BUSINESS IN BRIEF 30/3

Govt mobilises $184 million through G-bond auctions     


Govt mobilises $184 million through G-bond auctions, Vingroup sees rise in earnings for 2016, BIDV named best retail bank in Vietnam for third straight year, Sun Life Vietnam signs up with GOFS

The Bank for Social Policies has mobilised VND4.2 trillion (US$184 million), so far, this year by auctioning Government-guaranteed bonds at the Ha Noi Stock Exchange (HNX).

The latest auction was held on Tuesday, bringing the bank VND980 billion, which included VND300 billion in five-year bonds, VND400 billion in 10-year bonds and another VND280 billion in 15-year bonds.

The bidding for the five-year bonds fetched VND300 billion at a winning coupon rate of 5.4 per cent per annum, up 0.1 per cent from last week’s session. The bidding attracted two HNX members with valid bidding volume of VND400 billion and annual coupon rate ranging from 5.3 per cent to 5.5 per cent.

Two members participated in the bidding session for the 10-year bonds with valid bidding volume of VND650 billion at 6.45 to 6.5 per cent per annum. The bonds earned VND400 billion at a winning coupon rate of 6.47 per cent per annum, down 0.01 per cent from last week’s session.

Meanwhile, VND280 billion worth of 15-year bonds were mobilised at a winning coupon rate of 7.35 per cent per annum. The bidding session attracted two participants with valid bidding volume totalling VND380 billion and annual coupon rate ranging from 7.3 per cent to 7.35 per cent. 

Vingroup sees rise in earnings for 2016     

Property and retail giant Vingroup saw sharp increases in its earnings for 2016, according to the company’s post-audit combined financial report.

Vingroup said in its financial statement yesterday that combined net revenue rose nearly 70 per cent year on year to VND57.6 trillion (US$2.52 billion) for 2016, and post-tax profit jumped 134 per cent to VND3.5 trillion from 2015’s number.

The sharp increases in the group’s earnings result from rising revenues across all of its brands such as Vinhomes, Vincom Retail and retail store chain Vinmart and Vinmart+.

Among those segments, property business sales value was nearly VND37.3 trillion, a yearly increase of 76 per cent; sales in hospitality, tourism and entertainment activities hit VND4.25 trillion, an increase of 49 per cent from 2015; and sales growth from other segments varied from 25 per cent to 115 per cent compared to the previous year’s figures.

At the end of last year, Vingroup recorded total assets of VND180.45 trillion and total equity of VND45.26 trillion.

In 2016, Vingroup introduced more than 30 real estate projects across the country, with major sites located in Ha Noi, HCM City and Hai Phong.

The property and retail giant also launched the property brand VinCity, which targets middle-income customers. The new property project will be implemented in seven big cities and provinces, including Ha Noi, HCM City, Hai Phong and Nha Trang.

In 2016, Vingroup also expanded its market coverage with 32 shopping centres, 6,000 hotel rooms and 1,000 retail stores across the country.

In September 2016, Vingroup announced it had transformed Vinmec and Vinschool units into social companies, and committed profits from the two businesses to socio-development projects. 

Hai Phong draws over 208 mln USD in FDI in Q1

More than 208.5 million USD in foreign direct investment landed in northern Hai Phong city in the first quarter of 2016, up nearly 16 percent against the same period last year.

Of the figure, 57.34 million USD came from six newly-registered projects while the remaining 151.18 million USD was added to nine operational ones.

The city has to date hosted 491 valid FDI projects with a total investment of approximately 14 billion USD.

It is believed that the growth was largely owing to the city’s efforts to develop local infrastructure.

A number of large-scale projects have been developed to greatly support transportation in the city, such as Hai Phong Port, Cat Bi International Airport, Tan Vu – Lach Huyen Highway and Bridge, Hanoi – Hai Phong Expressway, Ha Long – Hai Phong Expressway, Bach Dang Bridge and expanded National Highway 10.

Chairman of the municipal People’s Committee Nguyen Van Tung said the city will continue improving local public administration system and enhancing business climate to lure more domestic and foreign investors.

Hai Phong has focused on improving quality of public services in order to make local residents and investors more satisfied.     

BIDV named best retail bank in Vietnam for third straight year

The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) has been named the Best Retail Bank in Vietnam for the third consecutive year by The Asian Banker.

Earlier, BIDV won the same award in 2015 and 2016. This award honours banks which have made efforts and achievements in providing services for individual clients and created impressive retail business development strategies.

The bank also obtained the Best Mortgage Product in Vietnam Award for 2017.

The titles were presented at an international awards presentation ceremony in Tokyo, Japan, on March 17.

Since 2013, BIDV has remained the top joint stock commercial bank in Vietnam in terms of the capital mobilised from individual customers and the retail credit with respective average growth rates of 30 percent and 50 percent each year to 2016.

The bank has expanded its network nationwide with more than 1,000 transaction offices, many of which have met international standards. It has also signed bilateral agreements with a number of large banks in such countries and territories as Russia, the Czech Republic, Taiwan (China), the Republic of Korea, Malaysia, Cambodia, Japan, Laos, and Myanmar.

