BUSINESS NEWS IN BRIEF 12/10

Hanoi Gift Show 2018 to open next week

The Hanoi Gift Show 2018 will take place in the capital city from October 17-20, the municipal Department of Industry and Trade told a press conference on October 11. 

Speaking at the event, Deputy Director of the municipal Department of Industry and Trade Dam Tien Thang said that apart from products by export firms and traditional craft villages, the event will introduce over 100 products by domestic and foreign designers, including this year’s winners of a local handicraft design contest.

It will also afford businesses a chance to introduce products; seek consumers; expand export markets; as well as share experience in designing, producing, and selling handicrafts. 

With over 650 stalls by nearly 250 domestic and foreign firms from India, Nepal, Japan, the Republic of Korea, and China, the show is expected to lure some 12,000 visitors and more than 600 importers from the US, Europe, Japan, Australia, Canada, and Brazil. 

As many as 40 university students majoring in the English, Japanese, and French languages will also be present to help domestic firms connect with foreign buyers.

An international seminar on traditional craft villages and handicrafts is also planned as part of the event’s activities. 

Series of manufacturing expos take place in HCM City

A series of exhibitions have opened at a venue in Ho Chi Minh City on October 11, featuring advanced metalworking solutions, electronics manufacturing technologies, and supporting products.

Metalex Vietnam 2018, Nepcon Vietnam 2018, and the Supporting Industry Show 2018 are all being held by Reed Tradex in partnership with the Investment and Trade Promotion Centre of HCM City (ITPC), the HCM City Centre for Supporting Industries’ Development (CSID), and the Japan External Trade Organisation (JETRO) at the Saigon Exhibition and Convention Centre (SECC) in the southern city.

Metalex Vietnam and Nepcon Vietnam are annual events that have been held over the past 10 years to provide platforms for manufacturers with updates and new knowledge in metalworking and electronics, said Reed Tradex CEO Isara Nurintranart in his opening remarks.

More than 10,000 buyers from around the world are expected to attend Metalex Vietnam 2018 to explore the cutting-edge machinery tools and metalworking solutions on display by 500 exhibitors from 25 countries and territories. The most popular stands include Hoffman, Hexagon, Takamaz, and Weldcom.

Nepcon Vietnam – the country’s only exhibition on SMT, testing technologies and equipment, and supporting industries for electronics manufacturing – is an opportunity for visitors to explore advanced technologies from over 200 firms from 20 countries, as well as acquire know-how by meeting technology providers and industry experts in seminars and expand business networks in the sector.

Organised by JETRO, the Supporting Industry Show 2018 delivers a platform for networking between players in the supporting industry’s supply chains from Vietnam and Japan.

Takimoto Koji, JETRO’s chief representative in HCM City, said that about 2,500 Japanese enterprises now operate in Vietnam, more than half of which are engaged in manufacturing. Most of these firms have to import materials, spare parts, and accessories, he said, explaining the importance of the event.

Despite wanting to increase local content in their products, they could only purchase around 30 percent of the parts and components they needed in Vietnam, including those produced by other Japanese manufacturers, he noted.

The show brings together 29 producers from Japan, including many big names that have been present in Vietnam. It is expected to enhance linkages between Japanese manufacturers and domestic suppliers that will facilitate higher local content in made-in-Vietnam products in the coming time.

The three expos will run through until October 13.

Vietnam economy steps into the late phase of business cycle: Brokerage

E-Commerce revenue increases, FIEs obscure potential risks in domestic economy, Coffee exporters count on local market as exports slow
For 2018, Vietnam`s inflation is estimated at 4-4.2% year-on-year.

The Vietnamese economy is stepping into the late phase of the business cycle, while FDI corporations alone cannot drive the economy, according to Vietnam Dragon Securities Corporation (VDSC). 

Although there are large-scale private projects, most of them still depends on credit flows. 
The ratio of total credit to GDP has now reached 164%, the second highest level compared with other regional countries. On top of that monetary policy will be tighter in the next few years. The economy's recent momentum has been driven by domestic consumption.

Moreover, Vietnam's macro-stability is being somehow threatened. It is possible to think about cost-push inflation as input costs rose sharply in the past few months. Oil and electricity prices are the main drivers. In addition, food prices surged. Although core inflation is still low, VDSC recorded a slightly stronger month-over-month growth. Producers might eventually pass it on to consumers.

 For 2018, Vietnam's inflation is estimated at 4-4.2% year-on-year.

According to official data, GDP growth in the January - September period is approximately at 7%, the highest level since 2011. However, Vietnam's economy grew at an annual pace of 6.9% in the third quarter, lower than the third quarter of 2017's 7.6% growth rate. On the aggregate supply front, the agriculture sector saw the most improvement. Manufacturing and services sectors growth slowed down compared with the same period a year ago. 

Agriculture producers have had a good year due to better export orders. While rice exporters are busy, fruit and fish exports are showing signs of strength. Notably, Vietnam's fish sector seems to benefit from trade tensions as the US softens its regulation and taxes put on imported fish. Meanwhile, China also reduced its import tariffs to meet domestic demand. Forestry products exports growth soared in 9M2018.

In the manufacturing sector, growth slowed down in the third quarter compared with 2017 although it is higher than during the 2011-2016 period. While large-scale projects in steel and the oil refinery sectors are in their initial phase, textile, furniture, pharmaceutical and car producers are benefiting from trade tensions and Vietnam's tariffs. Nevertheless, Samsung is still an essential part of the economy. 

