Insurance premium surges nearly 22% in eight months
The total premium collected by insurance companies in the first eight months of 2017 surged by 21.9 per cent year on year to nearly VNĐ65.56 trillion (US$2.89 billion).
Of the total sum, the revenue from life insurance premiums was VNĐ39.41 trillion and from non-life insurance premiums was VNĐ26.15 trillion, up 33.12 per cent and 11.5 per cent, respectively, the Ministry of Finance’s Insurance Supervisory Authority (ISA) reported.
During this period, insurance companies invested VNĐ226.42 trillion into the economy, a rise of 21.5 per cent, compared with the corresponding period in 2016.
They also paid VNĐ16.92 trillion as compensation for customers.
The Ministry of Finance said that it will continuously streamline draft decrees on agricultural insurance, micro-insurance, fire insurance, and sanctions against administrative violations in the field of insurance and lottery businesses for submission to competent authorities for signing in the remaining months of the year.
Besides this, the ministry will also share information and data used to manage social and health insurance to ensure the connection with commercial insurance.
The Insurance Association of Việt Nam predicts that this year, the growth for life insurance will be 25 per cent, and that of the non-life insurance sector will be 14 per cent.
The growth is a result of the increased awareness among people and companies about the role of insurance, the association said, adding that the country’s economic growth, targeted at 6.7 per cent in 2017, will be an added advantage for the growth of the insurance market.
Insurer FWD reports dramatic growth in 1st year
Hong Kong-based FWD Life Insurance said it has grown dramatically in its first year in Việt Nam and achieved its full-year sales target by August.
The company acquired Great Eastern Life Insurance in Việt Nam in September 2016 and launched the FWD brand.
Anantharaman Sridharan, FWD’s general director, said: “We have had an impressive year in Việt Nam, as did our group across the region. Our success is down to our vision to change the way people feel about insurance as well as thanks to a comprehensive development strategy implemented by our team.”
The company has revealed that it has a goal of rising to the top five in the life insurance industry within the next five years.
In the first year FWD has diversified distribution channels, used digital technology to support agency and customer engagement, minimised the number of exclusions in its products, and launched new products.
It has expanded its sales force and signed two 15-year partnerships with ABBank and Nam A Bank.
To mark its first anniversary FWD has launched a VIP customer gratitude programme, visiting and celebrating 300 seniors living on their own in Hà Nội and HCM City and giving away 70 scholarships and donating charity houses to two disadvantaged families.
Vo Quang Hue gives up Robert Bosch Vietnam to join Vinfast
With Vo Quang Hue’s achievements at Robert Bosch Vietnam, Hue is considered an important factor in realising the dream of “Made in Vietnam” automobiles as he has joined Vietnam’s leading property developer Vingroup as deputy CEO-Automotive to oversee the group’s Vinfast manufacturing complex.
According to newswire VietQ, a few days ago Hue shared on his private page the following message: “I would like to congratulate Vinfast on its ground-breaking ceremony. I would also like to take this opportunity to announce that I joined Vingroup as deputy CEO-Automotive a few days ago, to oversee the Vinfast project.”
Hue said he left Robert Bosch Vietnam with a heavy heart, but the move opened up opportunities for the Vietnamese automobile industry.
One of Vingroup’s important strategies to develop Vinfast is recruiting talented people, and Hue was the first choice due to his deep knowledge and achievements in the automotive engineering sector.
After graduating from a university of Germany, he immediately started working as an engineer for BMW Group, one of the world’s leading automobile makers. Then he was assigned as chief representative of BMW in Egypt for six years before coming back to Vietnam to work as CEO of Robert Bosch Vietnam Co., Ltd. in 2006.
From running Robert Bosch Vietnam with the initial capital of $1 million, Hue himself built the manufacturing and business plans for the factory. In May 2008, Robert Bosch Vietnam received the investment certificate to develop a factory manufacturing push-belts for continuously variable transmission (CVT) in automobiles with an investment capital of €52 million ($62 million), which was increased to €100 million ($112 million) one year later. Then, the factory was expanded to manufacture spare car parts.
Robert Bosch Vietnam’s products are exported to Japan and are present in the world’s leading automobile brands.
Hue played an important role in developing Robert Bosch Vietnam from a representative office in Ho Chi Minh City to one of the largest European-invested firms in Vietnam with more than 3,300 associates to date. The company now has established activities in four fields, including research and development (R&D), manufacturing, sales, and services.
Thus, Hue is considered one of the most knowledgeable people in international-standard automobiles manufacturing in the country.
Hue said that his devotion to Robert Bosch Vietnam is important, however, so is developing Vietnam, thus, he announced on his private page that he believes joining Vinfast will be the exciting next step in continuing to pursue his dream of transforming Vietnam into a dominant technology hub in the ASEAN bloc.
Prudential Finance retains throne with third Excellent Performance Award from SBV
Prudential Vietnam Finance Company Ltd. has received the “Excellent Performance” 2016 Award, announced by Decision No.1504/QD-NHNN and signed by Governor of the State Bank of Vietnam on July 17, 2017.
This is the third consecutive year Prudential Finance has received the award from the State Bank of Vietnam for its excellent performance in securing business objectives, risk management, personnel development, as well as advanced technology in business, and corporate management.
Speaking at the awards ceremony, Atul Dixit, chief executive officer of Prudential Finance, said: “It is our great privilege to win this award in this special year when we are celebrating 10 years of business in Vietnam. We are deeply honored to serve hundreds of thousands of customers and that more and more customers are putting their trust in our company’s services.”
Since commencing operations in 2007, Prudential Finance has grown up to be one of the leading providers of unsecured retail consumer finance in Vietnam. The company also disburses loans through bank accounts, helping convert the “unbanked” population.
Special incentives in pipeline for agricultural investors
In a move to attract more private investment to the agriculture sector, Vietnam is mulling over offering a series of special incentives in terms of land-use fees and favourable loans for such projects.
Yesterday afternoon, the Ministry of Agriculture and Rural Development (MARD) held a seminar to collect comments for the latest version of a draft decree on incentives for the farming sector, which will replace Decree No.210/2013/ND-CP.
“Decree 210 has proved problematic. There remain many problems in the agriculture sector due to reliance on small and retail households, thus having low productivity, market access difficulties, and low added value,” admitted Nguyen Xuan Cuong, Minister of Agriculture and Rural Development.
“The two key tasks will focus on agriculture restructuring towards increasing added value chains and dealing with the weaknesses of the sector, mainly processing and market access. We will also promote sci-tech applications amid the increasing global integration,” he added.
Under this draft decree, a firm that has a project with special investment incentives will be exempt from land-use fees, while those having a project with investment incentives will enjoy a 70 per cent reduction in land-use fees.
This draft also includes financial support for agricultural businesses. Accordingly, a firm investing in an agriculture project with special investment incentives and investment incentives, and accepting land-use rights of households and individuals as capital contribution to develop a material area will get a financial support of VND50 million ($2,270) per hectare to develop infrastructure for the area.
In terms of credit policies, a business investing in an agriculture and rural development project will get local support for the interest rate for their commercial loans, once the project is completed.
Specifically, local support for interest rate payments will have a maximum term of eight years for agriculture projects with special investment incentives and six years for projects with investment incentives.
The borrowing cap with interest rate support is not higher than 70 per cent of the project’s total investment.
This draft also includes big support for startups in the sector. Accordingly, they will be exempted from water surface and land rental fees from the moment their projects are put into operation. Startups will also be exempt from import duty for machinery and equipment for their project.
There are also many other special financial supports for research, transfer, and application of high-technology in agriculture, for human resources training and market development, for investments in dairy cow and high-yielding cow projects, for investments in slaughter houses, for grown-forest processing projects, for investment in agro-forestry-fishery processing and preservation facilities, and for investments in agriculture and rural development infrastructure.
Both local and foreign firms can benefit from the special incentives, according to the draft.
MARD expects to submit the draft decree to the government for approval in September, contributing to making the sector more attractive to private investors.
According to the ministry, the number of businesses investing in agriculture remains modest. As of September 2016, the country had 4,424 businesses in the sector, making up less than 1 per cent of the country’s total.
Imexpharm may scrap FOL if market winds are right
Imexpharm Pharmaceutical Joint Stock Company, Vietnam’s fourth-biggest pharmaceutical firm, will consider scrapping the foreign ownership limit if this becomes a common trend.
Nguyen Quoc Dinh, chairman of Imexpharm (IMP), told VIR that the company is not an exception to this trend. However, at present, IMP has yet to have any plans to remove the FOL as no stakeholders have submitted a proposal to this effect yet.
Imexpharm’s FOL now remains set at 49 per cent. The company has Balestrand Limited (6.09 per cent), Franklin Templeton Investment Funds-Templeton Frontier Markets Fund (8.49 per cent), and Kwe Beteiligungen AG (8.23 per cent) as foreign shareholders.
The drug maker aims to fetch a total revenue of VND1.26 trillion ($57.27 million) in the second half of this year, up 23.4 per cent on-year, while making a pre-tax profit of over VND160 billion ($7.27 million), up 14 per cent on-year.
At present, IMP is developing two new factories. Binh Duong high-tech pharmaceutical plant, coming at a cost of VND370 billion ($16.8 million), is over 60 per cent built and is scheduled to be put into operation in late 2019. Vinh Loc high-tech antibiotic plant, which will end up costing VND180 billion ($8.2 million), is 95 per cent built and is scheduled to open in late 2018.
When the two new facilities are put into operation, they will increase IMP’s revenue by 15-28 per cent and profit by 12-15 per cent on average in the 2017-2021 period.
In the first half of 2017, revenue from IMP-made products accounted for 83.9 per cent of the firm’s total net revenue of VND510.4 billion ($23.2 million), up 17.1 per cent on-year.
“Of this total, revenue from OTC drugs made up 81.7 per cent and rose 15.9 per cent on-year. ETC drugs accounted for 18.3 per cent, ascending 14.3 per cent on-year,” Dinh added.
In fact, scrapping the FOL seems an inevitable trend among leading Vietnamese pharma firms.
Vietnam’s biggest publicly-traded drug maker, Hau Giang Pharmaceutical JSC (DHG), has decided to entirely lift its FOL from January 1, 2018.
DHG now has Taisho Pharmaceutical Holdings, one of the five biggest pharma firms in Japan, as a strategic 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.
DHG will be the second Vietnamese pharma firm to remove the FOL, following the third biggest listed domestic drug maker, Domesco (DMC).
Last September, DMC became an industry pioneer when it decided to remove its FOL. At the time, other pharma firms, including DHG, were gripped by fear of being acquired.
Vinachem fertiliser plants amassing losses
Despite restructuring, Dinh Vu and Lao Cai DAP fertiliser plants, two of the twelve loss-making projects under the management of the Ministry of Industry and Trade (MoIT), are still struggling and facing possible closure.
