BUSINESS IN BRIEF 3/5 Petrolimex appoints new chairman    Phạm Văn Thanh, new chairman of Petrolimex. - Photo ndh.vn Việt Nam National Petroleum Group (Petrolimex) has appointed Phạm Văn Thanh as the new chairman of the group for the period of 2016-2021, starting May 1, 2018. Thanh has replaced Bùi Ngọc Bảo, who reached the retirement age according to current regulations. Prior to his appointment, Thanh was general director of Petrolimex Aviation Fuel Joint Stock Company. He graduated from Việt Nam University of Commerce in 1993 and worked in the accounting department of Việt Nam Petroleum Corporation (former name of Petrolimex). After that, he worked for eight years at Petrolimex Joint Stock Insurance Company, Hải Phòng branch, in many capacities, including director of the branch. In April 2013, Thanh was appointed general director of Petrolimex Aviation. Under his management, after seven years, the sales of Petrolimex Aviation are 40 times higher, and the ratio of profit over charter capital has always been more than 100 per cent in the last three to four years.  Vietnam pledges support for US firms: Deputy PM The Vietnamese Government will create most possible favourable conditions, which are in accordance with domestic and relevant international laws, for US enterprises, said Deputy Prime Minister Vuong Dinh Hue. He made the statement while hosting a reception for Michael Kelly, Chairman of the American Chamber of Commerce (AmCham), in Hanoi on May 2. Vietnam believes that all of obstacles will be removed to promote cooperation, investment and trade between the two nations, Hue said, expressing his hope that the AmCham, the US-ASEAN Business Council and US firms will serve as a bridge, contributing to boosting the diplomatic and economic relations as well as the common development of Vietnam and the US in the coming time. The two countries have complementary economies, Hue noticed, given that Vietnam does not set the guideline to enjoy trade surplus with the US but focuses on exporting products of its strengths while purchasing high-tech and environmentally friendly goods from the US to meet the demands of businesses and people from both sides. Kelly, for his part, highly valued the development in the bilateral diplomatic and economic ties over the past time, saying that it has made significant contributions to increasing benefits of enterprises of the two countries. As Vietnam is predicted to post the strongest economic growth in Asia, US firms will have more opportunities to collaborate with their Vietnamese partners in the coming time, he noted. Kelly said that the US firms are interested in cooperating with Vietnamese companies in the fields of healthcare, tax, digital economy, banking, defence-security and energy security, among others. He affirmed that the AmCham will work closely with Vietnamese ministries, sectors, localities and enterprises to lever cooperation and investment between the two sides as well as seek measures to give consultations to the two Governments to address emerging problems in trade and investment. NA leader witnesses gas processing plant inauguration in Ca Mau National Assembly Chairwoman Nguyen Thi Kim Ngan attended a ceremony in the southernmost province of Ca Mau on May 2 to inaugurate the Ca Mau Gas Processing Plant (GPP Ca Mau) invested by the PetroVietnam Gas Corporation (PVGas). Built within two years at a cost of more than 10 trillion VND (450 million USD), the plant has a daily capacity of 6.2 million cu.m of gas and is able to hold 8,000 tonnes of liquefied petroleum gas and 3,000 cu.m of condensate. Once operational, it will supply around 600 tonnes of liquefied petroleum gas and 35 tonnes of condensate to the market per day, meeting 10 percent of domestic demand. Speaking at the event, the top legislator noted that the Party and State give priority to oil and gas sector, including gas industry, with a number of incentives. She lauded PetroVietnam and PVGas for making Vietnam one of the countries that is able to turn gas into electricity and fertiliser. The leader said the inauguration of the plant is meant to realise the Vietnam National Energy Development Strategy approved by the government, contributing to economic development in the southwest and Ca Mau province in particular. Chairman of the PetroVietnam Members’ Council Tran Sy Thanh said the plant is the final part of the gas – electricity – fertiliser project chain in Ca Mau, adding that the successful project will contribute to PetroVietnam’s sustainable development. Deputy PM chairs meeting on use of WB, ADB loans Deputy Prime Minister and Foreign Minister Pham Binh Minh chaired a meeting in Hanoi on May 2 to review and accelerate the launch of 26 projects using loans from the World Bank (WB) and Asian Development Bank (ADB) for 2017-2018. The projects cover infrastructure upgrading, tertiary education improvement, urban development, new-style rural construction, grassroots medical network, improved use of water in drought-hit provinces. Speaking at the event, Deputy PM Minh, who is also head of the National Steering Committee on ODA and preferential loans, asked the State Bank of Vietnam to collect opinions of ministries, agencies and localities about projects to submit to authorities concerned. The Ministry of Planning and Investment was required to make a list of approved projects using foreign loans that are absent from the medium-term public investment plan, thus ensuring that the loans are fully tapped. As Vietnam graduated from the WB International Development Association’s lending in July 2017, the ministry must report a plan on capital use in the near future to permanent government members, especially less preferential loans. New enterprises up 80% in April     Over 14,500 new enterprises were formed in Viet Nam in April, with total registered capital of VND133.5 trillion (US$5.86 billion), marking respective month on month increases of 80 per cent in the number of enterprises and 65 per cent in level of capital. According