Thanh Hoa targets sustainable offshore fishing development

The north central province of Thanh Hoa will scale down inshore fishing and invest more in high-capacity vessels for offshore fishing between now and 2025, under Vietnam’s fisheries development strategy and the local fisheries master plan. 

Currently, Thanh Hoa is home to a large number of fishing vessels with an average capacity of more than 73 CV each, mostly in the coastal cities of Hoang Hoa, Quang Xuong, Tinh Gia and Sam Son township. 

In order to improve the efficiency of fisheries exploitation, Thanh Hoa has directed applying sound navigation and ranging technology, the global positioning system (GPS), and the use of polyurethane in preservation, as well as providing training for captains of offshore fishing vessels and building a database on active fishing vessels, thus making it easier for the State management. 

In compliance with the Government’s Decree 67, coastal localities have assisted fishermen in building and upgrading fishing vessels, and switching to the use of modern fishing equipment. 

As of this March, the province caught 27.515 tonnes of seafood. 

Tran Duc Cuong, deputy head of the provincial Department of Agriculture and Rural Development’s Sub-Department of Fisheries Exploitation and Protection, said the provincial agricultural sector will continue encouraging fishermen to use modern technology to improve their fishing capacity and raising their awareness of fisheries exploitation in tandem with environment protection. 

It is also scheduled to build fishing logistics facilities, storm-proof shelter areas, seaports, wholesale markets, and production models at sea, he said.

Vinh Phuc province’s youth urged to open startups

The northern province of Vinh Phuc on March 28 called on its youth to join the national startup movement and contribute to promoting socio-economic development.

Do Thi Thanh Huong, secretary of the provincial Youth Union, said the northern province had more than 300,000 young people aged between 16 and 30, accounting for 30 percent of the population and 47 percent of the labour force.

“We call on every young person in Vinh Phuc province to nurture the entrepreneurship spirit, be creative and actively prepare for launching businesses,” Huong said at the event. “There will be difficulties and challenges. Persevere and be determined.”

Le Duy Thanh, Vice Chairman of the provincial People’s Committee, said the private sector was identified as an important engine of the economy, and favourable conditions would be provided to promote its development and enhance the economy’s competitiveness.

Thanh said it was a good time to launch startups in Vinh Phuc province where the local authorities were aiming to provide support in terms of capital, land and policies to encourage the youth.

“Both the youth and enterprises play very important roles in the province’s development and the combination will certainly bring better results,” Thanh said.

Vinh Phuc currently has some 7,000 businesses and the figure is expected to increase rapidly in the future, according to Thanh.

According to Pham Ngoc Tuan, deputy head of the National Startup Programme’s Organisation Board, the Government of Vietnam was striving to build a startup ecosystem with the issuance of a resolution in June last year.

In 2017, the National Startup Programme will focus on connecting startup businesses to venture capital funds, associations and incubators to help them overcome initial difficulties.

At the event, a council of startup mentors were introduced, which aimed at selecting feasible startup projects and nurturing ideas to build a young entrepreneur community in the province.

In addition, Vinh Phuc province also launched the first startup competition on March 28.

Sun Life Vietnam signs up with GOFS

Canadian life insurer Sun Life Vietnam has signed a three-year agreement with Global Online Financial Solutions Limited under which the latter will distribute its products.

Sun Life will have the chance to introduce its life insurance products to customers of Timo, a banking service provided by GOFS.

The products will be uploaded on the Timo mobile application and Sun Life staff will offer consultancy for them.

The agreement follows Sun Life Financial’s purchase of a 25 percent stake in Crescent Asia Limited, GOFS’ parent.

Larry Madge, general director of Sun Life Vietnam, said the tie-up with Timo would strengthen his company’s position in the country.

He promised that his company would keep exploring ways to offer better solutions to customers in Vietnam.

Sun Life last January bought out its local partner PVI Holdings and has established itself as a market leader and industry pioneer in pensions.

Timo is developed by Global Online Financial Solution Company and VPBank.

Reference exchange rate goes up 7 VND

The State Bank of Vietnam set the reference VND/USD exchange rate at 22,260 VND/USD on March 29, up 7 VND from the day ago.

With the current /- 3 percent VND/USD trading band, the ceiling exchange rate is 22,927 VND per USD and the floor rate is 21,593 VND per USD.

In the opening hours, commercial banks increased their rates slightly.

Vietcombank revised its buying and selling rates down 10 VND from a day ago to 22,730 VND and 22,800 VND, per USD.

BIDV set its buying and selling rates at 22,735 VND and 22,805 VND, per USD, down 20 VND.

Vietinbank listed the buying rate at 22,720 VND/USD and the selling rate at 22,800 VND/USD, both down 5 VND.

State leader asks for Hyundai Motor’s help to raise local contents

President Tran Dai Quang received Hyundai Motor Vice Chairman Chung Eui-sun in Hanoi on March 28, asking the group to support its Vietnamese partner in personnel training and technology transfer, and increase the rate of domestically made content in its products.

He reiterated that Vietnam is open to and creates all possible conditions for foreign firms, including those from the Republic of Korea (RoK), to do long-term business.

