BUSINESS
IN BRIEF 19/7
SFC wants to buy more than 30 per
cent of Foodsaco
Sai Gon Fuel Joint Stock Company (SFC) registered to
buy over 9.7 million shares, or nearly 33 per cent, of stakes in HCM Food One
Member Company (Foodcosa) when the firm auctioned its shares in an initial
public offering this week.
According to the HCM City Stock Exchange, which will
organize the auction, the shares are to be offered on July 15 at a starting
price of VND12,000 each (US$0.53).
After equitization, Foodcosa is expected to have a
charter capital of VND294.5 billion ($13.1 million). Except shares sold in
the IPO, the state would hold 65 per cent equity, equivalent to 19.14 million
shares, while employees would hold over 2 per cent of the stakes.
Established in 1980 in HCM City, Foodcosa traded food
and industrial products, such as flour, fertilizers and pesticides, as well
as consumer goods. Focosa is also involved in trading fuel in the country,
along with retailing.
SSC fines public firm for late
document submission
The State Securities Commission fined Can Tho Urban
Joint Stock Company VND7.5 million (US$333,300) for the late submission of
their public firm document on July 6.
Can Tho Urban Joint Stock Company became a public firm
in July 2015, with charter capital of more than VND53 billion and 318
shareholders. Yet, it only handed over the document to the SSC this year.
Under local regulations, the document should have been
submitted one month after the company became a public firm.
MEF II sells 2.5m Mobile World
shares
Mekong Enterprise Fund II, or MEF II, announced
the successful sale of 2.5 million shares of Mobile World (MWG) on July 9.
After the sale, MEF II's ownership of MWG fell from
10.94 to 9.24 per cent, equal to 13.54 million shares in the technology firm.
The fund also became the largest shareholder of MWG
after World Retail Investment Consulting Limited Company with its 13.18 per
cent of shares.
According to statistics from the HCM Stock Exchange on
July 8, the entire 2.55 million shares of MWG, worth VND344.4 billion
(US$15.3 million), were traded when the shares ended at VNÐ130,000 each. So,
at the lowest intraday trading price of VND129,000 during the day, MEF II
could earn at least VND322.5 billion.
In the first six months of this year, MWG shares soared
64.5 per cent from VND79,000 to VND130,000.
The MEF II fund, managed by Mekong Capital, was one of
the earliest institutions to invest in MWG since 2007. It was once the
largest shareholder, with ownership of over 30 per cent.
VNPT and Microsoft signs
co-operation agreement
The Vietnam Post and Telecommunication Group (VNPT) and
Microsoft signed a memorandum of understanding for co-operation in strategic
agreements on cloud computing, cyber security and smart city plans on July 7.
The VNPT was focusing on developing new products
including information security applications and other applications on cloud
computing platforms; while developing platforms and applications for smart
cities, said Pham Duc Long, VNPT general director.
"Microsoft is an experienced provider in these
areas. Therefore, the two sides discussed and negotiated to reach to decision
of the co-operation and committed to bring effective and cost savings
products and solutions for customers", he added.
Vietnam Air to hold extraordinary
meeting before Sept
Vietnam Airlines Corporation will hold an extraordinary
shareholder meeting before September 30 to elect more board members after
Japan’s All Nippon Airways (ANA) acquired an 8.771% stake in the local firm.
A representative of Vietnam Airlines confirmed that ANA
has taken over the stake worth over VND2.43 trillion (US$109 million). The
corporation agreed to sell its shares to ANA in May and the deal was done
last Friday.
At the forthcoming meeting, Vietnam Airlines will seek
approval from shareholders to issue more shares to increase its chartered
capital.
Vietnam Airlines described ANA’s investment as an
important factor for its long-term development strategy. It will enable the
two sides to expand cooperation in many fields and Vietnam Airlines to
further modernize its aircraft fleet, expand markets, improve service
quality, and increase business efficiency.
Vietnam Airlines will sell further shares to investors
to lower the State holding to 65% in line with its restructuring plan.
Vietnam Airlines saw its consolidated revenue in the
first quarter of this year rising by 13.3% year-on-year to VND19 trillion
(US$851.8 million), meeting 26.4% of the full-year target.
It reported consolidated pre-tax profit of VND1.1 trillion
(US$49.3 million) in quarter one, a year-on-year increase of 32.5%. Its
parent company posted revenue of VND15 trillion (US$672.5 million) and
pre-tax profit of VND873.9 billion (US$39.3 million).
Vietnam Airlines credited its revenue and profit growth
to the world’s lower fuel prices and a 20% year-on-year rise in foreign
visitor arrivals to Vietnam in quarter one at 2.46 million, with the number
of foreigners traveling by air accounting for nearly two million.
In the first three months, Vietnam Airlines transported
over 4.6 million passengers, up 11.6% over the same period last year, and
nearly 61,000 tons of cargo, up 15.6% year-on-year and exceeding 11.2% of its
quarter target. It operated 34,500 flights on domestic and international
routes, increasing 9.3% over the same period last year.
