finance & business news 20 September · Vietbank named among Top 100 Apec Brands 7 AIPA: Vietnam...

20 September

finance & business news

FINANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Reference exchange rate up by 3 VND 2Short-term deposit rates tend to rise 2Politburo consent may be required for forced bank transfers 2Jury still out on cryptocurrency in Vietnam 3Remittances remain under downward pressure 4SBV: Banks to be rated but privately informed 5Number of transaction offices and bank branches in Vietnam

still low compared to regional countries 6Vietbank named among Top 100 Apec Brands 7AIPA: Vietnam proposes building AEC with equal development 8Tasks ahead for higher global value chain integration 8Vietnam jumps five places in Global Services Location Index 9Why Vietnam still attracts emerging-market bulls 10Rubber exports surge in first eight months 11Construction ministry asked to stabilise local sand market 11China imports 35pct of Vietnam's crude oil shipments 12Jan-August auto imports leap 12In Vietnam, imported feed material outdoes domestic produce 13VN posts 11.5pct IT revenue growth 14Vietnam seen lagging in 4IR 14Boost productivity for Industry 4.0 15Labour productivity of non-state enterprises alarming 16MoIT to reveal list of gas traders 17Mekong countries emphasize infrastructure connectivity 17Da Nang foreign investment surges 18HCM City mulls downtown congestion charge in 2020 19Government urged to improve business climate 20VN firms spending less on RD 21PE's industrial moment may be here 21Sales of low-cost homes lackluster despite huge demand 23Well-known cafe chains beat retreat from Vietnam 24

Foreign detergent brands corner market, but local brands still thrive 26

Big dreams for the banana industry 27Vietnam's 127 wish-listed projects fail to attract foreign investors 28Vietnamese to develop support industries with VinFast 28Hau Giang calls for investment in 7 projects 29Vietnamese, Chinese businesses seek cooperation opportunities 30

BIZ NEWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30Business Briefs 20 September, 2017 30Market corrects on sell pressure 31Stocks bounce back slightly 31Profits of many companies 'evaporate' after auditing 32HCM Stock Exchange warns TTF could be delisted 33Habeco to wrap up talks on stake sale to Carlsberg in November 34KIDO Food to trade on UPCoM by end of month 35Kido holds 40pct of market share in ice cream industry 35Consumption of mid-end apartments to increase to 60pct 36Major bridge in Mekong Delta ready late this year 37HCM City-Can Gio-Vung Tau high-speed boat service ready next

month 37Nghe An to get $440.5 million resort complex 38Starbucks unveils new Teavana frozen teas exclusively in Asia 38Traveloka strikes tourism deals with Danang and Hue 39Vissai Cement to launch eco-friendly packages 39H&M stirring up a fast fashion fever in Vietnam 40A year of huge success for Shopee Vietnam 42Vietnamese firms promote exports at Wire and Tube

Southeast Asia 2017 43Conference discusses difficulties, solutions in making

HCM City a smart city 44Investment promotion forum held in Brussels 45

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FINANCEReference exchange rate up by 3 VND

20/SEP/2017 INTELLASIA| VNA

The State Bank of Vietnam set its reference VND/USD exchange rate at 22,446 VND/USD on September 20, up by 3 VND from September 19.With the current +/- 3 percent VND/USD trading band, the ceiling exchange rate is 23,118 VND per USD and the floor rate is 21,774 VND per USD.Major commercial banks' rates continued to remain stable.Vietcombank, BIDV and Vietinbank offered 22,690 VND (buying) and 22,760 VND (sell-ing), per USD, unchanged from the day ago.-http://en.vietnamplus.vn/reference-exchange-rate-up-by-3-vnd/118126.vnp

Short-term deposit rates tend to rise

20/SEP/2017 INTELLASIA| TRI THUC TRE

During the week ended on September 15, the monetary market remained stable, interest rates were low. Of which, the interest rates of overnight, one-week, one-month and three-month terms were transacted at 0.76%, 0.99%, 1.68 percent and 3.21 percent at the end of the week, increasingly slightly in two the short terms and decreasing slightly in the two long terms, according to the weekly monetary report of SSI Retail Research under Saigon Securities Inc. (SSI).

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Vietnam finance & business 20 September

The total volume of T-bills issued in the week was 18.425 trillion dong. With 16 trillion dong matured T-bills, the State Bank net withdrew 2.425 trillion dong from the system. The T-bill interest rates tended to increase slightly from 0.4 percent to 0.45%.On market 1, deposit rates had slight fluctuations in terms. Specifically, interest rates of short terms i.e. one month, six months slightly improved from 4.5 percent to 4.7 per-cent and 5.5 percent to 5.6%. Meanwhile, terms longer than six months and 12 months slightly decreased from six percent and 6.8 percent to 5.8 percent and 6.7 percent re-spectively.Analysts said this fluctuation could only be attributed to seasonal factors when banks restructured their portfolio at the end of the quarter.In the bond market, the State Treasury maintained the volume invited for bids worth two trillion dong divided equally for four terms including five years, seven years, ten years and 15 years. The demand for bonds has gradually improved, the total registered bidding volume increased 17.3 percent reaching 6.37 trillion dong.However, both sellers and buyers remained cautious about interest rates. The range of bid interest rates gradually narrowed down, decreasing about 40-50 basis points in the highest interest rate and slightly increasing 1-3 basis points in the lowest interest rate.Conversely, the State Treasury slightly reduced interest rates, leading to fairly low bid winning volume, reaching 854 billion dong for three terms of five years, seven years and 10 years. The bid winning interest rates slightly decreased by four points and two points for five-year and seven-year terms. The State Treasury still kept relatively high interest rates though inflation has risen again.

Politburo consent may be required for forced bank transfers

20/SEP/2017 INTELLASIA| THE SAIGON TIMES

Lawmakers on September 18 proposed adding a provision to the draft amended law on credit institutions in which the Politburo's prior consent must be sought for forced transfers of commercial banks.At a session of the National Assembly Standing Committee held in Hanoi on Septem-ber 18 to debate the draft law, a couple of NA deputies said some regulations on com-pulsory transfers of credit institutions are unclear, so they should be put under review.The call for review comes after the State Bank of Vietnam (SBV) acquired three credit institutions, including the scandal-hit OceanBank whose former leaders are standing trial, at zero dong.The draft law, which will go before the National Assembly at its next meeting in late 2017, provides four options for dealing with banks under special surveillance, includ-ing restructuring, dissolution, forced transfer and bankruptcy.According to the draft law, owners and shareholders of commercial banks under spe-cial surveillance and subject to forced transfer would have to relinquish all their shares to receivers including domestic and foreign banks and investors picked by competent authorities."All rights and obligations of owners and shareholders of banks compelled to be trans-ferred will end when the State Bank of Vietnam issues decisions on their compulsory transfers," says the draft law.SBV Governor Le Minh Hung said how to cope with commercial banks under special surveillance has not been finalised due to insufficient legal grounds.The method of forced transfer complies with the Constitution because owners and shareholders of insolvent banks can no longer solve consequences on their own, he reasoned.However, NA vice Chairwoman Tong Thi Phong said such forced transfers may vio-late the Constitution which protects the property rights of the citizens as the Constitu-tion makes clear that legitimate properties of citizens must not be nationalised.NA Chairwoman Nguyen Thi Kim Ngan asked the central bank to clarify the defini-tion of forced transfer and make sure that this regulation falls in line with the Consti-tution.NA vice Chair Phung Quoc Hien also asked forced transfers of banks be thoroughly reviewed and sent to the Politburo for guidance before the NA looks into it.http://english.thesaigontimes.vn/56203/Politburo-consent-may-be-required-for-forced-bank-transfers.html

Jury still out on cryptocurrency in Vietnam

20/SEP/2017 INTELLASIA| VNS

The use of cryptocurrency and blockchains in Vietnam is currently limited to just one per cent of the total population, though experts anticipate that the number could grow