to the General Statistics Office (GSO), the latest addition has brought the number of newly-established firms in the first four months of this year up to nearly 41,300, up 4.3 per cent year-on-year. Their registered capital totaled VND412 trillion, up 12 per cent. The average registered capital of each firm in the period saw a slight rise of 7 per cent at VND10 billion, GSO said. It added that the new firms mostly focused on sectors such as wholesale, retail, repairing, automobiles, construction, manufacturing, processing and consultancy. The number of labourers in the newly-established enterprises in the four-month period was 332,000, posting a yearly decline of 22 per cent. During January to April, nearly 26,300 firms halted their operations, down 4 per cent year-on-year; 4,700 completed dissolution procedures, surging 16 per cent over the same period last year, while 52,700 resumed their business. Sweet news for Ben Tre farmers     The price of off-season rambutan in Ben Tre Province, the largest producer in the Cuu Long (Mekong) Delta, has increased to a two-year high. The regular seasonal harvest begins in June every year. Now traders are buying Rongrien rambutan at orchards at VND60,000 (US$2.6) a kilogramme, VND20,000 up from last month. Java rambutan has gone up by VND10,000 to VND30,000. Orchard owners attributed the high prices to the high domestic demand for the fruit, especially on the occasion of Reunification Day (30 April) and Labour Day (May 1) holidays. Huynh Thi Diem of Ben Tre Province’s Cho Lach District said she recently earned a profit of VND350 million ($15,400) from harvesting 2,500sq.m of Rongrien rambutan and 1,000sq.m of Java rambutan. Her off-season yield is 2.5 tonnes per 1,000sq.m, she said. Considering these prices, they would continue to produce off-season rambutan in the coming years, many farmers said. Bui Thanh Liem, head of the Cho Lach District Agriculture and Rural Development Bureau, said orchard owners should not increase off-season production since it could lead to oversupply. He warned further that the overexploitation could deplete the rambutan trees of nutrition. Most of them have yet to recover from the impact of saltwater intrusion in 2016, he said. Ben Tre has more than 5,000ha of rambutan, according to its Department of Agriculture and Rural Development. More than 40 per cent of the orchards also produce rambutan off-season. In recent years, local authorities have encouraged farmers to use advanced techniques for this purpose. The province has major rambutan growing areas in Cho Lach District’s Son Dinh and Vinh Binh communes and Chau Thanh District’s Tien Long Commune. The fruit is exported to China, Cambodia, the UAE, the EU and other markets. Cai Mep – Thi Vai port complex expected to become the economic centre of the south     The party secretary of the southern province of Ba Ria-Vung Tau, Nguyen Hong Linh, has proposed that the Ministry of Transport and the Government consider developing Cai Mep-Thi Vai Port complex and Long Thanh international airport into the economic centre of the south. Linh was speaking at the meeting on Thursday between the People’s Committee of Ba Ria-Vung Tau and a visiting delegation from the Transport Ministry, led by Minister Nguyen Van The. The Long Thanh international airport project is still in preparation phase while the Cai Mep-Thi Vai port complex, located in Ba Ria-Vung Tau Province, already received significant investment and was to become one of the largest seaport centres in the country. However, according to the provincial Party Secretary, the port complex is currently using only a small part of its designed capacity, causing economic waste to national resources. Therefore, provincial authorities have proposed that the Government and Ministry of Transport speed up the construction progress of traffic infrastructure projects such as the Bien Hoa-Vung Tau expressway and railway, provincial roads, ring roads and Phuoc An Bridge. The ministry also asked to push forward the progress of dredging Cai Mep-Thi Vai Port, Ganh Rai Bay area, aiming at facilitating the transportation of goods. In addition, the Government actively supports Ba Ria - Vung Tau Province authorities to set up Cai Mep – Thi Vai port’s management board, and inspection-quarantine centre, that will create favourable conditions for enterprises. Firms will find it more efficient to use Cai Mep-Thi Vai Port complex as a loading area, instead of Cat Lai (in HCM City), according to the provincial Party Secretary Nguyen Hong Linh. This contributes to reducing both pressure on Cat Lai Port (the current volume of cargo passing through Cat Lai port consistently exceeds its designed capacity) and traffic congestion in HCM City. He said that the province is preparing a plan to publicly auction five provincial land areas and use this money in conjunction with the government budget to carry out important projects, creating momentum for local development. At the meeting, recognising the importance of the Bien Hoa-Vung Tau expressway, Transport Minister Nguyen Van The has proposed provincial authorities to be the project owner because local authorities will have more options and ideas in seeking funding. The minister also proposed provincial authorities to be the investor of ring road 4’s section passing through the province. In addition, he said, the ministry will soon have a solution to the provincial authorities’ recommendations and proposals such as building a multi-use Vung Tau airport; upgrading Con Son Airport (Con Dao island district); creating conditions for airlines to use new-generation aircraft; exempting maritime charges and fees for all container ships landing at Cai Mep-Thi Vai Port complex; implementing measures to ensure traffic safety and flood prevention for National Highway 51. Vietnamese dairy products in spotlight at Asia’s biggest food, hospitality show in Singapore     Organic dairy products from Viet Nam’s TH Group have received great attention from foreign customers at