Vietnam Airlines now has a fleet of 89 modern aircraft,
including Boeing 787-9 Dreamliners and Airbus A350-900 XWB. Its flight
network covers 20 domestic and 29 international destinations.
Currently, Vietnam Airlines conducts 66 weekly flights
to Japan’s Narita, Haneda, Chubu, Kansai and Fukuoka airports.
Steel imports forecast to surge
toward year-end
The Vietnam Steel Association (VSA) has projected that
steel imports into Vietnam would continue leaping, especially in the final
months of 2016, when demand for construction rises.
VSA statistics showed Vietnam had imported over 9.6
million tons of steel worth US$3.42 billion in the year to date, up 48% and
1% year-on-year respectively. China is Vietnam’s largest steel exporter in
the period, accounting for 60% of the total.
VSA vice chairman Nguyen Van Sua was quoted by the
Vietnam News Agency as saying that although the local steel industry has
expanded strongly, Vietnam remains the biggest steel importer in Southeast
Asia and the seventh biggest in the world.
Cheap steel products from China, whose steel industry
is facing overcapacity, are predicted to overwhelm the domestic market at the
end of this year, Sua said, and local steel producers will have to scale down
production or face bankruptcy if Vietnamese authorities do not protect them.
Sua suggested using import duties as a tool to protect
local production. However, he stressed close cooperation among Vietnamese
steel producers to improve the quality of their products and make their
prices more competitive is a long-term solution.
The Ministry of Industry and Trade has imposed
respective temporary safeguard duties of 23.3% and 14.2% on steel ingots and
long steel imported into Vietnam from many countries and territories since
March 22 as a measure against cheap imports.
Around 18.7 million tons of steel was shipped into the
country last year.
Retail space demand in Hanoi
lackluster in Q2
A report of Savills Vietnam indicated that though the
retail space segment in the capital city was lackluster in quarter two,
supply reached 1.2 million square meters, up 4% quarter-on-quarter and 22%
year-on-year. As a result, the average space rental fell nearly 6%
quarter-on-quarter and nearly 2% over the same period last year.
At least three new projects, namely T1 Tower of Thang
Long Victory, Thang Long Garden and Victoria Van Phu, were launched in the
period, providing an extra 48,000 square meters of retail space for the
market.
As reported by JLL, the percentage of unoccupied space
at commercial centers in Hanoi rose from 25% in the first quarter to nearly
26% in the second quarter, and represented a year-on-year rise of 10% because
many food stalls were closed.
Commercial centers outside Hanoi’s central business
districts had the same fate. Therefore, the average space rental at
commercial centers dropped by 1.3% to nearly US$30 per square meter per month
in quarter two compared to the previous quarter.
JLL forecast that by the year-end the Hanoi market will
have an additional 43,000 square meters of retail space from two projects in
Long Bien and Dong Da districts and competition will intensify though more
foreign retailers are projected to enter the market.
Meanwhile, the office segment recovered in April-June.
Savills Vietnam reported in quarter two that office supply in Hanoi increased
by 1.4% over the previous quarter and 9.4% year-on-year as a new project
provided about 18,000 square meters of office for lease.
Average rents of grade A and B offices went up by 0.6%
and grade C grew 3.7% quarter-on-quarter. The occupancy rate of grade A
offices remained unchanged while the rates for grades B and C inched up over
3% and nearly 1% respectively.
In the second half of 2016, two new office projects
with a total of 47,000 square meters will join the market.
Savills Vietnam said apartment transactions in Hanoi
continued rising in quarter two. The total number of apartments offered for
sale stood at 17,370, up 7% against the previous quarter and nearly 30%
year-on-year. About 6,000 units found buyers in the period, up 7%
quarter-on-quarter and 30% compared to the same period of 2012.
Of the total apartments, grade B products led the
market with 73%. In the second half of 2016, about 22,000 units from 41
projects, mainly of grade B, are expected to be put up for sale.
EVN SPC to finalize power projects
for island communes in Q3
Southern Power Corporation (EVN SPC) will complete two
key projects designed to supply power for island communes in the Mekong Delta
province of Kien Giang in the third quarter of this year.
The projects are aimed at meeting electricity demand of
people in Lai Son and Hon Nghe communes of the province as well as ensure
social security and defense.
Work started on the power project for Lai Son Commune
worth VND467 billion (nearly US$21 million) in early September last year. It
includes a 110-kV An Bien-Lai Son power transmission line with a length of 43
kilometers including 24 kilometers undersea, a 110-kV power station, and 13
distribution stations with a total capacity of 2,080 kVA.
The project is 96% complete and scheduled to be up and
running this month, according to Kien Giang Electricity Co. It will supply
electricity to 1,956 households in the commune.