While some other fertiliser firms are reporting profit, DAP-Vinachem Co., Ltd. (ticker DDV on HoSE), a subsidiary of Vietnam National Chemical Group (Vinachem) operating Dinh Vu diammonium phosphate (DAP) fertiliser plant, recorded a loss in the first half of 2017.
In particular, although DDV’s revenue increased by 14.5 per cent over year, it still suffered a loss of VND55 billion ($2.42 million).
According to DDV’s leaders, despite a slight recovery, the company is still confronted with difficulties in product demand, declining selling prices, increasing loan interest rates, and so on.
Earlier, when forecasting business prospects for 2017, Nguyen Van Sinh, general director of DDV, said that its business in 2017 would not be smooth as the price of input materials would increase by nearly 30 per cent compared to the end of 2016.
DDV set the 2017 revenue target of more than VND2 trillion ($88 million) and profit target of VND1.2 billion ($52.8 million).
As of June 30, 2017, DDV suffered an accumulated loss of nearly VND521 billion ($22.9 million) and had an owners’ equity of VND944.6 billion ($41.6 million), while its chartered capital was over VND1.461 trillion ($64.3 million).
DDV’s total assets were more than VND2 trillion ($88 million), a reduction of 6 per cent compared to early 2017. Of the total, the short-term assets were more than VND503 billion ($22.1 million), accounting for 24 per cent of the total assets, and the long-term assets were VND1.534 trillion ($67.5 million), accounting for 76 per cent.
In 2016, Vinachem reported a record loss of VND470 billion ($20.68 million), a sharp growth compared to 2015.
DDV’s leaders said that the main reason for this loss is that fertiliser prices are declining while the cost of input materials is rising. Also, weak production cost management was mentioned for this failure.
Another Vinachem subsidiary in the fertiliser industry called DAP 2-Vinachem JSC operating Lao Cai DAP fertiliser plant reported even worse business results.
Besides objective problems of market surplus and fierce competition with foreign brands, high investment costs and limited product quality were the main reasons why the more Lao Cai DAP fertiliser plant produces, the worse its business results are.
Additionally, the Inspectorate under the Ministry of Construction and the State Audit have been constantly pointing out a wide range of serious violations in the investment and construction management of DAP 2-Vinachem JSC.
The total investment for Lao Cai DAP 2 fertiliser plant was nearly VND5.2 trillion ($228.8 million), a sizeable increase compared to the initial approved investment of more than VND4.4 trillion ($193.6 million).
Notably, from July 2015, when Lao Cai DAP was put into commercial operation, to June 30, 2016, the plant’s capacity did not reach the target.
In particular, from July 1, 2015 to December 31, 2015, the average capacity reached 65.2 per cent of the target. From January 1, 2016 to June 30, 2016, average capacity reached 43.5 per cent of the target.
In 2015, the plant suffered a loss of more than VND100 billion ($4.4 million), while in 2016, it was deep in a loss of over VND800 ($35.2 million).
Vinachem used to turn to the government to extend the maturity of its debts, reduce interest rates, apply tax to imported products, and so on, to save its four projects, including the two DAP plants.
From August 19, 2017, a temporary tax of VND1.85 million ($81.4) has been imposed on each tonne of imported DAP fertiliser. Nguyen Van Thanh, head of the Vietnam Chemicals Agency, said that this decision really benefits fertiliser manufacturers.
According to Thanh, this new policy will partly support loss-marking fertiliser plants like the Dinh Vu and Lao Cai DAP plants. Accordingly, Dinh Vu DAP may stop suffering losses if it can manufacture and sell 268,000 tonnes of DAP fertiliser.
The leader of a fertiliser plant in Ba Ria-Vung Tau said that the imposed tax on imported fertilisers can only support domestic fertiliser manufacturers so far, as their main problems are the high investment costs and inappropriate locations and technology, which lead to high production costs and low product quality.
MoIT said that the total losses of Vinachem DAP and DAP 2 are nearly equal to their owners’ equity and it is possible that in 2017 their owners’ equity may even turn negative. If the situation cannot change, these two plants will face high risk of closure.
CBRE Vietnam appointed as exclusive management agent for Central Point
CBRE Vietnam has been officially selected by 19-12 Bac Ha Co. Ltd., as the exclusive property management agent for its Central Point project located at 219 Trung Kinh Street, Cau Giay District, Hanoi.
Central Point is a mixed-use complex comprising of three towers (one office, two residential), each of 29 floors, and a five-floor retail podium on top of three basements providing ample parking capacity. The project is in the final stages of construction and is expected to go into operation in the third quarter of 2017.
According to Nguyen Bich Trang, director of CBRE Vietnam’s Hanoi Office, CBRE Vietnam believed that by combining the management and leasing teams on this project, it can make Central Point a more desirable address for tenants, visitors, and residents who seek a convenient lifestyle with modern facilities in the growing western districts of Hanoi.
“We will support all tenants and residents so that they can enjoy the onsite facilities and amenities and seize the advantages of living in western Hanoi,” said Trang.
With a convenient location, good access to nearby schools, hospitals, shopping and leisure facilities and parks, Central Point will provide a pleasant environment for residents to live, work, and play, while also providing opportunities for organisations and retailers to reach their target customers and develop their businesses.
Dairy enterprises eyeing China
The Nutritional Food Joint Stock Company (Nutifood) has successfully exported soy milk to China after exporting a test order to its partner in the country, opening up substantial opportunities for Nutifood to increase its export volume.
“China is densely populated and the dairy industry is well developed, but partners have chosen Nutifood as their supplier,” said Mr. Cao Tuan Thanh, International Business Manager at Nutifood, “Most products are found in major cities, but there is a lack of products in the countryside, especially milk products. This represents an opportunity for Vietnamese milk companies.”
Though this is the first order for Nutifood from China and there are no long-term orders, it has meet a number of potential new partners.
Vinamilk was the first milk enterprise in Vietnam to sign a memorandum of understanding (MoU) on the supply of dairy products to China, in May this year. It was witnessed by senior Chinese leaders and visiting State President Tran Dai Quang, who was in China from May 11-15 to pay a State visit and attend a high-level forum on the Belt and Road Initiative.
China is a market of great potential, with the world’s largest population and a dairy sector worth some $30 billion a year. Vinamilk expects the MoU will be a precondition for its export to China in the future.
Some Vietnamese milk enterprises can compete with major milk brands, while demand in China is high and varied, according to a representative from Vinamilk.
The Anova Milk JSC in Vietnam is now carefully researching the habits of Chinese customers to build marketing strategies for high-end milk powder exports to the country.
Mr. Vu Ngoc Quynh, General Secretary of the Vietnam Dairy Association, said that recent surveys have revealed that Vietnamese dairy products are popular among Chinese consumers, such as sweetened yogurt, sugar-free yogurt, sterilized yogurt, whole milk yogurt, and liquid milk.
Thai fruit & vegetable imports up handsomely
The latest figures from the Ministry of Agriculture and Rural Development (MARD) reveal that the import value of fruit and vegetables in August reached $169 million, bringing the first eight-month figure to nearly $1 billion, up 93.7 per cent year-on-year.
The import value of fruit reached $809 million in the first eight months, more than double the figure in the same period of 2016, while vegetable imports were estimated at $190 million, up 34.6 per cent.
Thailand is still the largest source of fruit and vegetables, with a share of 61.8 per cent, followed by China with 16 per cent.
According to Mr. Hoang Trung, Director General of the Plant Protection Department at MARD, 90 per cent of Thai fruit is exported to Vietnam and then re-exported to China. He added that, in recent years, trade negotiations with Thailand have achieved positive results, so more fruit from Vietnam can be exported to the country and vice-versa. At present, Vietnam exports about 9,000 to 10,000 tons of fruit to Thailand each year.
Fruit and vegetables from Thailand imported into Vietnam are growing in volume, as the level of trust among Vietnamese in Thai products has been rising over the years, including in tech goods, household goods, and food.
As Thai retail giants have acquired retail networks in Vietnam and the 100 per cent tariff on goods imported from Thailand has been removed, the country’s products have many opportunities in Vietnam.
In 2015 and 2016, two large retailers in Vietnam – Big C and Metro – were acquired by Thailand’s Central Group and Berli Jucker (BJC).
The prices of Thai fruit and vegetables are also on par with domestic equivalents.
Samsung Securities to acquire stake in Dragon Capital
Samsung Securities will acquire a stake in Dragon Capital, the largest asset management company in Vietnam, to accelerate its presence in the country rather than establishing a corporation, foreign newswire BusinessKorea has reported.
The move indicates that since the issuance of bills of lading, one of the main tasks of a large investment bank, was suspended in South Korea, Samsung Securities turned its eyes overseas so as not to lag behind its competitors.
According to securities industry and financial authorities on September 6, Samsung Securities will acquire Dragon Capital shares by partnering with Caldera Pacific, a Hong Kong-based private equity fund.
Samsung Securities and Caldera Pacific will jointly become the second-largest shareholder in Dragon Capital, with a 40 per cent holding. Caldera Pacific will be a general partner and Samsung Securities a limited partner.
Samsung Securities will own about 10 per cent of the stake, shelling out a considerable sum in the process.
A representative from Dragon Capital declined to confirm the news with VET, saying it will make an official announcement soon.
Dragon Capital is the largest asset management company in Vietnam, with assets under management amounting to $900 million. It has also played a role as a bridgehead for capital from Hong Kong to enter Vietnam.
“The opening of an office or a corporation, a general overseas advancement form, takes a lot of time from the input of money to results,” an official familiar with the acquisition said. “But the takeover of a stake in a local asset management company allows a company to efficiently and effectively secure a sales network and infrastructure.”
Unlike Mirae Asset, the Shinhan Financial Group, and Korea Investment, which all set up corporations in the early stages of their operations in Vietnam, Samsung Securities has no bridgehead to Vietnam except for the strategic alliance forged with the Ho Chi Minh Securities Corp. (HSC) in March. Thus, market experts say that there is a possibility that Samsung Securities will additionally acquire stakes in other companies, with this investment just the beginning.
Five South Korean securities firms – Mirae Asset Daewoo, NH Investment, Korea Investment and Securities, Golden Bridge, and Shinhan Financial Investment – have seven offices or corporations in Vietnam. Korea Investment & Securities increased its stake in EPS Securities in Vietnam to 98.2 per cent by investing an additional $39 million after launching KIS Vietnam and acquiring an initial 49 per cent stake.
KIS Vietnam, which hovers at around 70th among the Top 100 securities companies in Vietnam, increased its market share in the brokerage market by nearly 5 per cent from 0.25 per cent over the course of five years. NH Investment Securities entered Vietnam by establishing an office in Ho Chi Minh City in 2007. In 2009, it acquired a 49 per cent stake in Vietnam CBV, a local securities company. It is currently in negotiations with CBV to ramp up its stake to 100 per cent.
