BUSINESS IN BRIEF 17/4

VIB targets $33m pre-tax profit in 2017

The Vietnam International Bank (VIB) aims to earn a pre-tax profit of VNĐ750 billion (US$33 million) in 2017, 7 per cent higher than last year’s figure.

According to the VIB’s business plan published on Wednesday, the bank targets VNĐ120 trillion in total assets, up 15 per cent year-on-year.

It also strives for a minimal decrease in credit balance with the Việt Nam Asset Management Company (VAMC) and non-performing loans (NPLs) controlled below 3 per cent.

The bank’s goals for this year will also include a credit growth plan with two options which will be 16 per-cent credit growth approved by the State Bank of Việt Nam (SBV) previously and 32 per cent credit growth estimated by the Management Board based on its risk management capability and the economy’s priority direction, depending on SBV approval. 

Besides, the bank’s board of directors also proposed a plan to mobilise funds, expected to cost up to VNĐ7 trillion,  on the secondary market for up to 10 years in order to strengthen its capital adequacy ratio (CAR) and other financial indicators to serve the bank’s business.

“The year 2017 will be a promising one when the bank focusses on its targets of sustainable growth and size expansion,” the VIB said in its statement.

In 2016, the VIB recorded significant achievements thanks to its efficient, safe and sustainable development, and focus on sustainable source of revenue, cost optimisation, and efficient risk management.

The bank’s before-tax profit last year experienced a year-on-year rise of 7 per cent to VNĐ702 billion while its total assets rose sharply to VNĐ104.5 trillion, surging 24 per cent compared to 2015, and 16 per cent higher than the target set.

The VIB’s credit growth reached approximately VNĐ70 trillion, up 25 per cent for two consecutive years. Also, in the year, the bank re-purchased 30 per cent of the debts sold to the VAMC while controlling its NPLs under 3 per cent.

In 2016, the board proposed a plan of distributing dividend and bonus share at a maximum rate of 44.6 per cent of the charter capital, including 5 per cent in cash and 39.6 per cent by bonus share.

Corporate profit reduces about 60 percent after five years




Corporate profit growth rate reached 7.5 percent in the phase of 2010-2015, accounting for one third of the previous five year phase, reported the General Statistics Office of Vietnam (GSO) about enterprise development situation.

According to the report, profit before tax of businesses in 2015 reached VND552,700 billion (US$24.38 billion). during the phase of 2000-2015, their takings soared 19 percent a year, lower capital increase of 22.8 percent and revenue hike of 21.6 percent. 

In 2015 alone, businesses contributed VND746 trillion to the state budget. Annual contribution growth averaged 18.2 percent a year in the phase of 2000-2015, lower than capital, revenue and profit increase.

Up to 97 percent of Vietnamese enterprises are small and medium scaled including 60 percent of very small ones with outdated technologies. Their business efficiency has not been high affecting profit.

92 percent state capital still in businesses

Up to 92 percent of state capital has not been equitized, meaning private sector has attended insignificantly in fields which the state does not need to hold, reported the Steering Committee on Enterprise Reform and Development.

So far, 96.5 percent of state own enterprises (SOEs) are subject to equitization but equitization value has totaled only 8 percent.

By the first quarter this year, the country has equitized eight state own enterprises and one public service institution.

Besides, the country has announced the value of 108 businesses but yet to approve their equitization projects and has been estimating the value of 108 others. 

A business under Vietnam National Coffee Corporation has been dissolved and another's value has been approved for equitization.

About capital withdrawal, the government has sold state capital with book value of VND71.82 billion (US$3.16 million) at 10 enterprises and reclaim VND72.8 billion as of March 25.

Almost all pick-up trucks come from Thailand

Nearly 100% of completely-built-up (CBU) pick-up trucks, which can be used to carry both goods and passengers, on Vietnam’s market are imported from neighboring Thailand.

According to data of the General Department of Customs, in the year to March 15, Vietnam had imported 3,900 pick-up trucks worth US$76 million, up 0.8% in volume and down 1.7% in value compared to last year. Imports from Thailand accounted for 99.6%.

On average, the price of pick-up trucks imported to Vietnam is slightly more than US$19,000 a unit, excluding taxes.

Most popular made-in-Thailand models sold in Vietnam are Isuzu D-Max, Mitsubishi Triton, Nissan Navara, Toyota Hilux, Ford Ranger, Mazda BT 50 and Chevrolet Colorado.

Pick-up trucks have been the key products of Thailand and the main means of transportation for many Thai families. Thailand is also the largest exporter of pickup trucks in the world today.

In Vietnam, pick-up trucks have a better competitive edge than other kinds of autos since import tax applied to CBU pick-up trucks from ASEAN countries is 5% currently, compared to 30% for other automobiles. Besides, many people choose pick-up trucks for their versatility and convenience.

