.
The first six
households had to pay VND300,000 ($14.20), and later increased this to
VND500,000.
To compound
matters, the electricians refused to accept money to put a meter in the
village head's own home because they said he was not a priority.
Chairman of the
communal People's Committee Hoang Van Liem said that about 70 households in
Co Son 1 and 2 had agreed to pay the price to get electricity.
There were about
200 households in the commune, and nearly half of them were living in
poverty, he said.
Hoang Dinh Nghia, a
fee collector in Co Son 2, said he was told to collect different fees in the
two districts.
Deputy director of
the Tan Son Electricity Company Hoang Kim Doan said in principle, people only
paid to connect electricity equipment to the electricity network after the
meter was installed.
Other additional
fees were unauthorised, he said.
The company has set
up a team to inspect the incident.
However, Doan
refused to comment about the actions of his employees.
Taiwanese
firms stay put
A senior figure
with the Taiwanese Chamber of Commerce in
He said this was
because
Chairwoman Liu
Mei-te gave the assurance during a meeting with Prime Minister Nguyen Tan
Dung in Ha Noi yesterday.
She praised the Government's
action in stopping the riots and helping enterprises get back on their feet.
However, she
suggested the Government could offer more tax incentives.
PM Dung assured his
guest that foreign companies, including those from
He said
According to the
director of the Finance Ministry's Insurance Supervisory Authority, Phung
Ngoc Khanh, insurance companies may have to pay out VND2 trillion (US$94
million) for the damage.
Foreign
invested companies resume business operations
Around 90 per cent
of businesses affected by recent riots in
The riots erupted
last month during protests against
Head of the
association of Taiwanese businesses in Dong Nai province Chiang Chih Ming
said the recent unrest had affected 131 Taiwanese businesses in the province,
with 80 per cent slightly affected and 10 per cent seriously affected.
However, prompt
assistance and support from local authorities had helped businesses recover
and resume normal production, he said, noting that customs agencies had paid
visits to affected businesses to complete procedures for tax-related support.
All 44 affected
businesses in Binh Duong have also resumed normal production.
More than 2,100 out
of 2,650 foreign experts have returned to their work in industrial zones in
Binh Duong, according to Tran Van Lieu, head of the provincial management
board of industrial zones (IZs) at a press briefing on the province's
socio-economic development situation on Wednesday.
Lieu also said the
board has granted work permits free-of-charge to foreign experts. Chairman of
the business association of the HCM City Export Processing Zones and
Industrial Parks Authority (Hepza) Nguyen Van Be said all foreign-directed
businesses in the city had also resumed production.
Soon after
interrupted operations caused by the riot, Prime Minister Nguyen Tan Dung
laid out a comprehensive plan to support affected businesses, including the
provision of sufficient compensation, the reduction of import and export duty
rates and the extension of the tax deadline. This was in addition to tax and
budget payments arising before May 2014, the longest extension in two years.
Deputy Head of the
Customs Department of Dong Nai Province Huynh Thanh Binh said customs
officials would continue to work with the affected businesses to guide them
through tax-related procedures, particularly those who had their seals,
software and relevant documents destroyed.
Customs officials
were also assigned to work over the weekend to facilitate import and export
activities, he said.
Meanwhile, Deputy
Prime Minister Vu Van Ninh has asked the Ministry of Labour, Invalids and
Social Affairs to continue guiding localities to assist workers who were
forced to stop working during the recent unrest.
Workers will
receive wages for days off between May 12 and July 1.
The payment will be
equivalent to the wages agreed between enterprises and labourers and will not
be below the minimum level prescribed by the Government. The expense used to
pay workers will be deducted from corporate income tax obligations.
Corporate
governance below average in VN
Corporate
governance at listed companies is weak in
Le Cong Dien,
deputy director of the State Securities Commission of Viet Nam (SSC)'s
Inspection Department, said most companies' corporate governance standards
are below average.
He was referring to
a 2012 corporate governance scorecard of 100 listed companies in Ha Noi and
"They follow
laws and rules to avoid being punished, but do not believe that laws and
rules would help their companies function healthily and transparently,"
he said.