Welcoming Chung’s working visit to Vietnam amid the two countries’ 25th anniversary of diplomatic ties, the host leader highlighted vigorous growth of bilateral relations, noting that the countries established the strategic cooperative partnership in 2009 and have maintained high-level visits, helping bolster mutual understanding and political trust.

He stressed impressive economic, trade and investment cooperation outcomes, including the signing of a bilateral free trade agreement (FTA). The RoK has become the top foreign investor, the second biggest ODA and tourism partner, and the third largest trade partner of Vietnam. The RoK’s direct investment in Vietnam is surging, exceeding 3.1 billion USD in the first two months of 2017.

President Quang hopes that on the basis of the sound political ties and the Vietnam-RoK FTA, Hyundai Motor will continue expanding investment in the Southeast Asian nation.

For his part, Chung Eui-sun said Hyundai Motor set up a joint venture to manufacture, assemble and distribute cars in Vietnam almost a decade ago. This joint venture’s automobiles have also been shipped to other countries in the region.

During that time, the group has received substantial cooperation and assistance from the Vietnamese partner and local authorities, he said, adding that it will send experts to Vietnam to give training to its partner’s staff in the time ahead.

He attributed the RoK’s soaring direct investment in Vietnam to appropriate policies and effective assistance provided by the Vietnamese State and Government.

Aside from stepping up investment and technology transfer, Hyundai Motor will further engage in social welfare projects in Vietnam, the Vice Chairman added.

Investment Securities Company to expand to Japan via merger

Vietnam Investment Securities Company (IVS) will merge with Japan Securities Incorporated (JSI) to boost the number of customers, financial capability and expand the operation to Japan.

After the merger, the capital of IVS will increase to 372 billion VND (16.53 million USD), IVS said in its statement at the annual shareholder meeting held on March 25.

The merger will make JSI a department at IVS, and it will focus on the Japanese market only. 

Current shareholders of JSI will commit not to withdraw from it in the next three years after the merger is approved by the State Securities Commission.

However, the company did not clarify in its statement when the merger would take place.

The merger was also approved by the shareholders of JSI at the firm’s annual shareholder meeting held on March 14.

Vietnamese shareholders hold 48.87 percent of JSI’s capital now, including Viglacera Investment and Import-Export JSC (10 percent).

Japanese shareholders hold the rest of the company’s capital, including the Hong Kong-based Tanamark Investment Ltd (20 percent), Aizawa Securities Co Ltd (14.5 percent) and Japan Asia Securities Co Ltd (14.5 percent).

In 2016, IVS earned total revenue of 26 billion VND and a post-tax profit of 97.4 million VND. The figures were 95 percent and only 5 percent of last year’s targeted earnings. IVS will not pay dividend for last year’s performance.

In the third quarter of 2016, IVS issued 17.9 million shares to increase its chartered capital from 161 billion VND to 340 billion VND.

For 2017, IVS has forecast Vietnam’s economic growth at 6.5 percent to 6.7 percent and inflation rate at 4 percent to 5 percent, allowing the Government to keep the lending rates low and support the growth of the securities market.

According to the company, the Vietnamese economy will reach its short-term peak in three years.

Vinh Phuc seeks investment at Tokyo seminar

A seminar was held in Tokyo on March 28 to attract investments to the northern province of Vinh Phuc, seeing the participation of more than 120 big firms. 

Speaking at the event, Secretary of the provincial Party Committee Hoang Thi Thuy Lan said with an annual average growth of over 15 percent and its top ranking in the country’s provincial competitiveness, Vinh Phuc has become a destination for major investors from numerous countries worldwide. 

As of late February 2016, the province lured as many as 234 foreign-invested projects worth 3.6 billion USD from 15 countries worldwide. Japan ranked third in the number of projects and total investment in Vietnam but was placed first in terms of capital disbursement. 

Vinh Phuc calls on Japanese investors to get involved in industry, urban development, services, agriculture and infrastructure, she said. 

Vietnamese Ambassador to Japan Nguyen Quoc Cuong highlighted stability, young population and investment incentives as a magnet for foreign investments to Vietnam.

He also mentioned to Vinh Phuc as a major economic zone in the north and a gateway to the capital city of Hanoi. 

According to Director of the Asia-Pacific Division under the Japanese Ministry of Economy, Trade and Industry Yasushi Iwata, Vietnam in general and Vinh Phuc in particular is a promising destination for Japanese investors. 

He expressed thanks to Vinh Phuc authorities for offering business incentives to Japanese enterprises, thus lifting bilateral ties over the past years. 

In an interview granted to Vietnam News Agency, Deputy Director of the provincial Department of Planning and Investment Nguyen Duc Tai said the event provides a platform for investors and provincial authorities to discuss and answer questions, laying a groundwork for their investment decisions.

Obstacles hinder automated petrol stations

All 2,400 gas stations owned by the Vietnam National Petroleum Group (Petrolimex) are designed to accommodate cash free purchases and can switch to an automated pay model to help reduce labour costs, especially late at night, said Bui Ngoc Bao, Petrolimex’s Chairman.

Although automated payment functions are readily available, Petrolimex’s three year test run has yet to be implemented on a larger scale.