According to the General Department of Customs, pickup trucks imported to Vietnam increased sharply in both volume and value in the period 2010-2016. Specifically, Vietnam imported 29,900 pick-up trucks in 2016, a ten-fold increase over 2010.

Although Vietnam is forecast to be a big market for pick-up trucks in the coming time, it is unlikely for the Vietnamese auto industry to manufacture this product. The reason is that the import tax on CBU pick-up trucks is low, currently at 5%, and will be 0% next year, so most auto manufacturers have not planned to assemble this kind of vehicle in Vietnam.

Traditional taxi operators want fair competition with Uber, Grab

Representatives of local taxi enterprises have proposed State agencies should take appropriate steps towards foreign ride-hailing firms like Uber and Grab in order to create a level playing field, heard a dialogue held by Phap Luat newspaper on April 11.

Pham Minh Suong, deputy general director of taxi operator Mai Linh Group, suggested ride-hailing services like Uber and Grab should be managed and treated as traditional taxi firms to ensure fair competition.

He said traditional taxi firms wishing to change their fares must notify State management agencies in advance, and then adjust fare meters among others. Meanwhile, ride-sharing services are free to change them multiple times a day.

Vinasun Corporation’s deputy general director Truong Dinh Quy claimed Uber and Grab have plans to dominate the local passenger transport market. They are making life difficult for domestic taxi enterprises, leading to a decline in the number of vehicles and their drivers quitting jobs.

He said local taxi firms require fair competition with tech-based rivals. This means Uber and Grab should be subject to the Government’s conditions such as the number of licensed vehicles, fare registration and management as those applied to traditional taxi firms.

Nguyen Ngoc Giao, deputy head of the Transport Department’s transport management, said the master plan for citywide taxi service has been affected by the operation of ride-hailing apps.

The transport department capped the number of taxi cabs on the road at 11,000 due to overloaded traffic infrastructure, lack of parking lots, narrow roads and frequent traffic congestion.

However, the number of private minicabs, mostly offering transportation services via these apps, had reached more than 21,000 as of end-February, compared to over 9,400 vehicles last August.

KVIP struggles with lack of machinery

The Korea Vietnam Incubator Park (KVIP) is facing difficulties as the amount of US$5 million pledged by South Korea for investment in machinery and equipment for its operations has not been fully disbursed.

KVIP director Pham Minh Quoc said the Korean side originally promised to invest US$5 million in machinery and equipment for KVIP operations. “However, late last year, at a joint committee meeting between Vietnam and Korea, they announced Korea’s National Assembly had terminated the project, so only US$2 million had been spent,” he told the Daily on the sidelines of the meeting between the government of Can Tho City and KVIP on April 11.

Due to the lack of machinery and equipment, KVIP is experiencing certain hardships during its operations. “At present, Deputy Prime Minister Vuong Dinh Hue has asked the Ministry of Science and Technology to seek funding to partly support the park,” said Quoc.

KVIP is currently managed by the Department of Industry and Trade of Can Tho in the vertical hierarchy, since the Ministry of Industry and Trade was originally responsible for working with Korea on this project. However, as KVIP is facing the problem mentioned above and most of its operating expenses are in the field of science and technology, the project is being considered for transfer to the Can Tho Department of Science and Technology.

To limit the difficulties, Can Tho vice chairman Truong Quang Hoai Nam asked KVIP to review its equipment and machinery and issue regulations on coordination, sharing equipment and machinery between KVIP and the nurseries of Can Tho University and some other units.

This is aimed to utilize mutual resources, avoid overlapping investment and waste, and partly resolve the current difficulties of KVIP, said Nam. KVIP is required to complete the coordination regulations in May.

Regarding technology transfer, in the first two years, Korea sent experts to Can Tho for assistance in management and operation of equipment, which was already done.

“We are proposing Korea supply three other experts, including a mechanical specialist, an expert in agricultural product processing and one in seafood processing, which are the major operations of KVIP. Currently, the Korean party is considering this proposal,” Quoc said.

So far, five enterprises have been selected to operate in KVIP, the director informed. They are Nhat Viet, Hoang Thang, Pham Nghia T&N, Calevy Rice Milk and Vietnam Nestling, whose products are fish meal, sowing machines, fried fish balls with salted egg, rice milk and herbal bird’s nest respectively.

KVIP covers over 4.5 hectares in Tra Noc 2 Industrial Park in O Mon District, Can Tho City. The total investment in this project is more than US$21 million, including US$17.7 million of Korean grants (of which US$5 million is set aside for machinery and equipment) and over US$3.4 million from the annual budget of Can Tho.