Intellasia 20 September 2017 2 / 45

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to 30 million users in the next ten years.Nonetheless, the State Bank of Vietnam (SBV) has clearly stated that unlike legal ten-ders, cryptocurrencies such as bitcoin are not considered real money and thus not rec-ognised as payment methods in Vietnamese law.Bitcoin was first introduced to Vietnam in 2009, and has since experienced double-dig-it growth each year in terms of users, and an average daily transaction value reaching the thousands of US dollars, according to Bitcoin Vietnam Co ltd., the self proclaimed first bitcoin platform in the country, established in 2014.Subsequently, bitcoin's blockchain, its own open, distributed ledger that records trans-actions between two parties using the coin in a verifiable and permanent way, is now also accessible in Vietnam.As of late August this year, prime minister Nguyen Xuan Phuc had ordered relevant agencies to draft a legal framework for cryptocurrency and other digital assets, which could mean that bitcoin and its like will be one day accepted in Vietnam under appro-priate management.Nevertheless, at the moment, the issue has a number of loose ends, as the SBV still finds digital currency hard to control. Since bitcoin is a decentralised digital currency, its payment and control system works without a central administrator, so it poses la-tent administrative risks to the SBV in particular and central banks in general.Investors' money, SBV's headacheBack in July, the SBV sent out a document clearly stating its non-involvement in man-aging bitcoin on the Vietnamese financial market, as this particular cryptocurrency is not a payment method according to the SBV.This official document also stressed that since bitcoin and litecoin are not legal tender or legitimate currency, the acts of initial coin offering, generation, and use of such cryptocurrency as means of payment in place of legal tender are all prohibited with es-tablished sanctions.The SBV stated that such prohibition is to keep investors safe against the speculative nature of cryptocurrency, especially when there has been a reported surge in the number of bitcoin mining rigs imported to Vietnam, according to the general Depart-ment of Vietnam Customs (GDVC).In reality, the increase in demand for bitcoin mining rigs has troubled administrative authorities, as the GDVC's list of contraband goods according to Decision 187/2013/ND-CP does not regulate these machines, which are computers designed specifically for the decryption of bitcoin and litecoin, through which the process of adding trans-action records to bitcoin's blockchain can be completed, thus generating new coins.The SBV and the GDVC have reason to believe that the hike in demand for mining rigs is due to a misunderstanding on the part of investors, as they mistakenly consider the aforementioned draft scheme to be an official recognition of bitcoin in Vietnam.As such, new concerns have arisen for Vietnamese authorities. Since bitcoin and simi-lar cryptocurrencies are not accepted as legal payment in Vietnam, the main purpose of most entities importing these mining rigs is to resell them at a higher price instead of actually generating new coins.This would surely lead to a loss for many speculative investors, especially when the lifespan of these rigs is just around two to three months, with replacements worth more than $3,000.The SBV has repeatedly warned domestic investors of the systemic risks that lie there-in, but seemingly to no avail.A coin tossBack in 2009, the exchange rate for bitcoin was about 30 US cents per bitcoin, and it is now roughly $4,000 per bitcoin, with a record high of $5,000, stated Ha Ton Vinh, Chair and CEO of Stellar Management Corporation during a September conference on digital cash and blockchain in Hanoi.He commented that the sharp hike in the value of bitcoin is due to investors' specula-tion, creating hundreds of millionaires in the span of less than a decade while expand-ing technology and financial application over other economic sectors with about $2


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billion spent on bitcoin research over the past five years.In Vietnam, cryptocurrency, or digital cash, is available in popular forms such as debit or credit cards, or the recently introduced mobile wallets, and in rarer forms such as bitcoin or litecoin, said Terry O'Hearn, Chief Executive Office at iMozi Canada Inc, at the same conference.According to O'Hearn, digital currency allows for direct transactions through an on-line payment device without the need for an intermediate financial entity, thus cutting down on transaction costs and increasing convenience.After reaching up to $4,693 per bitcoin on August 29, 2017, the coin's value has been gradually decreasing after China slapped restrictions on initial coin offerings, though there is no sign of speculation letting up.Commercial bitcoin sites record a total capitalised value of the cryptocurrency's mar-ket of up to $120 billion, allowing for a staggering return on investment (ROI) ratio. Any bitcoin investors with enough sway and funding can enjoy an ROI of 150 per cent in a month, as oppose to the stock market's 11 per cent monthly.As high returns come with equally high risks, the positive nature of the bitcoin market has soon been replaced with grim warnings from experts on the overblown value of the coin due to too much speculation, which can crash at any moment, leading to un-imaginable devastation on financial markets.Jean Y. Foo, Founder and CEO of Singaporean Mastermind Crate, pointed out at the said September conference that the difference between legal tenders such as the US dollar or Japanese yen and cryptocurrency is that while the former must be regulated by a third party during transactions, such as a Central Bank, the latter simply forgoes this step and relies on technological advances for security.Therefore, there is no actual guarantee or failsafe mechanism against the coin's bubble bursting, should it actually happen. And with the many risks that bitcoin investors and users must face online such as cyber attacks, theft, or blocked transactions, the SBV cannot guarantee their safety and financial security.Still, as Vinh suggested, while several countries such as Japan now accept bitcoin as a legal payment method, it is nonetheless unregulated in the majority of economies in-cluding Vietnam's and is even heavily restricted in China. Thus, its definitive status as part of the economy is yet to be decided.http://bizhub.vn/news/jury-still-out-on-cryptocurrency-in-viet-nam_288959.html

Remittances remain under downward pressure

20/SEP/2017 INTELLASIA| BAO DAU TU

Nguyen Hoang Minh, deputy director of the State Bank of Vietnam's HCM City branch said in January-August, the remittances to HCM City via official channels reached $3 billion, up five percent from the same period last year. This figure was $2.1 billion two months ago.Minh said, as usual, the amount of remittances to HCM City from the U.S market ac-counted for the largest proportion with 60 percent compared to about 19 percent for the European region. At the same time, the end of the year has always been the time when remittances are higher than other months in the year. However, downward pressure of remittances is still difficult to be avoided in this year.The amount of remittances to Vietnam has continuously increased since 2010 and reached the record level of $13.2 billion in 2015 but fell 33 percent in 2016. One of the reasons for the decline in remittances to Vietnam was because banks have continuous-ly cut interest rates on foreign currency deposits to zero percent.CEO of a remittance service company said the company's remittance payment revenue in 2017 is expected to be around $1 billion only compared with more than $1.5 billion in the previous years. It is difficult to expect high level of remittance payment in this year because the money that Vietnamese overseas send to their relatives in Vietnam no longer rises as sharply as before because the US dollar savings rates are no longer available while exchange rate is stably controlled.In addition, the reality shows that real estate is the field that attracts the largest amount of remittances with $4.7 billion, accounting for 52 percent of the total remittances in


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2011. Therefore, the volatility of this investment market has significantly affected the remittance flow. The amount of remittances poured to real estate investment is also not much.Remittance inflow is one of the sources to offset the trade deficit, contributing largely to Vietnam's foreign exchange reserves. However, as per financial analysts, in the con-text that the global economy is facing larger difficulties and challenges, that investors are more cautious in their investment decisions is easy to understand.Recently, Chair of the U.S Federal Reserve (Fed) Jane Yellen said this agency would raise the base rate three times in the coming year. Meanwhile, the dong/US dollar ex-change rate in the next 4-5 months will remain the upward trend but the level of in-crease will be slow and within the control of the State Bank. This will affect the supply of remittances from the U.S market, greatly affecting the total amount of remittances to Vietnam.Not just Vietnam, in other developing countries in the world, the amount of remittanc-es also declines. The latest report of the World Bank (WB) said India used to be the world's largest remittance receiver in 2015 but the remittances to this country in 2016 also decreased five percent. Other countries such as Bangladesh, Pakistan, Sri Lanka also recorded the remittance decrease of 3.5%, 5.1 percent and 1.6 percent respectively.Financial analysts said the remittance situation over the last period was not just be-cause the deposit rate in US dollar was zero percent. Saigon Securities Company (SSI) also commented maintaining the US dollar interest rate at zero percent to reduce the dollarisation risk of the economy, and increasing the supply of U.S dollars to stabilise exchange rate has been the right policy in recent time. But Fed's interest rate increase in the near future will widen the gap between US dollar and savings rates in foreign currencies at Vietnamese banks.As per SSI, that will reduce the demand for transferring or storing money in Vietnam and is the reason for the decrease in remittances. But the capital withdrawal of foreign investors and the US dollar's maintenance at zero percent is not much directly linked.In fact, in recent time, one of the factors that greatly supports the remittance payment in Vietnam comes the export labour market. Therefore, the quality assurance of labour resource and the expansion of high quality labour export market will help increase the remittance inflows to Vietnam.

SBV: Banks to be rated but privately informed

20/SEP/2017 INTELLASIA| VN ECONOMIC TIMES

Banks in Vietnam are to be classified into five rating categories, A (Excellent), B (Good), C (Average), D (Bad), and E (Weak), the State Bank of Vietnam (SBV) plans in a draft circular on issuing ratings for credit institutions and foreign banks.The ratings will be determined based on a set of criteria, including capital, assets, ad-ministrative management, liquidity, and business results.The SBV Governor will approve the final ratings based on the previous year's perform-ance every June 30, according to the draft.The draft also states that the results will not be made public on the central bank's web-site, with each rated institution privately informed instead.The central bank explained that the ratings contain "sensitive information" that should not be widely publicised, and that ratings are undisclosed in many other countries.However, Nguyen Khac Quoc Bao, Dean of the Finance Department at the University of Economics HCM City, said that issuing credit ratings for banks and publicising the results is common practice internationally."Bank ratings are an essential means of increasing the transparency of the banking sys-tem as it allows people to understand the 'health' of a credit institution, particularly its risk level," he said.Once people know the risk level of a bank, they will know where to put their money. Bao said it was understandable that the central bank wants to keep bank ratings secret, for fear of rattling the market, but the seemingly cautious move would lead to prob-lems."What if the information the central bank tries to keep secret is leaked to the market?"


