The Vietnamese Embassy in the Czech Republic will create conditions for Czech enterprises including the Makro Group to boost cooperation with Vietnamese partners.
At a meeting with Mr Guillaume Chene, Director General of the Makro Group in Prague on March 29, Vietnamese Ambassador to the Czech Republic Truong Manh Son asked the group to help promote Vietnamese goods in Czech.
Chene said he believed in the expansion of Vietnamese goods in the Czech Republic and other European countries.
Vietnamese goods have great potential to enter the Czech market because the market trend is changing all the time. We want to boost cooperation with Vietnamese partners. In the next two months, we will introduce more than 450 types of Vietnamese goods in our market, he said.
Egg farmers, producers cry foul over new import quotas
New regulations increasing the import quota on eggs coming into Vietnam has ruffled the feathers of farmers and producers, who say the limits will only add to the problems of an already oversupplied market.
Egg producers say the new specialty quota program by the Ministry of Industry and Trade – set to begin this coming April – bumping up the annual quota to 600,000 eggs will likely force many companies out of business.
The price of one egg is already at an all-time low of US$.04 (VND1,000) Nguyen Van Trong, deputy head of the Livestock Production Department, told reporters in Hanoi recently.
Mr Trong was adamant that the increased quota is bound to drive the price down even further and that limits should be revised upwards to protect those in the egg production segment of the economy.
However, other industry experts point out that Mr Trong’s arguments aren’t necessarily sound.
First, they contend, the price of eggs is already so low that there is little economic incentive for exporters from other large egg producing countries to ship eggs of any type into Vietnam.
Second, they assert that over the past year the actual number of eggs that has been imported into the country has been totally inconsequential. They say that all the squawking by alarmists like Mr Trong is much ado about nothing.
They also note, that consumer demand for eggs, just like that for any commodity, is seasonal and egg prices are currently down because demand is relatively low and the market is suffering from an oversupply.
The peak season for eggs is in June, July and August and historically market prices have trended upwards during those months.
In addition, they note that Vietnam has generally been a net exporter of eggs as evidenced by the Vinh Nghiep Company in the province of Vinh Long who has shipped some 30 million salted duck eggs to other countries.
Singapore is one of the largest overseas markets for not only duck eggs from the company but eggs from all types of poultry, they add.
Phan Van Chinh, head of the Ministry of Industry and Trade Export Import Department is one of the experts that doesn’t think the increased quota is anything for farmers and egg producers to get upset over.
Mr Chinh explained that the increased egg quotas are in line with the country’s World Trade Organization commitments to open the commodity markets for farm produce and affect eggs, salt, sugar and tobacco.
Those commitments started in 2007, and in general, call for annual increases of roughly 5% per year, he added.
The egg production segment is under no threat from foreign egg producers, Mr Chinh asserted, adding that if there is an oversupply putting downward pressure on prices then domestic producers should scale back production.
The markets should be left to let natural forces achieve an equilibrium of price, supply and demand.
The egg production segment, he suggested, should look to reinvent the egg and cultivate niche markets such as the organic market if they seek to boost sales and earnings instead of constantly complaining and seeking protectionist measures.
In short, they need to learn how to compete in the new open market economy and start studying the demographics, trends in consumer demand and create innovative new marketing methods to reach both domestic and foreign consumers, Mr Chinh noted.
Other industry experts point to the fact that the global kosher egg market has largely been ignored by the Vietnamese domestic egg production segment. It’s also a very lucrative market that has a tremendous sunny upside to it, they concluded.
Khanh Hoa to build coastal solar plant
The Central Power Corporation (CPC) under the Viet Nam Electricity Group (EVN) will build a solar plant project with a capacity of 50 megawatts (MW) and solar farms in the south-central coastal province of Khanh Hoa.
CPC’s deputy general director, Nguyen Thanh, told Viet Nam News on Thursday that the plant will be located on 70ha in five rural communes of Cam Lam District and Cam Ranh City, 40km south of the city of Nha Trang.
He said the company has been awarded an investment certificate by the provincial People’s Committee, and a feasibility study would begin in late 2017. As scheduled, the plant will supply renewable energy for rural areas and the national grid from 2019.
Thành said the corporation and EVN have been negotiating with the Asia Development Bank (ADB) in seeking preferential loans for the project. The Da Nang-based corporation also plans to co-operate with Japanese Mitsubishi in production of battery-powered cars.
According to a survey, Khanh Hoa has great potential for solar energy with solar radiation of 5.4Kwh per square metre each day, and over 2,600 sunshine hours a year.
The province said 10 investors have registered to develop solar power projects in Khánh Hòa, with a total capacity of 2,000MW.
In 2014, Viet Nam’s first solar power project with a 19.2MW-capacity was built in the central province of Quang Ngai.
HCM City’s CPI falls 0.09 percent in March
The consumer price index (CPI) of Ho Chi Minh City in March fell 0.09 percent from the previous month, but rose 5.6 percent compared to the same period last year, reported the municipal Statistics Office on March 30.
According to the office, the prices of three out of 11 goods groups saw a month-on-month decline, with the largest fall of 1.13 percent seen in food and catering services.
The prices of foodstuff reduced by 1.61 percent, while that of restaurant services decreased by 0.63 percent and food by 0.03 percent.
A drop of 0.07 percent was also recorded in the prices of culture, entertainment and tourism services, while the prices of goods and other services fell by 0.01 percent.
An official of the Ho Chi Minh City Statistics Office said that in March, goods groups with rising prices include transport (up 0.47 percent); housing, electricity, water, fuel and construction materials (up 0.93 percent).