However, as external uncertainties increase and the overall overseas sales performances of South Korean securities companies are on a downward trend, financial authorities are paying attention to risk from overseas. Last year, brokerage firms’ overseas branches suffered a net loss of $4.5 million due to a spike in selling and administrative expenses related to losses on valuations under the equity method of accounting by some overseas branches and the provision of prime brokerage services (PBS). Large South Korean securities firms that made a foray into Vietnam have also targeted expanding new business items such as investment banking and prime brokerage services, breaking away from brokerage-oriented sales.
Vingroup shakes hands with Siemens
Vingroup and German conglomerate Siemens signed a memorandum of understanding (MoU) on September 7 to promote technological cooperation in many important areas.
Vingroup will cooperate with Siemens in applying innovative technologies and solutions for projects in three fields: automobile manufacturing, building and residential development, and hospital development involving Vinmec.
The two sides will also consider collaborating closely in agriculture and other industries Vingroup may expand into in the future.
“Vingroup is one of the most powerful private economic groups in Vietnam, with a sustainable and dynamic development strategy along with great potential for regional and international integration,” said Siemens Vietnam President and CEO Thai-Lai Pham. “Siemens is proud to successfully participate in a number of major projects of Vingroup and is very pleased with this fruitful partnership so far. Therefore, both parties decided to enter into this MoU, which is a critical milestone in our cooperation history and we are fully committed to supporting Vingroup in the successful implementation of upcoming projects.”
The cooperation with Siemens will enable Vingroup to optimize its business operations and product execution as well as improve the quality of its products and services to meet world-class technology standards.
In relation to its automobile project, Siemens will support Vingroup to become a digital enterprise and also undertakes to recommend and introduce it to suitable design consultants and engineering, procurement and construction (EPC) contractors.
Siemens is one of the international partners of the VinFast automobile manufacturing project, which was kicked off by Vingroup on September 2. The two sides will join forces to work on advanced plant management and operation systems towards Industry 4.0.
Siemens is also committed to organizing a workshop with Vingroup to provide the latest technology updates and training in the aforementioned areas.
“Vingroup considers Siemens a technology partner, to utilize its knowledge and experience in providing technologies in areas Vingroup is working on,” said Ms. Duong Thi Mai Hoa, CEO of Vingroup. “With 170 years of experience and a global presence in more than 200 countries and territories, Siemens is truly a technology pioneer and innovation leader. Thus, we believe that this cooperation will bring many opportunities in both breadth and depth for both parties, especially at this particular point in time when Vingroup is expanding its business towards industries that support sustainable development and apply state-of-the-art and green technologies.”
Vingroup held a breaking ground ceremony on September 2 for its electric automobile and motorbike manufacturing complex called Vinfast. Vinfast has total investment of VND35 trillion ($1.5 billion), is located at the Dinh Vu-Cat Hai Economic Zone in northern Hai Phong city, and has a designed capacity of 500,000 units. It expects to debut “Made in Vietnam” motorbikes in September 2018 and Vinfast automobiles, including electric and gasoline models, in 2019.
Grab expands to Quang Ninh
Ride-hailing platform Grab officially expanded its GrabCar and GrabTaxi services to northern Quang Ninh province a few days ago. The expansion is in line with Grab’s key mission of making transport more accessible for everyone and is testament to its commitment to fulfill Vietnam’s growing need for on-demand, door-to-door rides and to improving the lives of all Vietnamese.
Grab’s ride-hailing services are now available in four cities, establishing its leadership as the broadest ride-hailing network in the country.
“Following the government’s direction and the Ministry of Transport’s Decision No. 24/QD-BGTVT to pilot the application of science and technology in managing and connecting contract-based passenger transportation, the Quang Ninh Department of Transport has reviewed the feasibility of Grab Vietnam’s pilot project,” a representative from local authorities told the launch event. “Together with the Quang Ninh Provincial People’s Committee, we officially approve Grab Vietnam’s pilot of GrabCar and GrabTaxi in the province. We believe that with its experience in ride-hailing services in Southeast Asia and in some major cities in Vietnam, Grab Vietnam will fulfill all the requirements of the pilot scheme and bring about more transport options for local commuters and tourists.”
“We would like to thank local authorities for allowing us to pilot GrabCar and GrabTaxi services in the province,” said Mr. Jerry Lim, Grab Vietnam’s Country Head. “Working hand-in-hand with the government has always been the hallmark of Grab’s business. We are happy that we share a common goal with the Quang Ninh government of using technology to improve people’s daily commute. With their strong support, we will continue to innovate and provide a platform for our driver-partners to earn sustainable incomes and for our passengers to enjoy safe, affordable, and convenient transport services.”
Grab is also committed to building the technology and engineering talent pool in Vietnam, with a new research and development (R&D) center in Ho Chi Minh City. These engineers will use their local expertise to provide localized solutions that are tailored to the needs of Vietnamese commuters and drivers, enhancing their overall user experience.
Grab recently announced that Didi Chuxing, the world’s leading one-stop mobile transport platform, and the SoftBank Group Corp., a global technology leader driving the information revolution, will invest up to $2 billion to lead Grab’s latest financing round. Grab anticipates that it will raise an additional $500 million, bringing the total to $2.5 billion in this round from existing and new investors. This is the largest single financing seen in Southeast Asia.
Criteo marketing technology helps K&K Fashion boost sales
Criteo, a commerce marketing service provider, has recently announced that its Dynamic Retargeting tool has helped K&K Fashion achieve a 43 per cent increase in click through rates (CTR) and a 66 per cent increase in conversion rates, resulting in a 121 per cent increase in sales transactions within a short timeframe of just six months.
By leveraging the strength of Criteo Engine, K&K Fashion can precisely predict purchasing intent using the solution’s anonymous cross-device understanding of their customers’ behavior across all devices, browsers, and applications. This has empowered the brand to make informed decisions and improve its business decision making in areas such as budget allocations for marketing activities.
“It’s more important than ever for retailers like K&K Fashion to invest in their online platforms, to be able to correctly identify potential new and recurring customers,” said Mr. Joshua Koh, Regional Managing Director, Mid-Market Sales, APAC, at Criteo.
“In Vietnam, ‘showrooming’ is a popular trend and almost all Vietnamese shoppers are browsing online while in physical stores. By leveraging user-centric data, retailers will be able to show personalized ads to shoppers based on their browsing behavior. We are building an open ecosystem that connects brands and shoppers to the things they need and love, allowing them to compete more effectively with larger e-commerce companies.”
“Openness, transparency, security, and fairness are cornerstones of our commerce marketing ecosystem, where every participant gets more than what they contribute,” he went on. “To maximize K&K Fashion’s return on investment (ROI) on its marketing strategies, our user-centric approach allows them to capture a complete view of their customers’ shopping experience. This approach aligns with customers’ buying behavior and intent to more accurately report transaction attribution.”
Vietnam’s e-commerce industry is growing rapidly, driven by growth in internet penetration and increasing affluence. With 10 million more online shoppers expected in the next three years, the sector is estimated to grow 30 per cent per annum until 2020, when it will be worth $10 billion, according to the Vietnam E-commerce and Information Technology Agency (VECITA) 2016 report.
To ensure that it continues to engage new and existing shoppers, K&K Fashion wanted to focus on digital marketing to promote their brand and products. However, they had budget constraints and lacked comprehensive tools to measure their marketing outcomes effectively. This adversely affected their business decisions, such as expanding sales channels and increasing marketing budgets.
“Criteo’s performance marketing solution greatly helped us understand our business better and how we can improve our marketing strategies to retain our current customers and attract new potential customers,” said Mr. Le Viet Thanh, Managing Director of K&K Fashion. “This was something we had struggled with, especially after launching our e-commerce site. With Criteo, we are confident in optimal marketing budget allocations and making the right business choices for ourselves and our customers.”
Retailers must also pay attention to mobile as the next frontier for increased user engagement and e-commerce sales. With more than seven out of ten consumers having made an online purchase via a mobile device in the past month, according to a Criteo survey, Vietnam is truly a mobile-first country.
OSIM seeking franchisee in Vietnam
Singapore’s OSIM, one of Asia’s largest providers of health and wellness massage products, is searching for a master franchisee in Vietnam with the VF Franchise Consulting Company in order to expand its international network.
Vietnam is part of OSIM’s expansion plans, as its healthcare services market is growing rapidly from rising demand.
“The minimum financial investment for each outlet is $100,000-$150,000,” said Ms. Chan Yee Pheng, Franchise Manager at OSIM. The company will also support after-sales and customer services.
Besides financial capacity, OSIM is seeking local franchisees who are passionate about healthy and happy living. Franchisees with retail experience and connections to shopping malls are the preferred option.
“Vietnam has shown sustained economic growth, with encouraging growth in the health and wellness sector,” said Ms. Chan Yee Pheng. “Vietnamese consumers share common Asian beliefs about traditional medicine and health practices. Massage is a traditional healthcare practice that we believe will resonate well with Vietnamese consumers.”
Vietnam now has around 53.4 million people of working age who are increasingly unwell, and this is a major opportunity for OSIM to become more deeply involved in the market. Moreover, “Vietnamese people spend billions of dollars every year on improving their health and wellness,” said Mr. Sean T. Ngo, CEO of VF Franchise Consulting.
“A growing number of Vietnamese citizens are travelling abroad, to countries like Singapore and Thailand, in search of advanced health services,” he added. “In order to take advantage of the fast-growing demand for these types of services, many foreign service providers and franchisors continue to seek further expansions or to enter Vietnam.”
PMI solid again in August
The Vietnam Manufacturing Purchasing Managers’ Index (PMI) – a composite single-figure indicator of manufacturing performance – ticked up to 51.8 in August from 51.7 in July, signaling a further modest monthly improvement in the health of the sector, Nikkei has said in a report.
The recent improvements in the domestic manufacturing sector continued in August, extending the current sequence of strengthening business conditions to 21 months. A solid and accelerated rise in new orders was central to the latest improvement in business conditions. New business has increased continuously since December 2015 while the rate of expansion in new export orders also quickened and was the fastest in four months.
Rising new orders led to another increase in manufacturing production for the tenth month in a row. The rate of growth was modest, but quicker than that seen in July, according to the report. Higher output requirements encouraged firms to take on extra staff. However, the rate of job creation was only marginal and the slowest in the current 17-month sequence of rising employment.
Staff shortages and rising new orders were reportedly factors leading to a second successive monthly rise in backlogs of work. Though easing from July’s 75-month high, the rate of accumulation was still one of the sharpest in the series’ history, according to the report.
Raw material shortages were a feature of the latest survey, contributing both to higher input costs and longer supplier delivery times. The rate of input price inflation quickened to a four-month high, and was sharp.
Despite the marked increase in input costs, firms continued to reduce their output prices in August. Charges decreased for the fourth month running, albeit only marginally. Purchasing activity increased at a faster pace, with the latest expansion linked to higher new orders. Stocks of purchases also rose; the 14th month running this has been the case.