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he asked.This point was echoed by Tran Minh Hiep, a lecturer from the HCM City University of Law.He said that "for internal use only" ratings information, once leaked, would "cause even more instability in the market."Banking expert Bui Kien Thanh said that customers need to know if a bank is "healthy" before depositing their money."Similarly, it is crucial for businesses to understand a bank's liquidity before deciding to take out a loan," he said."There is a misconception that banks in Vietnam will never go bankrupt because they are all backed by the central bank," Bao went on."Most people will therefore care less about a bank's risk level than its interest rates, while there are, in fact, weak banks that accept deposits at high interest rates." Bao said banks should see the ratings as motivation for them to improve their per-formance, rather than a "sensitive matter"."For banks with strong performance, the ratings will be another means for them to boost their reputation and fortify their positions in the market," he said."Bank ratings are a time- and money-consuming task and for no reason should the cen-tral bank perform them only to keep the results for 'internal use only'."http://english.vietnamnet.vn/fms/business/186730/sbv--banks-to-be-rated-but-pri-vately-informed.html

Number of transaction offices and bank branches in Vietnam still low compared to regional countries

20/SEP/2017 INTELLASIA| NDH

Recently, there have had many concerns about the high number of transaction offices and bank branches in Vietnam's cities leading to a high level of competition.However, comparing with regional countries, the figures reflect a worth noticing pic-ture. As per the latest World Bank's data, there were an average of 3.8 branches and transaction offices in Vietnam serving 100,000 adults by the end of 2015.Meanwhile, this figure was 17.8 in Indonesia, 12.6 in Thailand, 9.3 in Singapore and 10.7 in Malaysia and 6.1 in Cambodia. As such, the coverage of Vietnamese banks on the population is rather low compared to regional countries.Similarly, the coverage of ATMs in Vietnam is also much lower than Southeast Asean countries. Also according to World Bank's data, the average number of ATMs per 100,000 adults in Vietnam are 24.1, compared to 113.54 in Thailand, 59.98 in Singapore and 51.12 in Malaysia.Meanwhile, Vietnam is speeding up non-cash transactions in order to enhance social transparency for sustainable development. So far, the government has allowed people aged over 15 to open payment accounts and more than six-year old children to use debit card to make payment (using supplementary cards and not withdrawing cash).From the aforementioned facts, Vietnamese banks still need to expand network to tap into the potential of the country's market. However, over the past years, many banks have faced difficulties in expanding the system because it is difficult for them to fully meet conditions provided by Circular 21 in order to tighten the bank's further devel-opment of branches and transaction points. Therefore, despite large potential, not many banks can strengthen the network expansion.In that context, despite many challenges after the merger of Southernbank, Sacombank has also benefited a lot from this deal to develop the system. Prior to the merger, Sa-combank had 428 transaction points. After the merger, the bank's network increased to 564 transaction points, ranking the fifth in Vietnam's banking system, just behind four state-owned banks. Of course, among them, many branches and transaction offic-es are quite close because Southern Bank mainly focuses in HCM City and South West provinces.To solve this overlap, Sacombank reorganised the network by upgrading all savings funds to transaction offices to expand products and services while transferring the management of transaction points having overlapping location, renaming and relocating transaction points near to each other to more potential locations to expand the market.


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As of the end of 2017, Sacombank relocated 150 transaction points into stable opera-tion. The bank also directed to suburban, coastal and remote areas.These are suitable areas for the long-term development potential of the banking sector as Vietnam gradually accelerates non-cash payment. Thereby, Sacombank also brought convenience banking service to the people in the aforementioned areas.Especially, under the restructuring scheme, Sacombank opens 14 branches in the North on the basis of transferring the licenses of existing branches and setting up 14 transaction offices on the basis of branches whose licenses were transferred to continue serving customers at the locations.Therefore, under the plan, Sacombank has been present in Ninh Binh, Thai Binh, Nam Dinh, Vinh Phuc, Hoa Binh, Bac Giang, Ha Giang, Bac Kan, etc. After putting into op-eration the 14 aforementioned branches, Sacombank fully covered its network in 62/63 provinces and cities in Vietnam. This is an advantage for this bank to establish long-term development platform in areas where most other banks still have not been present. This shows Sacombank's vision and sustainable operation strategy, which will develop the bank's advantage i.e. retail sales.Of course, that is also the motivation for the bank to strengthen the network develop-ment. Therefore, any bank that does not meet the coverage ability will very easily be lagged behind.

Vietbank named among Top 100 Apec Brands


Vietnam Thuong Tin Commercial Bank (Vietbank) has won an award for being among the Top 100 Apec Brands from Vietnam Integration magazine.The award has been instituted to honour outstanding entrepreneurs, businesses and brands in the country for building and promoting their brands and improving their product and service quality to strengthen the competitiveness of Vietnamese brands in the Asia-Pacific region and globally.The inaugural awards attracted the participation of many enterprises, who had to meet several criteria set by the magazine to make it to the list of the top 100 Apec brands.Ho Phan Hai Trieu, deputy director of Vietbank, said the lender has been trying to cre-ate products that meet customers' needs, accelerate investment in technology and im-prove service quality.The award is the best recognition for Vietbank's transformational efforts, he added.http://bizhub.vn/banking/vietbank-named-among-top-100-apec-brands_288969.html

AIPA: Vietnam proposes building AEC with equal development


Vietnam proposed a resolution on strengthening intra-regional cooperation to build an Asean Economic Community (AEC) of equal development and inclusive growth at the second plenary session of the 38th Asean Inter-Parliamentary Assembly (AIPA) general Assembly in the Philippines on September 19.The resolution, which was adopted with high consensus from AIPA member coun-tries, suggests enhancing multinational cooperation to narrow development gap, en-sure sustainable poverty reduction and effective implementation of social welfare. It calls for considering the building of a common institutional framework for the AEC.Vietnam also put forward ideas to modify the content of a resolution on combating marine plastic debris and micro-plastic proposed by Indonesia. The ideas concerned the mention of the UN sustainable development goal of enhancing the conservation and sustainable use of oceans, seas and marine resources and a call for the govern-ments of AIPA member countries to promote communication campaigns to change the consumers' habit of using plastic bags.Within the framework of the conference of the Women Parliamentarians of AIPA, the Vietnamese delegation contributed to the content of a resolution addressing health matters for women migrant workers and urging AIPA member countries to improve health financial policies to help them access healthcare services.After adopting 21 resolutions, heads of delegations of AIPA member countries signed a Joint Communique.


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Participants also agreed to change the logo of the AIPA with the hope of promoting its solidarity and development.The AIPA-38 is taking place from September 16-19 with the participation of represent-atives from 10 Asean member countries and 11 observer nations.Themed "Asean and AIPA: Partnering for Inclusive Change", the event focuses on challenges facing the region and the world such as anti-drug, environmental protec-tion, healthcare protection for women migrant workers, protection of women and chil-dren from sexual abuse, and food security, among others.http://en.vietnamplus.vn/aipa-vietnam-proposes-building-aec-with-equal-develop-ment/118098.vnp

Tasks ahead for higher global value chain integration

20/SEP/2017 INTELLASIA| VIR

In order to join the global value chain (GVC), Vietnam needs to expand production scale as well as improve labour capacity, product quality, and administrative capabil-ities.According to a recent report released by the World Bank (WB), only 9 per cent of en-terprises operating in Vietnam are qualified for GVC. Most of these companies are for-eign invested firms. Domestic companies qualifying for GVC are sub-tier suppliers with low value-added products.According to Nguyen Duc Hong, vice director of Thong Nhat Rubber Co., Ltd, the company owns five manufacturing plants that provide supplementary goods in the fields of automobile, electricity, electronics, minerals, and mechanical engineering. However, such products can only be sold to secondary product suppliers and thereby, have insignificant added value.For example, the company's rubber antenna spring mounts are installed in Toyota's In-nova cars. However, the company can only sell this particular product to antenna sup-pliers of the Japanese automobile makers.In addition, a company needs to grant international certificates for each specific prod-uct type in order to become an official supplier in GVC. The evaluation costs $15,000 per assessment and expires in three years, after which it needs to be renewed."Domestic firms cannot compete with foreign-owned suppliers in producing high added-value products, such as technological advancements, blueprints, and electronic components," said Charles Kunaka, lead specialist on connectivity at WB.Domestics firms are being constantly challenged as large-scale groups like Samsung, Toyota, and Ford trade with available global suppliers instead of local ones, Kunaka added.Le Bich Loan, deputy director of the Saigon Hi-Tech Park Management Authority, ad-dressed the capacity mismatch between local companies and foreign-invested ones. Foreign-invested enterprises (FIEs) tend to utilise global supply chain in manufactur-ing process in Vietnam.In order to match foreign-invested manufacturers' requirements, domestic companies should produce innovative goods with high quality, in consistent quantities, and at reasonable prices.A representative of Samsung Vietnam said that the country should provide favourable conditions for prospective joint ventures with foreign-owned companies, expand pro-duction scale, upgrade manufacturing procedures and administration, support hu-man resources training in order to prepare for technology transfer from FIEs.Asya Akhlaque, senior economist at WB, also talked about how businesses should be supported by revamping procedures, administration, and management in govern-mental agencies. Likewise, local companies need to enhance labour capacity and up-grade infrastructure.http://www.vir.com.vn/tasks-ahead-for-higher-global-value-chain-integration.html


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Vietnam jumps five places in Global Services Location Index