According to a Nikkei report, Vietnam's manufacturing PMI gradually decreased and was at 52 in September, the lowest level since November 2017. Although the country is still the 'bright star' in ASEAN, there were less orders in September while output and job creation softened.

Meanwhile, the service sector, contributing nearly a half of Vietnam's GDP, also recorded a slower growth. Wholesale and retail sales, accommodation and catering services, finance and banking as well as real estate saw lower growth.

The slip of wholesale and retail sales is an early signal of a potential peak in consumption. Slower growth of international visitors is not good for the accommodation and catering services. Tighter monetary conditions are affecting the financial services sector.
Third quarter business results decisive

The fact that Vietnam was added to FTSE Russell's watch list is very positive news. In addition, liquidity gradually increased. Fears of 'missing out' may encourage investors to return to the market. 

In September 27, FTSE Russell added Vietnam's equity market onto its watch list for possible reclassification. This was a positive news for Vietnam, after failing to join the MSCI list this June. 

FTSE Russell and MSCI are the two biggest institutions providing global indices that are used as tracking benchmarks by exchange-traded funds (ETFs) around the globe. 250 ETFs track MSCI's indices while 156 ETFs use FTSE.

After dropping in the past few months, the VND has stabilized. Interest rates have also not fluctuated dramatically. In that context, the third quarter business results will likely determine the trend for the market. 

VDSC expected that there will be more diversion between companies' stock price movements. Positive results overall will support the market. However, the amplitude of share price movements will not be as big as what happened in the beginning of 2018. 

In summary, VDSC stressed its belief that the worst period of 2018 has been left behind. After the weak performance in the first half of 2018, emerging and frontier markets have started recovering. Vietnam is not an exception.


Vietnam's customs revenue up 5.21% in Jan - Sep


E-Commerce revenue increases, FIEs obscure potential risks in domestic economy, Coffee exporters count on local market as exports slow

The revenue is equal to 79.54% of estimation and 76.83% of the 2018 target, Hai Quan newspaper reported.

Vietnam`s import-export duty revenue reached VND225.11 trillion (US$9.66 billion) in the first nine months of 2018, up 5.21% compared to the corresponding period last year, according to the General Department of Vietnam Customs (GDVC).
 
According to the GDVC's Import-Export Tax Department, customs revenue in the January - August period decreased by VND17.9 trillion (US$768.28 million) due to tariff cuts under free trade agreement commitments, while revenue from the export-import and special consumption taxes in the first nine months of 2018 is on a downtrend. 

However, a significant jump in imports (15%) in the January - September period led to a 12.53% increase in value-added tax year-on-year, which is one of the reason behind a higher customs revenue during this period compared to the same period of last year. 

Notably, collection from imported petroleum products and crude oil stood at VND29.05 trillion (US$1.24 billion), up 34.32% year-on-year or VND7.42 trillion (US$318.53 million). Meanwhile, the figure from other imported goods was reported at VND196.06 trillion (US$8.41 billion), up 1.93% year-on-year or VND3.72 trillion (US$159.68 million). 

Customs departments in a number of cities and provinces saw a higher revenue collection in the first nine months of 2018, including Khanh Hoa Customs with a 14-fold increase, Quang Ngai 3-fold, Quang Ninh 0.3-fold compared to the respective estimations. 

Other customs offices also experienced positive result, such as Ho Chi Minh City Customs with revenue equivalent to 70.87% of the year's target, Hai Phong 74.99%, Ba Ria - Vung Tau 90.52%, Hanoi  67.62%, among others. 

In a meeting on April 6, Luu Manh Tuong, director of the Import - Export Department, said it would be challenging to achieve the revenue target of VND283 trillion (US$12.5 billion) and the expectation of VND293 trillion (US$12.9 billion) in 2018. 

Specifically, forgone revenue from FTAs in 2018 is expected at VND30.1 trillion (US$1.3 billion).

Additionally, the import tariffs for auto parts will be removed as stipulated in the ASEAN trade in Goods Agreement (ATIGA) and the ASEAN - China Free Trade Area (ACFTA), import tariffs, thus will be refunded to enterprises.

To achieve revenue target in 2018, Tuong stressed the necessity of creating favorable conditions for enterprises and preventing them from exploiting loopholes in policies. Concurrently, it is essential to timely identify smuggling and trade fraud activities to avoid losses of state budget. 


IFC to promote private investments in Vietnam

E-Commerce revenue increases, FIEs obscure potential risks in domestic economy, Coffee exporters count on local market as exports slow

International Finance Corporation (IFC) committed US$3.4 billion in fiscal year 2018 in East Asia and the Pacific, spurring the growth of a thriving private sector in the region.

IFC, a member of the World Bank Group, stated it would promote private investments in the power sector and agribusiness in a number of countries, including Vietnam in the fiscal year of 2019. 

IFC committed US$3.4 billion in fiscal year 2018 in East Asia and the Pacific, spurring the growth of a thriving private sector in the region to ensure sustained growth through innovation, job creation, and infrastructure development, among others.

In Vietnam, where only about 35% of the population is connected to piped water, IFC lent US$15.3 million to one of the first private sector water companies - DNP Water JSC - to increase availability of clean water for urban households and residents in provincial cities. 