In Hanoi, the company has seven petrol stations with automated pumps for customers paying via credit cards, but they must all be accompanied by normal pumps with workers to supply the demand of the majority who pay by cash.

Bao stated the main reason behind the automated model failure is price difference; banks charge an additional fee for card-based purchases that is not borne by the customers but the company itself and is not included in the circulation and management fee that Petrolimex pays the Government.

Said transaction fee ranges from 0.5 to 1 percent of total amount paid for domestic cards and 2.5 percent for international cards.

The circulation and management fee imposed by the Government is about 5 percent of total price, including importing costs, storage costs, distribution costs or losses, of which labour costs account for 30 percent in total.

Furthermore, as petrol prices are regulated by the Government, petrol companies cannot change the price to respond to the market’s elasticity.

In reality, the price recorded at Petrolimex’s automatic stations is only 100 VND (0.009 USD) per litre cheaper than those with human workers.

This makes customers hesitant to pump petrol themselves, seeing how they will only save a miniscule amount of money even when the drop in price is solely created by Petrolimex to encourage them and is not included in the Government’s regulated price list. 

In addition, since motorbikes, the most common vehicles in Vietnam, do not have a safety switch to stop petrol from being pumped into the tank like cars, spilling is bound to occur and cause danger to the drivers. This is amplified by the lack of etiquette and regard for public safety in people who use mobile phones and smoke within the vicinity of a petrol station, regardless of prohibiting signs.

To counter this, the company has proposed to the Ministry of Finance and the Ministry of Industry and Trade to adjust the operation costs for petrol from 5 percent to 10 percent, a common rate in advanced countries, to push for cash-free purchases and the automated pumping model.

If said transaction fee can be included in regulated petrol price, in the next three years, Petrolimex expects to convert 70 percent of all petrol stations to automatic model, keeping only 30 percent with workers, said Bao.

The company aims to make automatic technology more popular to help save time and cut cost for customers and to improve service.

Dak Nong launches value chain building for pepper corns

Pepper growers and businesses in Dak Song district of the Central Highlands province of Dak Nong have committed to implementing a programme to create a value chain for pepper corns.

They met in Dak Song district, which accounts for over 50 percent of the pepper growing area in Dak Nong province, on March 28, seeking to develop the production of bio-pepper corn in service of export.

Dak Nong is home to about 27,600 ha of pepper, which is nearly double the province's planned area for the plant by 2020. The area gives a yield of over 34,000 tonnes of pepper corns.

Truong Thanh Tung, Vice Chairman of the provincial People's Committee said that all stakeholders, including farmers, cooperatives, businesses, scientists, and authorities need to join hands to build the value chain for the sustainable development of pepper. Local authorities should periodically supervise the implementation of the programme.

Pepper is among the hard currency-earning plants of the province. As the prices of pepper corns have risen over the years, cultivation areas have, therefore, been expanded without planning. Meanwhile, the management of pepper seedlings is yet to be effective, leaving grown plants to be likely affected by diseases, heard participants.

In the first two months of this year, pepper exports reached 16,000 tonnes worth 112 million USD, down nearly 20 percent in quantity and 36 percent in value.

The United States, India, Germany and the United Kingdom are Vietnam’s largest pepper consumption markets, making up 41 percent of Vietnam’s total pepper export.

Conference seeks to perfecting mechanisms towards sustainable agriculture

Agricultural experts and managers gathered at the Spring Conference on Agriculture 2017 in Hanoi on March 28 to discuss the impacts of current mechanisms to the growth of Vietnam’s agricultural sector.

Participants noted that the growth pace of the agricultural sector has been slowed down, showing shortcomings of a sector formed by small-scaled household farms with loose connection and poor quality and productivity amidst fiercer global competition.

According to Nguyen Duc Thanh, head of the Institute for Policy and Economic Research, who is also a member of the Agriculture Alliance, it is necessary to remove institution-related bottlenecks, including official institutions such as policies and laws and non-official ones like customs, common perceptions and agricultural associations’ activities.

In order to develop sustainable agriculture, Andre Well – Dang, Senior Governance Advisor of Oxfam Vietnam, emphasised the need to foster cooperation between State agencies at the central and local levels, as well as among research institutes, associations, non-governmental organisations and media agencies.

Farmers should have the right to raise their voices in policy discussions, he said.

At the same time, Nguyen Van Tien, head of the Department of Agricultural and Rural Affairs under the Party Central Committee’s Economic Commission, said that agricultural institutions, especially those related to land, finance, credit, market, science and technology, have shown many weaknesses and shortcomings.

Policies and mechanisms only focused on market segments with poor quality and raw processing, while links between farmers,cooperatives, enterprises and service providers remains weak, failing to create sustainable production and value chains.

In order to enhance farmers’ production capacity, Tien held that it is crucial to design policies to encourage farmers to expand their production and develop farm economy as well as form professional and high-quality farmers who can master science and technology.

Le Thi Ha Lien, Vice Director of the Centre for Agricultural Policy Consultation, highlighted the importance of building diverse agricultural institutions to raise farmers’ incomes and boost the growth of green, smart and economical agriculture.

Participants also agreed on the significance to complete land and financial policiesin agriculture.