At the same time, the prices of drinks and cigarette went up 0.13 percent, while that of garments, hats and footwear upped 0.08 percent; equipment, household and appliance climbed up 0.2 percent; and medicine and healthcare services rose 0.04 percent.
In March, gold price declined 0.73 percent, while that of US dollar dropped 0.05 percent month-on-month.
Fishing output gains 1.4 percent in Q1
The Ministry of Agriculture and Rural Development has estimated fishing output reached about 651,900 tonnes in the first quarter of 2017, 1.4 percent more than the previous year.
Favourable weather conditions together with abundant marine stocks of shrimp, mackerel, anchovy and decapterus along the central and southern coasts have led to increased fishing activity during the period, the ministry said.
In addition, provincial authorities across the country have tightened control on destructive fishing practices, notably bottom trawling and the use of explosives and toxic chemicals, while implementing measures to support offshore fishing.
The central coastal provinces of Phu Yen, Binh Dinh and Khanh Hoa – the country’s main producers of tuna – brought ashore approximately 5,850 tonnes of tuna in the first three months this year. Binh Dinh alone caught 3,466 tonnes of tuna, up 75 percent year on year.
Meanwhile, aquaculture harvest was estimated at around 570,000 tonnes, a year on year increase of 2.7 percent during the first quarter.
The figure included about 247,600 tonnes of Tra fish, up 1.5 percent year on year. However, tra supply remains scarce, pushing prices up.
Tra fish is currently sold at 25,000 – 26,000 VND per kilo.
Meanwhile, brackish shrimp output from 535,600 hectares of aquaculture farms reached 68,300 tonnes in the first quarter, up 1.7 percent in farming area and 14.14 percent in output.
Binh Duong lures big FDI projects in textile, infrastructure
Foreign investors have poured a large amount of investment into textile and infrastructure in the southern province of Binh Duong since the beginning of this year.
Polytex Far Eastern Co., Ltd from Taiwan (China) added 485,8 million USD to its project in the Bau Bang Industrial Park (IP), lifting total registered capital of the project to 760 million USD.
Polytex Far Eastern began its operation in the Vietnam-Singapore Industrial Park I (VSIP I) in the province since 2007. In its development strategy, Vietnam-based company will be the third largest branch of the Chinese firm.
Meanwhile, the Vietnam-Singapore joint venture company invested 284.7 million USD in developing infrastructure of the VSIP III.
Another project was invested by the Kolon Industries Co., Ltd of the Republic of Korea in the Bau Bang IP, with a total registered capital of 220 million USD. As part of the 1-billion-USD project signed between Kolon and the provincial authorities, the project specialises in manufacturing automobile tires cord and airbags.
As of March 15, Binh Duong granted investment licences to 43 foreign direct investment (FDI) projects with a total registered capital of 739.3 million USD, a year-on-year increase of 204 percent. Whilst, 18 existing projects registered to increase capital by 550 million USD, up 364 percent against the same period last year.
According to the Foreign Investment Agency under the Ministry of Planning and Investment, Binh Duong ranked second in luring FDI in the first quarter of this year after the northern province of Bac Ninh.
It was home to three out of seven projects having total investment capital of over 200 million USD in the country.
Binh Duong has set a target of attracting at least 1.4 billion USD in FDI in 2017, prioritising projects with high technology and large-scale ones on urban and services development.
In 2016, Binh Duong saw over 2 billion USD being poured in 240 new projects and 123 existing ones, equivalent to 145 percent of its target. Most new projects were in the fields of manufacturing and processing industries and services.
Thanh Cong, Hyundai Motor join hands to produce automobiles
Thanh Cong Group on March 30 signed a cooperation agreement with the Republic of Korea’s Hyundai Motor Company on forming a venture to expand the assembling of automobiles in Vietnam.
Le Ngoc Duc, Director General of Hyundai Thanh Cong company under Thanh Cong Group, said Hyundai Motor decided to choose Thanh Cong as its partner in the region based on the group’s achievements in the past years.
The venture is also part of Hyundai Motor’s strategy in expanding its global production base, with ASEAN as a potential market.
It is noteworthy that the decision is made at a time when the deadline is approaching (2018) for the reduction of import tariffs on completely-built-units (CPU) from ASEAN countries to zero, under the ASEAN Trade in Goods Agreement (ATIGA).
According to Duc, this is a chance for Thanh Cong Group to develop the local support industry, a move in line with the development strategy for the auto industry approved by the Government.
In the initial phase, the Hyundai – Thanh Cong Joint Venture will maintain the current factory with a capacity of 40,000 vehicles per year in Ninh Binh province and invest in expanding it in the near future, using up-to-date technologies of Huyndai group.
With the joint venture, the rate of completely knocked down (CKD) vehicles among Hyundai products available in Vietnam will be raised from 20 percent to 80 percent in the latter half of 2017 and 90 percent in 2018.
Hyundai Thanh Cong also aims for a localisation rate of 40 percent to be eligible for the zero percent tariff rate when exporting its vehicles to other ASEAN countries.
Jetstar Pacific launches Hai Phong-Quang Binh route
Travel from the northern port city of Hai Phong and Dong Hoi in central Quang Binh province will become much easier when the low-cost carrier Jetstar Pacfic launch its flight on the route from April 29.
Accordingly, three round-trip flights will be operated a week on Tuesday, Thursday and Saturday with flight duration of one hour, using 180-seat Airbus A320 aircraft, the carrier announced on March 30.
The flight from Hai Phong will depart at 17:35 and the return leg at 19:10.
In celebration of the new route, the airline is offering promotional fares priced from only 40,000 VND (1.76 USD). The promotion is applicable from 11:00-24:00 on March 30.
The tickets are available on www.jetstar.com for flights between September 11 and October 29, 2017.