Post-production inventories, on the other hand, decreased for the second successive month, albeit marginally. Panelists suggested that the dispatch of finished products to customers were behind the reduction.
The reported noted that business confidence improved in August and was the strongest since March. Anecdotal evidence suggested that firms were planning to increase output, helped by expansions in capacity and predictions of rising new orders. More than 56 per cent of respondents predicted a rise in production over the coming 12 months.
“Vietnam’s manufacturing sector continued to perform steadily mid-way through the third quarter of the year,” said Mr. Andrew Harker, Associate Director at IHS Markit, which compiles the survey. “There were further positive signs regarding new orders, which should help the sector maintain growth going forward.”
Coca-Cola completes additional investment
Coca-Cola Vietnam has recently announced the completion of additional investment of $300 million in Vietnam during the 2013-2016 period. The company officially put into operation a new warehouse and an ameliorated wastewater treatment system featuring state-of-the-art equipment and advanced technology at its Da Nang production plant; a milestone marking the fulfillment of the project.
This is yet further demonstration of Coca-Cola’s strong commitment to sustainable investment in Vietnam, setting business development goals that are in parallel with positive impacts on the community.
“Aimed at operating as a long-term investor in Vietnam, Coca-Cola has always focused on generating more added value that benefit both the business and the community’s living standards,” said Mr. Calin Dragan, Regional Director at Coca-Cola ASEAN and Middle East. “This is demonstrated through significant progress made in the utilization of green technology in every Coca-Cola plant, diversifying its product range to best meet consumer tastes, and pursuing community programs on a long-term basis.”
The company’s investment activities in Da Nang are in line with the direction of bringing practical values to the community and making Da Nang a new economic driving force in Vietnam and the region. The warehouse and wastewater system are equipped with the latest in technology and expresses the company’s commitment to the development of Da Nang in particular and Vietnam in general. The project’s completion is fundamental to Coca-Cola’s subsequent steps towards sustainable growth in Vietnam.
The Da Nang plant now has four manufacturing lines using cutting-edge technology. During the course of development, the plant has been continuously upgraded with smart, environmentally-friendly technologies that have secured stringent quality certificates in Vietnam and globally.
Total investment for upgrading the Da Nang plant’s warehouse and wastewater treatment system was nearly $5 million. The new warehouse, with a total area of 4,800 sq m and a capacity of 4,000 pallets, can be further transformed to a smart warehouse to store up to 8,000 pallets.
“With the goal of becoming one of the largest cities in the country, Da Nang always focuses on developing both its economy and environmental protection,” said Mr. Tran Van Mien, Deputy Chairman of the Da Nang People’s Committee. “City authorities always encourage companies and organizations to protect the environment. We greatly appreciate the commitments by Coca-Cola, a companion of the city for 20 years, to build long-term goals in not only economic development but also in providing a better living environment to the community.”
A memorandum of understanding was also signed between Coca-Cola Vietnam and the University of Industry on a program that provides clean, safe drinking water to students at secondary and high schools in the city through the supply of 65 drinking water filtration systems, worth up to $520,000.
August FDI in Hanoi at $1.74bn
Total foreign direct investment (FDI) into Hanoi stood at $1.74 billion in August, according to the Hanoi Department of Planning and Investment.
The city has welcomed 114 projects with total registered capital of VND70.6 trillion ($3.2 billion) this year and 22 public-private partnership (PPP) projects with total investment of VND60 trillion ($2.7 billion).
The city’s industrial production index increased 5.7 per cent in August compared to August 2016 and was up 6.5 per cent in the first eight months of this year.
Goods and services revenue increased 12 per cent year-on-year and 8.8 per cent in the first eight months.
International arrivals in Hanoi reached 313,000 during the month, up 9.9 per cent compared to July and 53.8 per cent year-on-year. Total international arrivals reached over 2.3 million in the first eight months, an increase of 22.7 per cent year-on-year.
Revenue from hotels and tourism stood at VND5.1 trillion ($233.6 million) in August, up 13 per cent year-on-year, and was VND39.9 trillion ($1.8 billion) in the first eight months, up 9 per cent year-on-year.
There were 16,714 newly-established enterprises with total registered capital of VND129.2 trillion ($5.8 billion) during the month, while 177 enterprises were dissolved and 2,497 resumed operations after being temporarily suspended.
Figures from the Ministry of Planning and Investment (MPI) reveal that more than 23,000 FDI companies are operating in Vietnam, contributing 22-25 per cent of capital and up to 15 per cent of State budget contributions. They now employ about 7 per cent of the country’s workforce and account for more than 70 per cent of total export turnover.
Data from the World Bank shows that as at the end of 2016, the FDI sector had contributed around 19 per cent of Vietnam’s GDP; almost double the rate recorded in 2000.
The ministry is also drawing up a report evaluating the impact of FDI in Vietnam during the 30 years since the Law on Foreign Direct Investment opened the country’s doors to multinational companies.
DHI to establish subsidiary in Vietnam
South Korea’s leading distributor, DHI, has decided to set up a subsidiary in Vietnam, Vietmate, after a year of exploring and evaluating Zalo’s potential in e-commerce, with the goal of using the Zalo platform to distribute quality South Korean products in the Vietnamese market.
In addition to representatives from DHI and the Zalo Corporation, the signing ceremony for the new subsidiary was also attended by representatives from the South Korean Consulate, the Korea Trade-Investment Promotion Agency (KOTRA), and South Korean provinces’ chambers of commerce seeking investment opportunities in Vietnam.
Vietnam has been an attractive destination for Japanese and South Korean investors in recent years, especially in trade and technology. The cultural similarities between the countries are important in promoting economic cooperation.
South Korean companies highly value Zalo’s development and see enormous growth potential on the platform. Mr. Shin Deok-Hwa, CEO of Vietmate, believes that Zalo is like Kakao Talk in South Korea, which is a particularly successful commercial platform in the country.
Assessing the cooperation between DHI and Zalo, the Consul General of the Republic of Korea, Mr. Moon Byung Chul, said: “This is not just a cooperative arrangement between two normal businesses, it is also representative of the mutual development cooperation between Vietnam and South Korea.”
According to the South Korean Consulate, there are more than 50,000 South Korean companies operating in Vietnam and more than 140,000 South Koreans working and living in the country, and this cooperative arrangement with Zalo is expected to help South Korean people access and purchase products in their hometowns more easily.
Under the agreement, Vietmate will initially focus on distributing and promoting cosmetics and beauty products at Zalo shop. This will help Vietnamese people in general and South Koreans in Vietnam in particular to gain access to high quality products instead of unsafe cosmetic options.
Zalo, owned by VNG, had 80 million users as at August and 120 million daily messages exchanged via its system. It ranks first in use, with 80 per cent of users having the app on their smartphone, followed by Facebook Messenger with 73 per cent, Viber 40 per cent, Skype 37 per cent, and Line 18 per cent, according to a report from Appota on Vietnam’s mobile market released in May.
Bao Viet & Munich Re launch storm coverage product
The Bao Viet Insurance Corporation (Bao Viet Insurance) and the Munich Reinsurance Company (Munich Re) officially launched their new “One Storm” insurance product on August 31 in Hanoi, providing protection against losses caused by typhoons.
Due to its tropical monsoon climate, Vietnam is in the path of many major storms, which regularly cause devastating losses. Businesses understand the importance of having solutions to protect their assets from unexpected disasters. Whenever a risk such as a tropical storm arises without proper preparation or having a safety solution in place, there may be financial difficulties due to the fact that the damaged property is not adequately protected or below their actual deductible.
This new non-traditional insurance solution is a parametric trigger typhoon risk cover, which protects fixed assets in operation or under construction, determined by the exact insured location (latitude, longitude) both onshore and offshore.
Unlike a traditional insurance product that only covers a policyholder’s losses following physical damage, “One Storm” handles claims by quickly paying out even without any physical damage incurred. Risk holders can check their pay-out in real time after a storm takes place at onestorm.munichre.com, with data being identified and verified by an independent third party, the Japanese Meteorological Agency (JMA).
This specific product targets customers such as organizations, power plant operators, big corporations, industrial enterprises, and government agencies, with a compensation limit from VND10 billion ($440,000) to VND100 billion ($4.4 million) per damaged location.
Fixed assets are not only covered under the five storm levels, as clients are also insured for non-material claims including loss of profits due to business interruptions, loss prevention costs, overtime paid, coverage for deductible of traditional property insurance policies, and costs of claim settlement for damage caused by the storm.
In addition, the “One Storm” product provides customers with financial support to minimize losses even though no deductible is applied, cover for losses below the deductible of other ordinary insurance claims, and simple and quick compensation procedures to finance investment activities and maintain business activities.
“Bao Viet Insurance’s main policy in 2017 is to strengthen its cooperation with reputable international partners in order to provide products and services,” Mr. Nguyen Quang Hung, Deputy CEO of Bao Viet Insurance, told the launch ceremony, adding that “One Storm”, which is a first in Vietnam, brings many favorable options to customers.
“This product cooperation showcases a win-win situation that could serve as a role model,” said Mr. Achim Dosch, Head of Section Engineering Construction CIP at Munich Re. “Bao Viet brought in their excellent market network, while Munich Re contributed with research and product development expertise. This is further proof of our ambition to be at the forefront of product innovation to the benefit of our clients.”
The launch of “One Storm” is the result of close cooperation between the two partners, mobilizing the strength of each to provide good experience and satisfaction with the product as well as the best quality of service to customers. The cooperation of the Number 1 non-life insurer in Vietnam, Bao Viet Insurance, with global reinsurer Munich Re, promises to provide many solutions to protect customers against the risk of tropical storms in Vietnam.
NFSC: 8M credit growth at 11.5%
Total outstanding loans in Vietnam grew 11.5 per cent in the first eight months of this year, faster than the 10.2 per cent recorded in the same period last year, the National Financial Supervisory Commission (NFSC) announced in a report.
Of total credit, VND-denominated loans accounted for 91.5 per cent while loans in foreign currencies made up 8.5 per cent. Lending in foreign currencies grew 11.5 per cent in the eight-month period, much faster than the 1.7 per cent growth in the same period last year, with lending in VND growing 11 per cent.
Some 31.2 per cent of total credit was funneled into manufacturing and construction while 37.4 per cent went to services.
According to the report, growth in capital mobilization was much slower than for credit, at 9.1 per cent between January and August. Deposits from clients went up 8.7 per cent since the end of 2016.
Notably, deposits from the State Treasury of Vietnam rose 68 per cent to around VND160 trillion ($7 billion) as at the end of August, it added.
The NFSC pointed out that system liquidity was profuse, evidenced by interbank interest rates remaining low and edging up 0.2-0.3 percentage points from the end of July.