The importance of
good corporate governance cannot be underestimated and should be a priority
for companies, shareholders, and governments alike, he said.
Enhancing corporate
governance brings increased protection for shareholders, additional security
to employees and directors, and advantages for companies in the competitive
environment and for governments as they seek to create an attractive
environment to entice investments, he said.
The risks and costs
resulting from inadequate attention to good corporate governance can be significant,
from both the financial and reputational angles, he said.
Failure to
implement adequate corporate governance practices can result in substantive
damage to a company's brand as well as its performance along with personal
exposure for employees and directors, he said, adding this creates
significant operational risks for many companies and a diminished competitive
edge.
Susan E. Loftus,
CEO and general director of insurer AIG Viet Nam, said: "Regulatory
investigations have moved to the forefront of exposures that board members
face in
"The right
preparation in this increasingly stronger regulatory environment is essential
to leading a successful and profitable organisation."
Owen Hakes, a
partner at KPMG, said: "The role of each manager in risk management is
more and more important. And the individual responsibility of managers needs
to be clarified."
Strict laws and the
ability of in-house controllers and levels of punishment would force
companies to significantly improve their corporate governance, he said.
"The biggest
fault in managing a company is not implementing good control."
David Lee, an
investigations lawyer based in
He suggested that
whistle blowers or in-house controllers must be good enough to immediately
discover any problems at the company, but companies must also have a good
system to verify what whistle blowers reveal.
Some companies that
have very good policies fail to apprise all their staff about them, and in
such cases, when the system does not work smoothly, someone must take
responsibility.
Jason Kelly of AIG
Asia Pacific said that responsibility must be fixed for even tiny problems
and top managers have to be reminded that even criminal liability is a
possibility.
"Corporate
governance and liability management protection for company executives"
conferences are being organised by AIG and KPMG, Norton Rose Fulbright,
PARIMA — the region's risk management organisation — in seven countries in
May and June.
They began on May 6
in
They will be held
next in mainland
Dong Nai
continues export growth trend
The southern
The state and
domestic private sectors contributed $98 million and $13 million,
respectively, according to the Deputy Director of the provincial Department
of Industry and Trade Nguyen Van Quan.
In the first five
months of 2014, Dong Nai recorded around $4.98 billion in export earnings, a
surge of 16.1 per cent per year, driven by high-value garments, wooden
products, iron, steel, machinery and coffee. The high performance is in part
due to a series of trade promotion events that the sector has hosted inside
and outside the country since the beginning of this year.
BPO joint
venture opens in central city
The Viet Nam
Business Process Outsourcing (VBPO) and Japanese partner GROP company have
opened the first Offshore Dedicated Centre at
It's the first BPO
office in
BPO is a subset of
outsourcing that involves the contracting of the operations and
responsibilities of specific business functions to a third-party service.
Viet
Nam-made power plant boilers exported to
Korean-owned Doosan
Vina has sent the eighth and final shipment of supercritical-once-thru power
plant boilers to Kudgi in
They will make up
two 800MW boilers that will each deliver 2,550 tonnes of high pressure steam
per hour.
The 13,102 tonnes
of coils, panels, headers, and links will be assembled onsite in
Doosan Vina in the
Dung Quat Economic Zone in the central
Pepper
exports to break annual record
The pepper industry
will, for the first time, make a full-year record gross of 1 billion USD from
selling the spice this year, buoyed by a bumper harvest and high prices,
according to the Vietnam Pepper Association (VPA).
Pepper exports are
hoped to reach around 150,000 tonnes in 2014.
In the first five
months of this year, the sector shipped 92,000 tonnes worth 645 million USD,
posting the highest ever increases of 33.6 percent and 42.3 percent,
respectively, year-on-year.
The US, Singapore
and India topped the list of buyers, making up 40 percent of country’s pepper
exports, according to the Ministry of Agriculture and Rural Development.
In May, the spice
set its highest price record so far, with black pepper worth 6,600 USD per
tonne and white pepper 9,600 USD per tonne. The average price in January-May
reached 6,879 USD per tonne, up 4.2 percent year-on-year, due to a
considerable fall in global supply.