The opening of Hai Phong-Dong Hoi air route is part of a tourism development cooperation programme between Jetstar Pacific, Hai Phong city and Quang Binh province. It is also part of the dual-brand strategy between the carrier and Vietnam Airlines to enlarge the flight network, meeting demands from customers and stimulating tourism growth.
Quang Binh province is home to a line-up of stunning landscapes, which have drawn increasing attraction from both domestic and foreign holiday-makers. Meanwhile, Hai Phong is one of the significant economic centres in the north with huge potentials for tourism development.
On the occasion, cheap tickets on domestic and international routes are provided from 88,000 VND (3.86 USD) to 348,000 VND (15.28 USD), depending on different routes.
The Hai Phong-Dong Hoi route is the 40th of Jetstar Pacific’s flight network, which is linked with the network operated by Jetstar Group connecting 80 destinations in 17 countries in the Asia-Pacific region.
Jetstar Pacific is a member of the Jetstar Group. It has two major shareholders: Vietnam Airlines and Qantas of Australia.
Saigontourist to offer huge discounts at int’l travel expo
Saigontourist Travel Service Company has announced that it will offer discounts of up to nearly US$230,000 for visitors at the Vietnam International Travel Mart – VITM 2017 scheduled for April 6-9 at the International Exhibition Centre in Hanoi.
This is the fifth time the company has participated in the event. Saigontourist plans to offer US$272 in discount for each tourist booking inbound and outbound tours along with vouchers for huge discounts on services at luxury resorts.
Visitors to the pavilion of Saigontourist will also have a chance to win a free Da Nang-Bay Mau Coconut Forest Tour valued at about US$210 with and get discount vouchers on air ticket bookings and car rentals.
US, Vietnam to focus on digital trade, industrial goods
The expansion of commercial trade was at the top of the agenda at talks held under the US-Vietnam Trade and Investment Framework Agreement that concluded today (Mar.30) in Hanoi.
A press release from the Office of the US Trade Representative states that the US also used the TIFA talks, the first between the two countries since 2011, to reaffirm the commitment of the Trump administration to the proliferation of economic ties throughout the Asia-Pacific region, including Vietnam.
According to USTR, the two sides agreed to launch working groups to resolve issues on agricultural and food safety, industrial goods, intellectual property matters, and digital trade.
Problems USTR identified in these areas in its most recent trade barriers report include the ‘broad scope and uneven enforcement’ of a comprehensive food safety law that Vietnam issued in 2012.
That law includes a requirement for phytosanitary certificates for many pre-packaged, consumer-oriented, or highly processed foods of plant origin for which such certificates are not normally issued or required.
The talks also addressed issues related to Internet-based copyright piracy and the increasing sale of counterfeit goods online and in physical markets in Vietnam as well as discussions related to ambiguity in the Vietnam 2015 law on network information safety among other topics.
In addition, the meeting reviewed the status of the Vietnam government giving effect to the World Trade Organization Trade Facilitation Agreement and its participation in the extended WTO Information Technology Agreement.
Trade representatives of both sides expressed interest in pursuing fresh bilateral trade negotiations, but it remains unclear if and when those negotiations might begin. Officials agreed to continue their talks at later dates.
HCM City may tax online sales in April
Ho Chi Minh City’s tax department has said it will work with related departments to impose sales taxes on businesses running on Facebook and other online shopping sites.
The department would submit the taxing plan to the city’s government for approval early next month, an unnamed official from the department told VnExpress.
The department said it would coordinate with information and trade departments, internet providers, banks and post offices to collect the tax.
Last month, the trade department proposed the city work with Facebook on measures to collect tax from businesses running on the site.
The General Department of Taxation later agreed with the proposal, saying it is working on measures to tax the businesses operating on Facebook, YouTube and Vietnamese messaging app Zalo.
Tightening tax collection from online businesses is part of a plan to enhance state budget revenue collection.
The city’s intent on taxing online sales has stirred up different opinions.
Many said the tax collection is not an easy job for the authorities as many online retailers use anonymous accounts for transactions, not to mention that most purchase or sales transaction are cash-based.
Vietnam’s e-commerce market, which has one of the world’s fastest growth rates, jumped 37% to around US$4 billion in 2015, data from the Ministry of Industry and Trade show.
The growth rate is about 2.5 times faster than that in Japan, according to Tran Duc Tam, an industry expert.
The government has projected revenue by Vietnam’s online retail to hit US$10 billion by 2020, accounting for 5% of the country’s retail market.
Retail sales in the first quarter of 2017 rose an estimated 9.2% from a year ago to US$40.5 billion, the government said on March 29, after an annual rise of 10.2% last year to US$118 billion.
Up to 60% Vietnam’s population is online.
Aeon Mall Vietnam to build shopping mall in Hai Phong
Aeon Mall Vietnam has met with leaders in northern Hai Phong city to promote the construction of a shopping center on a total area of 9.5 ha.
Mr. Iwamura Yasutsugu, General Director of Aeon Mall Vietnam, expressed his appreciation of the city’s development. “Hai Phong is one the most dynamic cities of the region and has major potential,” he said.
“Our company has successfully invested in the Aeon shopping center project in Long Bien district, Hanoi, and is now implementing another project in Ha Dong district,” he added. “Aeon has selected Hai Phong under its development and expansion strategy.”
However, he also explained that Aeon needs a large area of about 9.5 ha with high traffic connectivity. It would therefore like Hai Phong leaders to create favorable conditions, introduce an appropriate location, and work closely to bring the project to life as soon as possible.
Replying to Mr. Yasutsugu’s comments, Mr. Le Van Thanh, Secretary of the Hai Phong Party Committee and President of the City People’s Committee, welcomed the Aeon Mall Vietnam project and shared its expectations.