Meanwhile, the power project for Hon Nghe Commune is
planned to come on stream in the third quarter of this year, after around one
year of construction. The VND140 billion project comprises 16.37 kilometers
of 22-kV undersea medium-voltage cables and 154 kilometers of 22-kV line
overland cables. Two 22-kV lines with a total length of 9.8 kilometers and
eight substations with a total capacity of 975 kVA on Hon Nghe Island are
also underway.
EVN SPC plans VND6.5 trillion (US$295.9 million) for
power projects this year.
Regarding power supply in the third quarter, HCMC Power
Corporation said it will deploy smart power grid applications to minimize
power outages and meet demand.
Seminar: Greater chance of
partnering with Japan firms
Local enterprises, including small ones, will have a
lot of opportunities to join hands with Japanese firms, heard a seminar on
investment promotion and business expansion in the Japanese market in Hanoi
on July 5.
Nguyen Xuan Huy, director of Vietnam Precision
Mechanical, Service and Trading Co Ltd (VPMS), told the seminar that his
small company with an investment of only VND10 billion has been successful in
doing business with Japanese firms.
Huy said his company mainly tailor-made parts under
subcontracts in the past but has shifted to designing and producing molds
since 2011. The company posted revenue of VND125.4 billion last year, with
nearly 30% of it from Japanese partners.
Huy added he had contacted his customers via the
Internet, the Japan External Trade Organization (JETRO), state agencies and
word of month.
To secure deals with Japanese partners, VPMS regularly
organizes technical training courses for its staff with Japanese trainers to
increase their skills. He also called for Vietnamese businesses to discuss
with Japanese enterprises to well understand what they need.
Speaking at the seminar which also aims to call for
Vietnamese firms to invest in Japan, Shigeki Maeda, executive vice president
of JETRO Tokyo, said Japan and Vietnam had cooperated in many fields. In
terms of trade, Japan was the third biggest export market of Vietnam last
year.
Maeda said once Vietnamese companies succeed in
business ties with Japanese partners, they could meet quality requirements of
any other picky markets around the world.
Japan , the world’s third largest economy, has strong
consumption demand and serves 20 million tourists a year. Therefore,
opportunities abound for Vietnamese enterprises to tap into the hospitability
and food sectors.
Atsusuke Kawada, chief representative of JETRO Hanoi,
noted that when investing in Japan, Vietnamese firms should heed high labor
costs and enquire with JETRO about the Japanese market or get legal advice before
entering the market.
According to the Foreign Investment Agency (FIA),
Vietnamese enterprises have registered a total of US$7 million for nearly 40
projects in Japan, mainly in the fields of software, service and trade.
“With the growth of Vietnamese enterprises, the figure
will continue to rise in the coming time,” head of the FIA Do Nhat Hoang
said.
Long An: Over 900 new firms formed
in six months
A total of 918 new businesses have been set up in the
southern province of Long An in the first six months of this year, with
combined registered capital reaching 6.7 trillion VND (301.5 million USD).
The figure showed year-on-year increases of 140 percent
in the number of enterprises, and 72 percent in the value of capital,
according to the provincial Department of Planning and Investment.
In the same period, the local authorities have also
granted licences to 195 investment projects worth a total 20 trillion VND
(900 million USD), including over 400 million USD from 53 foreign-invested
projects.
To date, foreign investors have poured around 5 billion
USD in 739 projects in Long An, with 434 of them operational.
The positive outcomes were attributable to solutions
devised by the local authorities, including activities to support
enterprises.
The provincial administration has taken many measures
to improve the provincial competitive index (PCI), while organizing
conferences to boost links between local firms with foreign counterparts.
Director of the provincial Department of Planning and
Investment Nguyen Van Tieu said Long An will work harder to better investment
climate in the locality, thus facilitating enterprises’ production and
business.
Vinh Phuc province vows maximal
support for Japanese investors
The authorities of Vinh Phuc province in the northern
key economic region assured Japanese businesses of maximum support for them
at a meeting on July 6.
The event, held by the provincial People’s Committee,
the Vietnam Chamber of Commerce and Industry and the Japanese Embassy in
Vietnam, drew representatives of the Japan International Cooperation Agency
(JICA), the Japan External Trade Organisation (JETRO), the Japan Business
Association in Vietnam, and Japanese enterprises operating in Vinh Phuc.
Chairman of the provincial People’s Committee Nguyen
Van Tri promised continued efforts to improve local investment climate,
develop infrastructure and skilled manpower, and timely deal with Japanese
firms’ requests and administrative procedures.
Vinh Phuc has benefited from the growth in overall
Vietnamese – Japanese relations, especially since 1995 when Japan’s Toyota
and Honda groups began investing in the province, the chairman said.
He appreciated the quality and effectiveness of
investments from Japan which have substantially contributed to local
socio-economic development.
By the end of June 2016, Vinh Phuc houses 222 FDI
projects with a total registered capital of 3.43 billion USD from 16
countries and territories. Though Japan only ranks third in terms of the
project number (26) and registered capital value (over 786 million USD), its
companies have continually showed the best business performance and contributed
most to local budget.