the Food and Hotel Asia (FHA) 2018 exhibition held in Singapore from April 24-27. The fair – the largest of its kind in the food and hospitality industry in Asia – attracted the participation of more than 4,000 exhibitors from 70 countries and territories throughout the world. It showcased the latest trends in food consumption, in which healthy foods were considered the highlight of many booths, and the pavilion of TH Group was no exception. On display at its booth, TH Group introduced many premium products to both Singaporean and international customers, including TH true MILK Organic, TH True NUT, which comprise macadamia nut milk and walnut milk, and TH True Herbal, manufactured entirely from organic herbs from its own green farms. As the only Vietnamese dairy firm participating in the fair, TH Group demonstrated a new milestone in the process of delivering Vietnamese fresh and organic milk to the world, organisers said. Of note, Belinda Yeo, representative of Seven Eleven, said the retail chain will promote the import of TH Group’s milk products, following a thorough study of their quality. "TH Group’s products will make a great impression on Singaporean consumers, thanks to its excellent taste and quality,” she said. Meanwhile, Lim Hock Chee, CEO of Sheng Siong supermarket chain – the third largest in Singapore – visited the TH Group booth and asked for prices of its products and information about transportation, in the hope of creating a diversified supply of dairy products to Singaporean customers. Currently, Vietnamese rice has developed its presence in this supermarket chain. Many other distributors, such as LVBEI Global Import, High Flyer International limited, Chop Nam Huat SDN BHD and DIMA, also expressed their desire to purchase TH milk products. Not only distributors, but many young customers said they were surprised by the strange, but delicious, taste of TH milk products. “I have never drank a milk product like this before. It has a distinguished taste and is easy to drink,” said 19 year-old Yan Pink. Yan said she hoped TH products will soon be found in Singapore. According to the Rabobank Global Food and Agricultural Research Organisation, Singapore had a relatively high per capita milk consumption in the region in 2017, with 62 litres per capita per year. This figure is expected to continue to grow due to increasing awareness about the benefits of milk, especially fresh and organic milk. TH Group is the only Vietnamese dairy firm participating in FHA 2018. From an agricultural perspective, the group has brought new insights to the region’s enterprises, where it owns Asia’s largest dairy farm and uses state-of-the-art processing technologies. Visiting the group’s booth, Vietnamese Prime Minister Nguyen Xuan Phuc said that TH Group is “a typical example of local firms boosting investment in the Vietnamese agricultural sector,” and that the group is among the many domestic firms supporting the country in promoting Vietnamese products in foreign markets. He also praised the creativity of the group in researching and manufacturing healthy milk products. Wood exports can help 2018 target     Viet Nam can reach its export value target of US$9 billion for forestry products this year through the export of wooden products, said an expert. Viet Nam’s exports account for just 6 per cent of the global timber and wooden furniture market, which is estimated at $120 billion, said Pham Hong Luong, head of the Planning and Finance Department, operating under the Ministry of Agriculture and Rural Development’s Viet Nam Administration of Forestry. Viet Nam holds huge potential for wood processing and production, according to Luong. The nation has nearly 4,000 timber processing firms, including 1,500 companies specialising in producing wooden products for export. They can boost the sector’s growth if there are abundant materials, sound mechanisms and robust market signs. Meanwhile, they do not have to face fierce competition, as other foreign exporters are facing anti-dumping petitions. Moreover, the freshly-issued forestry law, together with the EU-Viet Nam Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade (VPA-FLEGT), will set up legal corridors and mechanisms to encourage market expansion of the forestry sector. With these favourable conditions, Viet Nam’s exports of forestry products are expected to bring home some $9 billion this year. Viet Nam is a leading wood exporter in ASEAN. It ranks second in Asia and fifth in the world, after China, Germany, Italy and Poland, in terms of the export revenue from forestry products. Last year, forestry exports hit a record growth of 10 per cent in the recent five years to reach more than $8 billion, which surpassed the target of $7.8 billion set for 2020. The largest markets for Vietnamese timber products are the United States, Japan, South Korea, China and the European Union. Viet Nam’s wood consumption in the domestic market is calculated at some $30 per person per year, which is much lower than the world’s figure of $72. The domestic demand for wood is expected to increase, spurred by rapid urbanisation and the bounce-back of the real estate market. Vietcombank plans to raise capital by 10%     The Joint Stock Commercial Bank for Foreign Trade of Viet Nam (Vietcombank) plans to add 10 per cent to its tier-1 capital in 2018 through issuing shares for foreign investors. According to the bank’s chairman Nghiem Xuan Thanh, the capital raise proposal was approved by the State Bank of Viet Nam and the Government in December 2017. The action aims to secure its capital adequacy ratio of nine per cent in accordance with Basel II standards. The number of to-be-issued shares would not exceed 10 per cent of the bank’s total number of shares, which is now nearly 3.6 billion. Vietcombank will issue additional shares to a maximum of 10 foreign investors, chairman Thanh said at the bank’s annual general shareholder meeting on Friday. The lowest price level of the to-be-offered shares would be evaluated