HSBC says GDP growth will bounce back

Vietnam’s gross domestic product (GDP) growth in quarter one has slowed to a three-year low of 5.1% from 6.8% previously, but it is expected to accelerate in the coming quarters, according to a macro-economic report which HSBC released on April 11.

The HSBC global research team said the slowdown in Vietnam’s GDP growth in quarter one is only a minor setback and that the manufacturing sector has the potential to lift growth in the remaining quarters of the year.

They added this highlights the economy’s sensitivity to manufacturing cycles, especially hi-tech industries. To broaden growth drivers and, as such, help reduce the volatility of economic output, further reforms would help, especially with regard to the efficiency of state-owned enterprises and the creation of fiscal buffers.

The bank’s economists analyzed the economic performance in quarter one did not result in strong GDP growth.

There are many factors weighing on activity. There were weather disruptions that curtailed agricultural output. Then, construction growth slowed markedly throughout the quarter.

Until recently, robust manufacturing masked these shortcomings. However, manufacturing growth stumbled in the previous quarter as Samsung stopped production of Note 7s, dragging down electronics production at large.

The impact was also felt in exports. Shipments of phones and phone parts, the country’s biggest export revenue earner, last month declined by a staggering 24.3% compared to the same period last year, according to the report.

However, HSBC expects exports to rebound soon, helped by new product launches and a gradual revival of global demand, which is reflected in the sustained increase in overseas orders in Purchasing Managers’ Index surveys.

Take the March survey for example – the rate of growth in new export orders was the fastest in 2017 so far.

Additionally, manufacturers remained strongly confident that output will increase over the coming 12 months, thanks to expectations of higher new orders and business expansion plans.

Importantly, a near-record increase in employment bodes well for the sector as it hints at optimism that workloads will continue to expand in the near term at least. Therefore, the manufacturing industry is likely to put the economy back on track in the quarters to come.

Elsewhere in the economy, inflation is gradually easing, even in the face of higher energy prices and increased costs of healthcare and education, owing to

muted food inflation. Headline inflation eased further to 4.6% year-on-year in March from 5% previously.

However, the General Statistics Office expects a higher monthly increase in the consumer price index this month on the back of slight rises in food, beverage and garment prices. Some provinces may also raise school fees in line with the Government’s roadmap.

Deputy PM wants faster sale of State capital

State stakes at enterprises should be sold faster, said Deputy Prime Minister Vuong Dinh Hue, head of the Steering Committee for Enterprise Reform and Development, said the Government news website.

As per Decision 58/2016/QD-TTg dated December 28, 2016 of the Prime Minister, 137 State-owned enterprises (SOEs) are set to go public in 2017-2020, concentrated in four ministries, 32 localities and four economic groups, said Le Manh Ha, vice chairman of the Government Office and deputy head of the steering committee.

By the end of last quarter, eight SOEs and one public service unit had gone public. Meanwhile, the plans for equitization of 41 firms had not been ratified and the value of 108 others not determined yet.

One subsidiary of Vietnam National Coffee Corporation had been disbanded. The value of another had been approved for equitization.

As of March 25, VND71.8 billion worth of State capital in book value in 10 companies where the State does not need to hold a stake had been sold, fetching VND72.8 billion. Six of these companies had posted capital sales below par.

Up to now, 96.5% of SOEs have undergone equitization, but the volume of capital floated has been small, at only 8%. In other words, as much as 92% of State capital has not been equitized, or private funds have not been attracted to the sectors where the State does not need to control, Deputy Prime Minister Hue remarked.

The members of the steering committee were of the opinion that restructuring, equitization and withdrawal of State capital moved at a snail’s pace in the first quarter of 2017 because the process is rather complicated when dealing with SOEs worth up to tens or hundreds of trillions of dong, such as Vietnam National Coffee Corporation, VNPT, PVN, Vinafood 1 and Vinafood 2.

In addition, State agencies and localities are waiting for the Government to complete the amendment of Decree 59/2015/ND-CP on the transformation of SOEs into joint stock companies (related to the handling of land ownership issues). Also, they are expecting competent authorities to set up an agency representing State capital in enterprises.

However, leaders of the Ministry of Finance and the Ministry of Planning and Investment deemed it necessary to speed up the equitization process without waiting for the revision of Decree 59.

Deputy Minister Hue agreed with this view, saying the restructuring of SOEs showed signs of slowing in the first quarter of 2017.

In the coming period, the country will focus on the equitization of large SOEs. For example, Vietnam Electricity Group is working on plans for floating power plants under its umbrella. Vietnam Rubber Group and Southern Food Corporation (Vinafood 2) will also undergo this process this year.

“These are big companies whose valuation results must be checked by State Audit of Vietnam to avoid capital and asset losses,” said the Deputy Prime Minister.