Chairman Chi called for Japanese investment in projects
using modern technologies such as mechanical engineering (including
automobile and motorcycle manufacturing and assembly), electronics and their
support industries, telecommunications, and hi-tech agriculture. Investors
from the Northeast Asian nation are also welcomed in tourism – entertainment,
health care and education.
At the meeting, Japanese firms asked for more
appropriate policies for importing used machinery with high quality and
boosting auto manufacturing’s support industry. Vinh Phuc should also keep
investment incentives transparent and stable, while improving infrastructure
at industrial parks.
Seafood exports to UK in the context of Brexit
Britain’s exit from the European Union (EU) , or
Brexit, may affect the competitiveness of seafood products exported to the UK
in terms of price, according to the Vietnam Association of Seafood Exporters
and Producers (VASEP).
Vo Van Phuc, Director of Vietnam Clean Seafood Corporation,
said that there will be difficulties in seafood exports to both the UK and
the EU as Brexit causes devaluation of GBP and EURO.
The VASEP also raised concern that exports to the UK
will not enjoy preferential tax conditions from the free trade agreement
(FTA) between Vietnam and the EU once it is approved.
Especially, Brexit will have a big effect on shrimp
exports as the UK is the largest importer of Vietnamese shrimp.
Shrimp exports to the UK reached 47.5 million USD by
June 15, up 16 percent against the same period last year, according to the
VASEP.
The export growth of this product has slowed down in
recent time, with an increase of 21.6 percent in the first five months in
comparison with a 39 percent rise for the four-month period.
VSIP Nghe An invests 6 mln USD in
ready-built warehouse
The Vietnam-Singapore Industrial Park (VSIP) Nghe An
Co., Ltd is investing 6 million USD in constructing a 20,000 sq.m ready-built
warehouse area in the central province.
The company held a ground-breaking ceremony for the
project’s first phase on July 6.
The first phase consists of two warehouses covering a
total area of 5,000 sq.m, each having office and manufacturing zones
furnished with electricity, water and telecommunication systems.
Enterprises operating at the warehouses will be
supported with legal services, recruitment consultancy and firefighting.
Speaking at the event, Director of the company Anthony
Tan said the ready-built warehouses will help investors accelerate their
business and production process with reduced initial investment costs.
It is an ideal model for small-sized investors, he
said, adding that the company’s ready-built warehouse system in the southern
province of Binh Duong has proven effective.
VSIP Nghe An lies on an area of 750 ha. Its
construction started in September 2015.
VSIP Nghe An commences construction
The Viet Nam Singapore Industrial Park joint venture
(VSIP JV) had a ground-breaking ceremony for the first phase of their Ready
Built factory of VSIP Nghe An on July 7.
The phase will commence construction on the 5,000sq.m
ready built factory in the initial phase before increasing it to 20,000sq.m
with total investment of about US$6 million.
Last year, VSIP Nghe An was granted exclusive rights by
the provincial people's committee to develop a 750ha integrated township and
industrial park and the investment licence for phase one of the project with
$15.2 million in funding.
The licence covers 198ha of industrial land and 81ha of
commercial and residential land.
"A ready built factory helps investors to start
their operation faster and with lower investment capital. It is ideal for
those who want to start smaller and over time take up bigger units or land to
build on their own as their operation expand. We have seen many tenants in
VSIP Binh Duong taking this path," general director of VSIP Nghe An
Anthony Tan said.
"To date, 124ha of land has been resettled and
handed over to VSIP and many more will be handed over in the coming months.
VSIP will push harder to quickly fill and put up the necessary infrastructure
including drainage, sewer pipes, roads etc. In the next two months, we will
also start building our fire station, sewage treatment plant and office
building. By next September, we should complete about 140ha of industrial
land with tree lined streets and facilities to support our tenants," he
said,
It will be the seventh VSIP in Viet Nam after the ones
located in Binh Duong, Quang Ngai, Bac Ninh and Hai Phong, in addition to Hai
Duong.
VSIP said Nghe An, located in north-central Viet Nam
and 70km from the Laotian border, played an important role in supporting Ha
Noi, 400km away.
Garment manufacturers, agribusinesses and fast-moving
consumer goods (FMCG) sectors are the target industries of VSIP Nghe An.
Till date, the total area of the seven VSIP projects in
Viet Nam covers more than 6,000ha.
The latest report said VSIPs nationwide have attracted
616 investors from 30 countries and territories with a total investment
capital of $8.5 billion, creating 160,000 jobs.
Over 10 tons of lychees shipped to
Australia
More than 10 tons of lychees under Luc Ngan brand name
were exported to Australia on June 23-29.
According to the Vietnam Trade Office in Australia,
last year Vietnam lychees were mainly consumed in Sydney and Melbourne, but
this year half of the volume was shipped to Perth city, Western Australia.