20/SEP/2017 INTELLASIA| VN EONOMIC TIMES

A.T. Kearney releases 2017 Global Services Location Index, reviewing the offshoring landscape around the world.A.T. Kearney has released its 2017 Global Services Location Index (GSLI), a study that analyses and tracks the contours of the offshoring landscape in 55 countries across three major categories: financial attractiveness, people skills and availability, and busi-ness environment.The GSLI brings rigor to companies' decisions about where to locate offshore opera-tions and sheds light on their complex and shifting choices, particularly in the business process outsourcing (BPO) arena.According to the study, Vietnam jumped five spots to sixth on the list. India, China, and Malaysia are once again the top-ranked offshoring destinations, with India pull-ing way ahead of all other countries. Indonesia and Brazil swapped fourth and fifth places."Though the top three countries have remained in the same order every year since the study's inception in 2004, we have begun to see a widening gap between first-ranked India and all the rest, starting with a significantly larger lead over the country ranked second, China," said Arjun Sethi, Partner and Global Head of A.T. Kearney's Digital Transformation Practice and co-author of the study. "But we are now far enough into the trend towards automation to see that substantial job loss is inevitable in all coun-tries involved in the BPO industry, as hundreds of thousands of low-skilled and repet-itive jobs are replaced by automation."GSLI is the premier ranking of location amenability for companies looking to relocate functions such as financial services, accounting, and customer service, and this year's study also takes a broader view of the likely implications of automation in several types of economies around the world.A.T. Kearney is a leading global management consulting firm with offices in more than 40 countries. Since 1926, it has been a trusted advisor to the world's foremost organi-sations. A.T. Kearney is a partner-owned firm, committed to helping clients achieve immediate impact and growing advantage in their most mission-critical issues.Now in its eighth edition since 2004, the 2017 GSLI helps companies make decisions about where to locate their offshore operations and sheds light on their complex and shifting choices. The 55 countries in the 2017 index were selected based on corporate input, current remote services activity, and government initiatives to promote the sec-tor. Each country is evaluated against 38 measurements to assess its financial attrac-tiveness, people skills and availability, and business environment.The eighth edition of the GSLI, entitled "The Widening Impact of Automation", chron-icles the growing threat to BPO jobs in both developed and developing economieses-timating that 1 million jobs are at risk in just four countriesand sheds light on the gap this is creating with the rest of the global outsourcing market. The study's findings re-veal a far bigger change in global employment stability than in shifts in the country rankings. In fact, the top-ranking countries have undergone few changes in position since the 2016 GSLI.Automation is putting more than a million point of sale (POS) jobs at risk in the next five years in four countries alone: the US, Poland, India, and the Philippines.http://vneconomictimes.com/article/vietnam-today/vietnam-jumps-five-places-in-global-services-location-index

Why Vietnam still attracts emerging-market bulls

20/SEP/2017 INTELLASIA| MARKETWATCH

Sunday marked the debut on PBS of Ken Burns and Lynn Novick's "The Vietnam War", kicking off what promises to be an exhaustive and illuminating 10-part exami-nation of a conflict that still casts a shadow over the American psyche more than four decades after US forces exited the conflict.Vietnam faced economic chaos following the fall of Saigon in 1975 and the unification of the country under a Communist government. In 1986, the government instituted a number of far-reaching reforms after a severe economic crisis. In the 1990s, the country


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began increasing economic relations throughout the region and the world. This includ-ed the reestablishment of trade relations with the US in the 1990s and Vietnam's join-ing of the World Trade Organisation in 2007.While the economy picked up steam, the path remained bumpy. Vietnam was relative-ly insulated from the chaos of the 1998 Asian economic crisis due to its small size. But the nearly two decades since has seen chaotic periods of boom and bust, as well as the bursting of a property bubble in 2011. Still, the country's economy has grown at an im-pressive clip of more than 6 percent a year since 2000, according to World Bank data.While Vietnam has embraced markets and outside investment, it remains a one-party state, ruled by arguably one of the most authoritarian regimes in Southeast Asia. Hu-man-rights groups have expressed alarm over the country's biggest crackdown on ac-tivists in years, Reuters reported.Investors, however, are encouraged by the long-run economic outlook and point to factors including a well-educated workforce and a high degree of openness to outside investment.While a high debt-to-gross domestic product ratio of 62 percent and the lack of a cur-rent-account surplus give some investors pause, low labour costs and a highly special-ised workforce have allowed Vietnam to become a key part of Southeast Asian supply chains, wrote analysts at Pavilion in Montreal.The result has been a substantial jump in foreign direct investment, or FDI, by the country's largest trading partners, including Japan and South Korea, in the last few years, they noted. Indeed, South Korea's Samsung Electronics Co. Ltd 005930, -0.19 percent is Vietnam's largest exporter, according to Bloomberg, accounting for around 20 percent of the nation's shipments in 2016.That uptick in FDI explains why growth indicators in Vietnam have outpaced other Asian economies, such as Indonesia and Malaysia, that have similar levels of compet-itiveness, the Pavilion analysts said in a late August note.Moreover, strong FDI means factories are being built. The new jobs generally offer a leg up to workers, but what's often overlooked is how they also serve to put upward pressure on wages across the lower end of the economy, said Robert Harvey, portfolio manager at Matthews Asia, where he co-manages the Matthews Emerging Asia fund MEASX, +0.00%The Vietnam Ho Chi Minh stock index VNI, -0.06 percent is up 21.2 percent in 2017, but lags behind the MSCI Emerging Markets index, which is up nearly 28%. The iShares MSCI Emerging Markets ETF EEM, +0.22 percent on Monday hit a six-year high.And then there is China. Hanoi and Beijing have long had a wary and, at times, tense relationship. But economically, it's no surprise, as the Pavilion analysts note, that small jumps in Chinese economic activity translate into large swings in Vietnamese exports.That's a double-edged sword, but the exposure to China should be a positive, Pavilion said, arguing that the recent rally in industrial metals prices underscores the idea that China is again supporting growth.Harvey at Matthews favours companies that are exposed to Vietnam's consumers, ar-guing that they're ability to raise prices, along with lower capital requirements, give them an advantage. While prices of commodities that such companies use as inputs can move faster than the firms can reprice, margins can recover quickly, he said.The Pavilion analysts argue that Vietnam's stock market is the best way to play the country's growth story, noting Vietnamese stocks had outperformed regional peers and other export-oriented economies until 2016, when slower growth caused Viet-nam's market to stall.They noted the MSCI Vietnam Index is comprised mainly of consumer staples (55%), real estate (19%), and financials (9%)."Consequently, it is more reliant on domestic and regional growth than global com-modity prices, especially compared to most frontier indices," they wrote.http://www.marketwatch.com/story/why-vietnam-still-attracts-emerging-market-bulls-2017-09-18


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Rubber exports surge in first eight months


Vietnam earned 1.38 billion USD from exporting more than 800,000 tonnes of rubber in the first eight months of 2017, year-on-year rise of 54.1 percent in value and 12.8 per-cent in volume.Export turnover of rubber products in January-August rose 25.5 percent annually to 382.2 million USD.China continued to be Vietnam's top export market with 867 million USD, 62.7 percent of the country's total rubber export turnover in the period.Malaysia came second with 75.4 million USD and the Republic of Korea was third with 56.7 million USD.Vietnam remained as the world's third largest rubber exporter with an estimated ex-port turnover of nearly 4.36 billion USD in 2016.http://en.vietnamplus.vn/rubber-exports-surge-in-first-eight-months/118081.vnp

Construction ministry asked to stabilise local sand market


Prime minister Nguyen Xuan Phuc assigned the Ministry of Construction to study Cambodia's permanent prohibition on sand exports and the impact on the construc-tion materials market in Vietnam.The assignment was given after Cambodia issued the ban on sand exports to protect the country's environment in July.Phuc asked the construction ministry to issue proper solutions and guide localities to take the initiative in stabilising the local construction materials market. He said Viet-nam would continue to carry out the policy of not exporting all kinds of sand to foreign countries.According to statistics from the ministry's Construction Material Department, licensed sand mining can meet only 60-65 per cent of the demand of large cities. Meanwhile, Vietnam is rapidly developing its infrastructure, therefore the demand for sand is con-stantly increasing.The country's demand for sand in 2015 was some 92 million cu.m. The volume is pre-dicted to reach 130 million cu.m. by 2020.Statistics revealed that Vietnam's total sand resources are estimated at 2.3 billion cu.m.Insiders said with this rapid pace of construction, the supply of sand will be exhausted in less than 15 years.Meanwhile, the Ministry of Natural Resources and Environment also warned that if there is no planning and no alternative material, there is a risk of no sand being left for construction.http://bizhub.vn/news/construction-ministry-asked-to-stabilise-local-sand-market_288975.html

China imports 35pct of Vietnam's crude oil shipments


China International United Petroleum and Chemicals Co Ltd (UNIPEC) spent $733 million buying 1.78 million tonnes of crude oil from the Vietnam Oil and Gas Group (PVN) in the first eight months of this year, accounting for 35 percent of Vietnam's crude oil exports.PVN on September 18 said it extracted 10.49 million tonnes of crude oil in January-Au-gust, with 9.19 million tonnes pumped locally.PVN and its partners sold 8.81 million tonnes at nearly $3.6 billion through the Petro-Vietnam Oil Corporation (PVOIL). Of which, 4.97 million tonnes of crude oil worth $2 billion was shipped to other countries and more than 3.8 million tonnes was supplied for domestic customers at $1.59 billion.China was among 30 customers to buy crude oil directly from Vietnam or via third-party international traders.Chinese customers imported the product directly from PVN at an average price of $412 a tonne, $9.59 higher than the average export price. For all China's crude oil im-ports from Vietnam, the average price was $405.31 per tonne, $2.9 above the average export price.