Vietnam, India trade on upward trend

Trade revenue between Vietnam and India jumped 37.8% to US$1.1 billion in the first two months of 2017 against the same period last year, according to latest statistics from the General Department of Vietnam Customs.

Of the figure, Vietnam’s exports to India rose 32.2% to US$454.5 million while imports increased by 42.1% to US$630.2 million.

Among 28 key export products to India in the period, computers, electronics and components came first with US$91.4 million, up 176% against the same period last year, trailed by telephones and components (US$64.8 million, up 11%) and base metal (US$61.3 million, up 78%).

Most export products to India obtained a growth, particularly tea (up 1,508%), steel (up 258%) and confectionary and cereal products (up 142%).

Meanwhile, import products from the country also saw a sharp increase, especially steel (up 1,661%), fruit and vegetables (up 148.7%), machines, equipment and tools (up 141%), animal and vegetable fats and oils (up 103.7%), and animal feed and raw materials (up 65.3%).

Particularly, Vietnam has no longer imported corn from India for the last few months.

Vietnam, China account for 45% of ROK aluminium exports

The Republic of Korea (ROK) is today one of the key aluminium producers in Asia with consumption primarily driven by demand in the Vietnamese and Chinese manufacturing sector, according to official studies.

The studies forecast that industrial production in the ROK will grow on average 5.9% per year through 2025, driven by expanded consumption in Asia, already at record highs, even further.

Vietnam and China together account for 45% of the demand for aluminium plate, sheet and strip output of the ROK, according to government figures.

Statistics show that outbound merchandise shipments for aluminium plates, sheets and strips have been on a steady upward trajectory over the past decade with the volume of tonnage expected to further grow at a 7% clip over the next few years.

The revenue generated by the exporters stood at US$1.5 billion and US$3.8 billion for the years 2015 and 2016, respectively with the growth primarily fueled by increased downstream manufacturing in the automotive and packaging segments of the economies of Vietnam and China.

Meanwhile, a report last year of the Ministry of Industry and Trade (MOIT) showed that Vietnam must import 100% of its aluminium needs, about 500,000 tons at an estimated cost of US$1.2 billion annually.

The report also showed that aluminium imports were forecast to expand significantly over the next decade largely because of increased sales in the fast-moving consumer goods retail segment of the economy.

With the rising concern among Vietnamese consumers for protecting the environment, the country’s packaging industry is likely to move more towards ‘green’ and recyclable packaging and labelling, says the MOIT.

The ability of aluminium to form any shape and its protective qualities have made it the most versatile packaging material around the globe. Additionally, a key benefit is that aluminium foil, aluminium cans and other aluminium packaging materials can be fully recycled and reused an infinite number of times.

Aluminium foil is non-toxic, so it does not damage the foods wrapped in it, but instead protects them. The foil is used in food containers, bins, bottle caps, soft packages for liquids or bulk food stuffs and many other types of containers.

Due to the benefits of a free trade agreement between Vietnam and the ROK that came into effect in 2015, which provides for tariff reductions among other non-tariff benefits, proximity and the country’s dependence on aluminium imports, the MOIT expects the demand for aluminium from the ROK to remain strong.

CapitaLand opens The Oxygen mall in Ho Chi Minh City

CapitaLand Vietnam on March 25 celebrated the grand opening ceremony of its mall, The Oxygen, at The Vista in District 2 of Ho Chi Minh City under the witness of hundreds of guests including the representatives from strategic business partners, tenants and the media.

The Oxygen, fully owned by CapitaLand Vietnam, is a three-storey community mall with over 8,000 square metres of retail space at the high-end residential development The Vista, located at 628C Hanoi highway in An Phu ward.

CapitaLand Vietnam has positioned The Oxygen as the “backyard of Thao Dien” – a new community mall concept with a lively ambience, green landscape and a relaxed and positive feel to it.

CapitaLand Vietnam named the mall The Oxygen, which defines the mall’s positioning as the perfect unwinding place that expat families and The Vista residents can visit every day to enjoy outdoor activities, shop, pamper themselves, and have a coffee while giving their kids an opportunity to enrich their creativity.

“CapitaLand first started in Vietnam with its serviced residence business unit, The Ascott Limited. In 2006, we ventured into the residential sector and today, Vietnam has become one of CapitaLand’s key markets,” Chen Lian Pang, CEO of CapitaLand Vietnam, said. “Apart from building residential projects, we hope to diversify into the commercial segment with office buildings and integrated developments. By harnessing the knowledge, expertise and experience accumulated from CapitaLand Group, The Oxygen will enhance the vibrancy of the shopping scene and experience in District 2 and surrounding areas.”

The Oxygen is a place where families and friends can gather and interact their neighbours while their children play in a conducive environment. It provides the space for community-building as residents can bond over activities such as garage sales, Sunday markets, birthday parties and charity events.

The Oxygen also offers a series of monthly public events to bring together and reach out to the residents. Recent successful events such as Christmas Festival, Tet Festival, Air Fest – Music, Art and Bazaar attracted hundreds of participants.