Overall, IFC provided $2 billion in financing for its own account and mobilized US$1.4 billion from other investors in the fiscal year, with IFC's support enabling businesses to provide over 550,000 jobs, distribute power to 4.4 million people, provide water to 9.6 million people, and improve livelihoods of more than 710,000 farmers.

Rapid urbanization and increasing business demand in the East Asia and the Pacific region are feeding massive infrastructure needs, while at the same time, the region is a major contributor to the global greenhouse gas emissions and highly vulnerable to natural disasters and climate impact. 

"In the face of countries' limited public resources, IFC has been actively looking for solutions to crowd in all possible sources of finance, innovation, and expertise to help meet their challenges," said Vivek Pathak, IFC's Regional Director for East Asia and the Pacific. "IFC is unlocking opportunities in emerging markets and creating jobs with the aim of achieving sustainability through lower costs and efficient service delivery in key sectors such as finance, infrastructure, healthcare, and education."

As the private sector contributes 90% of jobs in the region, IFC has been boosting its support to small and medium sized enterprises (SMEs) to promote job creation, which is key to reducing poverty in the region. 

In addition to financing, IFC advises governments and the private sector in the region to create a business-enabling environment and improve sustainability standards. At the end of the fiscal year of 2018, IFC's advisory services program in East Asia and the Pacific included 108 active projects valued at a combined US$244.1 million. ​

In the fiscal year of 2019, in coordination with other World Bank Group's member organizations, IFC's strategic focus continues to be on maximizing private finance to address development challenges.

The Hong Kong Monetary Authority's US$1 billion commitment to its Managed Co-Lending Portfolio Program will enable IFC to expand financing projects across region. 

Singapore's wealth fund GIC invests in Vietnam's Masan: Bloomberg

E-Commerce revenue increases, FIEs obscure potential risks in domestic economy, Coffee exporters count on local market as exports slow

It purchased the stock as part of a placement by KKR, which offloaded its entire holding in a US$209 million deal.

Singapore's sovereign wealth fund GIC bought roughly half of US-based KKR & Co.'s 4.7% stake in Masan, Bloomberg reported. 
 
It purchased the stock as part of a placement by KKR, which offloaded its entire holding in a US$209 million deal.

KKR is exiting its Masan investment after shares of the Vietnamese conglomerate more than doubled. The private equity firm sold 54.8 million Masan shares at VND89,200 (US$3.84) apiece, the midpoint of a marketed range. 

An investment in Masan will join GIC purchases in Vietnam's airlines, banking and real estate industries. GIC Chief Executive Officer Lim Chow Kiat said last month that he saw potential opportunities in emerging markets, which are experiencing "idiosyncratic" rather than "systemic" challenges.

The sale price represents a 5% discount to Masan's Thursday (October 4) close. The shares were offered at VND87,800 - 90,600 (US$3.78 - 3.90) each, according to terms for the deal obtained by Bloomberg earlier.

KKR's offering was oversubscribed with strong demand from long-only funds and local investors, according to Bloomberg. The top five investors who participated bought about 85% of the offering.

​In April 2017, KKR said it was buying US$100 million of Masan stock from Danish private equity firm PENM Partners. It also spent another US$150 million for a stake in Masan's meat business, according to a statement at the time.

Masan shares have risen 109% from KKR's announcement of the investments' completion through October 4, compared with a 44% gain in the benchmark VN Index over the period.


Goods imported by Air France enjoy tariff exemption

The Government Office has released a document on Deputy PM Vuong Dinh Hue’s directions on tariff exemptions for goods imported by Air France. 

Accordingly, the Deputy PM approved the suggestions of the Ministry of Finance on tariff exemptions for goods imported by Air France. 

He assigned the Ministry of Finance and customs agencies to supervise and monitor the imports and use of goods imported by Air France appropriately, which is regulated at Article 10 of the Agreement on Trade in Civil Aircraft inked on April 14, 1977 between the Governments of Viet Nam and France.

Ecommerce revenue reaches US$6.2 billion in 2017

E-Commerce revenue increases, FIEs obscure potential risks in domestic economy, Coffee exporters count on local market as exports slow

Vietnam saw the ecommerce sector grow by a whopping 24% to US$6.2 billion in revenue in 2017, according to the Vietnam Ecommerce White Book 2018 launched by the Ecommerce and Digital Economy Agency in late September.

The Vietnamese ecommerce sector recorded the strongest growth at 37% in 2015.

The number of shopping transactions online reached an estimated 33.6 million in 2017, up some 1.1 million against the 32.7 million transactions recorded in 2016. Customers in 2017 spent US$186 on each online purchase, rising US$16 from the US$170 spent in 2016.

Data from the Ecommerce and Digital Economy Agency show that business-to-consumer online transactions accounted for 3.6% of the total retail sales of goods in 2017, edging up 0.6% against 2016.

Revenue from online goods retail has been on the rise in recent years as customers become more used to shopping online, according to the Vietnam Ecommerce Association.

Regarding payment methods, 82% of customers opted to pay cash on delivery of the goods, 48% made payments through bank transfers, 19% paid with international payment cards and 7% used ewallets.

The White Book also showed the most popular way of shopping goods and services online. In particular, a package of 15 goods or services accounted for 19% of purchases, while packages of 10 to 15 goods or services represented 13%. Packages with five to nine items and those with less than five items made up 38% and 30%, respectively.