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The price depended on the quality of crude oil and market conditions. Vietnam cur-rently extracts and exports 18 types of crude oil, with 17 of them at local oil fields and one at overseas oil fields. The quality of these types is different, leading to a price dif-ferential of $17-18 a tonne between high-quality crude oil, such as from Bach Ho and Black Lion fields, and the rest.http://english.thesaigontimes.vn/56204/China-imports-35-of-Vietnam%E2%80%99s-crude-oil-shipments.html

Jan-August auto imports leap


Imports of cars with nine seats or less into Vietnam grew strongly in the first eight months of 2017, according to the general Department of Vietnam Customs.Customs data shows that August imports of completely-built-up (CBU) autos bound-ed back, with 7,830 units worth $187.8 million, up 12.8 percent and 12.7 percent over the previous month.However, CBU auto imports in July and August were lower than the average levels of the first and second quarters, which were respectively 8,850 and 8,240 units per month.According to the customs, Vietnam imported nearly 65,500 autos worth $1.39 billion in the first eight months of 2017, down 4.9 percent in volume and 14.1 percent in value compared to the same period last year.Although imports of vehicles with nine seats or more and trucks fell sharply, imports of under-nine-seat cars and commercial passenger vehicles picked up. In January-Au-gust, the nation bought 32,700 cars under nine seats from abroad, up 13.9 percent year-on-year, while imports of pickup trucks and other kinds of vehicle totalled 25,400 and 7,400, down 14 percent and 30.2 percent year-on-year respectively.The rise of imports of cars with less than nine seats resulted from Vietnam's commit-ments to the Asean Trade in Goods Agreement (ATIGA) in which the duty on CBU au-tos imported from Asean countries is down to 0 percent from 2018.Some auto assemblers in Vietnam have stopped making some models and shifted to importing them from some Asean countries instead.Thailand was the biggest CBU auto exporter to Vietnam in the first eight months, with 23,840 units worth $431.85 million shipped to Vietnam, up 12.8 percent in volume and 9.9 percent in value year-on-year.Indonesia came in second with 15,540 units worth over $277 million exported to Viet-nam, up eight-fold and 12-fold against the same period last year respectively.CBU autos imported from Thailand and Indonesia accounted for over 60 percent of the country's January-August auto imports.CBU vehicles imported from Thailand and Indonesia are replacing domestically as-sembled ones. According to the Vietnam Automobile Manufacturers Association (VA-MA), 177,030 domestically assembled cars found buyers in the first eight months, down 6 percent year-on-year.Meanwhile, auto imports from other countries declined. In the first eight months of 2017, South Korea was the country's third largest auto exporter to Vietnam, with near-ly 6,000 units worth $126.94 million, down 53.4 percent in volume and 43.8 percent in value year-on-year. Vietnam also imported 5,230 units from India, nearly 5,000 units from China and 2,410 units from Japan.http://english.thesaigontimes.vn/56195/Jan-Aug-auto-imports-leap.html

In Vietnam, imported feed material outdoes domestic produce

20/SEP/2017 INTELLASIA| TUOITRE NEWS

Vietnam has been spending big on imported animal feed and several types of agri-products for fodder production, mounting enormous pressure on domestic produce.Statistics from the Ministry of Agriculture and Rural Development show that the coun-try has paid $2.2 billion for foreign animal feed and relevant material in the year to date.In the same period, local businesses have imported 4.91 million metric tonnes of corn for animal feed production.In 2016, Vietnam imported eight million metric tonnes of corn for the manufacturing


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of animal feed, while the total amount of corn produced domestically was only 5.3 mil-lion metric tonnes.The nation also purchases from foreign countries a large amount of soybean, wheat, bone powder, and vitamins for fodder production on a yearly basis.According to Pham Duc Binh, vice-chair of the Vietnam Feed Association, domestic corn cannot compete with the cheap price of foreign produce, which sells only at VND4,400 ($0.19) per kilogram.Vietnamese soybean has been suffering a similar fate, he added."Many feed manufacturers in Vietnam have preferred imported corn thanks to low cost and higher quality," Binh elaborated.The demand for overseas material in the prduction of fodder has ben increasing becas-ue of limited domestic supply, the director of a husbandry business said, adding that using affordable imported ingredients can also help lower the overall price in the live-stock industry."It can open up an opportunity for Vietnamese products such as meat and eggs to be exported to other nations," the director continued.Thanks to low tax rates on feed material, people working in animal husbandry have been able to minimise their expenditure, thus increasing their profit, said Nguyen Hoang Ha, director of a fodder manufacturer in the southern province of Binh Duong.Local farmers, on the other hand, have been suffering as their products, especially corn and cassava, cannot compete with imported produce in terms of prices.They have no other choice but to sell products at lower rates, Ha stated.He suggested that the state should have certain policies to protect farmers, stressing that the country cannot rely entirely on foreign material in the production of animal feed."Other countries in Southeast Asia have implemented higher tax rates and set stricter conditions to create a balance between domestic and imported produce," Ha elaborat-ed.Relaxed procedures regarding the importation of feed material can also pose a risk of low-quality products.According to insiders, some businesses have been purchasing substandard bone and meat powder and reselling them to local feed producers, which may ultimately com-promise product quality and lead to epidemics.Vietnamese businesses import 300,000 to 400,000 metric tonnes of such powder to pro-duce feed for husbandry and aquaculture, said Nguyen Xuan Duong, deputy head of the Department of Livestock Production.http://tuoitrenews.vn/news/business/20170919/in-vietnam-imported-feed-material-outdoes-domestic-produce/41648.html

VN posts 11.5pct IT revenue growth


Vietnam's revenue from information and technology in 2016 reached nearly $68 bil-lion, posting an 11.49 per cent year-on-year increase.The figures were announced at a ceremony held in the city on Tuesday on the publi-cation of Vietnam's 2016 White Book on Information and Communication Technolo-gies (ICT). The annual publication, issued for the past eight years, provides official information and data on the ICT sector. This year's edition provided data on 12 areas, including IT application, information safety, telecommunications and broadcasting.Speaking at the release ceremony, minister of Information and Communications Truong Minh Tuan said the White Book would help not only Vietnamese people but foreign investors gain an overview of Vietnam's ICT situation, spurring investment."With the fast steps in ICT development in the past few years, Vietnam has had a high position in the world's map of IT services and software outsourcing," Tuan said. "Last year, it took the first position in the economic index using mobile applications among six Asean countries."The book also said in the 2015-16 period, 14 new policies were promulgated, contrib-uting to the development of a complete legal framework on ICT. The Law on Informa-


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tion Security was also promulgated on November 19th 2015.In the telecom sector, after the pilot period, the three big telecom providers of Viettel, VinaPhone and MobiFone were officially granted licence to establish and provide fourth generation (4G) LTE services in October 2016. The country's telecom market therefore has been seen positive competition.Last year, the country had 79 telecom companies with total revenue of VND136.5 tril-lion ($6.16 billion), representing a 1.6 per cent increase from the previous year.The total number of operating mobile phone subscribers in 2016 was around 128 mil-lion, including 36.2 million of broadband subscribers.IT has become one of economic sectors with a rapid and sustainable growth rate, bring-ing high revenue and export value and contributing to the country's GDP.Revenue from the hardware industry was $58.8 billion, software $3 billion, digital con-tent $739 million and IC services $5 billion.Vietnam earned $60.8 billion from exports of IT products last year, contributing VND34.3 trillion to the State budget.In the area of telecommunications, Viettel is the largest company with 46.7 per cent of market share of 2G and 3G mobilephone subscribers. It was followed by MobiFone with 26.1 per cent, VinaPhone 22.2 per cent, Vietnammobile 2.9 per cent and Gtel 2.1 per cent.The White Book will be published both in Vietnamese and English versions in October.http://bizhub.vn/tech/vn-posts-115-it-revenue-growth_288979.html

Vietnam seen lagging in 4IR


The director of the Vietnam Institute of Economics has said Vietnam may not be able to catch up with the Fourth Industrial Revolution (4IR).Speaking at a seminar on 4IR and growth strategies for Vietnamese enterprises in HCM City last week, Tran Dinh Thien gave some examples to prove his point.First, unlike the first, second and third industrial revolutions which came from a par-ticular field, the director said, 4IR can be found in all aspects of life and has a knock-on effect on almost everything. Many domestic companies whose strongest strength is information technology said there is up to 90 percent chance that Vietnam will fall be-hind in the fourth industrial revolution.Second, Vietnam is a smart people but lags behind other countries, Thien said. In its history, the nation missed two or three opportunities in the world's industrial revolu-tions. For instance, after the reunification of the country in 1976, the government ad-vocated for a scientific and technological revolution, but there had been no significant achievements by 1996. The concept of knowledge economy was introduced in 1996 but the nation never achieved this goal.Thien, who earlier presented 4IR reports to Party and government leaders, said the perception of the current industrial revolution is clear and that the government has sent out strong messages about it. However, specific action plans are not in sight, he noted.The Fourth Industrial Revolution will have far-reaching impacts on almost all aspects such as economy, society, culture, politics, security and defense. Especially, Vietnam is heavily dependent on outsourcing contracts with foreign partners and natural re-source exports given its abundant supply of labour but the growing automation trend in 4IR will make large numbers of workers jobless.Under such circumstances, Thien stressed, if there is no drastic change, the conse-quences would be serious. Local companies are enthusiastic about 4IR and the country also needs them to carry out it successfully, he said."Global integration is to gain access to new technology to enter the Fourth Industrial Revolution. I'm afraid we will lag in the revolution. However, I have some confidence in the corporate sector. Of course, it would be a labourious and costly process."http://english.thesaigontimes.vn/56208/Vietnam-seen-lagging-in-4IR.html


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Boost productivity for Industry 4.0