From now until 2020, the aim of restructuring SOEs and improving their performance is to create a stronger and more substantial transition, with equitization as one solution.

The enterprises retained by the State must improve their governance, he stressed.

Ministries and central agencies shall complete legal documents, intensify inspection and supervision, and prevent loss of State capital and corrupt practices in divestment and equitization. The legal loopholes in equitization should be soon remedied so that this process is carried out quickly in accordance with legal regulations.

Weak businesses shall be handled following the spirit of Resolution 05/NQ-TW: the State does not spend more money restructuring enterprises. Ministries, agencies and localities should take the initiative in dealing with ailing enterprises.

Most Vietnamese enterprises have low development indexes

Vietnam had only 442,485 enterprises as of end-2015 and most of them have low development indexes, according to a study conducted by the General Statistics Office in collaboration with the Steering Committee for Enterprise Reform and Development and the Vietnam Chamber of Commerce and Industry.

The study released in Hanoi on April 11 also shows that by 2015, the total gross turnover of the corporate sector reached nearly VND15 quadrillion (about US$661 billion), but their pre-tax profit totaled VND552.7 trillion (about US$24.4 billion) while the taxes paid totaled VND764.4 trillion (about US$33.7 billion).

This figure indicates that with every VND100 of revenue, Vietnamese businesses just earned a pre-tax profit of VND3.7 and contributed VND5 to the State budget.

Pham Dinh Thuy, director of the Industrial Statistics Department, said that among nearly half a million operating enterprises, 97% are of small and medium size and 60% are micro small. “Low investment capital and outdated equipment are the main reasons leading to low productivity and profitability and unsustainable development,” Thuy added.

According to Thuy, the number of newly established enterprises in 2016 rose by a record high but their contribution to economic growth in the first quarter of 2017 is almost negligible.

In 2016, more than 110,000 enterprises were established. However, only 41% of them are operational and make profits in the first quarter of 2017 while more than 60,000 businesses have almost no impact on the overall economic picture.

Updated on December 31, 2015, the total number of enterprises actually operating in the whole country was 442,485. In the period of 2000-2015, the corporate sector gained an annual growth rate of 17.6% in revenue, 19% in profit and 18.2% in budget contribution.

HCMC to set up business support center

The HCMC government intends to set up a business support center that will carry out a survey of business bottlenecks every six months, as one of the solutions to improve its Provincial Competitiveness Index (PCI).

The city last year moved down from the 6th to the 8th place in the PCI rankings of the Vietnam Chamber of Commerce and Industry (VCCI), says a report by the HCMC Department of Planning and Investment at a meeting on PCI improvement on April 11.

Five component indicators in the PCI reading of the city fell. Transparency fell from 6.51 to 6.5 points as businesses believed documents related to State management activities were not readily available, and the link between enterprises and State agencies was not strong enough.

The indicator of fair competition recorded a drop from 4.28 to 4.13 points, with respondents saying the municipal authorities still favor foreign-invested enterprises (FIEs) and State-owned enterprises (SOEs) over others.

The active government indicator declined from 4.19 to 4.17 points. Meanwhile, the indicator of business support services went down from seven to 6.82 points and that of the legal environment slid from 5.04 to 4.25 points.

In terms of transparency, many investors are now expressing their interest in the city, but municipal agencies are not really helpful, said Nguyen Hoang Minh, deputy director of the Department of Planning and Investment.

For example, regarding access to land, when businesses need land to expand their production, they look for equal government support regardless of the type of enterprise. Thus, it is not right to let private firms say the municipal government favors FIEs or SOEs, Minh said.

HCMC vice chairman Tran Vinh Tuyen said that although the city’s access to land indicator improved in 2016, there is still the state of people asking or even giving bribes for land planning quotas. In the coming time, it should be all made public to citizens.

On informal charges, Tuyen suggested city departments and districts strengthen their dialogues with enterprises, encourage them to abandon corrupt practices, since a healthy clean government needs joint efforts from both authorities and society.

In addition, the city will accelerate online public services that reduce direct contact between civil servants and citizens as well as businesses in an attempt to prevent harassment and bring down informal costs.

Meanwhile, to better the indicator of fair competition, the city is looking to build a center for entrepreneurship that will assist enterprises in investment and guide them to do business in all fields. This center will also offer consultancy, help foreign enterprises directly contact the city’s policies and planning to facilitate their investment, and act as a bridge between investors and policies as well as planning in an open and transparent manner.

Moreover, the city will study the formation of its own survey with the criteria suitable for the city. The survey will be conducted every six months, starting early this June (by the HCMC Institute of Economics), which will poll both domestic and foreign investors concerning the issues of their concerns such as taxation, publicity and transparency of planning and procedures.