Vietnam currently has over 50 million internet users, making up 54% of the country’s population and surpassing the world’s average of 46.64%, according to the agency. The country is considered a potential market for developing the ecommerce sector.

Revenue from the online retail sector in Vietnam rocketed from US$2.2 billion in 2013 to US$6.2 billion in 2017. The country has witnessed diversity in ecommerce operations and transactions, not only on computers but also on smartphones and tablets.

EVN achieves high workload in Jan-Sept period

During the year up to September, Vietnam Electricity Corporation (EVN) managed to complete a host of works, from construction of power grids and transmission lines to purchase of solar power from independent plants, the local media reported.

EVN signed 35 power purchase agreements with solar power investors that are EVN’s nonmembers, with a total capacity of 2,271 megawatts. In particular, a solar power project in Phong Dien District, Thua-Thien Hue Province, with a designed capacity of 35 megawatts, was the first project to be officially integrated into the national power grid and was put into operation in early October.

Regarding power-transmission projects, during the year up to September, EVN and the relevant power agencies completed construction of 121 electricity grids supporting 110-500 kilovolts (kV). In addition, they started construction on 102 power transmission projects.

During the given period, the group also put into commercial operation two power generators, with a combined capacity of 1,200 megawatts, at Vinh Tan 4 thermal power plant and two 300-megawatt units at Thai Binh thermal power plant.

A report on EVN’s operations in the January-September period showed that the State-run power group made great strides in managing and monitoring the execution of power-generation and transmission projects as scheduled, ensured the timely allocation of funds and disbursed investment capital for projects with a value of some VND65 trillion.

Apart from this, the group reaped positive results in restructuring its enterprises, capital divestment and equitization. Its divestment in Thu Duc Electrical Mechanical JSC enabled the group to withdraw VND77.5 billion in capital.

In the final quarter of the year, EVN will complete procedures to grant a Provisional Acceptance Certificate for the remaining power generator at Vinh Tan 4 thermal power plant. It will also start construction on the Phuoc Thai 1 solar power project, facilitate renovation works to protect the environment at operational thermal power plants and map out long-term solutions to cope with the ashes produced by the power generation centers of Vinh Tan and Duyen Hai.

Foreign manufacturers in dire need of local suppliers

Nearly 70 foreign direct investment (FDI) enterprises on October 4 participated in the fifth Supplier Day 2018, held by the HCMC chapter of the American Chamber of Commerce in Vietnam (AmCham), marking a fourfold increase over last year’s participation number, to look for qualified domestic suppliers.

The number of local suppliers taking part in the event was 90, doubling the number from last year’s event.

AmCham extended the size of the exhibition and created new ways for foreign manufacturers and domestic suppliers to approach cooperation opportunities, thus contributing to developing global supply chains.

According to the organizers, many other manufacturers wanted to join the exhibition, but the venue could not accommodate all of them.

Milton Hagler, co-chairman of AmCham’s Manufacturing Committee, said the higher number of FDI firms at the event this year proves that foreign firms are more confident in local suppliers.

However, it remains difficult for Vietnamese enterprises to produce high-quality products at reasonable prices, which would allow them to join global supply chains.

Brian Mtonya, a senior economic expert from the World Bank, noted that in Vietnam, there is a severe shortage of suppliers that are able to compete with their foreign rivals in providing high-quality input materials and components at reasonable volumes and prices.

Meanwhile, Vietnamese firms have complained that they found it more difficult to access bank loans than foreign-invested firms and have encountered a shortage of highly skilled workers.

Domestic enterprises should study the requirements of foreign manufacturers in terms of product quality and volume, while foreign manufacturers should determine the capacity of suppliers, suggested Hagler.

According to Frank Weiand, co-chairman of AmCham’s Manufacturing Committee, local suppliers need to be aware of many things to become part of global supply chains, of which the greatest problems facing local small and medium enterprises are related to their understanding of their customers’ and partners’ needs.

Kim Dental rolls out 26 clinics in Vietnam

Kim Dental Co., Ltd. on October 4 rolled out its dental clinic chain, comprising 26 dental clinics across the country, including clinics in HCMC, Hanoi, Dong Nai, Ba Ria-Vung Tau and Binh Duong, after two years of investment and development.

Addressing the launch ceremony, Su Duy Bin, general director of Kim Dental, said that the company has been thriving and has become one of the largest dental clinic chains in the country, with up to 200 dental chairs across all clinics.

The firm plans to continue investing in and expanding the number of facilities it operates to some 100 clinics in the coming period, aiming to meet all dental demands, ranging from basic dental care to intensive treatment, with manpower of more than 140 dentists and a 350-strong nursing staff and dental assistants.

Kim Dental not only offers dental care and dental aesthetic services to locals but also targets dental tourism, serving foreign visitors and Vietnamese people returning from abroad to purchase dental services at reasonable prices.

All clinics under Kim Dental are equipped with a wide range of modern facilities and equipment, such as X-rays, Brite Smile teeth whitening systems, anaesthesia machines, 3D simplant and face detection software and 3D printers for orthodontic applications.

Kim Dental has also invested in developing a lab to manufacture porcelain crowns, deploying CAD/CAM 3D technology, for its clients. The lab covers nearly 2,000 square meters of land in Binh Duong Province. Apart from this, the company currently uses computers to store medical records, a diagnostic imaging database and customer invoices.

Bin added that Kim Dental also makes efforts to provide comprehensive training to its manpower and to upgrade its facilities in line with international standards to offer high-quality dental services to overseas customers at lower prices than those in foreign countries.