“We will create the most favorable conditions possible, including in location and administrative procedures, to begin and complete the project in the shortest time,” he said.
Mr. Thanh also noted that Aeon should pay attention to the potential of Hai Phong and build a suitably-sized shopping mall.
Hai Phong has been investing in building a modern infrastructure network that is thoroughly connected to all forms of transport.
Many major economic groups have come to the city to invest in modern urban areas, tourism resorts, high-class entertainment areas, and five-star hotels. In the future, the development of trade, tourism and services, and port services will be a strength of the city.
TPG buys majority stake in Vietnam Australia International School
Global alternative asset firm TPG has entered into definitive agreements with shareholders of the Vietnam Australia International School (VAS) to acquire a majority holding, according to a statement from VAS.
As part of the transaction, two private equity funds, Mekong Enterprise Fund II and MAJ Invest, will fully divest their holdings in VAS. Founder Mr. Pham Tan Nghia will continue as a shareholder after the TPG investment wraps up.
“VAS is a business that is uniquely adapted to the Vietnamese market,” said Mr. Dominic Picone, Managing Director of TPG Asia.
“Its innovative educational model responds to the needs and preferences of the expanding middle class, and it has a strong brand with great potential for growth. VAS is a good example of the type of creative investment opportunities we look for in Southeast Asia, and we believe the business will thrive in partnership with TPG.”
Leveraging TPG’s expertise in Asia and in the education sector, VAS will continue to expand its campuses, improve the quality of its programs, and further develop its staff to remain the market leader in the bilingual K-12 education segment in Vietnam.
“In the next three to five years, with the support of TPG, we will invest in the development and training of our staff, further improvements in the quality of our services, teaching-learning activities, and facilities,” said Mr. Marcel van Miert, Executive Chairman of VAS.
“Regarding expansion plans, VAS intends to open many more large-scale campuses in Ho Chi Minh City and elsewhere. I am honored to continue to accompany VAS’s staff and teachers, who will implement the plan.”
TPG is a leading global alternative asset firm with more than $74 billion in assets under management. TPG Capital Asia is the dedicated Asia platform for TPG, with investment professionals in Beijing, Hong Kong, Melbourne, Mumbai, Seoul, and Singapore managing more than $6 billion in assets.
As one of the first private equity firms to invest in Asia, some of TPG Capital Asia’s past and current investments include 8990 Holdings, Cushman & Wakefield, Healthscope, HCP Packaging, Janalakshmi Financial Services, Lenovo, Myer, PropertyGuru, Union Bank of Colombo, and Wharf T&T. Across platforms, TPG’s past and current investments in Vietnam include Proconco, Masan Group and FPT Corporation.
VAS has more than 6,300 students in seven campuses in Ho Chi Minh City. This represents a significant increase from the 2004 school year when it had 400 students. It is now the largest private K-12 education group in Vietnam.
The school system’s growth has thrived since it introduced the Cambridge International Curriculum, which has led to an increase from 4,100 students in 2014 to 6,300 in 2017.
With investments in new buildings and facilities such as the newly-opened Garden Hills campus and planned campuses in Ho Chi Minh City and Hanoi, the school is providing more educational opportunities to students throughout Vietnam.
Investors express interest in KIDO Frozen Food
A Malaysian fund plans to spend $200 million on acquiring all shares in the KIDO Frozen Food JSC (KDF) under the KIDO Group Corporation (KDC), after the group announced the sale of 35 per cent of shares earlier this month.
A Japanese company also expressed an intention to buy the 35 per cent stake in KDF at a much higher price than the expected listing price of VND52,000 ($2.3) per share.
KDC’s Deputy Chairman and CEO Tran Le Nguyen told a conference introducing investment opportunities in KDF that 1.2 million shares, or 20 per cent, will be offered in April at a starting price of VND52,000 ($2.3) per share. The company will then offer the remaining 15 per cent to internal partners and shareholders.
Individual investors and domestic and foreign investors are permitted to purchase the shares. The number of shares available to individuals is a minimum of 3,000 shares and a maximum of 100,000, while for organization it is 10,000 and 500,000, respectively. Registrations are being taken from March 31 to April 12.
The shares are scheduled to trade on the Unlisted Public Company (UPCoM) market at the end of April.
The frozen food business brought substantial profits to KIDO last year. According to a report from the Ho Chi Minh Securities Corporation (HSC), its net revenue in 2016 reached VND1.4 trillion ($61.6 million), up 3.48 per cent against 2015. After-tax profit was VND139 billion ($6.1 million), up 80 per cent and accounting for 63 per cent of KDC’s profit.
Profit is expected to increase in the years to come when KDC’s frozen food facility in northern Bac Ninh province comes into operation. Construction began on November 8 with initial capital of VND400 billion ($18 million), on 25,000 sq m, making it the largest of its kind in Vietnam’s north.
KDC now owns a frozen product distribution network with over 60,000 points of sale throughout the country. According to data from market researcher Euromonitor, it held 25.5 per cent of the ice cream market share in 2010 and 36.4 per cent in 2014.
Its net revenue stood at VND2.2 trillion ($96.8 million) last year, down 28.7 per cent against 2015. Gross profit was VND880 billion ($38.72 million), thanks to consolidating the profits of the Tuong An Vegetable Oil Company (TAC).
Q1 2.81% credit growth highest in six years
Credit growth of 2.81 per cent during the first quarter of 2017 was a six-year high, figures from the General Statistics Office reveal.
As at March 20, credit growth had surpassed capital mobilization growth. According to the GSO, the ability of enterprises to absorb capital has been relatively good and interest income for banks has improved.