by an underwriting company and be the average price of the last 10 trading sessions prior to the issuance date, he said. Such calculation would make sure bank’s shareholders, including the Government, secure their benefits and rights at the bank, Thanh said. Vietcombank general director Pham Quang Dung said the Japanese bank Mizuho, one of the largest shareholders at Vietcombank, would purchase more shares to assure its ownership in the bank is secured at 15 per cent. Some foreign investors had expressed interests in buying Vietcombank shares, Dung said, adding that some of them had offered to purchase all of the bank’s additional shares. If Vietcombank failed to raise its tier-1 capital to comply with the Basel II standards, the bank would have to issue VND5.8 trillion (US$257.8 million) worth of corporate bonds to increase its tier-2 capital. Vietcombank had issued VND11.8 trillion worth of corporate bonds, including VND2 trillion for individual investors, thus leaving a large room for the bank to increase its tier-2 capital – which makes up its required reserves. Truong Gia Binh, chairman of the technology-communications giant FPT Corporation, has become the newest management board member at Vietcombank. Binh was voted by 91.73 per cent of the total voting shares, equal to three billion shares at the meeting, becoming one of the board members along with seven other people. The total number of board members at Vietcombank was approved by shareholders to up to 11, meaning there are still three seats left empty at the bank. In 2018, Vietcombank targets a yearly increase of 14 per cent in total asset, 15 per cent in both mobilised capital and credit. It also plans to cut non-performing loan ratio (NPL) to below 1.5 per cent. The bank also projects its pre-tax profit will rise 14.6 per cent year on year to VND13 trillion from its record-high VND11.3 trillion made in 2017. The bank plans to spend 8 per cent of its charter capital, equal to VND2.88 trillion, on dividend payout for its performance in 2017. Maybank Kim Eng Securities ups capital     Maybank Kim Eng Securities Limited has added US$10 million to its charter capital to VND1.06 trillion ($46.38 million). John Chong, CEO of Maybank Kim Eng Group, said the decision to hike the capital is in line with Maybank Kim Eng Group’s business strategy and clearly demonstrates the firm’s long-term commitment in Viet Nam. “Viet Nam is one of the fastest growing economies in the region and a key component of Maybank Kim Eng’s ASEAN strategy. “Being the first 100 per cent foreign-owned securities company in Viet Nam, we are deeply invested here; we strongly believe in the potential of the country’s economy and want to ensure that its capital markets continue to grow.” Kim Thien Quang, CEO of Maybank Kim Eng Vietnam (MKEV), said: “Since we started our operations in Viet Nam in December 2007 with a charter capital of only VND200 billion, we have increased our capital four times and by more than 400 per cent. “This additional capital will give us a strong foundation to enhance our competitiveness and increase our product offerings. In particular, with a capital of more than a trillion dong, we will now be able to enter a new market to offer covered warrants." The company has had a successful first decade, he said. “To maintain our leading position, we will continue to focus on strengthening our retail brokerage, particularly online brokerage. “Currently 86 per cent of our brokerage transactions are via online trading. Our target is to grow it to 90 per cent. We are also looking to grow our institutional brokerage by tapping on MKE Group’s regional footprint and strong presence in ASEAN. “As the gateway to ASEAN, we will continue to give Viet Nam’s corporates access to global investors, and bring global investors to Viet Nam.” BIDV plans to raise chartered capital by 28% this year     The Bank for Investment and Development of Viet Nam (BIDV) has proposed a plan to its shareholders to increase its chartered capital this year by 28 per cent, compared to the end of 2017. In the plan which was unveiled at the bank’s annual general shareholder meeting on April 21, BIDV proposes to add VND9.45 trillion (US$418.2 million) to its chartered capital, so the figure would reach VND43.65 trillion by the end of 2018. Specifically, BIDV will issue 965 million ordinary shares with a face value of VND10,000 per share. Of the total, more than 171 million shares will be sold to the public through an initial public offering or private placement, 603.3 million shares to be sold to foreign strategic investors under private placement, and over 171 million shares sold under the Employee Stock Ownership Plan (ESOP). The increase in chartered capital is part of BIDV’s plan to increase its equity to meet the minimum capital adequacy requirement set by the State Bank of Viet Nam, which is aligned with Basel II. The move is also expected to help the bank improve the credit rating results of international institutions, enhance prestige in its business operations, and improve its financial capacity and competitiveness, in both domestic and international markets. Also, the bank commits to use added capital in the business areas of BIDV, with reasonable guidance to ensure the capital is used with efficiency and maximises benefits to shareholders. Regarding the profit distribution plan in 2017, the Board of Directors has submitted to shareholders to approve the cash dividend payment plan at the rate of 7 per cent. The total amount of dividends is nearly VND2.4 trillion. The remuneration of the Board of Directors and Board of Supervisors in 2018 will be, at maximum, 0.44 per cent of the profit after tax in 2018. In 2018, BIDV sets the target of credit growth of up to 17 per cent; before-tax profits of VND9.3 trillion; a bad debt ratio below 2 per cent; and a dividend payout ratio is expected to range from 5 to 7 per cent. At the meeting, BIDV General Director Phan Duc Tu said that in 2017, BIDV continued to be the market