Japanese firm seeks to join new coach station project

A representative from Japan's Tokyu Corporation proposed the HCMC government for the company's participation in setting up a joint venture with Saigon Transportation Mechanical Corporation (SAMCO) to construct the new Mien Dong Coach Station covering an area of three hectares in District 9, HCMC, heard a meeting with HCMC vice chairman Tran Vinh Tuyen on October 4.

Besides the new station, the representative also asked the government for approval to build a service and commercial center, including schools and shopping areas.

Construction will be carried out in three phases. The first phase covers the construction of the service and commercial center, which is slated for inauguration in 2020 once Metro Line No. 1 is completed, helping increase connectivity and efficiency for the project.

The representative from Tokyu Corporation stated that as the initial funding earmarked for the project was high and the area was off-limits to the development of commercial houses, hindering the quick recovery of the investment capital, the project required long-term land use rights to ensure its feasibility.

As such, in jointly constructing the station, SAMCO will use the land use right as capital contribution and Tokyu will contribute capital to the construction and operation of the station.

Le Van Phan, deputy general director of SAMCO, said that the last station of the metro line’s Ben Thanh-Suoi Tien route was the meeting point of HCMC and the Binh Duong and Dong Nai provinces. The construction of the new Mien Dong Coach Station, expected to link with residential areas, will effectively utilize the metro line and ease the density of the population, bringing benefits to the economy and society.

Tran Vinh Tuyen appointed SAMCO to research and work with Tokyu on creating a report on the conditions needed to deploy the project and to submit the report to the Government for approval.

SAMCO said the first phase of the project, including a passenger terminal area and parking lots, is under construction and slated for operation in the first quarter of 2019.

In the initial period, when the station is put into service, some interprovincial routes from HCMC to provinces in central and northern Vietnam will be moved from the current coach station in Binh Thanh District to the new one in District 9.

The new station is located along Hanoi Highway, considered a key road connecting HCMC with northern provinces.

Con Cung case: Two market-surveillance leaders violate regulations

Two deputy heads of the Market Surveillance Agency under the Ministry of Industry and Trade are found to have violated regulations with unfounded claims involving the suspected irregularities at Con Cung (Beloved Kid), thus affecting the normal business activities of the retail store chain specializing in mother and baby products.

On August 17, the ministry decided to establish a task force to review and evaluate the law enforcement efforts of the Market Surveillance Agency in inspecting Con Cung. The results were made available in a statement posted on the ministry’s website yesterday, October 4.

According to the statement, the agency instructed 29 market surveillance divisions in various provinces and cities to inspect the business activities of Con Cung in line with prevailing regulations.

Market-surveillance officials then uncovered some legal violations by the retailer in terms of the labeling of goods, promotions and ecommerce. The firm, as a result, paid a total of VND250 million (US$10,700) in administrative fines.

During the inspection period, two deputy heads of the agency – Nguyen Trong Tin and Tran Hung – were found to have violated ministry and State regulations on speech.

The statement indicated that the officials’ unfounded allegations in reference to the suspected irregularities at Con Cung had affected the State management operations of the ministry and the normal business activities of the retailer.

The officials provided the local media with inaccurate information, leaving local consumers puzzled about the true number and nature of violations committed by the retailer. The ministry said in its statement that this action should be corrected immediately.

Even though the head of the agency, Trinh Van Ngoc, reported to the ministry’s leaders about the provision of inaccurate information to the media by his two subordinates, his intervention was considered not timely.

The deputy heads, who are also members of the Communist Party at the agency, are now subject to disciplinary action from the Party and personnel organization.

The ministry demanded the Market Surveillance Agency strengthen the management of its staff; improve the professionalism and ethics, communication styles and behavior of its leaders and employees; and ensure absolute compliance with the law and other regulations of the ministry in performing its public duties.

The agency was told to strictly comply with the Party’s regulations, especially with market surveillance officials who are also Party members and leading officials.

The agency should also learn from this experience in directing and organizing large-scale inspections and should take prompt measures to overcome its shortcomings while performing its duties to avoid hampering the business activities of firms subject to inspections, according to the statement.

Earlier, despite committing some violations involving the labeling of goods, promotions and ecommerce, the retailer was found to have conformed to regulations protecting the legitimate rights and interests of consumers, and ensuring product quality and traceability. Besides this, its importation paperwork is valid and in line with regulations on import procedures.

Founded in 2011, Con Cung mainly distributes maternal and baby products, such as clothing, food, milk, diapers and toys, which are sold through Con Cung and its other retail chain called "Toy City."

The firm operates 346 retail stores in Vietnam, including 313 Con Cung shops and 33 Toy City stores, and focuses on the HCMC market and other southern localities. In the first half of this year, it earned after-tax profit of roughly VND8 billion (US$343,000) on revenue of VND745 billion (US$32 million).

The retailer, which first received funding from the Vietnamese-Japanese DAIWA-SSIAM Vietnam Growth Fund in 2017, plans to have more than 1,000 stores by 2020. The fund has recently disbursed a second round of investment in the chain.


First 35-MW solar power plant inaugurated in Vietnam

Gia Lai Electricity JSC (GEC), a unit of Thanh Thanh Cong (TTC) Group, opened the TTC Phong Dien solar power plant on October 5 in Phong Dien District, Thue-Thien Hue Province. This 35-megawatt solar power facility is the first such project to start commercial operation in Vietnam, local media reported.