The mobilization interest rate has been relatively stable, at 0.8 to 1 per cent per annum for demand and one-month term deposits and 6.4 to 7.2 per cent per annum for terms of more than 12 months.
Common lending rates for priority sectors stood at around 6 to 7 per cent per annum, while the short-term lending rate was 6.8 to 9 per cent per annum for common manufacturing sectors and 9.3 to 11 per cent for mid- and long-term loans. For customers with transparent financial performance, short-term lending rates are 4 to 5 per cent per annum.
A number of commercial banks have recently raised their deposit rates, with the long-term rate for individual customers via the issue of certificates of deposit to be as high as 9.2 per cent per annum. The State Bank of Vietnam believes these adjustments are perfectly normal and that liquidity in the banking system at the moment remains healthy.
A GSO survey showed that 33.7 per cent of enterprises in the industrial sector viewed their business performance in the first quarter as being better than in the previous quarter, while half expected their business performances to be better during the second quarter.
Only 34.5 per cent of respondents met financial difficulties during the January-March period, while 27 per cent claimed that the lending interest rate was still high.
Vietnam’s economy expanded less than anticipated in the first quarter as trade data indicated export growth slowed more than expected in March.
GDP grew 5.1 per cent in the first three months of 2017, markedly short of the median estimate from economists surveyed by Bloomberg, who predicted year-on-year growth of 6.25 per cent.
Growth was the slowest since the first quarter of 2014 and well short of the 6.21 per cent recorded for 2016 as a whole. The Asian Development Bank has forecast Vietnam’s GDP to rise 6.3 per cent in 2017.
New inflation data also points to softer price growth, with the country’s CPI registering a rise of 4.65 per cent in March, down from 5.02 per cent in February and less than the median forecast of 6.25 per cent.
Vietnam is targeting credit growth in 2017 to expand at the same rate as last year, at 18 per cent, while money supply this year is targeted to grow 16 to 18 per cent against the end of 2016.
HSBC launches e-customs payments
HSBC Vietnam has signed a cooperative agreement with Vietnam Customs to launch e-customs payments, which will provide HSBC customers with a more convenient customs payment process online.
Upon registering for the service, HSBC customers will be able to use the bank’s electronic banking channels to pay taxes, fees and charges to customs offices. Customers will also benefit from a reduction in payment errors and can expect faster customs clearance on goods and better operational efficiency when importing goods into Vietnam.
The cooperation with Vietnam Customs also allows HSBC to retrieve electronic information on customs declarations directly from the e-customs gateway. HSBC customers no longer have to provide forms for customs declarations when making payments.
The initiative is in line with the direction issued previously by the Ministry of Finance calling for greater cooperation between banks and Vietnam Customs to enhance administrative formalities, quicken the customs clearance process, bring convenience to customers, and modernize the collection of State budget funds.
“At HSBC, developing payment solutions on digital platforms has been one of our key focuses in recent years to offer our customers greater convenience,” said Ms. Nguyen Thi My Hanh, Head of Global Liquidity and Cash Management. “This cooperation with Vietnam Customs is the latest step on this journey, one that is further contributing to Vietnam’s digital transformation.”
“Each digital solution that we introduce not only saves time for HSBC customers, so they can focus on their business, but also contributes to Vietnam’s financial development, enhancing the country’s competitive edge by moving away from cash payments, as we have been urged to do by the State Bank of Vietnam.”
HSBC also partnered with the General Department of Taxation to launch an online tax payment platform, in December 2015, becoming one of the first foreign banks to apply an extended “cut off time” for Online Tax Payments, to 8pm, providing more time for customers to meet their tax obligations.
The move is in also line with an earlier comment from the CEO of HSBC Vietnam Mr. Pham Hong Hai, who told VET that the bank will continue to digitalize to further streamline processes, deliver automation to corporate clients, and enhance their digital channels to increase customer engagement in the retail business.
The bank will also continue to leverage its international network to support clients’ business, specifically focusing on business corridors with leading foreign-invested enterprises in Vietnam and industry leaders, providing them with a one-stop solution while growing its retail portfolio.
HSBC Holdings, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 4,000 offices in 70 countries and territories in Europe, Asia, North and Latin America, the Middle East, and North Africa. With assets of $2.375 trillion at December 31, 2016, HSBC is one of the world’s largest banking and financial services organizations.
HSBC has been in Vietnam for more than 140 years, opening an office in Ho Chi Minh City in 1870. It was the first foreign bank to launch a locally-incorporated entity, on January 1, 2009. Its current network includes two branches and five transaction offices in Ho Chi Minh City, one branch and four transaction offices in Hanoi, and three full service branches in Binh Duong, Can Tho, and Da Nang. HSBC is one of the largest foreign banks in the country in terms of investment capital, network, product range, staff, and customer base.
Novaland acquires majority ownership of Harbor City project
The Board of Management at the Nova Real Estate Corporation (Novaland, HSX stock code NVL) has recently approved the corporation’s purchase of 34.34 million common shares of the Phu Dinh Port Joint Stock Company, worth VND343.4 billion ($15.08 million) and representing 34.34 per cent of charter capital.
The purchase will increase Novaland’s holding in Phu Dinh Port to 59.73 million shares, or 59.73 per cent of charter capital. It currently holds 27.91 per cent.
Phu Dinh Port JSC, formerly known as the Ho Chi Minh City River Port Company, is an enterprise directly under the Saigon Transportation Engineering Corporation One-Member Limited Liability Company (SAMCO) and owns the Harbor City project in Ho Chi Minh City’s District 8. The project has a total area of 60 ha, of which the building area is nearly 640,000 sq m and includes 3,240 villas. It is expected to open in the fourth quarter of this year.