In addition, the State Bank of Vietnam (SBV) net withdrew VND4.5 trillion ($198 million) between August 1 and 22, leading to a net withdrawal of VND32.63 trillion ($1.43 trillion) since the start of the year.
At a monthly cabinet meeting on August 29, Prime Minister Nguyen Xuan Phuc asked the central bank to boost lending growth to at least 21 per cent, or three percentage points higher than the initial 18 per cent target adopted by the National Assembly, and to reduce loan rates by 0.5 percentage points.
According to a government report, credit growth was 10.06 per cent as at August 21, compared to 9.01 per cent in the same period last year.
A number of economists have warned that 21 per cent credit growth is high for the country’s nominal GDP growth and the task of monitoring needs to be strengthened to ensure loans are funneled into production and business and away from speculative sectors.
Mr. Nguyen Duc Khanh, Director of Investment Strategy at the Ho Chi Minh City Securities Corp. (HSC) brokerage firm, said that such an upwardly revised credit growth target risks fueling inflation. Agreeing, a 15 per cent growth rate for lending would already be considered high for an economy that grows 6.5 per cent annually like Vietnam, according to Mr. Vu Thanh Tu Anh, Research Director at the Fulbright Economic Teaching Program.
Faster credit growth in Vietnam is likely to undermine macroeconomic stability, particularly amid already rapid credit growth. The focus on GDP growth via credit growth is credit negative for the sovereign and its banks, Moody’s Investor Service wrote in a recent note. Policymakers’ focus on achieving GDP targets risks compromising banks’ asset quality and, hence, broader macroeconomic stability, it added.
Savills: Da Nang real estate in good shape in 1H
Savills has released a report on Da Nang’s real estate market in the first half of this year.
In the hotel segment, total supply from 86 three- to five-star hotels was approximately 9,400 rooms, with five-star the best performer.
Average room rates increased 11 per cent year-on-year and revenue per available room (RevPAR) was up 22 per cent year-on-year.
Over 1,300 four- to five-star rooms will enter the market in the second half.
The report noted that in the apartment and condotel segments, there was one newly-launched condotel project in the first half. Total apartment supply increased 3 per cent year-on-year, with one newly-launched project.
Condotel absorption was relatively high, at around 70 per cent. High and committed yields reached 12 per cent per year and the more recent developer buy-back commitments are increasingly resonating with buyers. Large condotel supply, mainly from domestic developers, is expected to the end of the year and into 2018.
Meanwhile, the apartment average absorption rate was approximately 33 per cent. Primary prices averaged $1,690 per sq m, down year-on-year. Two projects will launch 1,200 apartments by year’s end.
The second-home villa market saw high absorption in the first half. Total villa stocks were 801 dwellings, of which 169 were from the primary market. Ngu Hanh Son district was the largest supplier, with 728 dwellings, representing a 91 per cent share, followed by Son Tra district with 73 dwellings, or 9 per cent.
Market-wide absorption was 81 per cent, and seven projects were fully sold.
Fully finished villa land prices were from $650 per sq m to approximately $3,000. Forty-five dwellings will enter the market in the second half.
Da Nang continues to be one of the leading local destinations for domestic and international tourists, according to the Savills report.
There were 3.2 million visitors in the first half, up 33 per cent year-on-year. International visitors were up 72 per cent year-on-year, to 1.2 million.
CGV opens 50th cinema in Vietnam
CJ CGV Vietnam (CGV), a subsidiary of South Korea’s CJ Group, opened its 50th cinema complex in Vietnam a few days ago, at Parkson Dong Khoi in Ho Chi Minh City’s District 1, with five modern cinemas and 404 seats.
The opening increases CGV’s cinemas to 313 in the country with 42,795 seats and confirms its commitment to building high quality cinema complexes in Vietnam, to bring the movie experience to more and more people around the country. In an official statement released in May, the South Korean company said it planned to invest some $200 million over the next four years to upgrade and expand its cinema complexes in Vietnam, including in second tier cities and remote areas.
CGV began operating cinemas in Vietnam six years ago after acquiring MegaStar, the country’s largest cinema chain at the time, for $73.6 million. It is now Vietnam’s largest film distributor and cinema operator and posted $79 million in revenue last year, up 3.3 per cent year-on-year, and around $4.1 million in profit, which was almost triple the level of the previous year.
“The local entertainment market’s high annual growth, which has been estimated at more than 20 per cent, offers huge potential for investors and justified the company’s investment, which is far higher than its annual profits,” said Mr. Dong Won Kwak, General Director of CGV Vietnam.
Related businesses are vying with each other to find the best way to maximize cinema talent and other resources to develop the local film market, including arranging film-making workshops and investing in movie projects.
By the end of this year, it will be operating 54 or 55 cinema complexes nationwide, including in remote areas. It will invest in building 12-15 new complexes each year, four or five of which will be in remote areas. With total investment of $4-7 million per complex, total investment will reach $70 million.
Vietnam’s biggest cinema operator in Vietnam also launched its immersive technology studios in Hanoi and Ho Chi Minh City in May, the first such facilities in Vietnam. CJ CGV Vietnam is now testing other technologies for large screens and expects to introduce new services in Hanoi and Ho Chi Minh City in the next few months, as a part of its total investment of $70 million into Vietnam’s cinema market this year.
Mr. Dong Won Kwak told the opening ceremony that Vietnam’s population is double the size of South Korea’s and cinema-going is becoming increasingly popular, meaning the country has a lot of development potential over the next decade.
Import taxes on auto parts may be cut
The Ministry of Finance (MoF) plans to cut import taxes on automobile parts in line with WTO rules, according to the Vietnam News Agency (VNA).
Vietnam’s WTO commitments require it maintain a tax level on imported auto components of between zero and 30 per cent. Officials say the changes will also serve domestic interests.
Deputy Minister of Industry and Trade Do Thang Hai was quoted by VNA as telling a press conference at Smart Industry World 2017 in Hanoi last week that the import tax cuts would bolster auto production in Vietnam by leveling the playing field between imported vehicles and vehicles made in the country with imported parts.
“Automakers said that they had not received much support from the State, but the government’s upcoming document will create fair play for businesses,” Mr. Hai said. “Automakers and auto assemblers only need to be treated as fairly as auto importers.”
Automakers have invested thousands, and even tens of thousands of billions of VND but there is still an unreasonable issue: import taxes on auto parts are higher than for completely-built-up (CBUs) units, he said.
In a draft document currently before relevant ministries, sectors, and associations to collect opinions, MoF presents two methods for implementing the tax cuts, which will apply to parts that are used to assemble cars with nine seats or less and trucks with capacity of five tonnes or less. The document will be submitted to the Prime Minister for approval in the future and will become effective from January 1, 2018 to December 31, 2022.
In the ministry’s first proposed method, import tariffs on 163 auto parts will be cut to zero per cent. The average tariff on auto components would be reduced from 14-16 per cent to 7 per cent for nine-seat cars and to 1 per cent for trucks.
In the second method, the ministry wants to cut import tariffs on 19 components, including engines, gear boxes, automatic transmissions, and fuel injection pumps, which are not produced in Vietnam, from 3-50 per cent currently to 0 per cent. Under this plan, the average import tax on components would fall from 14-16 per cent to 9-11 per cent for cars and to 7.9 per cent for trucks.
According to the finance ministry, both methods encourage businesses to manufacture and assemble automobiles locally. Officials say the cuts would increase competitiveness with imported cars, support local industry, increase domestic consumption, and promote exports.
Comparing the two methods, the ministry said the first would help automakers cut costs more significantly than the second.
The first method would cut total import taxes on components for both types of vehicles by an estimated VND5.23 trillion ($229.79 million) and result in VND535 billion ($23.5 million) more in corporate income as production increases. As for the second method, total import taxes would be reduced by VND3.5 trillion ($154 million) and corporate income would increase by VND535 billion ($23.5 million).
To benefit from the tax cuts, the ministry said that automakers would have to reach an annual growth rate of 16-18 per cent and 40 per cent of production value must accrue locally, in line with the national automobile industry development program. Automakers that don’t hit the targets will pay higher taxes on imported components.
Manufacturers must record annual growth of 16 per cent, with a minimum output of 34,000 units by 2018. Output must rise steadily each year to hit 61,000 units by 2022.
With this requirement, the ministry said three automakers may already qualify to join the program. According to the Tien Phong (Vanguard) newspaper, they are Toyota Motor Vietnam, Hyundai Thanh Cong, and the Truong Hai Automobile Corporation.
As for trucks, the ministry requires that manufacturers achieve annual growth of 18 per cent, with a minimum output of 8,000 units in 2018, raised to 15,000 by 2020. There may be only one business qualified under these regulations, according to the ministry.
Automobiles must also meet emissions and fuel consumption standards. Cars are required to have engines of 2,000 cc or less, meaning they must be relatively fuel efficient. They must also have economy of seven liters per 100km, and both cars and trucks must meet strict European exhaust emission standards.
Tourists to Ca Mau increase by 11 percent in eight months
More than 840,000 tourists, including 17,000 foreigners, chose the southernmost province of Ca Mau as a destination for their holidays in the first eight months of 2017, rising by 11.2 percent from a year earlier.
Tourism earned Ca Mau total revenue of nearly 400 billion VND (17.6 million USD) during the period, up 38 percent year on year.
The tourist number increase is attributable to the province’s improved service quality, diversified typical tourism products, and upgraded infrastructure at many places of interest.
Chairman of the Ngoc Hien district People’s Committee Ly Hoang Tien said in the National Day holiday from September 2 to 4, the Dat Mui and Khai Long tourism areas attracted over 30,000 visitors thanks to Ho Chi Minh Highway’s section from Nam Can district to Dat Mui commune becoming operational.
According to Nguyen Tien Hai, Chairman of the Ca Mau People’s Committee, resources mobilisation will continue to be implemented for developing infrastructure and upgrading tourist sites so as to capitalise on local tourism potential and advantages.
Management efforts will also be augmented to ensure security, order and safety for tourists at local attractions, he noted, adding that more attention will be paid to tourism cooperation with other regional localities, connecting roads to boost tourism, improving service quality, diversifying tourism products, and encouraging the community-based ecotourism.
Ca Mau is accelerating the construction of four important facilities at the Ca Mau Cape tourism area in Ngoc Hien district. The provincial Department of Culture, Sport and Tourism is also updating tourism-related information and stepping up tourism promotion activities.
The province aims to serve 1.2 million tourists this year, Hai said.
Soc Trang, RoK firm cooperate in developing garment factory
Leaders of the Mekong Delta province of Soc Trang had a working session on September 6 with representatives of Youngone Corporation from the the Republic of Korea (RoK) on the production and recruitment plan for its garment factory.
Under its plan, Youngone will build a factory covering 15ha at An Nghiep industrial zone in An Hiep commune, Chau Thanh district. The project is expected to be put into operation in March 2018, employing 8,000 staff and workers.