The plant, which was funded by GEC at a cost of nearly VND1 trillion, is expected to generate some 60 million kWh of electricity per year, contributing to the planned development of power sources and grids, while ensuring the safe operation of the national power grid and efficient investments.

The TTC Phong Dien solar power plant is about 50 kilometers from Hue City, covering an area of 45 hectares. GEC began construction of the plant in January this year, employing 300 workers and engineers, at home and abroad.

In particular, GEC installed 145,560 solar panels for the plant, using modern technology and equipment that is expected to generate the high level of output. The solar panels will absorb solar radiation to convert to electricity.

The plant’s estimated electricity output of 60 million kWh per year is equivalent to the annual power consumption of over 32,600 households in Vietnam, which is expected to help reduce an annual 20,500 tons of carbon dioxide gas discharges.

On September 25 the plant was officially switched on.

By next year, the plant is projected to upgrade its generating capacity by an additional 29.5 megawatts and cover more than 38.5 hectares of land to meet future power consumption needs.

In related news, GEC expects to begin operating TTC Krong Pa solar power plant in the Central Highlands province of Gia Lai in the final quarter of 2018. This project has the designed capacity of 49 megawatts, with total investment capital exceeding VND1.4 trillion.

As for the solar power sector, TTC Group is currently building six plants, which are slated to begin operating prior to mid-2019. The group plans to raise the combined capacity of solar power facilities to some 1,000 MW by 2020 in localities showing great potential for solar power development.

Shark Tank Competition opens for young startup women

The Entrepreneurs’ Organization (EO) in coordination with the Australian Consulate General in HCMC has announced Women's Shark Tank Competition 2018, where women contestants under 30 years old in Vietnam will present their business startup ideas to a panel of experienced judges and a general audience.

Young female contestants working in any sector such as business, community, health, and arts with either an existing business or with a business project can submit their application at http://bit.ly/pitch-like-shark-tank no later than October 10.

The judges will select five or six finalists, who will receive feedback and mentoring from experienced entrepreneurs and investors before competing in the final round at Soul Live Project in District 3, HCMC on October 15.

The winners will receive a cash prize of VND50 million (US$2,150) and other prices like free office space for six months at TINYpulse Saigon Vincom Office, team building activities at Grain Cooking School and Xu Restaurant Lounge, and free coding classes at Coder School.

In addition, they will get support to attend one of the following programs: EO Global Student Entrepreneur Awards, EO Accelerator, or SIHUB Runway to the World Program.

The Women's Shark Tank Competition coincides with Vietnamese Women’s Day on October 20. For further information, visit https://facebook.com/eovietnamorg/ or write to chaptermanager@eovietnam.org.

EO is a global, peer-to-peer network of more than 12,000 influential business owners with 173 chapters in 54 countries. Founded in 1987, EO is the catalyst that enables leading entrepreneurs to learn and grow, leading to greater success in business and beyond.

Coffee exporters count on local market as exports slow

E-Commerce revenue increases, FIEs obscure potential risks in domestic economy, Coffee exporters count on local market as exports slow

Vietnamese coffee exporters are seeking opportunities in the domestic market, as they are facing reduced exports due to falling prices.

According to the Ministry of Agriculture and Rural Development, coffee in the Central Highlands was priced at VND31,900-32,500 per kilogram last month, down VND700 month-on-month. In the January-September period, domestic coffee prices plunged by VND2,100-2,400 per kilogram.

Meanwhile, the global export price of coffee averaged some US$1,900 per ton between January and August, a year-on-year decline of 15.5%.

At present, the global market is facing an oversupply of coffee, as demand remains low.

Major coffee exporting countries, such as Brazil, Colombia, India and Indonesia, have had bumper crops, while Vietnamese farmers will harvest coffee in the next few weeks, thus intensifying the oversupply.

In addition, the U.S. Federal Reserve has raised interest rates, resulting in the U.S. dollar becoming stronger than other currencies, eroding the competitiveness of Vietnam's coffee exports. In addition, many Vietnamese coffee processing and exporting enterprises have yet to develop their brands, making it difficult for them to penetrate global markets.

Therefore, numerous coffee exporters have shifted to exploiting the domestic market. However, it is not an easy job, said Phan Minh Thong, chairman and general director of Phuc Sinh Company, an exporter of coffee and pepper, which reported revenues of US$300 million last year.

Although Phuc Sinh has launched many coffee products in the Vietnamese market over the past two years, its revenues from the domestic market account for a small proportion of its total revenues.

Thong said Phuc Sinh annually exports some 65,000-70,000 tons of coffee, while its coffee sales in Vietnam are equal to only 1% of outbound sales, and the company is suffering losses in its domestic sales.

At a recent press conference, Nguyen Quoc Toan, acting director of the Agro Processing and Market Development Authority under the Ministry of Agriculture and Rural Development, recommended local coffee processing and exporting firms boost their connectivity and develop their brands, in a bid to cope with global price volatility.

In reality, the ministry has issued multiple solutions to build value chains to enhance coffee exports and local consumption. However, the number of enterprises successfully shifting to the domestic market remains modest.

According to the Ministry of Agriculture and Rural Development, the country exported 1.46 million tons of coffee through September 2018, valued at US$2.77 billion, up 20.1% in volume and 0.4% in value over last year.