Nguyen Anh Tuan, head of Vietnam's National Productivity Institute, tells the Kinh te & Do Thi (Economic & Urban Affairs) newspaper that business managers should play a leading role in increasing labour productivity.A recent study by the Vietnam National Productivity Institute shows that the growth rate of Vietnam's labour productivity in the 2004-15 period is lower than the average increase of the minimum wage, which are 4.4 per cent and 5.8 per cent, respectively. Why the big gap?The key problem is that our labour productivity is too low. Labourers are partly to blame but business managers bear the main responsibility because they have not paid due attention to improving labour productivity. Although businesses don't want to in-crease wages, in the long term this is an impetus for effective use of labourers and pro-ductivity increase. Instead of debating how much the wage should be increased, businesses and labourers should sit together and discuss the main target, which is in-creasing productivity and income.How does Vietnam's labour productivity compare to other countries in the region?Vietnam's labour productivity is very low compared to high-productivity countries like Singapore, Japan and South Korea. The gap is about 10-15 times. Even compared to countries in the region like the Philippines, Thailand and Indonesia, the situation is worrying. Meanwhile, compared to Laos, Cambodia and Myanmar which had lower productivity than us, the gap is being narrowed. The issue of labour productivity has been put on the table many times, but so far, the solution have not been sufficiently ef-fective.The era of Industrial Revolution 4.0 revolves around investment in automation and ro-bots. What do you think about that?Investing in robots is costly, and it remain to be see whether it is effective. While robots can do some kinds of jobs, there are also jobs that should be done by humans. In Viet-nam's case, we still have to ensure jobs for labourers while improving productivity. It would be meaningless if productivity improvement results in more unemployment. I think we should not be hasty in carrying out the Industrial Revolution 4.0.What should be the solutions to increase labour productivity for small- and medium-sized enterprises?For small- and medium-sized enterprises, the first thing is to reshuffle production or-ganisation, which is very weak in many businesses. Second, they should focus on re-search activities and get rid of ineffective technology to renovate production processes, and select high-value products. Without due attention and investment, there will not be significant progress.http://english.vietnamnet.vn/fms/business/186662/boost-productivity-for-industry-4-0.html

Labour productivity of non-state enterprises alarming

20/SEP/2017 INTELLASIA| DTCK

Many enterprises have to conduct their training themselves or retrain employees in the form of combining work and study. This is also one of the basic bottlenecks in the de-velopment of non-state enterprises.The above findings were released by the research group of the National centre for So-cio-economic Information and Forecasting at the conference on "The Development Trends of Labour in Types of Enterprises in Vietnam" dated September 14th 2017.Low productivityAccording to Dr Nguyen Van Thuat, in comparison with other types of enterprises, the average labour productivity per worker in non-state enterprises was the lowest in the period of 2011-2014. The gap in labour productivity of non-state enterprises with other types of enterprises' is increasingly expanding.The quality of education and training is also inadequate in which the training quality is low or the training is not suitable to the practical needs of non-state enterprises. A study by the World Bank in 2012 showed that a significant percentage of enterprises complained that the skills workers trained at schools did not match the skills that en-


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terprises needed.About 65 percent of owners of foreign invested enterprises said that the skills trained at that vocational schools and technical secondary schools do not meet the enterprises' requirements. This ratio was about 35 percent in state-owned enterprises (SOEs) and non-state enterprises.Thuat believed that this is a very worrying factor because it hinders the competitive-ness of non-state enterprises in particular and the country's economy in general since non-state enterprises is the economic group that has the highest number of enterprises.According to Thuat, the main reasons leading to the low labour productivity of non-state enterprises are not only the low quality of labour but also business environment and market economic institution in which there are inequalities between different types of enterprises.In particular, non-state enterprises are most affected, which inevitably leads to the lowest average monthly income of labour compared to other types of enterprises, es-pecially in comparison with SOEs.The data in 2014 showed that the average monthly income of labour in non-state en-terprises was only about 57 percent of the corresponding income of labour in SOEs.Locating the development trend of labourThe research group found that the group of non-state enterprise tends to develop rap-idly, leading to the trend of labour development in the near future.It is forecasted that the number of employees working in non-state enterprises will reach about 12.8 million by 2022, 16 million by 2020 and 19.4 million by 2030. On aver-age, from now to 2030, the labour demand in non-state enterprises will rise by about 733,000 persons per year.The factor playing the fundamental role in promoting the development of labour in non-state enterprises is the Law on Support for Small and Medium-sized Enterprises, which will be effective on January 1st 2018, and Resolution 10 on developing private sector to become an important drive of the socialist-oriented market economy of the Central Committee of the 12th Party Central Committee, signed by general Secretary Nguyen Phu Trong on June 3rd 2017.However, the concern is the shortage of skilled workers. Dr Thuat recommended that leaders of non-state enterprises should pay more attention to the use of labour in the direction of considering the working time of labour as the profit of enterprises and also the labour's. In addition, enterprises should focus on professional training for their em-ployees.In order to increase labour productivity, raise income and improve the competitive-ness of human resources in Vietnam, Assoc. Dr Cao Van Sam, deputy general director of the general Department of Vocational Training said that the participation of enter-prises in vocational education should be strengthened and state management in voca-tional education should be improved, etc.

MoIT to reveal list of gas traders


Vietnam's Ministry of Industry and Trade (MoIT) has recently announced a list of eli-gible exporters, importers and distributors of gas.Under the announcement, 51 enterprises are eligible to distribute gas and 23 traders are qualified to export and import gas in Vietnam according to Decree No 19/2016/ND-CP on regulations of gas business and requirements for gas trading in Vietnam.The list of 23 qualified traders for gas import and export includes some large compa-nies in the gas industry, such as PetroVietnam Northern Gas Joint Stock Company, Tran Hong Quan Trading Company Limited, Hai Linh Company Limited, PetroViet-nam Gas Corporation One Member Company Limited and Totalgaz Vietnam Compa-ny Limited.Four traders are eligible to export and import liquefied gas, including Tannan Vietnam Company Limited, Birz Vietnam Company Limited, Samsung Electronics Vietnam Thai Nguyen Company Limited.In particular, PetroVietnam Gas Joint Stock Corporation (PV Gas) is on the list of eligi-


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ble traders producing and processing liquefied petroleum gas (LPG) that can exercise the right to export and import LPG.MoIT issued Decree No 19/2016/ND-CP on March 22, 2016 stipulating that enterprises trading in gas must meet certain conditions, such as every gas importer/exporter must own a certain quantity of LPG bottles (excluding mini-sized LPG bottles) that are eli-gible to be used on the market with total capacity of at least 3.93 million litres or every bottled LPG distributor must own LPG bottles (excluding mini-sized LPG bottles) that are eligible to be used on the market with total capacity of at least 2.62 million litres.In addition, the total capacity of LPG tanks has been reduced to 300cu.m. (formerly 800m3) for bottled LPG distributors.Prior to that, more than 40 small gas trading companies petitioned against the decree, saying they were being pushed into bankruptcy and were forced to quit the market be-cause of this regulation.http://bizhub.vn/news/moit-to-reveal-list-of-gas-traders_288986.html

Mekong countries emphasize infrastructure connectivity


Countries in the Greater Mekong Sub-region (GMS) should enhance their economic and infrastructure connectivity to promote economic development in the sub-region, deputy minister of Planning and Investment Dang Huy Dong said at a forum on Tues-day.Dong made his remarks during the ninth GMS Economic Corridors Forum, themed "Deepening and Widening Benefits of the Economic Corridors through Inter-sectoral Synergies." The forum, co-organised by Vietnam's Ministry of Planning and Invest-ment and the Asian Development Bank (ADB), attracted ministers, vice-ministers, sen-ior officials, development partners and representatives of the private sector from the six GMS countries.GMS cooperation in general and the forming of economic corridors in particular, with the support of ADB and development partners, would help the GMS countries fully tap their development potential and achieve equitable and sustainable development, Dong said."The strengthening of cooperation within member countries in the GMS region would help us achieve a common strategy which is fortifying linkages, enhancing competi-tiveness and community spirit," he added.To achieve these goals, Dong stressed the need to improve the transport system, par-ticularly the transport links that formed the base of the envisioned corridors, facilitat-ing trade and hastening the development of industries along the economic corridors. Ramesh Subramaniam, director general of the ADB's Southeast Asia Department in-sisted on the need to build country-linking transport in multiple modes, including roads, railway and inland waterways. But simply building the infrastructure is not enough, he said."Deepening and widening connectivity along the GMS economic corridors requires the upgrading and enhancement of transport infrastructure, but the crucial question now is how to ensure that these infrastructure links will yield their intended benefits in terms of increased trade flows, investment activity, industrial growth, employment, and incomes," Subramaniam said.According to ADB's assessment, GMS countries should strengthen infrastructure con-nectivity within the sub-region, boost the mobilisation of finance resources through Public-Private Partnership (PPP) form, reduce non-tariff barriers and facilitate trade within the GMS and between the sub-region and other regions.The larger goal is to build a Greater Mekong Sub-region of peace and stability in secu-rity and politics, dynamism and connectivity in economy, sustainability in the envi-ronment and harmony in social affairs.The forum also discussed the promotion of environmentally sustainable power trade in the region; the mobilisation of private sector investment into GMS infrastructure; lo-cal area development along the GMS economic corridors; ensuring the growth of re-gional e-commerce confers benefits for society; and the promotion of safe and


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environment-friendly agro-based value chains in the GMS.The GMS countries formed the forum in 2008 to bolster efforts to ensure the region's inter-country transit links facilitate not only the movement of people, but also trade and other economic activities.The ADB has supported the establishment of the East-West, North-South, and South-ern GMS Economic Corridors since 1998 to promote economic growth and integration in the sub-region.http://bizhub.vn/news/mekong-countries-emphasize-infrastructure-connectivity_288983.html