Yonguk Lee, Project Director of the firm, said the corporation is running three factories in the northern provinces of Nam Dinh, Bac Giang and Hung Yen, employing over 11,000 labourers.
The firm wishes to contribute to Soc Trang’s socio-economic development and job generation for local residents after the project comes operational, Lee said, adding that a workshop, which covers 1,500 sq.m in Minh Chau residential area in Soc Trang city, is scheduled to become operational on September 20.
It needs about 500 staff and workers.
Currently, the enterprise is providing Soc Trang city and Chau Thanh district with 100 sewing machines for training courses for local labourers, he said.
Addressing the working session, Vice Chairman of the Soc Trang People’s Committee Le Thanh Tri said that the province will create optimal conditions for the factory to operate as scheduled.
He also pledged to work closely with the corporation in making plan on housing for workers, while assisting the firm in removing obstacles facing it during the project implementation.
Central economic commission head attends Eastern Economic Forum
Head of the Party Central Committee’s Economic Commission Nguyen Van Binh joined top officials from 60 countries worldwide at the third Eastern Economic Forum (EEF) which opened in Vladivostok city on the Far East of Russia on September 6.
Nearly 5,000 top public officials, representatives of respected organisations and leaders of large Russian and foreign companies get together at the event themed “The Russian Far East: Creating a New Reality”.
In his speech at the forum, Binh lauded the Far East region’s positive changes in recent years.
Vladivostok will become a new economic centre connecting Russia and other economies in Asia-Pacific thanks to its abundant natural resources and Russia’s strategic policies to develop infrastructure, technology, finance, human resources and other mechanisms to branch out economic special zones, Binh highlighted.
Meanwhile, Deputy Prime Minister and Presidential Envoy to the Far East Federal District Yuri Trutnev said that Far East has created favourable conditions for the investors like reducing electricity costs and granting electronic single entry visas for citizens of 18 countries when entering Russia through checkpoints at the Free Port of Vladivostok.
Russia is willing to cooperate with partners and ensure a good environment for the investors in healthcare, education, sports and culture, he added.
After the opening ceremony, the Vietnamese official and the Russian Deputy Prime Minister witnessed the signing of a cooperation deal between Vietnamese dairy firm TH True Milk and Russian Far East development group.
The EEF was firstly held in 2015 to promote economic development in the Far East and enlarge international collaboration in Asia-Pacific. The second forum in 2016 recorded over 200 agreements valued at around 35 billion USD.
President Vladimir Putin is expected to deliver a speech at the plenary session on September 7.
Vietnam to make customs reform
The Global Alliance for Trade Facilitation (GATF) will help Vietnam to establish a customs bond system – part of the country’s efforts to modernise and reform administrative procedures relating to import and export.
The GATF and the Vietnam Private Sector Forum (VPSF) launched their joint project on customs bond last week, aimed at facilitating customs clearance in Vietnam. A customs bond is an agreement that ensures that any importer will pay all fees and taxes as well as operate according to all laws and regulations.
This is the start of the GATF’s Technical Assistance Project with the Government of Vietnam to help the country implement its World Trade Organisation (WTO) commitments, as well as implement the Government’s Resolution 19 on improving the national competitiveness and business environment.
Vietnam is the first country in Asia and the first developing country in the world to be selected by donor countries in the WTO to receive technical assistance under the agreement on WTO Trade Facilitation, in effect since February 22, 2017 when 112 countries ratified it.
The scheme will be co-ordinated by the PM’s Advisory Council for Administrative Reform, whose standing agency is the Government Office.
Customs bonds are designed to streamline importers’ process for bringing goods into the country. Anyone that is importing goods or transporting them locally is required by the customs agency to purchase a bond from a surety company. If an importing company fails to pay fees or follow regulations, Customs can file a claim against the bond. The surety company would then pay to make restitution, but in the end the importing company is required to pay back the surety company.
According to the advisory council, a customs bond is a trade-facilitating mechanism widely used in countries such as the US, Australia, Sweden, New Zealand, the UK, Singapore, Malaysia, the Philippines, Thailand and the Republic of Korea.
Basically, the mechanism is meant to separate the releasing of goods at border gates and the preparation and submission of required customs documentations to facilitate the export or import into the country.
Once importers or exporters have customs bonds, they are guaranteed to fulfill their tax obligations before their goods arrive in the country, so the goods can undergo faster customs clearance.
GATF director Philippe Isler said that the GATF would provide Vietnam feasible solutions to implement WTO commitments, increase national competitiveness and improve business climate.
Foreign experts from WTO member countries will assist with administrative procedure reforms, reviewing and amending the legal framework as well as monitoring Vietnam Automated Cargo and Port Consolidated System/Vietnam Customs Information System (VNACCS/VCIS).
A customs bond system would be a breakthrough in facilitating trade in Vietnam, he said.
Nguyen Viet Nga, vice head of International Affairs Department under Vietnam Customs, said that in Vietnam, customs clearance operations consumed up to 72 percent of required time for goods to be released from border gates because of cumbersome procedures relating to specialised inspections of goods.
Dao Huy Giam, General Secretary of the Vietnam Private Sector Forum, said that the customs bond has helped enterprises, surety companies and customs effectively monitor import and export processes and save time in customs clearance.
An official from the Insurance Supervisory Authority under the Finance Ministry told thoibaotaichinhvietnam.vn that over 30 non-life insurance companies in Vietnam provided insurance guarantees but none of them offered customs bond.
Surety companies face major difficulties such as a lack of information about insured companies or the risk of losing money that they paid to make restitution.
Vietnam has climbed 9 spots to 82 from 91 on the World Bank’s Doing Business 2017 ranking, and moved 15 spots up to 93 from 108 for improved border-trade indicators related to import-export operations. Time needed to handle customs procedures was cut from 138 hours to 108 hours.
Vietnam wants to cut down the required time for customs procedures from 108 hours to 80 hours by 2020.
August retail sales in huge surge
Vietnam’s total revenue from retail sales and services reached 2.58 quadrillion VND (114.7 billion USD) in the first eight months of this year, a year on year increase of 10.3 percent, reported the General Statistics Office (GSO).
The figure amounted to an 8.9 percent increase, excluding the price factor, the highest rise recorded since the beginning of this year, said GSO domestic trade expert Vu Manh Ha, adding that the figure was also higher than 8.5 percent growth of the same period last year.
Ha attributed the growth in purchasing power to surges in demand for accommodation and catering services after high school graduation and university examinations as well in essential goods for the new school year which starts in September.
Recovery in revenue from accommodation and catering services in four central provinces – Ha Tinh, Quang Binh, Quang Tri and Thua Thien-Hue – after last year’s environmental disaster caused by Formosa also contributed to the retail sales increase, he said.
From January to August, revenue of retail sales reached 1.93 quadrillion VND (86.1 billion USD), accounting for three quarters of total revenue, a yearly rise of 10.3 percent. Sectors posting significant growth included textile and garments, up 14 percent; equipment and home appliances, up 11.6 percent; food and foodstuff, up 10.6 percent; and transportation, up 7.6 percent.
Revenue from accommodation and catering services stood at 318 trillion VND (14.1 billion USD), an increase of 11.3 percent against the figure in the same period last year.
Meanwhile, the tourism sector experienced a revenue increase of 11 percent year-on-year in the first eight months to 23.1 trillion VND (1.26 billion USD), with several localities witnessing significant growth, such as the northern province of Bac Giang with 25.1 percent; the central province of Khanh Hoa (23 percent); HCM City (12.2 percent) and the southern province of Ba Ria – Vung Tau (12 percent).
The Association of Vietnam Retailers has forecast that the country’s retail turnover will rise to 179 billion USD by 2020.
Cruise ship launched in Nghe An and Ha Tinh
Giang Dinh Co Do cruise ship has been launched on the Lam River to take visitors to popular tourist sites in the central provinces of Nghe An and Ha Tinh.
The USD2m Giang Dinh Co Do ship is compared to a floating hotel with two floors to accommodate 340 passengers. Tran Quoc Lam, chairman of Song Ngu Son-Giang Dinh JSC, said Giang Dinh Co Do meant Giang Dinh ancient wharf.
“We aim to restore the Giang Dinh wharf with a cultural market, resort, fishing place and old house which was built with the ironwood that was used to welcome the ship of Chancellor Nguyen Nghiem, under the Le Dynasty, to his hometown in Nghi Xuan District, Ha Tinh Province,” Lam said.
Tourists will be able to visit Hon Ngu Island, Cua Lo Beach, Doc Cuoc Temple and enjoy various entertainment activities offered on the ship including traditional singing and cuisine in Nghe An and other regions.
Vice Chairman of Ha Tinh Province People’s Committee Dang Quoc Vinh said more firms had invested in Ha Tinh, boosting the local economy and Giang Dinh Co Do was the first of many coming tourism projects.
Vinh said Nghi Xuan was the district with most potential to attract tourists and asked the local authorities to co-operate with investors to quickly complete procedures and implement new tourism services.
Casino business: Commercial banks allowed to provide services
Commercial banks will be allowed to trade and provide foreign exchange services related to the casino business from next month.
This information was stated under Circular No10/2017/TT-NHNN on the management of foreign exchange for the casino business, which will come into effect from October 15 this year.
Casino business is a conditional business and under close management of competent State agencies. It is regulated under Decree 03/2017/NĐ-CP, which allows foreigners and Vietnamese people residing overseas with passports licensed by a foreign competent agency to gamble at the country’s casinos.
Vietnamese citizens are also permitted to enter domestic casinos on a three year trial basis. They must be 21 years old or above with full capacity for civil acts of individuals according to Vietnamese law, have proof of regular monthly income of VNĐ10 million (US$450) or be subject to third degree taxation according to the law on individual income tax. The Ministry of Finance is responsible for providing citizens with application forms to verify the above conditions.
After the pilot period, the Government will then decide whether or not to continue to allow domestic citizens to participate in gambling at casinos.
According to experts, easing regulations for the casino business will help prevent capital from leaving the country by Vietnamese who visit casinos in neighbouring countries such as Cambodia and Macao, help better manage social order in the sensitive entertainment area in Việt Nam and attract foreign tourists.
Furthermore, Việt Nam hopes to further integrate regionally and internationally, attract billions of dollars of foreign investment to sustain growth and make tourism a key sector to further development.
State treasury mobilises VND200 billion through government bonds
The State Treasury of Viet Nam mobilised VND200 billion (US$8.77 million) through Government bond auctions last week, the Ha Noi Stock Exchange (HNX) said.
According to the HNX, a winning volume was more than two weeks ago, but it was still very low, accounting for only 10 per cent of the offered bonds, Thoi bao tai chinh newspaper reported.