“We should make State agencies a place for enterprises to rely on rather than their obsession when they want to do business here,” Tuyen said at the meeting on April 11.

State Treasury mobilises VNĐ6.8 trillion through Government bonds

The Việt Nam State Treasury raised around VNĐ6.8 trillion (US$300 million) for the state budget through an auction of bonds on the Hà Nội Stock Exchange (HNX) on Wednesday.

The bonds were offered for five tenures - five years, seven years, 15 years and 20 years -  with VNĐ1 trillion in each term, and the 30-year term valued at VNĐ2 trillion.

Bonds worth a total of VNĐ3 trillion for five, 15 and 20 years got sold out at lower interest rates compared to the previous sessions, with winning yields of between 5.1 per cent and 7.36 per cent per year.

For seven-year bonds, only VNĐ610 billion of VNĐ1 trillion was raised, with a winning yield of 5.43 per cent, a similar rate to the previous sale on April 5.

The 30-year bonds did well, collecting VNĐ2 trillion at 7.79 per cent interest per year, six basic points lower compared to the session held on April 5.

A total of VNĐ1.2 trillion was raised in the sub-session sales for the three terms of 15, 20 and 30 years.

The state treasury has mobilised around VNĐ68.3 trillion since the beginning of this year. In 2017, it plans to issue Government bonds of VNĐ 183.3 trillion.

Đồng Nai: 30 of 32 IZs treating wastewater

Thirty two industrial zones were founded in Đồng Nai Province last month and 30 of them are equipped with proper wastewater treatment plants, the provincial People’s Committee declared on Thursday.

The plants have total capacity of more than 135,000cu.m per day.

At present, total wastewater discharged from the 30 industrial zones was some 96,000cu.m per day, the provincial industrial zones management board said.

To check resources of wastewater from industrial zones, the province has installed 25 automobile wastewater checking stations. The stations are connected with a supervision centre at the Đồng Nai Department of Natural Resources and Environment. The stations transfer information and data to the centre every 5-10 minutes, helping managers keep a close watch on the wastewater and give timely warnings and treatment suggestions.

Võ Văn Chánh, deputy chairman of the provincial People’s Committee, said the province has been completing procedures to set up six more checking stations at six industrial zones to ensure that by the end of this year, all functional industrial zones had wastewater checking stations. 

Traders not buy rice despite price reduction in Mekong Delta

Farmers have slowed harvest of ripening winter spring rice in the Mekong Delta because unseasonable rains have caused many areas fall to the ground and prices have dropped continuously for the last couple of days. 

According to Mr. Nguyen Cong Ly, owner of a combine harvester establishment in Cao Lanh district, Dong Thap, the price now drops to VND4,400 a kilogram of normal rice, VND4,900-5,000 a kilogram of fresh long grain rice and VND5,200 a kilogram of fragrant varieties. 

The prices reduce by VND400-600 a kilogram on average compared to that in the early of the winter spring crop. 

Talking to Sai Gon Giai Phong Newspaper yesterday, Mr. Ly said that many traders left their deposits, refusing to buy ready to harvest rice to mitigate losses.

Mr. Le Van Hoang from Phuong Thinh commune, Cao Lanh district said that traders left the deposit of VND200,000-300,000 a hectare they paid formerly to buy long grain rice at the price of VND5,400 a kilogram. 

Farmers have been seeking consumption sources accepting low prices to reduce losses.

Some traders in Dong Thap, Vinh Long and Tien Giang provinces say that five percent broken rice price now approximates VND6,700 a kilogram, 25 percent broken rice is sold at VND6,500-6,600 a kilogram. These prices are not high but businesses have slowed buying, resulting in traders’ purchase reduction.

The Ministry of Agriculture and Rural Development reports that the Mekong Delta has harvested over 1.2 million hectares of winter spring rice out of the total of 1.5 million hectares. Productivity reaches 6.4-6.5 tons a hectare. 

In addition, local famers have sown over 450,000 hectares of summer autumn rice crop as per plan. 

Last month, businesses exported nearly 419,000 tons of rice worth $186 million, taking the total number since early this year to one million tons worth $472 million.

Vietnam increases backing for supporting industry development

The government decided to increase backing for supporting industry development, said the Ministry of Industry and Trade.

The government will provide maximum support to enterprises which are suppliers of local and foreign companies, which attract foreign investors in the supporting industry or help other enterprises to apply management system to meet production chains in the globe, help research and development, application of transferred new production technology of accessories, materials.

Enterprises which spread information of supporting industry annually will also receive most support while enterprises which provide training to improve personnel quality will receive support equivalent to 70 percent of the cost from the government.