Germany and the United States were Vietnam’s largest coffee buyers in the January-August period, accounting for 12.6% and 9.8%, respectively. Meanwhile, shipments to Indonesia, Russia and the Philippines reported high growth rates at between 46.6% and 66.6%.

Philippines to import 250,000 tons of rice

The National Food Authority of the Philippines has issued an invitation to a tender, expected to take place on October 18, for importing 250,000 tons of 25% broken rice under government-to-private (G2P) contracts, according to the Vietnam Food Association in an announcement to local food traders.

Nguyen Trung Kien, vice chairman and general secretary of the association, has issued Document 410/CV/HHLTVN announcing the Philippines’ tender to encourage local food traders to take part in the tender.

No restrictions have been imposed by the Philippines on the origin of the rice or the types of enterprises permitted to attend the tender. This means both private and State firms are eligible to join the tender, and the deadline for putting their names down to join the tender is October 17.

The Philippines intends to divide the volume of 250,000 tons of 25% broken rice into nine tender packages. The reference price set by the Philippines is US$431.2 per ton, inclusive of the insurance, freight and delivery to the designated warehouses. The payment will be made 30 days after the buyer receives the original legal documents.

Earlier, the Philippines in May opened a tender to import 250,000 tons of rice under G2P contracts, but Vietnamese traders failed to sell any rice to the Philippines, as Thailand offered better prices and won the tender.

However, Vietnam secured a deal on May 4 to supply 130,000 tons of rice to the Philippines at a bidding session, under government-to-government rice contracts.

Data from the Ministry of Agriculture and Rural Development show that outbound Vietnamese rice sales brought in US$2.5 billion for some five million tons of rice over the January-September period, up 8.5% in volume and a whopping 23.2% in value year-on-year. In particular, the rice shipment to the Philippines over the January-August period surged by 67.4% year-on-year.

E-Commerce revenue increases

E-commerce revenue reached US$6.2 billion last year, a year on year increase of 24 percent, reported E-Commerce and Digital Economics Department under the Ministry of Industry and Trade.

The number accounts for 3.6 percent of the country’s retail sale of goods and consumer service earnings.

It is estimated that 33.6 million people attend online shopping in Vietnam and each person spend VND4.3 million (US$184). Of these, 24 percent spend more than VND5 million, 31 percent spent VND1-3 million, 25 percent less than VND1 million and 20 percent from VND3-5 million.

Of goods purchased online, 59 percent are clothes, footwear and cosmetics; 47 percent are technology, electronic products and home appliances.

In Vietnam, up to 82 percent of people pay in cash while receiving goods.

Anxiety persists despite surplus

It’s time Vietnam found for herself new drivers instead of waiting for more mega FDI projects.

Latest data from the General Department of Customs show that Vietnam enjoyed a trade surplus of as much as US$2.1 billion in August, making the total value in the first eight months amount to US$4.6 billion. This is a record high for many years. Given that the way things are going, Vietnam’s balance of trade for the whole year should be positive. If this scenario plays out, it will mark the third consecutive year the country has achieved a trade surplus.

Trade surplus is a very important factor for Vietnam to keep her current account positive. It should be noted that most of the countries which are coping with the current financial crisis—such as Argentina, Turkey, Venezuela or Indonesia—face a deficit in their current balances. In the context of rising interest rates around the globe, foreign investors will be aggressively selling bonds of countries with a negative current account.

It is not difficult to point out the reason why the trade balance of Vietnam set a record surplus in August. The surplus is due greatly to the contribution of foreign-invested enterprises (FIEs), or more specifically, Samsung, with the launch of its new product (Galaxy Note 9). The U.S. and China are the two largest buyers of phones and components made in Vietnam.

FIEs obscure potential risks in domestic economy


E-Commerce revenue increases, FIEs obscure potential risks in domestic economy, Coffee exporters count on local market as exports slow

Vietnam’s economy grew 6.81% in 2017, and is likely to attain a higher growth rate this year. While Samsung was the key driver of economic growth in 2017, Formosa and Nghi Son Refinery will take over this role in 2018. Last year, Samsung invested more than US$5 billion in Vietnam. Meanwhile, starting this year, Formosa and Nghi Son Refinery will operate at 100% capacity.

Almost all of the major drivers of Vietnam’s economic growth are FIEs. Then, what will be the driving force for the country to maintain high growth momentum in 2019? So far, no answer has been figured out. Then, how can Vietnam keep her economic growth strong for a long period as per the goal she is aiming at?

Back to the story of trade balance, the entire surplus value comes from FIEs. On the contrary, domestic manufacturers always suffer deficits. As shown in the chart below, while FIEs are achieving a greater and greater surplus, the deficit domestic firms run up is more and more severe. However, the problem is probably not that simple. We know that the surplus registered by FIEs is not necessarily bringing Vietnam real money. It is because the cash flows for most FDI projects run through intermediaries: corporate headquarters in foreign countries. However, the deficit recorded by domestic manufacturers is almost certainly real money. For this reason, the demand for foreign currencies in Vietnam tends to increase over time, and if it is not offset by other cash flows such as foreign indirect investment or overseas remittance, the value of the dong will face downward pressure on the long run. Therefore, the fact that the economy is lacking elements in maintaining high growth momentum and that our currency will always be under the pressure of devaluation are the potential risks for Vietnam in the future.