This year’s import price was lower as transportation
costs were reduced, but Vietnam lychees have to compete with Chinese lychees
which were cheaper. However, the Vietnam fruits can compete with Chinese
lychees given their quality and nice-looking skin.
A delegation from Hai Duong provincial Department of
Industry and Trade have made a market research in Melbourne city to find an
outlet for lychees under Thanh Ha brand name.
Earlier in June, the Australia’s Department of
Agriculture and Water Resources certified the Hanoi Irradiation Centre to
irradiate Vietnamese lychees exported to the market. This is the third
irradiation centre recorgnised by Australia, after two centres in Ho Chi Minh
City.
Irradiation treatment in Hanoi will help save time and
reduce transportation costs. As a result, the exported lychees will be
cheaper and more competitive, experts said.
Japan's Oita prefecture keen to
boster ties with Vietnam
Japan's Oita prefecture Governor Hirose Katsusada
expressed his locality''s desire to step up all-around cooperation with
Vietnam.
At a meeting with Vietnam Ambassador Cuong to Japan
during his working visit to Oita on July 2-4, Hirose Katsusada highlighted
great potential for bilateral broader cooperation, affirming local
authorities' willing to offer favourable conditions for their
businesses to invest in Vietnam.
Oita prefecture hopes to attract more Vietnamese
tourists, students and workers to the locality, he said, adding that a host
of activities will be launched to promote connections between local firms and
foreign students, including those from Vietnam.
Ambassador Cuong in turn reiterated the embassy’s
support for Oita prefecture to augment cooperation with Vietnam, especially
in economy, tourism, education-training, and labour.
During the visit, the Vietnamese diplomat had a meeting
with former Japanese Prime Minister Murayama Tomiichi, during which he
praised great contributions made by the Japanese official to the
Vietnam-Japan relations.
Cuong and his delegation, visited APU University which
is home to more than 500 Vietnamese students, and toured some businesses and
tourist sites.
Vietnam-Taiwan economic links thrive
Economic and trade cooperation between Vietnam and
Taiwan (China) has strongly expanded in recent years, with two-way trade in
2015 hitting US$13 billion.
According to the Vietnam Chamber of Commerce and
Industry (VCCI)’s branch in Ho Chi Minh City, Vietnam mainly ships telephones
and spare parts, textiles and farm products to Taiwan, while importing
machines and equipment, computers and materials for textile and garment.
In the first four months of this year, Taiwan ranked
third among 50 countries and territories running investment in Vietnam.
According to the Foreign Investment Agency under the
Ministry of Planning and Investment, Taiwanese investors have mainly injected
money into processing and manufacturing industries, water supply, waste
treatment and logistics services.
Taiwanese investors’ projects were present in 17 out of
the 63 cities and provinces across Vietnam in the period.
The southern province of Tien Giang took the lead in
the number of projects and the amount of investment capital. It was followed
by the central province of Ha Tinh.
Seaports represent growing logistics
opportunity
The nation’s logistics network has not been implemented
in an integrated manner, says the Vietnam Ministry of Industry and Trade
(MoIT).
Speaking at a recent seminar, Bui Hong Minh from the
Import-Export Department of the MoIT directed the audience’s attention to the
fact that this has resulted in an annual total logistic cost of between
15-20% of GDP.
“This cost is nearly double that of more developed
nations,” said Mr Minh.
For comparison purposes, said Mr Minh, an analysis by
the Vietnam Business Forum last year showed that the US spends about 9.5%,
Japan 11%, and China 21% of GDP on logistics each year.
The rapid growth of the nation’s export oriented growth
has outpaced its infrastructure, creating major bottlenecks in ports and is
now a major constraint to continued economic expansion.
The country’s infrastructure has often been described
as “roads without bridges, bridges without roads” meaning there is no
consistency and compatibility between ports and roads and the surrounding
land use.
Simply put, a large part of the country’s logistics
network has not been implemented in an integrated manner, he stressed.
The problem isn’t just limited to ports and
inter-provincial roads, bridges and inland infrastructure works connecting to
them— but can also be found in the major metropolitan areas and the
inner-city traffic congestion.
The World Bank estimates that the nation will need to
muster roughly US$200 billion to bring its dire infrastructure need for
roads, bridges, and ports in line with the nation’s economic requirements.
“As long as Vietnam fails to improve its infrastructure
and waste13-14% of its GDP on an annual basis, it will continue to lag behind
other developing countries around the globe,” said Sandeep Mahajan, lead
economist for the World Bank in Vietnam.
Big names like Toyota, Honda, Mercedes-Benz, Intel,
PepsiCo, Coca-Cola, P&G, Metro Cash & Carry, and Unilever, are all
present in Vietnam and if they decide to take their business elsewhere
because Vietnam is no longer cost-advantageous, the economy will suffer tremendously.
The air and rail transportation network accounts for a
low share of the overall transportation market in Vietnam and therefore the
emphasis should be on port development.