The world pepper
harvest this year is estimated at 320,000 tonnes, down a remarkable 45,000
tonnes over the previous year. Meanwhile, consumption demand increased 4-5
percent per year, according to the International Pepper Committee (IPC).
There has been
stable and increasing demand for pepper in Europe, the
In 2013,
As the world’s
largest pepper producer, Vietnamese spice is shipped to more than 90
countries and territories.
Investors
retain confidence in Vietnamese market
Foreign investors
declared their continued support for and confidence in the Vietnamese market
at the 2014 mid-term Vietnam Business Forum (VBF) in
Regarding social
disturbances across some localities in early May - which caused damage to
businesses, including foreign ones - Virginia Foote, co-chair of the forum,
praised the Vietnamese Government’s timely response and expressed her belief
that
Minister of
Planning and Investment Bui Quang Vinh stressed that
“The country will
work tirelessly to improve its business and investment environment and raise
its competitiveness in order to make it more attractive to investors,” he
promised.
It will also create
increasingly favourable conditions for businesses in order to maintain its
image as a safe and friendly destination for foreign investment, he said.
President of the
Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc, who also served
as VBF co-chair, said that
“
According to
Yoshihisa Maruta, President of the Japan Business Association in Vietnam, a
recent survey shows that the Japanese businesses in Vietnam now number 1,320,
and 70 percent of them said they will continue to consider the country as an
important market and think about expanding their operations here.
Although the
enterprises highly value businesses opportunities in
He suggested the
Vietnamese Government offer loans with low interest rates to businesses and
grant tax exemptions to those damaged by recent disturbances.
Meanwhile, Tomaso
Andreatta, Vice Chairman of the European Chamber of Commerce in
According to the
VCCI President, Vietnam is going to finalise many important free trade
agreements (FTAs), including the Trans-Pacific Partnership (TPP) Agreement,
now in its final negotiating stages, and the Europe-Vietnam FTA.
Therefore, the
Vietnamese Government and businesses should stay well prepared to deal with
both opportunities and challenges from these agreements, he said.
The TPP is expected
to bring a good development direction to the Vietnamese economy, as it will
help increase the country’s GDP by 28.4 percent and its exports by 35.7
percent by 2025, said Marc Townsend, Chairman of the American Chamber of
Commerce (Amcham).
He added that TPP
and other trade agreements will offer
To prepare,
After the FTA
between
However, these
potential benefits may be reduced if
CIM
discusses business environment improvement
The Central Institute
for Economic Management hosted a seminar on the improvement of business
environment and national competitiveness on June 4.
Businesses pay tax
at the Ho Chi Minh Taxation Department (Photo: SGGP)
The Government has
issued Resolution 19 on measures to improve the business environment and the
national competitiveness in March, said the institute head Dr. Nguyen Dinh
Cung, .
However, the
resolution has been implemented rather slowly by related ministries while
only one third of provinces have built action plans.
The resolution aims
to carry out administrative reform as a result of cutting short time and
costs on tax payment and customs clearance, he added
However, the most
difficult issue is how to cut the tax payment time from 872 hours down 171
hours per year, according to WB.
Tax agencies have
made a lot of efforts but seemed unable to considerably reduce tax payment
time and costs, said Hoang Thi Lan Anh, deputy head of the Committee for
Reforms and Modernization of the General Department of Taxation.
Of the measures,
taxation declaration software has been built and is used by over 90 percent
of companies for online tax payment since 2013.
According to World
Bank, the tax payment time is related to social insurance payment of
businesses, she said.
As a result, Dr.
Cung proposed a synchronous cooperation among authorized agencies to improve
the business environment.
NA Deputy:
progress on
A National Assembly
deputy from Lam Dong said that construction on
During an NA recent
discussion on the revision of the Law on Civil Aviation, Deputy Le Van Hoc
said the level of investment for
Deputy Le Van Hoc
said that construction on
Meanwhile, four
other airports are operating in the vicinity of Tan Son Nhat or Long Thanh
International Airport, namely Can Tho, Cam Ranh, Phu Quoc and Lien Khuong. In
total, these four airports have a capacity to serve 20 million passengers per
year.