Harbor City has been built on land at Phu Dinh Port. At the beginning of this year the company increased its charter capital from VND330 billion ($14.5 million) to VND1 trillion ($43.9 million).
Novaland is one of the leading real estate developers in the south of Vietnam in the mid-end segment. Its 600 million shares were listed on HSX on November 28, 2016 and is behind only Vingroup in terms of total asset size, market capitalization, sales, and profit. The company currently owns more than 40 major projects, primarily in Ho Chi Minh City, totaling nearly 10 million sq m.
SCIC Investment looks to sell nearly 900,000 FPT shares
The SCIC Investment One-Member Limited Liability Company (SCIC Investment) has announced an intention to sell shares in the FPT Corporation.
It has registered to sell 875,663 of its total of 1,675,663 FPT shares, or a 0.36 per cent holding. The transaction is expected to be executed by order matching and agreement matching from March 29 to April 27.
If the transaction is successful, SCIC Investment will retain 800,000 FPT shares, or 0.17 per cent.
FPT’s share price has rebounded after a few days of decline and now trade at around VND48,000 ($2.1). At this price, SCIC Investment will receive about VND42 billion ($1.85 million).
SCIC Investment has previously announced sales of FPT shares has not met its target. Last October it registered to sell 1 million FPT shares but failed to do so due to price fluctuations.
In early November, instead of selling, SCIC Investment registered to buy an additional 500,000 FPT shares but this move also failed. Since then it has only focused on purchasing FPT shares, not selling them.
FPT is the leading IT company in Vietnam and was the first internet service provider (ISP) and internet content provider (ICP) in the country. Its shares were listed on December 13, 2006 on the Ho Chi Minh City Stock Exchange (HSX).
SCIC Investment is a member company of the State Capital Investment Corporation (SCIC). SCIC is a State-owned enterprise that acts as the representative of State capital in enterprises and invests in important sectors in order to strengthen the leading role of the State, based on market principles. Officially launched in August 2006, SCIC manages a portfolio of businesses operating in various sectors, such as financial services, energy, industry, telecommunications, construction, transportation, consumer goods, healthcare, and information technology.
Hotel Nikko Hai Phong signs management deal
Festive fare at Hotel Nikko HanoiThe Okura Nikko Hotel Management Co. has announced that it has signed an agreement with Chuo Vietnam Co., a subsidiary of the Chuo Limited Liability Company, owned by Daiwa House Industry Co., and the Fujita Corporation to manage the Hotel Nikko Hai Phong when it opens its doors in northern Hai Phong city in 2020.
The 269-room hotel will be operated by Nikko Hotels International (NHI).
Hotel Nikko Hai Phong is located within Waterfront City, a coastal district currently under development. Rooms will average 35 sq m and guests have a choice of traditional Japanese dining, all-day dining, and bars.
CEO of Okura Nikko Hotel Management, Mr. Marcel P. van Aelst, said that Hai Phong boasts transport infrastructure, including motorways and an international airport.
“The city is attracting numerous Japanese multinational corporations, which is expected to create strong demand for accommodation in the Hai Phong area,” he added. “NHI looks forward to offering sophisticated hospitality services and exceptionally comfortable hotel experiences for visitors to Hai Phong.”
Hotel Nikko Hai Phong will be Okura Nikko Hotel Management’s fourth hotel in Vietnam, joining Hotel Nikko Hanoi (1998), Hotel Nikko Saigon (2011), and the soon-to-be-opened The Okura Prestige Saigon (2020).
Aiming to operate 100 hotels worldwide by 2020, Okura Nikko Hotel Management is focusing on developing properties in the fast-growing Asian region.
Investment in Vietnam is closely aligned with its strategy to optimize hotel management efficiency and increase brand recognition by venturing into countries with strong economic growth.
Okura Nikko Hotel Management, a subsidiary of Hotel Okura, operates 74 properties, including 49 in Japan and 25 elsewhere with nearly 23,000 guest rooms in three hotel groups: Okura Hotels & Resorts, Nikko Hotels International, and Hotel JAL City.
Hai Phong, which is some 100 km east of Hanoi, is one of Vietnam’s most developed coastal cities.
Registered FDI stood at $14.6 billion in 563 projects as at February 20, 2017, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment (MPI). There are 130 Japanese projects with total investment of $4.14 billion.
Pangasius price hits peak in Mekong Delta
Pangasius fish price now reaches VND27,000 a kilogram, the highest peak for the last recent years in the Mekong Delta.
That was announced at a seminar in Can Tho city on Tuesday.
Stating at the event, Dr. Vo Hung Dung, standing deputy chairman of Vietnam Pangasius Association, said despite the high price, it has been difficult to forecast price movement in the upcoming time.
According to him, the current price hike is because of sharp reduction in fry fish supply after losses in previous years have sent many farms transfer into breeding others. He advised breeders to sell fish amid this high price period.
The Vietnam Pangasius Association reported that farmers in the Mekong Delta bred 739 hectares of the fish and harvested 672 hectares in the first quarter this year with the output of 210,000 tons.
The current high price ensures big profit for farmers however authorized agencies have warned them against spreading farming to avoid risks from price fluctuation.
Pangasius price increase has started since the Tet holiday, creating the longest hike period for the last many years.
Realty market sees more mergers and acquisitions
Some large-scale real estate projects delayed or frozen for years have recently been revived via mergers and acquisitions (M&A) deals which would help increase the market’s liquidity.
An Gia Investment and Tokyo-headquartered investment fund Creed Group completed the acquisition of seven blocks of the Lacasa complex in HCMC’s District 7 from Van Phat Hung Corporation earlier this month.
The project covers an area of around six hectares, with 2,000 apartment and officetel units in the pipeline. It requires a total investment of some VND3.5 trillion (US$153.6 million), according to Luong Sy Khoa, vice chairman of An Gia Investment.