Some analysts estimate that more than 85% of the
nation’s import and export commodities are shipped by sea, said Mr Mahajan,
and the focus should be on integration of transport networks, information
technology, warehousing and distribution facilities with the ports.
Because of the nation’s geographical landscape, its
access to water channels via ports is essential to maximize its competitive
advantages.
With 3,200 kilometres of coastline, the nation has 266
ports, about 144 of which are seaports. However, most ports are relatively
small with obsolete facilities and poor support services, said economist
Gerard McLinden.
Mr McLinden underlined the fact that the lower the cost
of freight the more likely that large multinational corporations would invest
in and conduct their business operations in the Southeast Asian nation.
Most importantly he stressed the need for more port
storage capacity and ports that can harbour larger vessels. In comparison to
Thailand and Malaysia, the nation’s main container ports seem miniscule in
terms of storage capacity and depth.
Since Vietnamese ports lack the capacity to accommodate
larger vessels the larger post-Panamax ships have to transit through
Singapore and Hong Kong, more focus on dredging and upgrading ports in
Vietnam would be extremely cost and time-efficient.
AEC integrates logistics network
Foreign logistic firms are expediting their efforts to
tap into the market’s growth following the establishment of ASEAN Economic
Community.
Clement Blanc, managing director of DHL Global
Forwarding Vietnam, told VIR that one key aspect of achieving the AEC is to
create an integrated transport market to increase connectivity and help spur
ASEAN’s goals of economic integration.
Logistics is a priority sector for ASEAN integration,
and the Roadmap for the Integration of Logistics Services under the AEC makes
firm commitments to liberalise ASEAN’s logistics sector including everything
from cargo handling, storage, and warehousing, to courier services, customs
clearance, and international freight.
As road freight is more cost-effective than air
freight, and faster than ocean freight, DHL Global Forwarding has expanded
its road freight network in ASEAN in anticipation of a boom in trade in the
AEC in the years to come.
The firm first launched its road freight network in
2011 connecting Singapore, Malaysia, and Thailand, which now links to the
existing Vietnam-China connection. Its latest integrated road freight network
links all five countries and caters for the further expansion of trade and
production networks across the region.
According to Blanc, Vietnam is an exciting country to
be in right now – booming with investment especially in the hi-tech sector.
It has a young workforce, and a reform-minded government. From a logistics
provider’s perspective, the firm is particularly satisfied with the
consistent alignment with international best practices.
“Vietnam is the only ASEAN country which has a truly
paperless customs environment. All this has been done within a relatively
short time frame. DHL will continue to work with the government on all
aspects of customs and trade facilitation reforms,” he said.
Another foreign logistics firm, DB Schenker, has also
witnessed an increasing volume following the establishment of the AEC. The
last few months have been especially exciting for the firm, as it has
received many enquiries from its international customer base about trade
opportunities in the region, DB Schenker claims.
Christoph Matthes, managing director of DB Schenker in
Vietnam, told VIR that the AEC is a critical enabler for the entire region
because of the enormous market of over 600 million consumers. The ten member
states have diverse economic profiles, and it will be interesting to see how
the journey to full economic integration develops.
Indeed, the AEC is a great opportunity for Vietnam to
expand its international trade prospects. Vietnam is located at the heart of
the ASEAN region and is well positioned to enjoy the benefits of the single
market and production base.
“To prepare ourselves, we will focus more and more on
developing cross border logistics solutions. A good example is our Landbridge
Asia road transport service where we take freight by truck to cross the
borders of our neighboring countries,” he said, adding that, “We expect that
the demand for this type of service will grow significantly in light of
ASEAN’s substantial tariff reductions.”
DHL-VNPT Express is also uniquely set up for ASEAN with
its newly expanded South Asia Hub in Singapore and another hub in Bangkok.
Currently, the firm’s intra-regional Asia Air Network is one of its key
strengths. DHL-VNPT Express says it benefits from having the fastest network
intra Asia-Pacific, as the firm is the only service provider that can provide
same-day uplift on its own aircraft for a next day delivery across most of
the region.
According to George Berczely, the firm’s general
director, participation in the AEC will give Vietnam more opportunities to
attract foreign direct investment, expand its export markets, and help boost
the capabilities of its logistics service providers through physical
connectivity, such as hard infrastructure for transport within the regional
network. However, it should also be noted that the AEC will undoubtedly
intensify competition within the region.
“For us, the AEC brings about more opportunities than
competitive challenges, and we are continuously investing to capitalise on
these opportunities. We are seeing strong growth within ASEAN, which has been
the trend for a few years now,” he said, adding that, “Our primary focus is
the expansion our air network and ground network.”
DHL-VNPT Express has recently expanded its Saigon
gateway by 50%, and plans to open more facilities across the country over the
next few years to further its reach and improve services across the region.
Debt trading decree in effect
The first ever legal framework for debt trading
activities in Viet Nam is available.