Undeniably, FIEs have been the main driving force of Vietnam’s economy. However, the country cannot rely on them forever. Aside from such issues as environment, taxation or poor added value, which have been analyzed over and over by experts at various scientific conferences, the first thing Vietnam should take into account is that FIEs themselves are limited. Vietnam will hardly find a second Samsung or Formosa in the near future. It may take some time until the country manage to find one.

This was also the issue raised by the Prime Minister. The scenario many people are expecting is that local private corporations will gradually replace FIEs in the coming time. To have an elite force of private firms, the Government must adopt a comprehensive, breakthrough solution in its management of the economy.

Binh Duong to develop smart industrial park

The southern province of Binh Duong intends to build a smart industrial park for hi-tech enterprises as part of its smart city development, it was announced during a press conference held in the province on October 5.

Speaking at the press conference introducing a series of events associated with technology and science, which take place in the province next week, a representative of the organizer said this is the first time Binh Duong Province has hosted such important events of international stature in the technology field.

The 11th WTA General Assembly, the 15th WTA Hi-tech Fair and the 2018 Global Innovation Forum are being held in the province from October 10 to 12, under the theme “Smart City, a Motivation for Sustainable Innovation and Growth.”

Other events include the 16th WTA Mayors’ Forum and the 10th WTA University Presidents’ Forum.

The events are considered a convergence point for members of the World Technopolis Association (WTA) to meet and share experiences in building a smart city.

Mai Hung Dung, vice chairman of the Binh Duong government, said that the province is mapping out a plan to build a smart city by 2021, using a smart model for an industrial park for hi-tech firms.

Binh Duong Province is selecting a provincial administrative center and adjacent areas to develop the smart city project, according to Dung. He added that some new road routes will be chosen to develop a smart transport model with advanced technology solutions.

The provincial authorities are also working closely with enterprises and scientists to set up the smart city efficiently and at the lowest cost.

The hi-tech fair, organized on October 11 and 12, within the framework of the WTA event, will showcase a score of advanced technology and services applied to the development and construction of a smart city and feature a smart infrastructure area, a smart information technology area and a smart energy and environment area.

The Global Innovation Forum was initiated by the United Nations Educational, Scientific and Cultural Organization (UNESCO), WTA and South Korea’s Daejeon City in 2014. The annual forum seeks to contribute to sustainable growth by bridging the gap between developed and developing countries.

This year’s forum will focus on strategies and policies to develop and operate a smart city, and foster a city’s competitiveness.

Vietjet launches three-day ticket promotion

Vietjet launched a three-day promotion on October 10 with 700,000 promotional tickets priced from only 0 VND available at www.vietjetair.com.

The tickets, which will avail between noon and 2pm, will be for all international routes to Tokyo and Osaka (Japan); Seoul, Busan and Daegu (the Republic of Korea); Hong Kong; Kaohsiung, Taipei, Taichung and Tainan (Taiwan); Singapore; Bangkok, Phuket and Chiang Mai (Thailand); Kuala Lumpur (Malaysia); Yangon (Myanmar) and Siem Reap (Cambodia) from November 1, 2018 to June 30, 2019.

Flights for the Hanoi – Osaka route will run from November 8, 2018 to March 30, 2019; the Ho Chi Minh City – Osaka route is from December 14, 2018 to March 30, 2019; the Hanoi – Tokyo route is from January 11 to March 30, 2019; the Hanoi  – Taichung route is from November 1, 2018 to March 30, 2019; and the Phu Quoc – Seoul route is from December 22, 2018 to March 30, 2019.

These discounted airfares will also be applied for domestic routes on ThaiVietjet – a  joint venture between Vietjet and Thai airline Kan Air – from November 1, 2018 to March 30, 2019.

As a consumer airline, Vietjet has opened many new routes, added more aircraft, invested in modern technology and offered more add-on products and services to serve the demands of customers.

Over the past six months, Vietjet has continued to lead the domestic passenger sector with 59,944 flights, up nearly 22 percent year-on-year. Technical reliability was 99.66 percent, with safety performance and ground operation indicators among the top in the region. The on-time performance stood at 83 percent.

Vietjet is the first airline in Vietnam that operates a low-cost, modernized carrier model to provide a wide range of services to its customers. Apart from air transportation, Vietjet also provides consumer goods and services to the customers through the application of advanced E-Commerce technology.

Vietjet is an official member of the International Air Transport Association (IATA) with IOSA Safety Certificate. In addition to the “Top 500 Leading Brands in Asia 2016” and “Best Recruiting Brand in Asia” for many consecutive years, Vietjet is also honored to be the Best Asian Low Cost Carrier awarded by TTG Travel Award in 2015. Besides that, Vietjet is also honored as the Top 3 Fastest Growing Facebook Fanpage award by Socialbakers.

Currently, Vietjet operates 60 A320, A321 aircraft with more than 385 flights daily, carrying more than 60 million passengers up to date, with 94 routes covering destinations in Vietnam as well as international destinations such as Japan, Hong Kong, Singapore, the Republic of Korea, Taiwan, China, Thailand, Myanmar, Malaysia and Cambodia.              

Vietjet plans to expand its network across the Asia-Pacific region and is continuing to expand its regional network. Recently, Vietjet signed a contract agreement to purchase new, modern aircraft from the world’s leading aircraft manufacturers.


E-Commerce revenue increases, FIEs obscure potential risks in domestic economy, Coffee exporters count on local market as exports slow
 
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