Da Nang foreign investment surges


The central city has attracted 43 new foreign direct investment (FDI) projects worth $60 million in the first eight months this year, 4.6 times the amount in the same period last year, vice director of the Da Nang Investment Promotion and Support Agency, Nguy-en Ky Anh said.In addition, five FDI projects increased their investment capital by a total of nearly $900,000.Anh said tourism real estate and service projects made up 60 per cent of the new FDI projects, while manufacturing projects attracted 40 per cent.The city now has 461 FDI projects worth more than $3.6 billion, mostly in tourism, services, property and industry.Singapore was the biggest investor in Da Nang with 23 projects worth $717 million, while Japan had 134 projects worth $598 million. The United States ranked third with 46 projects worth $517 million, followed by South Korea with total investments of $244.6 million.Da Nang encourages investors in high-tech industries and high-quality services in the form of public-private partnerships (PPP), as well as investment in waste treatment, infrastructure development, solar and wind power.Earlier this month, the city listed 68 PPP projects, 22 of them in the high-tech sector. From 2017-20, the projects call for investment from domestic and foreign businesses of $1.4 billion.The city's 1,010ha high-tech park, which was built in 2013 in Hoa Vang District 20km west of the city, has attracted six projects valued at $180 million from two Japanese and four domestic investors.The park, which was designed as a hub for green and high-tech investors, is keen on attracting more investors from Japan, Thailand and South Korea.Korea, Japan investmentsThe city is seeking additional investment from South Korea and Japan.At an investment promotion event in South Korea last week, president of Acro Eng, Lee Ho-sung, said his company would consider investment opportunities in the city's high-tech park. Deahan A&C group also plans to invest in an underground shopping and entertainment complex, the Lotus Square project.Last month, two new direct air routes connecting Da Nang with Deagu, South Korea, and Osaka, Japan, were launched. According to the city's tourism department, there are 12 flights from Korea to Da Nang every week, carrying an average of 1,500 passen-gers.Last year, Da Nang and the South Korean city of Gyeongsan signed a Memorandum of Understanding on development and cooperation in the cosmetics industry.Tourists from South Korea make up the second-largest segment of foreign tourist ar-rivals in Da Nang, with more than 443,000 nearly 20 per cent of total foreign travellers last year.In a promotion in Japan last Thursday, representatives from Da Nang's administration urged the Japanese Business Association and Japanese businesses to invest in high-tech farms, infrastructure, sea ports and green industries.The city has offered favourable conditions and priorities for Japanese businesses by setting up a one-stop shop and a Japanese desk to support investors in Da Nang.


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Representatives of Kawasaki Heavies Industry and Mitsubishi Group have investigat-ed investment in sea ports, electric cars and a metro in Da Nang.Japanese goods accounted for 37 per cent of the city's total imports, while 30 per cent of the city's industrial production value comes from Japanese FDI projects.Earlier this year, Route Inn Group from Japan inaugurated its first hotel project in Da Nang, the first of its kind in Vietnam, with a total investment of $18 million.FPT Software's Da Nang company began its 10,000-Bridge Software Engineer (BrSE) programme in cooperation with Japanese partners in 2016. In 2014, Da Nang started including Japanese language education in its curriculum at some high schools and col-leges.Da Nang, which is situated in central Vietnam and at the end of East-West Economic Corridors linking Laos, Thailand, Myanmar and Vietnam, will help boost exports and trade between local manufacturers and regional markets, as well as industrial centres in Binh Dinh, Quang Nam and Quang Ngai.http://bizhub.vn/news/da-nang-foreign-investment-surges_288961.html

HCM City mulls downtown congestion charge in 2020


The government of HCM City is weighing charging a downtown congestion fee on au-tomobiles from 2020.The HCM City Department of Transport and the Innovative Technology Development Corporation are working on a long-stalled plan of imposing a fee on automobiles op-erating within the downtown zone which has been plagued by heavy traffic.The plan will be submitted to the HCM City government for approval.Unlike its original version adopted in 2012, the latest version is envisaged implement-ing the plan in two phases. The first phase will be carried out in 2019 to form a ring road around the city centre, and build 36 automated fee collection points and a control centre.The control centre will be connected to the collection points to manage fee collections. The second phase will develop an extra 39 fee collection points.The corporation has presented three options for fee levels from 6 a.m. to 5 p.m. In op-tion one, it suggests charging VND40,000 per time on cars, taxis and coaches of less than nine seats. In option two, cars and taxis would be subject to the same fee but trucks and coaches of more than nine seats would pay VND50,000.Meanwhile, the third option sets a fee of VND30,000 for on taxis, and VND40,000 for cars, coaches of fewer than nine seats, and tour buses.An additional option is that the fee would be charged at peak hours from 6 a.m. to 9 a.m., and from 4 p.m. to 7 p.m. It may be applied in the first phase.The plan now requires a total investment of VND1.66 trillion (US$73 million) com-pared to the initially proposed VND1.2 trillion.The HCM City Department of Justice said such a traffic congestion fee is not provided in the Law on Fees and Surcharges. Therefore, the department asked the corporation to give a clearer explanation.The HCM City Department of Finance shared the same view, saying charging VND30,000 or VND50,000 per vehicle per time would be a big deal for many. The de-partment asked for a legal basis for this proposal.The Road and Railway Traffic Police Division at the HCM City Police Department wondered whether fee collection would lead to traffic congestion at collection points and whether this fee would overlap that collected by build-operate-transfer (BOT) road developers.Bui Xuan Cuong, director of the HCM City Transport Department, said the plan was aimed at easing the pressure on the downtown roads. The fee, he said, would force people to decide whether to travel by car or public bus to the city centre.He added the city had asked the central government for approval to collect this con-gestion fee in its downtown districts. If approval is forthcoming, it would come into force in 2020.


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Government urged to improve business climate


Removing barriers and improving the business environment would contribute to reaching economic growth targets in the context of a tight State budget, director of the Ministry of Planning and Investment's National Economic Issues Department Tran Quoc Phuong said on Tuesday at a Hanoi conference.Phuong suggested three main elements needed to reach the GDP growth target of 6.7 per cent this year: monetary flexibility and financial management to curb inflation; promoting production in processing and manufacturing, developing tourism and ac-celerating disbursement of FDI and private capital; and restructuring the economy.He added that the growth rate in the second quarter was 1 per cent higher than in the first. Other indexes were stable while inflation was less than 4 per cent. Financial and credit growth in the first eight months of the year was more than 10 per cent.In addition, the director was also optimistic about the growth of processing, manufac-turing and imports-exports. Exports posted growth of 18 per cent while imports rose by 22 per cent in the eight-month period. The import-export growth was expected to surpass the year's targets.However, he said, the prime minister does not want to achieve growth at any cost, only to take advantage of all opportunities to ease difficulties."In the context of a tight State budget, the importance is how to provide encouraging policies and mechanisms to create an open environment to businesses," he said.Vo Tri Thanh, former deputy director of the Central Institute for Economics Manage-ment, said Vietnam has three to four barriers to growth, including the State budget; po-litical reform; restructuring and stabilising the macro-economy while ensuring foreign reserves and curbing inflation."However, international integration would be one of the most important solutions as we have seen an increase of resources from FDI and the private sector," Thanh said.Dau Anh Tuan, head of the Legal Department of the Vietnam Chamber of Commerce and Industry (VCCI) agreed, saying that taxes have been an extremely important issue, affecting investors and enterprises.A VCCI's survey of 2,000 FDI firms operating in Vietnam showed that tax and prefer-ential policies are one of four advantages in attracting foreign investors.Tuan said the government and the Ministry of Finance should carefully evaluate any change relating to tax policies as it could have a major effect on businesses and the economy. "The long-term solution for economic growth is to reform, reduce costs and shorten time to carry out administrative procedures for firms," he added.http://bizhub.vn/news/govt-urged-to-improve-business-climate_288980.html

VN firms spending less on RD


Innovation was critical for the growth of factory productivity, but Vietnamese firms spent less on R&D than in most other Southeast Asian countries.This was highlighted in a recent World Bank report titled: "Vietnam: Enhancing Enter-prise Competitiveness and SME Linkages.""While a substantial proportion of firms declare spending on R&D, the average amount spent as a proportion of sales is lower than in most other Southeast Asian countries," the report said. "Relatively few firms in Vietnam invest in licensed or pat-ented knowledge to support their innovation efforts."Findings showed that the average R&D effort in monetary terms was 1.6 per cent of annual sales, much lower than in Laos (14.5 per cent), the Philippines (3.6 per cent), Malaysia (2.6 per cent) and Cambodia (1.9 per cent).Compared to other countries in the region, relatively few Vietnamese firms appeared to be spending on the purchase or licensing of inventions and knowledge for the de-velopment of new products and processes, the report said. "They more rarely intro-duce products that are new to their markets and have completely new functions compared to their existing products."According to the report, there was scope to dedicate more resources to R&D and the licensing of foreign technologies, adding that innovation seemed driven by larger