Last week, bonds valued at a total of VND2 trillion were offered for four tenures – five years, seven years, 10 years and 15 years. Ten-year bonds attracted five bidders with eligible bid volume at VND1.051 trillion and an annual interest rate of between 5.38 and 6.3 per cent. Thus, the State Treasury mobilised VND200 billion from issuing 10-year bonds with annual interest rate of 5.38 per cent.
However, the five-year, seven-year and 15-year bonds did not see a winning volume.
Since early this year to date, the State Treasury has mobilised VND144.093 trillion through Government bonds issued on the HNX.
BMW bikes recall in VN
BMW has recalled all 79 of its Motorrad line R1200GS and R1200GS Adventure motorcycles sold through Euro Auto, BMW’s official distributor in Viet Nam, due to a faulty suspension system.
According to the Vietnam Register (VR), any motorcycle of the two models under production codes 0A01, 0A02 and 0A32, manufactured between November 2013 and June 2017 at the BMW factory in Aktiengesellschaft, Germany, is subject to the recall, but is only eligible for repair and inspection if it was sold by Euro Auto in Viet Nam.
Any vehicle produced after June 2017 is considered unaffected.
The recall and restoration period should start from late August 2017 to August 7, 2019 at BMW’s two official distributors in Ha Noi at No 1, Ngo Gia Tu Street, Long Bien District and HCM City at No 808, Nguyen Van Linh Street, District 7.
Repair fees will be paid by Euro Auto and its official distributors.
Each motorcycle should be repaired and have parts replaced, during which it will be fitted with an additional fixed fork tube bush which slides over the existing fork tube to strengthen it.
Starting from July 2017, complaints have been filed against BMW’s suspension system for the models due to several road incidents. Globally, about 185,000 vehicles will be recalled, according to BMW’s reports.
The two vehicles are sold in Viet Nam for about VND750 million to VND800 million each (US$33,400 to $35,600), with a 1,170 cc two cylinder engine.
In some cases, the faulty suspension system can result in the fork becoming separated from the yoke, resulting in an immediate front end failure, which can result in the fork tube coming loose, the VR warned.
There has yet to be any documented case of casualty or injury due to the two models’ flawed suspension system in Viet Nam, though it is still recommended the vehicles be brought back for restoration to ensure safety.
Companies fined for medical violations
Three pharmaceutical businesses in HCM City were fined VNĐ180 million (US$7,920) each for being unable to present necessary certificates related to medicine production.
The three companies were fined for producing natri chloride 0.9% when they were not yet certified as complying with the Good Manufacturing Practices (GMP) Guidelines by the World Health Organisation (WHO), and for not registering their medicinal products with the authorities.
The three companies are the COMIHO Việt Nam JSC located in Tân Bình District, the Đại Lợi International JSC and the Nam Hà Medical Equipment Production and Trading JSC, both located in District 12.
Another company, the Quốc Anh International Hospital Ltd located in the city’s Bình Tân District, was fined VNĐ120 million ($5,280) for providing medical examination and treatment services beyond their registered scope of expertise.
Fines of VNĐ3 million to VNĐ35 million ($132 to $1,540) were imposed on thirteen clinics and pharmaceutical businesses in the city from August 28 to September 1 for their wrong medical practices and medicine production and trade.
The types of wrongdoings include trading medical equipment without documents that clarify their origins, retail trading of outdated medicines, advertising medical services that are beyond their registered scope of expertise, and advertising specialised products and services without approval from the authorities.
Paper imports from US rise high
Paper imports from the US skyrocketed 203.4% to 17,700 tons in the first seven months of this year, according to latest statistics from the General Department of Vietnam Customs.
The Department reported that July was the second month of this year seeing a decline in paper imports with 169,900 tons valued at US$136.3 million, down 2.1% in volume and 3.6% in value compared to June. In total, in the first seven months, Vietnam imported 1.1 million tons of paper worth US$954.7 million, up 9.3% in volume and 14.2% in value against the same period last year.
China and Taiwan remained the key importers of Vietnam paper with 247,700 tons and 162,200 tons respectively, trailed by Indonesia with 154,700 tons and Japan with 145,200 tons.
Besides, Vietnam imported paper from Sweden, Singapore, Finland, Germany and Malaysia.
Vietnam promotes renewal energy development
As fossil fuels run out, the use of renewable energy is necessary for Vietnam’s development orientation and energy security. Vietnam is considered a country with a great potential for renewable energy.
Vietnam has a great potential for wind, solar, and biomass energy. A recent survey shows that Vietnam’s total wind power potential is between 7,000 and 8,700 MW, mainly concentrated in the central coast, southern, and central highlands areas and islands.
With a total of about 2,500 hours of sunshine a year, Vietnam has a strong potential to develop solar energy.
As heavy investment in industries and the population are on the rise, meeting the growing demand for electricity is a real problem. Renewable energy is one solution adopted by many countries to replace the power based on dwindling fossil fuels,
Aware of the potential of renewable energy for Vietnam’s socio-economic development, the Vietnamese government has approved a strategy for renewable energy development in Vietnam by 2030 with a vision to 2050.
Tran Viet Ngai, Chairman of the Vietnam Energy Association, said, “Fossil fuels are running out and causing environmental pollution, especially coal power plants. This makes renewal energy essential. Vietnam has a plan to develop renewable energy by 2030 with a vision to 2050. Thanks to this policy, a number of foreign companies have invested in wind and solar power in Vietnam.”
Despite its great potential, the exploitation of wind, solar, and biomass energy in Vietnam remains on a small pilot scale.
In 2013, 10 wind turbines with a capacity of 16 MW – the first phase of the Bac Lieu wind power project – were officially connected to the national power grid, providing more than 100 MW of electricity per day.
In the second phase, an additional 50 wind power towers with a capacity of 83 MW will be built. This is one of 3 wind power plants that have been put into operation.
The other projects are in Tuy Phong district and on Phu Quy Island in Binh Thuan province. The two largest solar power projects are the Di An project, with a capacity of 212 KW, and the Saigon Hi-Tech 200 KW project.
More and more companies are getting involved in manufacturing batteries and solar equipment, according to Vu Minh Phap, Deputy Director of the Center for New Energy and Renewable Energy.
“We have formed a market for domestic solar cell and component manufacturers, which will reduce the cost of renewable energy systems,” Phap said.
Each kind of energy – small hydropower, wind energy, solar energy, biomass energy, and bioenergy – needs different technologies and policies to develop in line with global trends and practical conditions within Vietnam.
Doan Van Binh, Director of the Institute for New Energy and Renewable Energy, said, “We are particularly interested in biomass energy. Input materials that are by-products of agroforestry production and husbandry been used to produce solid energy in various forms, such as bio-tablets, bio-coal or fuel rods. We have also created different forms of biogas, and bio-chemicalization of biomass.”
According to the scenario for renewable energy development, Vietnam can exploit 3,000 to 5,000MW with an output of more than 10 billion kWh from renewable energy by 2025.
CJ CGV invests heavily in cinemas
CJ CGV Vietnam, a subsidiary of Korean firm CJ Group, is planning to spend up to US$200 million expanding its cinema system in Vietnam.
The company launched another cinema at the Parkson Dong Khoi commercial complex in downtown HCMC on August 31, taking its total in Vietnam to 50 cinemas with 313 studios and around 42,800 seats.
CJ CGV is planning to spend US$200 million bringing its state-of-the-art cinema technology to its theaters nationwide as part of its growth strategy in the 2017-2020 period.
The company plans to open 12-15 new cinemas a year, including four to five in remote provinces like Yen Bai, Ha Tinh, Tra Vinh, Kien Giang and Vinh Long. With each cinema costing US$4-7 million, its total investment could amount to US$70 million this year.
In early May, the leading cinema chain launched the ScreenX immersive technology, the first of its kind in Vietnam, in Hanoi and HCMC. The technology offers moviegoers a 270-degree view from a three-dimensional angle.
Besides, CGV is working on plans to build cinemas with large screens in Hanoi and HCMC until 2020. Three to four locations have been chosen for large-screen cinemas in the two cities.
CJ CGV, an entertainment platform operator under CJ Group, is the largest film distributor and cinema operator in Vietnam and one of the top five cinema chains in the world.
In Japan, Vietnamese chicken will soon be on the menu
The first delivery of chicken from Koyu & Unitek Co Ltd headquartered out of Ho Chi Minh City, Vietnam will soon be on its way and on the menu in Japan, say company representatives.
While the first shipment may represent a relatively small volume, the moment itself is significant as it marks an early step in the Vietnamese ambitious plan to establish itself on the global poultry stage—and Japan is a high priority target.
Earlier in June the company opened its first poultry slaughtering and processing plant at the Long Binh Industrial Zone in the southern province of Dong Nai as part of its plan to sell product in the Japanese market.
The US$6 million facility has been equipped with the latest in technologically advanced machinery and equipment and operates in accordance with strict food safety and hygiene standards, note company representatives.
The company expects to ship its first chicken to Japan by boat on September 9, which should reach the dock in Tokyo and be on supermarket shelves and dinner plates within 10 days.
Oysters from northeast Vietnam start shipping to the EU
Up until about a decade ago, the fledging oyster industry along the north-eastern coast of Vietnam in the provinces of Thai Binh and Nam Dinh had virtually zero production, say local officials.
Then, under the guidance of a team of Australian shellfish experts headed by Dr Wayne O’Connor from the Port Stephens Fisheries Institute in New South Wales all that began to change.
Within four short years, 2007-2010, production really began to take off, surging to roughly 2,000 metric tons per annum largely due to improvements at the Vietnamese government-owned oyster hatchery on Cat Ba Island.
That growth rate was somewhat remarkable considering that oysters start out as larvae, so small that they are invisible to the naked eye. After about a year, they can grow to 16-25 millilitres and usually reach market size anytime from 18-24 months.
The hatchery at that time was also producing an estimated 100 million spat a year.
Oysters are a type of shellfish that when they reproduce, spawn tiny larvae that freely navigate the waters until they find an appropriate habitat with a structure to settle on. Once the larvae permanently attach to a surface, they are known as spat.
Although at that time the industry in the two north east provinces showed great promise, it quickly evaporated largely because of the choices that farmers made to use the cheapest production methods.
They chose to grow oysters in clumps on recycled shells, which were hung on rafts. This method resulted in oysters of unequal size and shapes, which greatly reduced their marketability and the price consumers were willing to pay.
The oysters raised had little to no ability to sell profitably in the export market.
The Dutch company Lenger Seafoods is now collaborating with the Nam Dinh Province People’s Committee to transform the industry and bring it out of the doldrums and into compliance with international norms.
Nguyen Phung Hoan,vice chair of the Committee, said that currently there are about 2,000 hectares in the province devoted to oyster farming. To date most of production has either been consumed locally or shipped to Chinese buyers.
Lenger Seafoods based out of the Netherlands has just opened a newly constructed facility to process oysters for export. It has also worked diligently to establish a supply chain, from breeding, harvesting, to transporting and processing, in line with the strictest of international standards.