Decree No 69/2016/ND-CP, which took effect last Friday,
stipulates the following major conditions for enterprises dealing in the debt
trading business:
- The companies must have at least VND100 billion, or
US$4.4 million, in charter capital. Firms dealing in debt trading floor
services must have at least VND500 billion in equity.
- Agreements in documents do not state that the debts
cannot be transferred; the debts are not used as a mortgage for a civil duty
at the time that transactions take place; debt buyers and sellers are not
related parties in accordance with regulations of the Enterprise Law.
- Debt transactions must be contracted in documents
based on agreements of relevant parties, guaranteeing their legal rights and
interests. The documents are to specify the rights and responsibility of debt
buyers and sellers.
- Debt trading companies must not use loans of credit
institutions and foreign bank branches to buy debts from other borrowers of
these lenders. Also, the firms are not to use a guarantee of credit
institutions and foreign bank branches to buy debts from customers of the
lenders.
- Debt buyers and sellers and relevant parties must
obey current regulations on foreign exchange management in case debt trading
forms a foreign lending/borrowing relation and requires foreign exchange in
the debt transactions.
- Managers of debt trading firms must have adequate
civil capacity and are not banned from corporate management in accordance
with regulations of the Enterprise Law. They must have a bachelor's degree or
higher degrees either in economics, business management, laws or a certain
field that they are going to assume in their jobs. They are to have at least
five years working directly in areas such as banking and finance, accounting,
auditing, laws, asset evaluating or debt trading.
Persons who already worked for a debt trading firm,
whose business registration certificates were revoked, can become managers of
another debt trading company if they did not manage the old firm in the last
three consecutive years.
Dau Anh Tuan, head of the Viet Nam Chamber of Commerce
and Industry (VCCI)'s legislation department, said debt trading remained on a
list of business areas where enterprises must satisfy specific conditions, as
attached in Appendix 4 of the Investment Law.
"I think debt trading should not be on this list.
It should be developed widely," Tuan told Viet Nam News in a phone call
yesterday.
"I have no specific idea about developments in the
domestic debt trading market, but activities here apparently remain feeble,"
he said.
State Bank of Viet Nam (SBV) Governor Le Minh Hung said
last week that banking authorities would accelerate steps to form a market
for debt trading, as part of national efforts to restructure the credit
institution system and settle bad debts.
This was also part of an action plan of the banking
sector to support the domestic business environment and national
competitiveness with a vision towards 2020.
The SBV has also issued 14 circulars, and it reportedly
abolished many business conditions in the banking area.
According to Government portal chinhphu.vn, the new
circulars simplify administrative procedures related to activities such as
lending abroad, mandating and payment for credit institutions, and foreign
bank branches in Viet Nam.
Viet Nam International Bank Deputy General Director Le
Quang Trung told Dau tu (Vietnam Investment Review) that simpler procedures
would help banks cut time and costs to improve their business efficiency.
Can Van Luc, director of the BIDV training centre under
the Bank for Investment and Development of Viet Nam, agreed, saying that this
would create conditions for banks to lower interest rates.
Decree No 69/2016/ND-CP is one of about 50 decrees that
have become effective and provided guidelines for the enterprise and
investment laws. These laws took effect last Friday.
As of yesterday, the contents of fewer than 10 decrees
were posted on the Government portal. The available ones include decrees on
business conditions related to credit intelligence, maritime navigation,
agriculture and automobile transportation.
Tuan from the VCCI said he expected the other decrees
to be published in the next few days.
He said these documents had been built based on
"quite a lot" of suggestions from the VCCI, which represents the
domestic business community.
"The decrees provide clearer and more transparent
regulations, yet greater changes are needed," he said.
Phan Duc Hieu, deputy director of the Central Institute
for Economic Management, said last Friday was not a "dead-end" for
Vietnamese business conditions reforms.
Legal revisions would go on, said Minister of Planning
and Investment Nguyen Chi Dung.
Capitalising on Vietnam’s retail
market
Vietnam’s retail sector posted an average growth rate
of 7.3% per year during the 2010-2015 period with sales last year up 10% to
reach US$112 billion, of which modern retail channels accounted for about one
fourth of distribution.
It is projected that the retail sector will grow at an
annual rate of 11.9% until 2020 when sales are expected to hit US$180
billion, of which more than 45% belongs to modern retail channels.
To achieve such targets, the Ministry of Industry and
Trade (MOIT) has approved the plan to develop a network of supermarkets and
commercial centres until 2020 with a vision towards 2030, in addition to
stable economic growth.
Under the MOIT’s plan, Vietnam will have between 1,200
and 1,500 supermarkets, 180 commercial centres and 157 shopping centres in
2020 to meet consumers’ growing demand.
Despite many successes, Vietnam’s retail market is
facing numerous challenges both at present and in the future.