The distance
between
“The civil aviation
and transport sector should not depend on visual reports and inaccurate
forecasts when it comes to planning. This could cause losses for the state
budget,” Mr. Hoc added.
Deputy Hoc cited statistics
from the Civil Aviation Authority of Vietnam, saying that, at present,
According to Hoc,
profit the aviation sector has been very low. Over the past decade, the
international aviation market has faced losses of more than USD50 billion.
The aviation market of the Asian Pacific is expected to grow by 10% per year,
and Vietnamese aviation market is expected to serve around 150 million
passengers by 2020.
Under the aviation
sector’s planning by 2020, with a development vision towards 2030,
which was approved by the government in 2009,
The country
invested USD1.4 billion in domestic airports in the period between 2011 and
2013.
Meanwhile, other
forms of transportation also require huge investments from the state budget.
The country plans to spend USD80 billion for road network construction by
2020. Vinalines plans to build 160 ships totaling VND100 trillion by 2020.
The
ACE Life
launches new insurance benefits package
ACE Life, the
global life insurance division of ACE Group, today announced the launch of a
new insurance benefits package – “The Gift for Life” in
This product
provides parents with more options to find the right insurance and financial
solutions to help them plan a secure future for their child against
unexpected risks.
This is an
enhancement of the Premier Universal Life 2013 product which now offers the
added feature of comprehensive protection for the whole family packaged in
one policy.
Without proper
insurance protection, a child’s future educational funding may be exposed to
risk if they lose their parents.
ACE Life’s “The
Gift for Life” provides a comprehensive financial solution to ensure
children’s dreams can still come true if the unfortunate circumstances
happen.
Thus, when
selecting the package, which includes Parents Term, Parents Waiver due to
Death and Parents Waiver due to Critical Illnesses features, in addition to
the standard benefits of the base plan, customers can enjoy additional
benefits for extensive protection.
This includes
receiving up to 200 per cent of the Parents Term face amount (FA) upon death
of either or both father and mother, upon death or critical illness of either
or both father and mother until the child attains age 25, insurance costs of
the base plan and supplementary benefits will be waived, while the policy
account value will continue to earn interest.
Chairman and
country president of ACE Life in Vietnam Lam Hai Tuan said “To be ACE insured
means that ACE Life is there when you need us the most. In this case, the
‘The Gift for Life’ package is designed to enhance your children’s future and
education. This also helps nurture your children’s life planning skills that
are necessary for their adulthood.”
With the unique
features, “The Gift for Life” is considered as an heirloom which brings
financial protection for three generations in a family.
Moreover, after
deducting all prescribed fees of the main plan and the supplementary
benefits, the policy account value is contributed by the total deposited
premiums, while the policyholder will receive the investment benefits from
the Universal Life Fund.
With the newly
added supplementary benefits, the Premier Universal Life 2013 now offers a
total of 13 supplementary benefits for customers to flexibly choose the
appropriate financial plan to protect the insured and their family.
ACE Group is one of
the world’s largest multiline property and casualty insurers.
In
Employers
discuss 2015 minimum wage increase, better co-ordination and evidence-based
data needed
Regional minimum
wages in
The Vietnam Chamber
of Commerce and Industry (VCCI), Vietnam Co-operative Alliance (VCA), Vietnam
Association of Small and Medium-sized Enterprises, Vietnam Garment and
Textile Association (VITAS) and other sectorial associations sat down
together in Hanoi today to discuss “Employers’ proposal on adjustment of
minimum wages for 2015” at a workshop co-organised by VCCI and the
International Labor Organization (ILO).
According to the
statistics of VCCI, regional minimum wages in
“The increase of
minimum wages for 2015 should ensure both the actual salaries of workers and
the production of enterprises,” said VCCI Employers’ Bureau director Phung
Quang Huy.
According to VCCI,
minimum wage adjustment mostly affects garment, footwear and fishery
industries.
“Increasing minimum
wages by 10 per cent could increase enterprises’ costs for salaries by over
17 per cent due to increased allowances and other social benefits,” said VCCI
Employers’ Bureau deputy director Vi Thi Hong Minh.
Representing
employers’ organisations at the National Wage Council are VCCI, VCA, Vietnam
Association of Small and Medium-sized Enterprises, Vietnam Leather and
Footwear Association, and VITAS.