The project had been delayed since 2013 due to the market slowdown in the 2009-2013 period. The new investors have intended to put these real estate products up for sale in the third quarter of this year which will be deployed in phases of two years on average, he said.
Prior to the deal, An Gia Investment had previously acquired five half-done projects. The company has plans to strike other M&A deals in the coming time.
Meanwhile, Hung Thinh Corporation has recently acquired around 20 half-finished projects. After a period of reinvestment, more than 10 projects have been put up for sale such as Moonlight Park View, 8X Plus, Tan Huong Tower, Sky Center, Melody Residences and Lavita Garden.
To date, NovaLand Group has got involved in dozens of half-done property projects, including Icon56, Galaxy 9, The Tresor, Lexington, RiverGate Residence, and Sunrise City.
An industry insider named Luong Sy Khoa said the majority of these projects have completed legal procedures, which allow new investors to finish their projects. Therefore, clinching M&A deals has recently been seen as an effective way to increase the market’s liquidity, as well as save enterprises’ costs and time.
If investors get involved in new projects, it would take them more than one year to go through the regulatory approval process, pay compensation, and implement site clearance, Khoa said.
In addition, the majority of delayed projects are in prime locations which cover large areas of land, especially those near the center, and have sufficient infrastructure. Hence, investors should grab these opportunities to develop their property products in a timely manner.
Le Hoang Chau, chairman of the HCMC Real Estate Association, said the real estate market in HCMC a few years back had some 500 half-done or frozen projects with over 14,000 apartment units. However, this situation has provided opportunities for property developers to make M&A deals.
He added with M&A deals, sellers could solve their financial problems while purchasers might reduce their investment cost and time. Thus the number of unsold apartments will gradually fall on the market.
HCMC seeks to bolster startup ecosystem
The HCMC government has just released a plan to bolster the startup ecosystem, with specific aims to support feasible startup ideas and projects, and launch a startup training program at high schools.
Under this plan, the city will introduce curriculums and materials on startup development with guidance on corporate organization and product development. Such materials will be taught in classes of startup idea formation and development, administration and startup training programs of high schools in the city.
The Department of Education and Training, the Department of Labor, Invalids and Social Affairs, universities and colleges will coordinate to create standard curriculums for startup training programs at universities, colleges, professional education centers and high schools in the city.
The city will support 50% of tuition fees to individuals and organizations participating in such courses and fund curriculum development.
In addition, HCMC will annually organize startup idea exchanges, startup contests and a startup day in October. The city also plans to provide the startup database and connect service providers, startup investment funds and enterprises.
The municipal government assigned the Departments of Planning and Investment and Finance to allocate funds from the startup budget worth VND1,000 billion to implement the plan.
Multi-storey car parks proposed at nine hospitals
Investors have asked the HCMC Department of Transport for approval to build parking buildings at nine hospitals to meet high vehicle parking demand, especially in the city center.
According to the department, the nine hospitals are Nhi Dong, Pham Ngoc Thach, Nguyen Tri Phuong, Trung Vuong, Tu Du, Dermatology, Eye, Tropical Diseases, and Oncology.
The department, together with the Department of Health, will review investors’ proposals for two parking models, namely smart parking buildings where vehicles would be automatically parked after owners pick up a card and semi-smart parking buildings where available parking spaces are displayed after owners collect a card.
The Department of Transport and investors are weighing high-rise parking lots on Ly Thuong Kiet Street in District 10 and Gia Dinh Park in Go Vap District.
In another development, city authorities had a meeting last week to find ways to speed up work on car park projects. Nguyen Thanh Phong, chairman of the HCMC People’s Committee, told the Department of Transport to find more locations where underground car parks could be built.
The Departments of Transport and Construction will publicize the current underground car parks in the city on the Internet so that vehicle owners can locate them. Meanwhile, the temporary parking lots which have been in service for more than five years could be allowed to stay on.
Lam Son Square is ruled out as a location for a high-rise car park as it could become an eyesore for the downtown landscape.
City chairman Phong told the Department of Transport to review underground car park projects and eliminate those investors unable to get the projects done as planned so as to find new investors.
In the short run, multi-storey car parks are seen as a suitable solution as their assembly is fast.
Banking sector has huge recruitment demand
Although the banking sector is not yet out of the woods, many banks such as HDBank, Sacombank and ACB have been recruiting thousands of employees in recent times, VnExpress reports.
Sacombank has announced to recruit more than 1,000 people while ACB needs 800 new staff. But these figures are nothing compared to HDBank which has announced 1,500 job vacancies in the first recruitment stage of 2017.
It is notable that the majority of job vacancies are for individual and institutional customer care services.
Among 1,000 job vacancies at Sacombank, 600 positions are for individual customer care service, 150 positions for small and medium-size corporate client executives and 20 positions for FDI corporate executives. The situation is the same at HDBank and ACB.
“In order to increase competitiveness, the bank must attract talent, especially those specializing in sales,” said a deputy general manager of a joint stock bank in the south.
Earlier, the banking market also saw massive recruitments in 2016. Typically, BIDV and VietinBank recruited more than 1,000 employees while Lien Viet Post Bank recruited nearly 2,000.
A representative of HDBank said the massive recruitment is for the expansion of the bank’s business in the coming time.
“The recruitment by banks is usually done all year round, but it is most hectic in the first quarter of the year, the beginning of the business season,” he added.
A recent survey by the Statistical Forecasting Department of the State Bank of Vietnam showed that 46.5% of credit institutions plan to add full-time and part-time jobs in the first quarter of this year while none of them intends to cut their staff.