The People’s Committee in Ho Chi Minh City also has a program to support enterprises in supporting industry, which started on March 26, 2017. Enterprises in the field of mechanism, rubber, food processing, electronic – IT, textile-garment are eligible for loans with preferential interest in seven years after the first disbursement.

Truong Hai's 2016 revenue up 43%

The Truong Hai Auto Joint Stock Company (Thaco) has recently released its audited consolidated financial statements for 2016, revealing that Vietnam’s largest automobile company recorded net revenue of VND59.2 trillion ($2.61 billion), an increase of VND17.7 trillion ($780.7 million) compared to 2015, or a 43 per cent increase.

Revenue growth was equivalent to growth in vehicle output (40 per cent), reaching more than 112,847 vehicles, an increase of 32,400 vehicles against 2015. Its growth was much higher than the 30 per cent average among members of the Vietnam Automobile Manufacturer’s Association (VAMA) during the year.

Although Thaco’s revenue and sales volume increased 40 per cent, its pre-tax-profit rose only 15 per cent, from VND7.4 trillion ($326.4 million) to VND8.53 trillion ($376.3 million). After-tax profit was approximately VND8 trillion ($352.9 million), for an average of nearly $1 million each day.

Excluding minority interests, Thaco’s net profit came in at VND7.9 trillion ($348.5 million), equivalent to an earnings per share (EPS) of VND19,372 ($0.85). Its after-tax profit was lower than at other listed companies, such as Vinamilk (VND9.4 trillion, or $414.6 million) and far behind large companies like GAS, Vietcombank, Hoa Phat, BIDV, Sabeco, Masan, and Vingroup. Two years ago its profit was growing in the triple digits.

As at the end of 2016, its total assets and equity were VND53.9 trillion ($2.38 billion) and VND23.3 billion ($1.03 billion), respectively. Last year it outlaid VND8.2 trillion ($361.7 million) to raise its stake in the Dai Quang Minh Real Estate Joint Stock Company, the investor of the Thu Thiem Sala urban area project in Ho Chi Minh City, from 45 per cent to 90 per cent.

Consisting of Thaco KIA, Thaco Bus, Thaco Truck, VinaMazda, and Peugeot, Thaco now accounts for 41.5 per cent of VAMA members’ sales. This year it has a relatively low growth target of 118,000 units, up 5 per cent compared to 2016.

Coffee, pepper enterprises and farmers should connect well

Links between enterprises and coffee and pepper farmers need to be enhanced to improve the economic value and competitiveness of the two products.

This idea was agreed on by Deputy Minister of Agriculture and Rural Development Le Quoc Doanh and representatives from the Vietnam Coffee-Cocoa Association (VICOFA) and Vietnam Pepper Association (VPA) at their working session on April 11.

VICOFA General Secretary Nguyen Viet Vinh said that enterprises and farmers currently do not connect well because of intermediaries who benefit much from business deals.

In 2016, Vietnam ranked second in the world in coffee exports. It sold 1.78 million tonnes of coffee for 3.34 billion USD, up 32.8 percent in volume and 25 percent in value. However, export value remained low as most coffee beans were exported unprocessed.

Similarly, Vietnam mainly exports raw pepper, but a lack of varieties and diseases are causing a decrease in the quality of Vietnamese pepper.

VPA Deputy General Secretary Nguyen Mai Oanh said that although the ministry of agriculture and rural development established a pepper research centre in Gia Lai province, Vietnam has to date have no standard set of varieties.

She requested more efforts to find good pepper varieties suitable for Vietnam’s land and weather.

Foreign partners are willing to pay 10-20 percent higher than normal if Vietnam can provide clean and safe pepper, she added.

According to Deputy Minister Doanh, 98 percent of Vietnamese pepper is shipped abroad. Therefore, he asked businesses to work with farmers to ensure safe and sustainable pepper production.

In 2016, Vietnam’s pepper exports reached 177,893 tonnes, earning 1.43 billion USD, an increase of 35.3 percent in volume and 13.5 percent in value year-on-year.

Businesses more aware of CSR: Vietnam Report

A survey by Vietnam Report JSC revealed today that leading firms in Việt Nam are more aware of the importance of corporate social responsibility (CSR) for their growth and prosperity.

Five CSR issues which received significant attention from firms were business transparency, local community aid, reducing unemployment, environmental protection and career orientation for the youth, according to the survey’s findings.

The major motivation behind businesses’ CSR strategies is to preserve and enhance the brand’s reputation, which accounted for 89.47 per cent of the responses.

Businesses were also more aware that “to give is to receive,” according to Viet Nam Report.

A majority of leading firms agreed that growth and prosperity were vital to their success.

The findings were highlighted at a ceremony held on Wednesday in Hà Nội to announce the top 500 best growth (Fast 500) and top 500 best prosperity (BP500) companies.