ILO Vietnam’s chief
technical advisor on Industrial Relations, Phillip Hazelton, said that it was
important to enable and encourage joint and evidence-based discussion and
interventions of key employers’ groups on minimum wage adjustment.
The ILO encourages
a stronger co-ordination role of VCCI in working with other employer’s
organisations on the National Wage Council and hopes that “different
associations will be able to work more closely on joint studies and joint
activities around this important area”.
“We urge minimum
wage adjustment proposals of employers’ organisations and the trade union
side to be based on the use of reliable statistics and sound data analysis,
taking into consideration both social and economic criteria,” Hazelton added.
Minimum wage is a
single wage floor level below which employers cannot go legally.
The ILO suggests
that the negotiations should look into the needs of workers and economic
factors such as payment ability and competitiveness.
“Minimum wage has
limitations and it should not be used to address all poverty issues,” said
ILO senior specialist on Employers’ Activities, Gary Rynhart.
He advised
Regional minimum
wages in Vietmam are now deliberated on by the National Wage Council, which
was established in 2013 and gave an equal voice to the government, employers’
organisations and trade unions.
Minimum wages for
2014 range from VND1.9 million ($90) to VND2.7 million ($129) per month
depending on regions.
Binh
Duong looks to US$1.4 billion in FDI attraction
The southern
At a press
conference on socio-economic updates in the province on June 4, the Binh
Duong Department of Planning and Investment said the FDI pledges in the year
to May had exceeded US$978 million, or 97.8% of the year’s target previously
announced by the province.
The FDI came from
65 new projects with registered capital of over US$370 million and 56
operational projects with combined capital of US$608 million.
The department said
there had been 2,295 valid FDI projects with a combined investment of
US$19.74 billion as of May.
Also on June 4, the
government of
With positive FDI
results in the year to date, the authorities of
Nguyen Anh Hoa of
Dong Hung Joint Stock Company told the Daily that the violence did not affect
the confidence of the firm’s leaders in
Xie Zu Hong,
director of the newly-licensed Zhui Rui Vietnam Co., Ltd. (
Mai Hung Dung,
director of the department, told the Daily at the press conference that Binh
Duong targeted US$5 billion in FDI in the 2011-2015 period but this goal had
been realized now.
Le Thanh Cung,
chairman of
Regarding the
aftermath of the riots, Binh Duong vice chairman Tran Van Nam said he had
been appointed head of a team to address relevant issues of the protest-hit
firms at industrial parks and compensation would be implemented very soon.
Nguyen Phung Trung,
deputy director of the provincial Department of Labor, War Invalids and
Social Affairs, said the province was exerting efforts to arrange jobs for
the more than 9,000 workers who have been jobless since the incident
occurred.
Financial constraints
force ministry to revise expressway projects
The Ministry of
Transport has scaled down many expressway projects nationwide due to
shortages of State money and difficulties in finding capable investors.
The ministry has
announced a list of expressways to be built with two lanes in the first phase
instead of four to six lanes as previously planned. A typical case is the
Ninh Binh-Thanh Hoa expressway, which will connect northern and central
provinces and was initially estimated to cost more than VND30 trillion (over
US$1.4 billion).
The ministry has
recently divided the expressway project into two phases to make it easy to
woo investors to develop two lanes in the first stage at a much lower cost of
over VND30 trillion.
Thai
The ministry and
The developer of
Trung Luong-My Thuan has found it hard to mobilize sufficient capital for the
expressway project in the Mekong Delta region. Duong Tuan Minh, general
director of Cuu Long Corporation for Investment, Development and Project
Management of Infrastructure (Cuu Long CIPM), said that the first phase of
this big-ticket project was put at nearly VND25 trillion and this investment
was too huge to mobilize at the moment.
Therefore, Cuu Long
CIPM suggested developing Trung Luong-My Thuan in two stages with the first
having two lanes 2.5 meters wide each plus sections for vehicles to stop in
case of emergency built under the build-operate-transfer (BOT) format. The
expressway will be expanded to six lanes using official development
assistance (ODA) loans in the second phase.