ExxonMobil and PVN cut deal to tap gas field in Quang Nam
ExxonMobil Corporation of the U.S. on March 26 signed a cooperation agreement with the Vietnam Oil and Gas Group (PVN) and the government of Quang Nam Province to tap the Blue Whale gas field, said a PVN source on March 27.
This is the country’s largest gas project with a total investment of around US$10 billion. PetroVietnam Exploration Production Corporation (PVEP) under PVN and ExxonMobil Vietnam Co Ltd early this year signed a framework agreement on the Blue Whale project development and gas sale.
The PVN source said the Blue Whale gas field’s reserves are estimated to reach 150 billion cubic meters. Under the signed agreement, ExxonMobil will step up investment in a platform for offshore water separation, and two underground platforms with each having four wells, and an 88-kilometer pipeline connected to the shore of Chu Lai.
In addition, PVN will develop two onshore plants, including a gas treatment plant and a power plant with two generators with a combined capacity of around 600-700 megawatts (MW) each.
The two plants will be located in Nui Thanh District of Quang Nam Province and is expected to put into operation in 2023.
The volume of gas extraction from the field is estimated at around nine to ten billion cubic meters a year. Of the number, around one billion cubic meters of gas will be brought to Dung Quat Oil Refinery in the central province of Quang Ngai for deep processing.
In a related development, Binh Son Refining and Petrochemical Co Ltd (BSR), an offshoot of PVN that operates Dung Quat Oil Refinery, is expected to gain first-quarter revenue of VND21,000 billion, or US$920 million, accounting for 30% of the annual plan, VnExpess news site reports.
In addition, the after-tax profit reached VND1,800 billion in the first quarter, higher than the targeted VND1,682 billion. The company has paid VND2,400 billion in taxes to the state budget.
Late last year, BSR announced targets of obtaining revenue of VND62,400 billion for all of 2017, a contraction of VND10,100 billion compared to 2016.
BSR CEO Tran Ngoc Nguyen said the plan is based on the estimated oil price of US$50 a barrel. The oil refinery is currently running at 5% higher than the designed capacity.
This year, the oil refinery will suspend operations for 52 days for the third comprehensive maintenance period from June 5 to July 23.
Government approves infrastructure leasing at Lach Huyen Port
Haiphong International Container Terminal Co Ltd has got the green light from the Government to lease infrastructure facilities at Lach Huyen International Port in the northern coastal city of Haiphong.
Document No.426 signed on March 27 by Deputy Prime Minister Trinh Dinh Dung says the Government has approved the company as the lessee to exploit the infrastructure of the port invested with State capital.
The Ministry of Transport is tasked to coordinate with the Ministry of Finance and relevant agencies to appraise and approve the leasing plan, and arrange an agreement signing ceremony.
This is not the first time the Government has approved leases of seaport infrastructure upon completion of the investment. Earlier, Thi Vai General Cargo Terminal and Cai Mep International Terminal in Ba Ria-Vung Tau Province, and An Thoi Port on Phu Quoc Island off mainland Kien Giang Province were leased to private firms with a leasing duration of 30 years.
Currently, the deep-water Lach Huyen Port is still underway. The project is divided into two components, with component A constructed in 2013 with a total investment of VND18.6 trillion (US$817 million), and funded by Japan’s ODA loans and the State budget.
Meanwhile, component B consists of two piers with a combined length of 750 meters along with handling equipment for container ships weighing up to 100,000 DWT. Construction of the component started in May last year and is scheduled for completion in the first quarter of 2018, with a total investment of some VND6.6 trillion.
Sovico, BSR in investment talks
Investment firm Sovico Holdings is in talks with the Binh Son Refining and Petrochemical Company (BSR Co Ltd) on exploiting opportunities arising out of the latter’s equitisation process.
The talks are focusing on BSR’s equitisation plan for 2017 as well as its Dung Quat Refinery expansion project, another major task undertaken by the company.
“The equtisation process is a chance for potential investors to partake in BSR’s progress, while the Dung Quat expansion programme is still in its developmental stage.
“Once it is operational, BSR’s market value will surely change accordingly,” said Tran Ngoc Nguyen, BSR General Director.
As the operator and overseer of the Dung Quat Refinery, BSR intends to complete the expansion in 2021, he said.
The refinery will increase its capacity by 30 per cent to 8.5 million tonne of crude oil per annum, meeting about 50 to 60 per cent of domestic oil demand, and generate export products meeting EURO IV and V standards.
Executives of both companies are also discussing import and export channels for BSR’s crude oil to accommodate Dung Quat’s expansion, operating capacity and growth opportunities in the context of fluctuating world oil prices.
“We hope to have further in-depth meetings with BSR to gather enough information before making our decisions on investing in BSR’s equitisation,” said Nguyen Thanh Hung, Chairman of Sovico Holdings.
Once the equitisation process starts in the third quarter of 2017, BSR expects to leave 49 per cent of its shares owned by the Vietnam Oil and Gas Group (PetroVietnam).
BSR aims to have three main investor groups: strategic shareholders, financial shareholders and registered shareholders.
Sovico Holdings’ current registered capital is VND1 trillion (US$45 million), with interests in a wide range of businesses including real estate. It is a majority shareholder in private airline Vietjet Air.
BSR’s 2016 revenue totalled VND5 trillion ($224.6 million), down 21 per cent from 2015. In the first quarter of 2017, however, the company has already earned a post-tax income of VND1.8 trillion ($80.8 million).
BSR general director Nguyen disclosed that at the end of 2016, many foreign partners had asked to purchase shares in the Dung Quat Refinery, including Russia’s Gazprom Neft and oil companies from Thailand and Singapore.
Key criteria for BSR’s future strategic partners include strong financial capability and experience in the oil refining field, he said.
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