The management of Lenger claim they can produce up to 300 metric tons of oysters per day— and already have begun to export product to markets in the EU such as Italy.
Key markets the management stated it is focusing on expanding into include the Netherlands, Spain, France, the Republic of Korea, Japan and US.
This is good news to the many young Vietnamese looking to get in on the action. At a recent conference in Nam Dinh Province, more than one third of the attendees were young people interested in starting oyster businesses that export to overseas markets.
Vietnam-Australia trade rises 4.7 percent each year: MoIT
Six years after implementing the ASEAN-Australia-New Zealand Free Trade Area, trade between Vietnam and Australia has increased 4.7% each year on average, according to the Ministry of Industry and Trade (MoIT).
Last year, trade between the two countries reached US$5.26 billion, up 6.5% from 2015, with Vietnam’s trade surplus sitting at US$480 million.
During a conference held by the Department of Asian Market on August 31, the MoIT said that Australia has high demand for goods from Asia-Pacific and has become an important market for Vietnam.
Popular Vietnamese exports to Australia include aquatic products, consumer goods, apparel, footwear and wooden products due to preferential tax deals in the ASEAN-Australia-New Zealand Free Trade Area, added the ministry.
Vietnam spends billions of USD on pharmaceutical products import
Vietnam has spent billions of US dollars on the import of pharmaceutical products every year, according to the statistics from the General Department of Vietnam Customs.
By August 15, imports of pharmaceutical products have hit US$1.712 billion, up 5.8% against the same period last year. Most of the products were imported from France, India, the Republic of Korea, Italy, the UK, Belgium, Germany and the US.
By the end of July, the import value from five markets reached US$100 million and more. Germany came first with US$187.7 million, trailed by France with US$180 million, India with US$164.4 million, the ROK with US$111 million and Italy with US$102.5 million. The import value from these markets made up 46.6% of the country’s total import value.
Imports of pharmaceutical products increased from US$2.035 million in 2014 to US$2.32 billion in 2015 and US$2.563 billion in 2016.
France was the biggest supplier last year with US$321.7 million, followed by India with US$276 million and Germany with US$225.5 million.
Vietnam also imported pharmaceutical products from the ROK, Germany, UK, US and Switzerland.
Rice exports on sharp rise
Rice exports rose high by 19.8% in volume to 3.96 million tons and 17.5% in value to US$1.75 billion in the first eight months of this year against the same period last year, according to the Ministry of Agriculture and Rural Development.
Vietnam has set a rice export target of around 5.7 million tons. To meet the target, the country will have to export 1.74 million tons of rice in the four remaining months.
In August, the price of normal rice inched up while that of the high-quality rice fell slightly. The price increase can be attributed to the fact that winners of contracts to export rice to the Philippines accelerated purchasing.
China remained the biggest importer of Vietnam rice in the first seven months of this year with 1.38 million tons valued at US$623 million, accounting for 40.9% of market shares.
Early this year, rice exports showed positive signs thanks to export contracts with the Philippines, China and Africa.
The Industrial and Trade Information Centre under the Ministry of Industry and Trade forecast that annual rice exports in the 2017-2020 period is expected to reach 4.5-5 million tons with a value of US$2.2-2.4 billion.
According to the rice export market development strategy in the 2017-2020 period with a vision to 2030 approved by the Prime Minister, the rice sector will diversify its export markets to reduce dependency on certain markets, take full advantages of free trade agreements and improve the value, brand and reputation of Vietnamese rice on the global market.
State budget collection reaches more than VND623 trillion
The total State budget collection hit more than VND623.2 trillion (US$27 billion) during the eight-month period, up by 10.8% annually, according to the General Department of Taxation.
Of the figure, VND30 trillion came from crude oil thanks to its higher prices, equivalent to 78.3% of the estimate and posting an 11.3% annual increase. The domestic revenue was estimated to increase 10.8% year-on-year to VND593.3 trillion.
The central budget collection hit VND 275.7 trillion during the period, or 56.7% of the estimate and up 21.6% annually.
Up to 28 out of the 63 localities performed well in terms of the progress of the State budget collection while the other 15 localities obtained average level in the collection, the department said.
To fulfill State budget collection for this year, the department will focus on intensifying disciplines in State budget management and improving operational efficiency of tax agencies.
Vietravel to conduct charter flights to Fukushima
One of the leading Vietnamese tour operators, Vietravel, has officially launched a plan to conduct charter flights from Vietnam to Fukushima in Japan from next year.
It will cooperate with low-cost carrier Vietjet Air to fly 15 direct charter flights starting next spring.
Fukushima is the capital of Fukushima Prefecture. Located along the foothills of the Azuma mountain range about 40 km inland from the Pacific Ocean, Fukushima is not a major tourist destination but offers a variety of natural and seasonal attractions, including hot springs, hiking trails in spectacular volcanic landscapes, and Hanamiyama, one of Japan’s most pleasant cherry blossom spots.
Some 3,000 Vietnamese are expected to visit between February and April, the cherry blossom season and also the Tet (lunar new year) holiday in Vietnam, when many people travel abroad.
Vietravel will charge US$1,188 per person, a saving of about 30%, for tours that take in Fukushima, Ibaraki, Mito, Mt. Fuji, and Tokyo over five days.
Vietravel took nearly 700 visitors to Fukushima on pilot charter flights last year and so far this year. With 15 flights between February and April 2018, it will take about 3,000 visitors, a record for charter flights to Fukushima.
Vietravel has been introducing several charter flights in recent years, to Phuket in Thailand, Sanya in China, Jeju in the Republic of Korea, and Fukushima. It said the tours are warmly received by travelers for their cheaper cost, good services, and the punctual departures.
Charter flights is a term for tours with a leased aircraft and its crew. There are many advantages in using this type of flight, such as time and cost savings, and more and more travel companies are offering such flights.
According to the Japan National Tourism Organization, 233,000 Vietnamese visited Japan in 2016, a 26% increase against 2015 and four-fold the number in 2012.
As at July, 181,900 Vietnamese had traveled to Japan, up 28.6 per cent year-on-year. Some 6.5 million Vietnamese traveled abroad last year, a 15% increase against 2015.
China, Singapore, and Thailand were among the most popular destinations, with Japan, the Republic of Korea and Taiwan considered emerging destinations.
State treasury mobilises VNĐ200 billion through government bonds
The State Treasury of Việt Nam mobilised VNĐ200 billion (US$8.77 million) through Government bond auctions last week, the Hà Nội Stock Exchange (HNX) said.
According to the HNX, a winning volume was more than two weeks ago, but it was still very low, accounting for only 10 per cent of the offered bonds, Thời báo tài chính newspaper reported.
Last week, bonds valued at a total of VNĐ2 trillion were offered for four tenures – five years, seven years, 10 years and 15 years. Ten-year bonds attracted five bidders with eligible bid volume at VNĐ1.051 trillion and an annual interest rate of between 5.38 and 6.3 per cent. Thus, the State Treasury mobilised VNĐ200 billion from issuing 10-year bonds with annual interest rate of 5.38 per cent.
However, the five-year, seven-year and 15-year bonds did not see a winning volume.
Since early this year to date, the State Treasury has mobilised VNĐ144.093 trillion through Government bonds issued on the HNX.
New P&G initiatives help SMEs and startups access global business opportunities
Procter & Gamble has hosted P&G Leadership College and introduced the Signal Accelerator for SMEs, reaffirming the company’s commitment to work with the Ministry of Planning and Investment to enhance SMEs’ competitiveness, increase innovative capabilities and approach new business opportunities.
In parallel with the SME Ministerial Meeting of APEC 2017, P&G Leadership College for SMEs took place, attracting more than 100 leading SMEs from across Northern Vietnam. It focuses on improving leadership skills for SMEs in Vietnam.
The workshop highlighted one of the top priorities of the Vietnamese government from now until 2020, which is to position SMEs as the engine of economic growth. This is one of the key mutual goals discussed among ministers responsible for the SME sector in the APEC. Improving the capabilities of Vietnamese enterprises will bolster Vietnam’s ties with other APEC economies.
P&G Leadership College for SMEs in the ASEAN was first launched in Singapore in 2014, aiming to boost cooperation for mutual benefits among large multinationals and SMEs in the region via transferring knowledge and experiences as well as enhancing management competency and competitiveness, and promoting innovation initiatives.
Today’s seminar enabled more than 100 SMEs in Vietnam to access useful knowledge and relevant skills in business innovation shared by Satyajit Sengupta from Singapore-based P&G Innovation Center.
At the workshop, P&G also introduced P&G Signal Accelerator to Vietnam. A global programme working as part of P&G’s innovation strategy, P&G Signal Accelerator seeks out breakthrough innovations and business solutions to address P&G’s business challenges and opportunities.
By launching Signal Accelerator in Vietnam, P&G invites Vietnamese SMEs and startups to a global innovation playground where they can submit their ideas and solutions that can facilitate P&G to resolve challenges and seize business opportunities, by for instance improving the product quality and consumer experience.
Nguyen Hoa Cuong, deputy head of MPI’s Enterprise Development Agency, said, “P&G is one of thefew multinational enterprises providing Vietnamese SMEs with realistic support thanks to their rich experience and knowledge. Through P&G’s help, SMEs’ competitive capacity has seen significant enhancement. I hope that P&G will become a pioneer in holding such events, so that SMEs in Vietnam will be provided with timely support.”
With the local launch of Signal Accelerator, Vietnamese SMEs and startups can now compete with their peers around the globe through innovative ideas and embrace the opportunity of becoming P&G’s innovation partners and gaining access to pilot funding by P&G. This way, P&G’s Signal Accelerator can paves the way for any Vietnamese startup that has the curiosity to learn, the mastery to create, and the passion to win, to join the global players in game-changing innovation.
“Vietnam is one of P&G’s important markets. We are proud to continue our unwavering commitment to support and grow with local enterprises in a sustainable way. Vietnam is among the first nations in Asia where P&G introduces both P&G SME Leadership College and Signal Accelerator. We hope that these two programmes not only help to build capabilities for SMEs in Vietnam, but also connect them with great business opportunities that will help position Vietnam on the global innovation map,” said Omar Channawi, vice president of P&G Asia-Pacific.
P&G has been operating in Vietnam for over 20 years and was one of the first US firms to make an investment after the two countries announced the normalisation of diplomatic relations.
Since then, P&G has invested in three production plants in Vietnam, notably the world-class Gillette plant in the southern province of Binh Duong, one of three Gillette factories in Asia with the most advanced technology run by Vietnamese technicians and engineers who were professionally trained in Europe and America.
P&G’s commitment to Vietnam’s development also extends to investments in nurturing the local talent pool. Specifically, P&G has run long-term programmes in partnership with Vietnam’s top universities, including P&G Leadership Talks, P&G CEO Challenge, and P&G Dream Internship.