The Oxygen is a one-stop shopping destination where one can live, play and eat. The tenant mix of this new concept mall focusing mainly on F&B with a wide variety of restaurants offering “East meets West” fusion food and eateries such as Starbucks, Tous les Jours, Gaxeo, Shalom, KOGI ZIP Korean BBQ and Genshai supermarket.

At The Oxygen, there are also a variety of kids’ enrichment classes including English lessons by ILA, Maths enrichment class by Superbrain, Mandarin classes by GOODKIDS, and skills classes by Little Genius.

On the third floor, Toong has opened an artistic co-working space of more than 1,000 square meters, which offers convenient access to modern amenities and high-quality value-added services for more than 300 members and is a conducive working environment to startups, and small and medium enterprises.

In line with the grand opening on March 25, The Oxygen supported Earth Hour by organising activities such as the collection of used bottles and paper cups at all the restaurants, eateries, and the supermarket at The Oxygen Mall and Thao Dien area; teaching children to do arts and crafts with recycled bottles and cups, holding a movie night about Earth Hour and environment protection, and offering plants in exchange for old books.

ASEAN growth solid despite global risks

Although geopolitical risks continue to plague economies, ASEAN countries are still expected to grow thanks to their strong fundamentals and increasing supply of intra-block capital.

And among all ASEAN countries, Vietnam seems to be the most attractive destination for this capital flow.

At the Invest ASEAN 2017 conference held by Maybank Kim Eng last week in Singapore, 800 participants from funds, universities, and listed corporates discussed the future of ASEAN following the breakup of the Trans-Pacific Partnership (TPP). Three ASEAN states- Vietnam, Malaysia, and Singapore- were part of the doomed trade pact from which the US already withdrew.

“The world is going through a tough time with rising protectionist policies in the US and Europe, the fall-through of TPP,  rate hiking plans of the US federal Reserve, and slowdowns in the Chinese economy. As a region with strong connectedness to the world in term of trade and investment, ASEAN is affected by these headwinds as well”, said Dato’ John Chong, CEO of Maybank Kim Eng Group.

The CEO was optimistic about ASEAN’s future growth, saying that the region will benefit from its 600 million consumers, expanding middle-class, a focus on infrastructure development, and intra-ASEAN capital.

Reports from this investment bank shows that ASEAN-5 countries-Indonesia, Vietnam, Malaysia, the Philippines, and Thailand-will grow by 5% in 2017 while the rest of the world remains sluggish. Most notably, Vietnam is forecast to expand by 6.3%, behind only the Philippines in the ASEAN-5 region.

Between 2011 and 2015, intra-ASEAN investment jumped by 11%. Intra-trade still takes up only 24% of the total trade quota, meaning that there is still room for growth. According to Chong, to stay strong amid global volatilities, ASEAN as a whole should focus on intra-block investment and trade. New emerging markets in the region, especially Vietnam, have high potential as recipients for this flow.

Dr Kishore Mahbubani, dean in the practice of Public Policy at the Lee Kuan Yew School (National University of Singapore), also believes in intra-ASEAN collaborations in investment and trade. However, he is concerned that despite geographical proximity, ASEAN states are vastly diverse in terms of politics, culture, languages, and economic development. ASEAN investors must be well-in-formed of these differences when venturing to nearby countries.

Experts at the event praised Vietnam’s determination to build its capital market, including the equitisation and state withdrawals from various state-owned enterprises. More private firms also choose to list on stock exchanges. At the end of 2017, the Vietnamese stock market is expected to reach US$100 billion in market capitalisation, from only US$80 billion last year.

Besides indirect capital, ASEAN investors are also likely to pour direct investments into Vietnam, thanks to cheap money pumped into the market from central banks around the region.

Thailand seems to be the most enthusiastic investor in the merges-and-acquisitions market, having bought a slew of big Vietnam-based firms like Big C, Nguyen Kim, and Metro.

Marc Woo, head of Asia E-commerce at Google, told VIR that Vietnam would also be attractive to regional e-commerce sites and startups in financial services. He expects to see more names like Zalora, Lazada, and Grab in Vietnam in the coming years.

“Similar to other developing markets in ASEAN, only 6% of sales in Vietnam are made through online channels, and less than 2% of Vietnamese people use credit cards. At the same time, 60% of consumers here check reviews online before heading to the shops or restaurants. This is a great potential for e-commerce websites and startups in financial technology across ASEAN” said Woo.

Despite their overall optimism about Vietnam, experts still listed out challenges that should be tackled to welcome foreign investors. Lee Eng Keat, executive director of Singapore’s Economic Development Board, told VIR that Vietnam must focus on infrastructure development to improve its logistical standards.

Funding for infrastructure projects, according to Lee, should come from the private domestic or foreign sector instead of the national budget. He warned that if Vietnam does not improve its facilities, its great economic potential will not be realised. 

HCM City hosts two international expos

The sixth edition of INMEX Vietnam, one of the region’s most comprehensive international business platforms for the maritime industry, opened on March 28 in the Saigon Exhibition and Convention Centre (SECC) in HCM City.

The expo has attracted more than 300 companies and brands from China, Germany, the Netherlands, Korea, Norway, Singapore, the UAE, the UK, the United States and other countries. 