leader, maintaining its position and market share in the industry. Accordingly, its total assets reached over VND1.2 quadrillion, up 19.5 per cent, compared to 2016. Total deposits of the bank reached VND 1.12 quadrillion, up 19.7 per cent over the beginning of the year. The consolidated profit before tax was VND8.6 trillion, up 13 per cent year on year, exceeding the target set by the General Meeting of Shareholders in 2017, with a return on assets reaching 0.63 per cent and a return on equity (ROE) of 5 per cent. Sacombank targets 23.2 per cent rise in pre-tax profit     Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) has set itself a target of increasing its assets to VND430.9 trillion (US$18.92 billion) this year, an increase of 16.9 per cent from last year. It targets pre-tax profits of VND1.838 trillion ($80.72 million), a year-on-year increase of 23.2 per cent, and expects to bring down bad debts to 3 per cent. At its annual general meeting recently, the company said its total assets had reached nearly VND368.5 trillion at the end of last year, an increase of 11 per cent. Its deposits were VND338.4 trillion, up 11 per cent, and total outstanding loans were nearly VND225.6 trillion, up 12.5 per cent. The bank managed to recover nearly VND20 trillion worth of bad debts last year, bringing down the bad debts ratio to 4.59 per cent from 6.81 per cent at the end of 2016. Pre-tax profits were VND1.492 trillion ($65.5 million), up more than nine times from the previous year. Replying to shareholders’questions about plans to acquire other banks or establish subsidiaries, chairman Duong Cong Minh said there are no such plans. The bank would focus on its restructuring plan approved by the State Bank of Viẹt Nam, he said. It plans to enlarge its two subsidiaries, Sacombank Laos and Sacombank Cambodia, this year. Vincom Retail’s consolidated revenue up by 16%     Vincom Retail Joint Stock Company posted a total consolidated revenue of nearly VND1.62 trillion (US$71 million) in the first quarter of 2018, a year-on-year increase of 16 per cent. This was revealed in the company’s first quarter financial report. In the reviewed period, the revenue from leasing and rendering-related services as well as from the sale of inventory properties was nearly VND1.27 trillion and VND335 billion, an increase of 20 per cent and seven per cent compared to the same period last year, respectively. The company achieved a pre-tax profit of VND702 billion, a year-on-year decrease of eight per cent, due to an absence of profit from associates in the current period. As of March 31, 2018, Vincom Retail had 46 operational shopping centres in 24 cities and provinces throughout the country. Its total assets were VND38.12 trillion and shareholders’ equity was nearly VND26.64 trillion. In the first three months of the year, Vincom Retail implemented many attractive marketing programmes for consumers. Two of the major marketing campaigns were organised throughout the firm’s retail mall network, which resulted in an increase of 15-30 per cent of customers compared to other regular periods. In addition to this, the company also opened three Vincom Plaza malls in Long An, Bao Loc-Lam Dong and Thanh Hoa, which were launched on April 28. Two other Vincom Plaza centres in Hue and Quang Binh will be inaugurated in May, raising the total number of malls to 51 across 28 cities and provinces in the country. ICAEW strengthens partnership with local government and universities The Institute of Chartered Accountants in England and Wales (ICAEW) has promised that it would continue to work closely with the Vietnamese government and universities to achieve its objective of helping to drive the growth of finance and accounting professionals in Vietnam. The Department for International Trade (DIT) brought the UK government’s first trade delegation to Southeast Asia and participated in a roundtable in Hanoi to promote British chartered professional institutes and explore how both countries can work together to help develop local training and vocational education. The delegation comprised of the six largest chartered institutes in the UK—the Chartered Management Institute, Chartered Institute of Personnel and Development, Chartered Insurance Institute, Institution of Engineering and Technology, Royal Institution of Chartered Surveyors, and ICAEW. Together with senior executives from other chartered professional bodies, Mark Protherough, executive director, Learning and Professional Development at ICAEW, met with government officials, policy makers, and industry and university executives in Hanoi and Ho Chi Minh City on April 19 and 20. The visit also sought to establish new partnerships based on professional ethos, quality testing procedures, and the development of internationally recognised professions. Dr Liam Fox, Secretary of State for International Trade and member of the British Parliament, said: “Chartered professional institutes in the UK enjoy a prestigious global reputation and reach to drive international standards of professionalism. They are well-placed to form high-value partnerships with universities, governments, and employers across Southeast Asia. This is critical in capacity building, helping economies grow, driving educational standards and innovation, and supporting common governance standards to promote trade.” Of the six chartered professional bodies represented in the delegation, ICAEW is the only one with a presence in Vietnam, where it has been operating for nearly four years. At the roundtable, Protherough highlighted the close relationship between ICAEW and various Vietnamese government agencies, including the Ministry of Finance, the State Audit Office of Vietnam, the State Securities Commission, and the Ministry of Education and Training, as well as nine top local universities. ICAEW, together with the Ministry of Finance and the State Securities Commission, recently launched a programme called ‘Supporting the application of International Financial Reporting Standards (IFRS) in Vietnam.’ The project, funded by the British government, aims to train around 200 finance professionals to the highest internationally-recognised professional finance standards, which are recognised and trusted in the UK and around the world. “To date, nearly 80 certificates with International Financial Reporting Standards have been awarded by ICAEW to finance and accounting professionals from the Ministry of Finance and its agencies, the State Securities Commission, and two stock exchanges, listed companies, major auditing firms, and university instructors,” Protherough said. “Following the successful pilot phase of the project, ICAEW, the Ministry of Finance, and the British Embassy in Vietnam are looking at the potential of scaling up the operation going forward.” Another of ICAEW’s meaningful partnerships is the introduction of ICAEW chartered accountant training manuals for six different academic disciplines as a training and reference source at the State Audit Office. Given the globally proven reputation, quality, and value of ICAEW certificates, the Certificate in Finance, Accounting, and Business has been included in the curriculums of nine top economics, finance, and accounting universities in the country. British Ambassador to Vietnam Giles Lever said: “Delivering UK professional training programmes to universities in Vietnam marks an important step in allowing Vietnamese students to access world-class, internationally-recognised curriculum content and qualifications. This boost of professional development will enhance their overall employability and open up more global opportunities.” “ICAEW is committed to nurture and develop capable accounting and finance professionals in Vietnam, who will play a vital role in the development of the accounting and finance profession and drive economic growth. This is evident in the various successful partnerships that ICAEW currently has with the top Vietnamese universities,” Protherough said. For every two new enterprises, there is one quitting In the first four months, there were 41,295 newly-established enterprises, while the number of those registering to temporarily cease operations was 26,277. The Ministry of Planning and Investment’s Business Registration Agency has just published its latest report on enterprise registration in the first four months. 14,510 new enterprises were established in April with the total registered capital of VND133.5 trillion ($5.9 billion), up 79.5 per cent in number and 64.5 per cent in registered capital compared to March. The average of registered capital per business was VND9.2 billion ($405,300), a decrease of 8.3 per cent. Additionally, 3,281 enterprises resumed operations in April, an increase of 82.2 per cent against the previous month, while 6,138 enterprises registered to temporarily cease operations (up 71.3 per cent), and 1,378 completed dissolution procedures (up 74 per cent). In the first four months, there were 41,295 newly-registered enterprises with the total registered capital of VND412 trillion ($18.15 billion), up 4.3 and 11.5 per cent on-year. The average registered capital was VND10 billion ($440,500), up 6.8 per cent. Including the VND749 trillion ($33 billion) of the nearly 12,200 enterprises that adjusted capital, the total registered capital in the first four months was VND1.161 quadrillion ($51.15 billion). In addition, 11,442 enterprises resumed operations, which is 0.9 per cent less than in the same period last year, thus the total number of new and resumed enterprises in the first four months was 52,700. This included 14,100 newly-established enterprises in wholesale and retail, accounting for 34.2 per cent of the total. The construction sector ranked second with 5,700 newly-established enterprises, making up 13.7 per cent. The processing and manufacturing industry ranked third with 5,100 newly-established enterprises (12.3 per cent). The number of enterprises ceasing business in the first four months was 26,277, down 4.1 per cent in comparison to the same period last year, including 14,187 enterprises that temporarily ceased operations and 12,090 enterprises awaiting dissolution. The number of enterprises that have completed dissolution procedures was 4,699, which increased by 15.8 per cent. Thus, 250 enterprises dissolved and suspended operations per day in the first four months. Bamboo Airways to try new model in high-stakes local aviation market While Bamboo Airways is making bold moves in high hopes of taking off in late 2018, there are doubts it could follow in the footsteps of previous losing efforts amid stiffening competition in the potential domestic aviation market. In late April, Vietnamese real estate, investment, and business service conglomerate FLC Group and its unit Bamboo Airways officially made their debut with a brand identity pack. The step is one part of the airline’s preparations for its historical step to turn the dream into a reality. It is now completing necessary legal procedures to get a licence. Bamboo Airways plans to base its business model on medium-level prices and routes to newly emerging tourism destinations to compete with national carrier Vietnam Airlines and the budget airline Vietjet. The newcomer plans to run a ‘hybrid’ business model, between traditional and low-cost airlines. It will provide services of both these models. Its ticket prices are also an average of the two models. However, it may not be easy for Bamboo Airways to compete with Vietjet, which has its image imprinted in Vietnamese people’s minds with its cheap airfares and even cheaper promotional programmes. Meanwhile, as a legacy carrier, Vietnam Airlines has won the confidence of customers, especially the high-end passenger segment, with its full services. To deal with the competition, Bamboo Airways is choosing a different approach. Instead of focusing on big cities, where aviation infrastructure is already suffering from capacity overload, Bamboo Airways will explore niche markets, including direct