Experts said that
scaling down and dividing the planned expressways into stages was an
appropriate solution to attracting capable investors and helping shorten the
time for return on investment.
Currently, the
transport ministry is reviewing many of the 25 transport projects listed to
call for foreign investors by 2020 with a view to scaling down and dividing
these projects into phases.
Foreign
consultants keep PNJ a step ahead
As most Vietnamese
enterprises still lack experience, using consulting services for
international best practices can offer a major step forward.
Since transitioning
to a market economy in 1986,
Phu Nhuan Jewelry
(PNJ) is a typical example of one such firm overcoming these obstacles. It is
now
PNJ has an
excellent growth outlook, as it has steadily developed its distribution and
production chains. It currently has more than 170 retail stores and is
looking to expand this to 300 by 2017. Today, PNJ’s business model is similar
to that of Tiffany’s in that it designs, produces, and then sells products
via its own stores.
Nguyen Thi Cuc,
deputy general director of PNJ, attributed the firm’s successful growth to
the determination of the board of directors in taking advantage of consulting
services provided by international firms. These services have helped PNJ to
gain experience and skills in advanced management throughout the production
and sales processes, and in terms of developing human resources.
PNJ was first
founded in 1988 as Phu Nhuan Jewelry Trading Store with an initial investment
of VND14 million (equivalent to a mere 9 ounces of gold at the time) and a
staff of only 20 employees.
Two years later it
became Phu Nhuan Jewelry, Fine Arts and Currency Exchange Company, which
operated under the direct control of the Finance Department under the Ho Chi
Minh City People’s Committee. In 1992 it assumed its current name, or PNJ for
short. This time witnessed tremendous changes to the firm, resulting from the
board of director’s bold decision to invest in Italian production line
technology. In the same year, the company also co-founded Dong A Bank and
formed a joint venture with Phu Nhuan House Trading and Development Company.
“From our first
days we have enlisted the help of foreign consulting firms to advise on our
business strategies and to learn the best practices from them” said Cuc, who
cited that 25 years ago PNJ hired a group of Japanese consultants to help
develop its first jewelry production facility in
“For 25 years,
effectively using consulting services for best practices have helped PNJ
cement its leading position in the jewelry market,” she affirmed.
In 2011, the
company worked with its Italian consultant Value Partners Management
Consulting in developing its long-term strategy, setting up the firm’s
business goals, and coming up with plans to become the leading jewelries
manufacturer and retailer in Asia and maintain its number one position in its
target segments in
In 2012 PNJ signed
an agreement with Cowan, an international brand and packaging design agency,
to rebrand the firm in a way that aligned with its business objectives and
aspirations.
Accordingly, Cowan
worked closely with the firm’s CEO and other key executives to identify the
values and attributes of the organisation.
PNJ also has
agreements with Hay Group and the former senior vice president of Zales Corp,
Sterling Pope, for consulting on its human resources, information technology
and retail chain.
“If a company is
aware and understands exactly what its goals are, using foreign consulting
services is a major advantages,” said Cuc.
She attributed the
firm’s successful business results in 2013 to the use of foreign consulting
services. During that time, PNJ’s core jewelry business performed extremely
well with after-tax profits (deducting financial income) up 45 per cent
on-year thanks to the implementation of best practices in operations and
improved retail management.
This trend is
continuing in 2014, as evidenced by an on-year increase of 58 per cent in
after-tax profits from its core business as of April 2014. This is well
on-track for the goal of 45 per cent for the entire year.
In fact, many
Vietnamese firms have failed in their application of foreign consulting
services. This begs the question: how are local firms positioned to follow
the advice offered by such consultancies?
“Being open-minded
and authentic is a shared culture from top management to every staff in PNJ.
We must look directly into our strengths and weaknesses and then look for
solutions with experts’ inputs,” Cuc said.
At PNJ, to
successfully implement the direction defined by foreign consulting firms all
staff and leaders had to be aware of essential changes, she added.
She noted that the
company has over 1,500 employees, but that they unify together for common
goals without focusing on individual benefit. “That is the foundation needed
for any change to be successful.”
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Chủ Nhật, 8 tháng 6, 2014
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