The three-day event features a comprehensive showcase of the latest marine products, equipment and services in areas like shipbuilding, shipping, marine engineering, offshore engineering and technology, dredging and ports and logistics.

There will be a seminar organised by the National Oceanography Centre (NOC) and Inmatech Corporation.

The seminar, “World class marine science and technology for your business”, will focus on four topics: using NOC science, technology and specialist facilities to improve business; marine geoscience: resources, hazards and climate change impacts; people and oceans: environmental coastal zone impacts from global changes; and eco-system and biogeochemical data-led solutions to global problems.

The seminar will take place from March 29 to 31.

Inmatech will also present a seminar on digital shipping on the 31st covering marine BWMS, operational risk intelligence solutions for the maritime industry, ADMIRALTY digital services, and maritime satellite communication and application.

“Right now in 2017, Vietnam ranks eighth in the world in new ship-buildings, with 1.3 million CGT (compensated gross tonnage),” Hendrik G. Lacet, managing director of Maritime-Consult Lacet and advisor to INMEX International Maritime Exhibitions, said.

“This means that the number of orders is growing again after a slow period.

“Vietnam secured this position by restructuring its shipbuilding sector. Part of this restructuring is allowing foreign shipbuilders like Damen shipyards from Holland, Vard from Norway, Pilion from France, and Triyards from Singapore to have a bigger influence in Vietnam.”

The 11th HVACR Vietnam, the only focused industrial show in the country featuring heating, ventilation, air filtration and purification, air conditioning and refrigeration technology and machinery, is also taking place at the same venue.

Two hundred and fifty local and international companies and brands are showcasing their latest technologies and solutions.

“With the swift world-wide expansion of the tourism industry and the enormous increase in the construction of new hotels, restaurants, and cafes across the world, the global market for heating, ventilation, air filtration and purification, air conditioning and refrigeration systems is likely to witness a strong rise in its valuation over the forthcoming years,” Jack Wei, general manager of Informa, the exhibition organiser, said.

“In addition, the increasing implementation of norms and rules for the regulation of food safety and quality is also expected to boost the adoptions of HVACR systems in the near future.

“Vietnam will continue to enjoy a positive growth in the HVACR industry.”

In the period from 2009 to 2014, the country’s imports of HVACR products grew at a compounded annual rate of 11.9%, he said. In 2014, they were worth US$1.5 billion, he added.

Workshop discusses organic production in Vietnam

A workshop on ‘Organic Vietnam: Development Trends’ was held on March 27 by the Ca Mau Department of Agriculture and Rural Development (DARD).

The two-day event was also co-organized by the German Development Cooperation, Netherlands Development Organization (SNV), Naturland - Association for Organic Farming and Saigon Co.op, aiming to jointly develop an organic development declaration to jointly strengthen the organic sector and its potential.

Since its start in 1999, based mainly on joint Vietnamese-European projects and initiatives, organic farming in Vietnam has developed positively. An important driver has been the increasing demand for organic seafood by European retailers. In addition, there is a growing demand for safe and organic foods by Vietnamese consumers as well. Despite an economic rapid growth, stabilization of the Vietnamese organic sector all along the value chain will be essential to foster future growth.

The Vietnamese agriculture and aquaculture are among the key production sectors, which have been growing substantially over the last two decades. However, a key challenge the sector faces, is meeting the demands of export markets for high quality, safe, clean and especially organic products.

International customers expect a very high quality of Vietnamese shrimp and other products, through time, they trend to go to green food, of which organic products are more prioritized”, said Dr. Christian Henckes, Programme Director of the Integrated Coastal Management Programme (ICMP) implemented by GIZ on behalf of the German and Australian Government . 

“The government, private companies and farmers all have to work together to meet these standards – without harming the environment”, Dr Hencknes noted. 

There is a high potential for organic production in Vietnam, however the sector is still facing a lot of challenges. Especially market demand and farming practices need to be improved. How to promote green production remains the key question.

“The international support from GIZ, SNV and other organization for the sustainable development of the sector are really important, while the role of private sector is a decisive factor to support the Vietnamese Government urging for re-structuring the agriculture sector towards strengthening value chain improvement and climate smart production, as well as promoting agriculture commerce in the Mekong Delta”, stated by Mr. Le Van Su, Vice Chairman of Ca Mau Provincial People’s Committee at his opening remark. 

Mr Su emphasized that green growth is a very high priority for the development in Ca Mau, since Ca Mau has an advantage of natural mangroves, Ca Mau’s policy is to encourage the private sector and farmers towards sustainable production, with organic production being among the key measures. 

Ca Mau Shrimp currently had large areas certified by Naturland, EU organics and different standards which contribute to increasing the benefit and value for producers in particular and economic development in general.

The Mekong Delta is also supported by the Scaling up Mangrove Ecosystem Based Adaptation in the Mekong Delta (MAM2) that is one of the granted projects of the International Climate Initiative (IKI) implemented by SNV in Ca Mau and IUCN in Tra Vinh and Ben Tre.

The MAM2 has aimed to restore mangroves through building inclusive business and sustainable shrimp value chains in coastal provinces. There are 2,000 smallholders and four companies involved. A pilot payment for mangrove ecosystem services is in place (Decision 111/PPC of Ca Mau, 2016).