flights from international and domestic airports to newly emerging tourism destinations in Vietnam. In the first two years, Bamboo Airways will focus on the domestic market, with eight to 10 flights to prioritised destinations like Quang Ninh, Haiphong, Thanh Hoa, Quy Nhon, and Nha Trang. From its third year of operation, international flights will be added to the domestic flights, mainly to destinations in Asia, including Japan, South Korea, China, Singapore, Thailand, Hong Kong, and Taiwan. “Bamboo Airways has a competitive advantage that the two major airlines do not have. It works within a good ecosystem by FLC Group, which owns resorts ranging in size from 1,000 to 3,000 rooms. Initially, Bamboo Airways flights will make use of this advantage,” said Dang Tat Thang, director of Bamboo Airways. “For example, if a customer flies from Hanoi to Quy Nhon with Bamboo Airways, the airline may offer them a discount if they stay at FLC Quy Nhon, and vice versa.” Meanwhile, Vietjet gained a big market share with its short-haul domestic routes. It is continuously developing domestic air routes and breaking into the North Asian market. At the end of 2017, Vietjet had 38 domestic and 44 international routes. It will continue expanding and increasing international flights to Japan, India, and Australia in order to become an airline with global competitiveness and vision. In a similar move, Vietnam Airlines is opening its network to international hubs worldwide, while Jetstar Pacific Airlines is expanding domestic and regional routes. While confident of its advantages, Bamboo Airways has a more modest number of aircraft than Vietnam Airlines and Vietjet. Bamboo Airways plans to lease 10 airplanes, waiting for 24 A321 NEO to be delivered starting in 2021, while Vietnam Airlines has 88 aircraft and Vietjet’s fleet is expected to be 66 by late this year. Despite mounting competition, the opportunity for Bamboo Airways remains open, driven by the potential of the aviation market. According to Vietnam’s transport development plan, the number of aircraft in operation in the country is expected to reach 220 by 2020 and over 400 units by 2030. Meanwhile, statistics from the Civil Aviation Authority of Vietnam showed that by mid-March, there were just 175 aircraft registered as Vietnamese. However, several failed attempts to enter the market in the past act as a lesson to Bamboo Airways. The failure of Indochina Airlines and Air Mekong proved the stiffening competition in the lucrative industry. Vietjet expands amid oil price hike Vietnam’s private budget carrier Vietjet Air is focusing on its expansion plans and hedging against rising fuel costs. At the annual general shareholders’ meeting last week in Ho Chi Minh City, Vietjet revealed ambitious goals for 2018 and beyond, to boost its influence in Asia. After securing 41 per cent of the market share in Vietnam, the budget airline is now setting its sights on various overseas markets, aiming to compete against the likes of Air Asia, Scoot, and Jetstar Airways. In particular, Vietjet plans to launch 16 new international routes this year, with a focus on East Asian destinations. It will debut in Japan in the third quarter and expand its routes into other markets such as China, Taiwan, and South Korea. At the same time, Vietnam’s first private carrier will also boost its code-sharing and interlining collaborations with other airlines in the region, especially those who fly to Europe and North America. Other markets on the list for Vietjet include India, Indonesia, and Russia. Feasibility studies for Australia are already underway, said CEO Luu Duc Khanh. If all goes to plan, according to Khanh, Vietjet will operate a total number of 100 routes by the end of 2018 - 39 domestic routes and 61 international routes. The fleet size will increase to 66 aeroplanes, so as to serve 24 million passengers. Vietjet believes that Vietnam’s rising appeal as a tourism, investment, and trade destination will ramp up the demand for international travel, especially affordable flights. In 2018, Vietjet plans to earn VND50.9 trillion ($2.2 billion) in revenue, up by 20 per cent from last year, and VND5.8 trillion ($254 million) in pre-tax profits, up 9.5 per cent. At the meeting, chairwoman Nguyen Thi Phuong Thao revealed that Vietjet has received multiple calls from overseas stock exchanges such as Singapore, Hong Kong, and London. According to Thao, these bourses are willing to waive a portion of listing costs for Vietjet and offer advisory services, but the budget airline has yet to make any concrete plans to list overseas. The airline made its debut on the Ho Chi Minh City Stock Exchange last February. Le Nhi Nang, a representative of the State Securities Commission in Ho Chi Minh City, said Vietjet is encouraged to list abroad and this will help improve Vietnam’s status on international markets. To date, no Vietnamese businesses have managed to list on stock exchanges outside of Vietnam. However, a major roadblock for Vietjet’s global expansion is the rising price of fuel. Two months ago, the International Air Transport Association voiced its concerns that recovering oil prices will pose threats to airlines around the world this year, eating away at their record-high profits. Last Thursday, Brent crude oil traded at new highs of $74.44 per barrel while WTI crude oil stood at $68.37 per barrel. This is not good news for Vietjet, whose business targets are set on the condition that oil prices remain at $70. As jet fuel takes up half of the budget airline’s expenses, analysts believe that its management must either act quickly or see its company’s profits erode. In a recent research paper, Bao Viet Securities pointed out that Vietjet is more susceptible to swings in oil prices than full-service carriers like Vietnam Airlines. Going abroad seems to be a prime option. Thao noted that the airline wants to go regional partly because profit margins for overseas flights are 20 per cent higher than domestic routes, and fuel costs