2017 is the seventh year in a row that Fast500 has been published and the second year for BP500.

FPT Software topped the Fast500 list, while the Vietnam Military Telecommunications Group topped BP500.

Vietnam Report also announced the top 10 property developers, which included VinGroup, Novaland, Sacomreal, CEO Group and Hoa Bình Group.

For the first time, Vietnam Report officially launched the Top 50 Việt Nam Best Growth and Prosperity at today’s event.

Its report on Việt Nam’s growth and prosperity in 2017 also pointed out that the economy must be transformed in terms of quality and efficiency to improve competitiveness for successful integration and sustainable development.

Ministry rejects proposal to build mini apartments

The Ministry of Construction has rejected a HCMC Real Estate Association proposal for housing developers to construct mini apartments that measure less than 25 square meters each.

The association has proposed the Ministry of Construction give the green light to developers to construction these mini apartment units for rent to replace many slums and cramped, dirty apartment buildings in HCMC that fail to meet both quality requirements and living conditions for tenants.

The association explains that the majority of low-income earners can afford to own these small units, which will result in a substantial improvement in their living environment and security issues.

However, the ministry said the proposal was not in line with its Circular 20/2016 TT-BXD.

Specifically, the circular specifies households or individuals can develop rooms for rent with a minimum area of 10 square meters, as the majority of such individuals develop these housing units on their land that is usually not large. These regulations are aimed to encourage households or individuals to build homes for rent.

Meanwhile, each budget housing apartment developed by enterprises must cover at least 25 square meters since they can secure vast areas of land to develop their projects.

In addition to apartment units, they have to invest in technical and social infrastructure in order to guarantee residents’ quality of life, the ministry added.

Regarding a question by the HCMC Real Estate Association over funding for social housing projects to support the poor, the ministry said the Government has directed the Ministry of Finance to work with relevant ministries and agencies to map out a mechanism for partly covering interest rates for social housing apartments, which are budget homes for poor people.

Besides, the Ministry of Planning and Investment has been assigned to coordinate with the ministries of finance and construction to determine the amount of money needed.

The State Bank of Vietnam and the Vietnam Bank for Social Policy are responsible for devising interest rates. Then, the Prime Minister will have a final say on this.

Work starts on vehicle parts plant in Binh Duong

Taiwan’s Kingstar Technology Co Ltd on April 10 began construction on a plant manufacturing bicycles, and automobile and motorcycle parts at Dai Dang Industrial Park in the southern province of Binh Duong, the Vietnam News Agency reports.

The facility, covering nearly 80,000 square meters, is expected to turn out over 1.5 million products per year, including 300,000 bicycles, one million bike frames, and 100,000 tons of parts for bicycles, motorcycles and cars.

The factory is scheduled to become operational at the end of this year, creating jobs for hundreds of locals, said the company.

The province’s chairman, Tran Thanh Liem, said the construction of the plant matches the province’s investment attraction policy and orientations, and is consistent with its master plan for industrial development.

The province has enjoyed a strong start in investment attraction since early this year, he said.

In particular, more than US$1 billion in foreign direct investment was pledged into the locality in quarter one, with 43 newly-registered projects valued at US$793 million, and operational projects adding US$551 million.

Besides, its industrial production index rose by over 7% compared to the same period last year.

Singaporean IT companies seek cooperation opportunities in Vietnam

International Enterprise (IE) Singapore, the Singaporean government agency promoting international trade and partnering Singapore companies in going global, is working to build a bridge between Singaporean and Vietnamese companies in the information technology (IT) sector.

With the growing interest of Singaporean companies in Vietnamese high-tech and start-up ecosystems, Tan Soon Kim, assistant chief executive officer of IE Singapore who oversees the agency’s international operations for Southeast Asia and Oceania, North and South Asia, North America and Western Europe, came to Vietnam in the first week of April to assess the potential and growth opportunities of the Vietnamese technology and start-up market.

During the trip to Vietnam, Tan met the leaders of the Ministry of Science and Technology and Ministry of Industry and Trade to discuss the connection between Singaporean and Vietnamese companies in the technology sector.

At the same time, he also spent some time with potential start-up companies such as Tiki, Haravan, Giaohangnhanh, Circo Co-working Space. Tan suggested that IE Singapore can assist them in connecting with the Singaporean partners.

During the trip, Tan also paid a visit to VNG. After the discussion with Nguyen Hoanh Tien, vice president of operations at VNG Corporation, and listening to VNG's history of development, corporate culture and products, Tan said, “I was really inspired by your story. VNG is not just an IT or tech company, but to me it’s very much a lifestyle company, and you’ve successfully created so many services and products that has integrated the real aspects of living. Overtime, it will probably become indispensable and every Vietnamese will probably have a VNG app in their phones.”