An old farmer, hamlet leader in Nhung Mien said “With all farm trainings and on-the-job trainings of the project, we’re able to monitor water quality of our shrimp ponds by ourselves at home, such as, I can measure salinity, pH, and turbidity to prepare for stocking. We deeply understood about how important of not to stock too many post larvae (PL)… I got more than 15% to compare to average year before”. 

In addition, 550 farmers got certified by Naturland already and received payments for forest ecosystem services from the company every year.

For the market, Sai Gon Co.op is one of the biggest retailers in Vietnam that is committed to set up a part of their business to stabilize the organic sector and to foster future growth, by a series of interconnected activities at all levels of the supply chain.

The workshop received many positive comments from over 80 participants from Government agencies, private sector, international organisations and farmers. It was affirmed that organic production will be the green way forward which can bring a higher value to Vietnamese products globally, such organic tiger shrimp, and help to protect the coast of the Mekong Delta.

Vietnam Airlines starts Hanoi, Sydney direct service

Vietnam Airlines is adding nonstop across-the-pond service between Noi Bai International Airport in Hanoi and the Sydney Airport in Australia three times weekly starting today (Mar. 29), according to a release.

The inaugural flight to Sydney is scheduled to leave Noi Bai at 11:55pm and arrive in Sydney some nine hours 35 minutes later with return from Sydney departing at 3:15pm tomorrow (Mar. 30).

The flights are operated by Boeing 787-9 Dreamliner equipped with the latest Vietnam Airlines travel cabins, with a capacity of 302 seats including 18 in Business, 21 in Premium Economy and 263 in Economy.

Vietnam tour operators irked by increased airfares

Vietnamese tour agencies are scratching their heads over unexpected airfare increases by local carriers, as they have charged tourists the old air ticket prices when selling packages for the upcoming summer holidays.

In mid-March, the Civil Aviation Authority of Vietnam submitted a proposal to the Ministry of Transport, seeking permission to hike landing and takeoff fees for airlines, as well as several passenger services.

The Airports Corporation of Vietnam, which manages all civilian airports in the country, has said the fee hikes would reduce the state budget’s spend on countrywide airports, while claiming that the increased fees would not result in much higher airfares. 

Vietnamese airlines were quick to grab the opportunity however, having announced their increased airfare plans.

Vietnam Airlines has said business-class tickets for domestic services will be hiked by VND100,000-500,000 (US$4.5-22), while economy tickets will rise by VND40,000-300,000 (US$2-13), depending on routes, starting April 1.

On March 23, low-cost airline Vietjet increased the service fee for domestic routes to VND140,000 ($6) per flight, and VND160,000 (US$7) for international services. The old fees were VND100,000 and VND120,000 (US$5).

Vietjet is now also charging higher fees for such services as seat selection, baggage, and flight change surcharges. Passengers who fail to board their international flight on time will have to pay VND1 million ($45) to be able to use the next service on the same route, instead of VND735,000 ($33).

Jetstar Pacific Airlines has also raised its system management fee to VND130,000 ($6) per route from the old VND100,000 from March 15.

Even foreign carriers, such as Japan Airlines and All Nippon Airways, have upped their system management fees and fuel surcharges for services to Vietnam.

Travel companies have been the first to get upset about those new fees.

Tran Van Long, general director of Vietnam Media Travel Co., said the fee hikes would lead to higher airfares, which is a headache for tour operators given that they had sold packages to tourists based on the old prices.

“The impact will be huge as airfares account for 35 to 45% of a tour’s total price,” Long said.

The increased airfares will hit travel agencies on future packages, as they have to cover the extra costs but may not increase the tour prices to maintain competitiveness.

In the meantime, an official from the Civil Aviation Authority of Vietnam, who asked not to be named, has defended the airfare hikes, saying carriers “had tried to keep ticket prices unchanged when global fuel prices spiked.”

“Vietnamese airlines had even cut airfares to stay competitive against foreign carriers,” the official said.

He added that the new airfares are well below the ceiling prices airlines are allowed to charge flyers.

“The highest airfare for a domestic service is still 20% lower than the ceiling price,” he said.

Hanoi moves to improve qualifications of tourism workers

Hanoi’s Department of Tourism has organised a series of training courses to improve qualifications of tourism workers and managers as many of them have failed to satisfy the work’s requirements.

According to the department, eight training classes for tourism managers at all levels were held with the participation of 520 people.

As many as 317 drivers and travel bus attendants, along with more than 1,800 tour guides were enabled to attend training courses on tourism knowledge and service skills.

The department also organised classes to improve awareness of tourism for almost 500 local residents in Ba Trai, Van Hoa and Ba Vi communes of Ba Vi district.

In the coming time, it plans to collaborate with all districts to complete official introductions about the city’s relic sites then translate them into languages of major tourism markets.

Statistics released by the department showed that from the beginning of the year, Hanoi welcomed 6 million visitors, a rise of 7% year-on-year. Of them, 1.3 million were foreign tourists, with total tourism revenue exceeding VND18 trillion (US$800 million).

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR

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