overseas are 30 per cent cheaper than in Vietnam. A second solution for Vietjet is signing hedging contracts with banks. The budget airline revealed last Thursday that it is in negotiations with at least three banks to lock in oil prices and minimise risks. New and more energy-efficient aeroplanes have also been ordered. Lastly, Vietjet is planning to boost its partnerships with Vietnam’s top oil firms. In January, an affiliate company of Thao made a bid to be a strategic investor at PV Oil Corporation, which is Vietnam’s second-largest oil retailer. Last week, HDBank, another business controlled by Thao, bought out the loss-making PGBank, which is an entity of Vietnam’s top oil producer and seller Petrolimex. For the past five years, as a strategic partner, Petrolimex Aviation has served half of the fuel needs for Vietjet. “Higher fuel costs may dampen Vietjet’s business results this year, and the budget airline must step up its international expansion efforts to retain the same growth rate it has enjoyed in previous years. Foreign exchange is another potential risk to take care of as Vietjet goes further beyond Vietnam’s borders,” wrote analysts at KIS Vietnam in a recent note. DHG's profit falls in first quarter, challenges posed by FOL removal Despite having Taisho Pharmaceutical Holdings, one of the five biggest pharmaceuticals in Japan, as a big foreign shareholder, Vietnam’s biggest publicly-traded drug maker Hau Giang Pharmaceutical JSC (DHG) saw a 4.4 per cent fall on-year in its gross profit in the first quarter of 2018. DHG made a net revenue of VND908.4 billion ($40.37 million) during the period, up 3 per cent on-year and meeting 25.67 per cent of the company's annual target. The drug maker also reported a gross profit of VND378.4 billion ($16.8 million), down 4.4 per cent on-year, thus meeting 22.3 per cent of the company's yearly target. DHG blamed the fall on a rise in the cost of goods sold during the period. DHG is planning to lift the foreign ownership limit (FOL) to 100 per cent before July 2018, meaning that it will lose the distribution rights of pharmaceuticals produced by other companies. As the FOL will be removed, from 2018, DHG no longer sells the products of other companies, thus its sales revenue is set to decrease by 49 per cent. The company will neither receive revenue from services this year. Raising FOL in the pharmaceutical industry has been a controversial issue for years. Under the current rules, if a Vietnamese pharma firm’s foreign partners hold a 51 per cent stake, this could cause the firm to be labelled as a foreign-invested enterprise, depriving them of the profitable right to distribute medicines. With the trend towards co-operating with multinational corporations (MNCs), this fear seems less of a problem now. In a recent interview with VIR, a DHG official said that the firm will focus on its advantages in sales systems and storage systems, meeting good distribution practice standards to expand the distribution of products to MNCs while co-operating with them in production stages. This year, DHG aims to make a net revenue of VND4.017 trillion ($178.53 million), equal to 2017, while its pre-tax profit is set to rise by 6.7 per cent on-year to VND768 billion ($34.13 million). DHG now has Taisho Pharmaceutical Holdings as a big foreign shareholder with 24.5 per cent, followed by FTIF Templeton Frontier Markets Fund. State Capital Investment Corporation (SCIC) is the biggest stakeholder with 43.3 per cent. In late March 2018, DHG partnered up with Vinamilk in R&D and the marketing and distribution of functional products and foods items. Vietjet unveils regional ambitions with new routes and collaborations Vietnamese budget carrier Vietjet will launch 16 international routes and shake hands with new overseas partners as it aspires to compete on the regional level. On April 26, Vietjet Air held the 2018 annual general shareholders’ meeting in Ho Chi Minh City and commemorated its 10th anniversary. Vietnam’s first private airline revealed that it will focus on overseas routes this year, as international travelling is a vast market for budget carriers and Vietjet hopes to boost its influence in the region. In particular, Vietjet will launch 16 new international routes in 2018, with a focus on East Asian destinations. The budget airline will debut in Japan in the third quarter, while expanding its routes in current markets such as China, Taiwan, and South Korea. At the same time, Vietjet will boost its code-sharing or inter-lining collaborations with other airlines in the region, especially those who fly to Europe and North America. According to CEO Luu Duc Khanh, Vietjet is also doing research on potential new markets, such as India, Indonesia, and Russia. Feasibility studies for Australia are also underway, said the CEO. “Our profit margin for international routes is at least 20 per cent higher than Vietnamese routes, as petrol prices in overseas markets are 30 per cent cheaper than Vietnam and charges for overseas services are also higher,” said chairwoman Nguyen Thi Phuong Thao. The businesswoman, who is Vietnam’s first female billionaire, added that the country is becoming more popular among foreign tourists, creating fresh opportunities for budget carriers. If all goes to plan, Vietjet will operate a total number of 100 routes in 2018, including 39 domestic and 61 international routes. Four new domestic routes will be introduced this year. The fleet’s size will increase to 66 to serve 24 million passengers. To boost its business activities and slash operating costs, the airline said it will also seek partnerships with petrol companies. In January, Sovico Holdings, another company owned by Nguyen Thi Phuong Thao, has made a bid to become a strategic investor at PV Oil Corporation, Vietnam’s second largest oil retailer. In 2018, Vietjet plans to earn VND50.9 trillion ($2.2 billion) in revenue, up 20 per cent from last year, and VND5.8 trillion ($254 million) in pre-tax profit, up 9.5 per cent. VNN