 “I think the willingness to learn, to be open and to look for partnership is critical to scale up globally. In my opinion, VNG has successful ingredients already and very soon you’ll be a global player,” Tan said at the end of the trip.

VNG has been exporting its services and application software to some foreign countries. One year ago, in March 2016, VNG introduced its social network Zalo to Myanmar. From June to October 2016, Zalo gained 2 million users in Myanmar.

“If developed well, Myanmar would become as lucrative a market as Vietnam. Zalo’s long-term goal is to have 9-10 million users,” said VNG deputy director Vuong Quang Khai.

VNG aims to become an internationally competitive IT enterprise. In 2012, VNG exported its games “Sky Garden” and “Oink” to the Chinese and Japanese markets. Notably, the online game “Sky garden” was awarded “Most innovative foreign game” after three months launching in the Chinese market.

VIETWATER 2017 slated for November

VIETWATER, Vietnam’s leading international water supply, sanitation, water resources, and purification event, will hold its ninth edition in Ho Chi Minh City from November 8 to 10, presenting a trade platform for more than 450 industry players to showcase their new solutions and innovative products.

According to a survey conducted at VIETWATER 2016, 84 per cent of exhibiting companies found new buyers while 94 per cent expressed satisfaction with the event.

“The return of VIETWATER 2017 will cater to sustainable water development in Vietnam and feature a wide array of advanced technologies and new products and solutions in the water industry,” said Ms. Eliane van Doorn, Director of Business Development ASEAN at UBM Asia, the largest trade show organizer in Asia. “Four hundred and fifty leading companies from 38 countries will gather together to network and exchange insights with local and international professionals, key leaders, and decision makers.”

More than an exhibition, VIETWATER will also provide many informative sessions at international conferences and the technical seminars, enabling industry players to explore the latest innovations and solutions as well as share practical experience.

With support from the Vietnam Water Supply and Sewerage Association (VWSA), the Ministry of Construction (MoC), and other organizations, VIETWATER 2017 will significantly contribute to the improvement and development of water quality and quantity in Vietnam.

Mr. Cao Lai Quang, Chairman of VWSA, also expressed his confidence in VIETWATER 2017, which will encourage business cooperation in water development between Vietnamese enterprises and international partners, by accessing and exchanging new technologies.

Vietnam Report announces top 500 companies with best growth and prosperity in Vietnam

The Vietnam Report Joint Stock Company (Vietnam Report) announced its 2017 list of top 500 best growth (FAST500) and best prosperity (BP500) companies in Vietnam at a ceremony held in Hanoi, on April 12.

This is the seventh year in a row that FAST500 has been published and the second year for BP500, based on the research and assessment outcomes conducted independently by Vietnam Report.

Addressing the event, Deputy Minister of Planning and Investment, Dang Huy Dong, spoke highly of the honoured businesses, highlighting their good business operation, growth potential, continuous business innovation and flexibility, responsibility for the society and the community, and significant contributions to the development and prosperity of the economy.

FAST500 sees the presence of the Sunhouse Group JSC, the Da Nang – Mien Trung Investment JSC, the Dong Nai Plastic JSC and the Central Forest Seed JSC, while BP500 features military-run telecom giant Viettel, the Vietnam Dairy Products JSC (Vinamilk), the Mobiphone Corporation and the FPT Telecom JSC.

On the occasion, Vietnam Report also introduced the Vietnam Growth and Prosperity Report 2017, which pointed out that the new period requires the Vietnam economy to make radical transformations in terms of quality, efficiency and competitiveness to ensure successful integration and sustainable development.

As for enterprises, in order to gain success and maintain status in the market, the two factors of growth and prosperity must be thoroughly taken into account and closely associated with each other, the report said.

It added that businesses should not only set out growth targets in terms of quantity but also have to ensure growth in quality, which means responsibility for labourers, the society and the community.

According to a Vietnam Report survey conducted among its FAST500 and BP500 businesses, over 80% of the interviewed companies were clearly aware of and highly appreciated the role of growth, considering it the most important factor to bring businesses closer to prosperity.

Corporate social responsibility (CSR) was also the issue that received the most feedback from enterprises. CSR mentions an entire process of striving to promote transparency in business, support local communities, reduce the unemployment rate, protect the environment and provide employment for labourers.

The biggest motivation for businesses in enforcing their social responsibility is to preserve and increase their trademark prestige.

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

Singaporean IT companies seek cooperation opportunities in Vietnam, VIETWATER 2017 slated for November, VIB targets $33m pre-tax profit in 2017, Corporate profit reduces about 60 percent after five years
 
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