A series of free trade agreements that Vietnam has
signed, and will come into effect soon, are expected to mount greater
pressure on domestic enterprises.
Quality and competitively priced goods from member
countries of the Trans-Pacific Partnership and the European Union will flood
the Vietnamese market thanks to tax cuts and tariff eliminations.
Furthermore, as foreign retailers are expanding their
distribution channels aggressively, Vietnamese counterparts face the risk of
being sidelined and taken over right on the home turf if they have no viable
strategies.
Vietnam is no longer among the world’s 30 most
attractive retail markets (number one in 2008 and 28th place in 2014) but remains
a market with great potential to both foreign and domestic companies.
As such, identifying the trends in Vietnam’s retail
market correctly so that Vietnamese retailers are not overwhelmed at home is
an urgent task for both regulators and business circles.
Vietnamese retailers need to formulate sensible and
effective tactics to compete with rivals who possess strong financial
resources, good business and marketing strategies, and professional
management.
Vietnam used to have a number of plans to develop
supermarkets and commercial centres but implementation was not as expected
and this needs to be addressed to develop a healthy and transparent market
where parties can compete fairly, serve consumers and promote production and
trade effectively.
Domestic enterprises should build strength by working
together to increase brand recognition and provide products in chains to
maximise profits, while at the same time taking advantage of existing
channels to increase their market share.
On the other hand, the government should facilitate
domestic retailers’ access to capital, land and other infrastructure so that
they can proactively participate in the market without being crushed by
foreign competitors.
Vietnam delays work on largest
airport until 2021: report
State-owned Airports Corporation of Vietnam (ACV) has
confirmed that complex preparatory work will delay the construction of the
country's US$15.8 billion airport near Ho Chi Minh City.
In its recent report to the Ministry of Transport, the
manager of 22 airports said work on Long Thanh Airport will likely start in
April 2021, news website Dau Tu reported on July 5.
That will put the project in Dong Nai Province at least
two years behind the original schedule.
It is taking ACV longer than expected to finish all the
pre-construction tasks for the megaproject, described as the "biggest
ever."
The selection of consultants for the project's
feasibility study, for instance, will not be completed until January next year,
about nine months behind the previous deadline.
Long Thanh Airport, about 40 kilometers from HCM City,
is designed to serve 100 million passengers and five million tons of goods
annually.
It is expected to replace the country's currently
biggest airport Tan Son Nhat, which reached its full capacity of 20 million
passengers a year in 2013.
Hanoi Gift Show 2016 to attract over
600 foreign importers
The Hanoi Gift Show 2016 is set to get underway at the
National Planning Exhibition Center in Tu Liem, Hanoi on October 17-20.
It will exhibit handicraft and home décor products,
indoor and outdoor furniture, home textiles and embroidery, gifts and ethnic
items, personal accessories, toys and others.
Deputy Director of Hanoi Department of Industry and
Trade Tran Thi Phuong Lan said at a press briefing on July 5 that the annual
show will provide wide networking opportunities and build new commercial
relations in the Gifts & Handicrafts industry.
It is expected to attract around 250 domestic
businesses from 16 provinces and cities across the country to showcase their
products on over 620 stalls.
The organizing board will allocate a special area to
introduce new and typical designs of handicraft and home décor products and
furniture in 2016.
To draw more visitors and foreign importers to the
show, the Hanoi Department of Industry and Trade has actively coordinated
with the Ministry of Industry and Trade and Vietnam Chamber of Commerce and
Industry to introduce the event at home and abroad. They expect to lure
around 3,000 trade visitors and over 600 foreign importers to the event.
Export value hits over 82 billion
USD in six months
Vietnam exported 82.2 billion USD worth of commodities
in the first two quarters of 2016, a year-on-year increase of 5.9 percent.
According to the Ministry of Industry and Trade (MoIT),
the group of processing industries was not listed among sectors with
impressive export growth. Meanwhile, the group of mining industries posted a
tumble due to the rapid exhaustion of natural resources and the falling price
of crude oil.
Economic experts said this is a negative sign for the
national economy as these are key contributors to economic growth.
According to statistics from the ministry’s
Export-Import Department, Vietnam had 17 types of goods reaching export
values of at least 1 billion USD in the period, with the
agro-forestry-aquaculture sector having five out of its nine products named
in the list.
According to Le Quoc Phuong, deputy director of the
MoIT’s Commercial Industry Information Centre, the reducing price of goods in
the world market was one of reasons behind the slow export in some sectors of
Vietnam.
He stressed the need to provide more support for
businesses and facilitate their production and business, towards maintaining
momentum for the export sector.
Vietnam’s export is likely to have stronger growth in
the remaining months of the year as textiles and footwear manufacturers are
speeding up their production for signed orders. Processing industries are
also hoped to recover their growth in the period.
Vietnam is set to rake in 180 billion USD from
exporting commodities in the whole year, up 10 percent compared to 2015.
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR
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Thứ Ba, 19 tháng 7, 2016
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