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firms rather than small and medium-sized enterprises (SMEs).Establish linkagesThe government of Vietnam has put in place a supporting industries policy framework that aims to upgrade the capacities and technology of local enterprises to facilitate sup-plier linkages with FDI as well as SME policy for strengthening the domestic private sector.Promoting linkages was considered an effective way to enhance the transfer of tech-nology, know-how and management practices, and help raise domestic firm produc-tivity.However, the report found that lack of availability of skilled workers and lack of infor-mation on FDI sourcing strategies and standards appeared to be the binding con-straints for domestic suppliers."Across manufacturing sectors, Vietnamese firms also suffer from lack of management skills. Without formal information channels to obtain information on FDI sourcing strategies, potential domestic suppliers with no business connections are disadvan-taged in terms of linkage opportunities."In addition, there was a lack of competitive local suppliers and access to finance re-mained restrictive, according to the report.The report said the World Bank proposed Vietnam strengthen and streamline the gov-ernance and institutional arrangements for supporting industries policy and linkage programme implementation through the set up of an interministerial committee on supporting industry development and competitiveness.The second proposed pillar was to connect multinational enterprises and local firms through providing information about FDI sourcing information and requirements and implementation of effective business-to-business match-making services.In addition, it was necessary to design and carry out a demand-driven supplier devel-opment programme to upgrade capacities and improve competitiveness of local sup-pliers.http://bizhub.vn/news/vn-firms-spending-less-on-rd_288981.html

PE's industrial moment may be here


To sustain growth, Vietnam needs to build a strong industrial backbone with the help of foreign investments. Dr Per Stenius, client director at global professional services firm Reddal's Seoul office, and Giao Le, business analyst at Reddal's Helsinki office, discuss how private equity investors can seize opportunities in local industry.Strong FDI but weak local industriesIn the last 15 years, foreign direct investment (FDI) in Vietnam has grown at 15 per cent every year, as multinational firms relocated their manufacturing bases to Vietnam to take advantage of low-cost labour and government incentives.Vietnam's growth can be largely attributed to export growth, with a significant impact from the FDI sector, accounting for 70 per cent of total exports.However, heavy reliance on multinational firms for export growth is not sustainable for Vietnam. Foreign companies cannot serve as the backbone of an economy due to their mercenary nature they are the first to move in favour of better conditions offered by countries elsewhere.Consider the case of Malaysia, where the twin withdrawals of Seagate and Western Digital in 2016 from Penang to Thailand will result in thousands of jobs lost. At the same time, companies like Adidas are building highly-automated plants in the US and Germany to be closer to their customers, leveraging the latest technologies such as ro-botisation, cloud computing, and 3D printing to enable mass customisation at low costs. Such trends emphasize the need to prepare Vietnamese manufacturers to serve as the country's industrial backbone.The reality is that Vietnam's export-led growth has not translated to strong local sup-porting industries. According to the Japan External Trade Organisation, localisation rates of Japanese companies in Vietnam were 32 per cent, much lower than China (65 per cent), Thailand (56 per cent), and Indonesia (41 per cent). Excluding Japanese and


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Taiwanese suppliers operating in Vietnam, local companies accounted for less than 13 per cent of component purchases.This is a missed opportunity for domestic manufacturers to benefit from foreign in-vestments, because serving as suppliers to multinational corporations is one of the channels to absorb foreign technology, know-how, and management expertise spillo-ver. Consequently, Vietnamese local supplier quality ranked 92 out of 144 countries in the OECD Global Competitiveness Report.Bridging the gapOne lever to raise Vietnamese manufacturers' capabilities is fostering linkages with the FDI sector, leveraging proximity to foreign know-how to accelerate the catch-up. The state can increase the spillover potential of multinational firms through investment and intellectual property policies, and boosting the absorptive capacity of local firms.It is important to note that the government's call for FDI and incentives for technology transfer without first improving local firms' absorptive capacity will not help local in-dustries. A key determinant of firms' absorptive capacity is human resource quality and the technological state of the receiving firms. The closer the gap in such factors be-tween foreign and local firms, the easier it is for local firms to absorb the spillover.To close the gap, Vietnam should encourage research and development (R&D) activi-ties in the private sector. According to the World Bank, Vietnam's spending on R&D is low at 0.2 per cent of the GDP, compared to Malaysia's 1 per cent and Korea's 4 per cent, and is dominated by national institutions and state-owned enterprises.Take South Korea as an example of the benefits that R&D can bring. The East Asian country has followed a successful technology-led growth strategy since the 1970s. In addition to funding R&D, the Korean government has actively shared publicly-funded R&D results with private firms, promoted R&D in private firms via tax incentives, and created public-private joint consortiums for larger and riskier projects.Similarly, the Vietnamese government can boost the impacts of their limited R&D budget by sharing publicly-funded R&D outcomes to the private domain. Limited public funding means that the government should also incentivise and ease the path for private investors to invest in local manufacturers' training and technology.At the same time, early-stage education reforms are needed to focus on critical think-ing, problem solving, teamwork, and communication skills, which are lacking in the current Vietnamese workforce. This gap was found to be more profound among inno-vative and exporting firms, reported a 2012 survey conducted by the World Bank and the Central Institute of Economic Management.The role of private equity fundsGiven the current situation, steering investment into the fragmented and cash-hungry local manufacturing sector can be a fresh alternative for private equity (PE) investors. This is especially true for new joiners.Finding good deals in consumer-driven sectors has become increasingly difficult for Vietnam-based PE firms, as most lucrative targets have already been invested or grown into publicly-listed companies. Meanwhile, the valuations of available deals are inflated, driven by the premiums foreign companies are paying to secure a foothold in Vietnam.Reddal's interviews with leading PE firms in Vietnam revealed that deal scarcity and inflated prices have driven some funds to seek targets abroad or be less selective in choosing focus sectors. This is understandable but also unfortunate, as it does not speed up the development of capable Vietnamese industrial corporations and the small- and medium-sized enterprises (SMEs) supplying them.Meanwhile, there is a good amount of room for value creation in the manufacturing sphere. As 93 per cent of manufacturers are SMEs, PE can utilise a roll-up strategy to boost deal sizes and improve efficiency through consolidation. Value creation oppor-tunities also come from the proximity to foreign technologies and expertise thanks to the thriving FDI sector.Admittedly, realising opportunities with local manufacturers has not been easy for PE firms. Mekong Capital's first fund nearly 20 years ago targeted export-led manufactur-


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ing businesses but had to retreat, as they found local management skill and accounting transparency gaps too significant to overcome to achieve operational improvements. That is not to mention Vietnamese owners' reported reluctance to equity financing, de-spite lack of finance being a common barrier.However, the times are changing. Nowadays, PE may find family businesses in tran-sition to second-generation management a suitable match. The second generation sent abroad to study is returning to take over the family business. Their international expo-sure and openness to change might be a key to opening this sector to PE by advocating organisational change toward professionalism and transparency. A similar trend has been seen in Korea, where SMEs increasingly contribute to industrial development as new owner-manager generations step in.Tips for private investorsTo succeed, PE firms need to balance between hiring local professionals to navigate a fragmented landscape with deep-routed managerial norms, and taking on expat PE veterans with solid portfolio management skills to push for the needed organisational transformation.For instance, Mekong Capital only managed to turn around its investment in a manu-facturing target after hiring a US expat to streamline its export division. The Mekong Capital case shed light on a conventional myth that hiring local people is key to suc-ceeding in emerging markets like Vietnam.Investing in local manufacturers' capabilities is win-win for both the Vietnamese econ-omy in the long run and investors looking for hidden yet attractive investment oppor-tunities.If done right, PE has the chance to play a much bigger role in the Vietnamese economy by steering value creation in the manufacturing sector. They may want to look out for mid-cap family businesses led by second-generation owner-managers eager to trans-form the legacy business into professional and growing ventures. Granted, there will be both cultural and capability hurdles, but those who succeed may see significant re-wards from their hard efforts.http://www.vir.com.vn/pes-industrial-moment-may-be-here.html

Sales of low-cost homes lackluster despite huge demand


The demand for low-cost apartments in Hanoi is huge but sales of such homes have been poor this year.Experts said affordable housing projects for low-income people are mostly in the cap-ital city's outlying areas which make it inconvenient to commute to central areas, and which lack necessary supporting facilities.Low-cost housing projects are mainly developed in suburban areas such as Ha Dong, Hoang Mai, Thanh Tri and Long Bien.They include Xuan Mai Complex on Le Van Luong extended street in Ha Dong Dis-trict, which is developed by Xuan Mai Investment and Construction Corporation and has 26 floors and two basements with 700 units. Units of 47 to 80 square meters are of-fered at VND0.8-1.5 billion each.Those apartments having two bedrooms and a toilet and measuring 47 to 54 square meters each cost VND1 billion or less.Also in the district is the Boss Tower, built by Tay Do Investment Import Export JSC. In the 52-storey building, the price is VND17 million per square metre including value added tax (VAT), and the smallest unit of this project costs VND800 million. However, it is short of supporting facilities.Besides the projects under construction, the completed projects in Xa La and Duong Noi urban areas supply a huge number of affordable homes.BIC Vietnam JSC's Rice City project with commercial and social homes is another typ-ical project in Long Bien District. The 19-floor building offers social houses of 40 to 69 square meters at VND14.5 million per square metre and commercial houses at over VND17 million per square metre.Ruby City CT3 Phuc Loi Complex developed by Thang Long-Vietnam Housing Devel-


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opment Investment JSC provides 1,120 apartment units measuring 48-60 square me-ters each. The price is VND18 million per square metre, so the cheapest unit costs nearly VND900 million.Apartments of Ecohome Phuc Loi project invested by Thu Do Investment and Trading JSC are being sold at VND16.5 million per square metre.This is clear proof that these homes are not at all affordable.According to market research and consulting firm Savills Vietnam, 4,000 homes cost-ing less than VND20 million per square metre have been launched in Hanoi this year, mainly in outlying districts such as Hoang Mai, Ha Dong, Thanh Tri, Long Bien and Hoai Duc.Of which, 2,700 of them were handed over to customers in the first half of 2017, far low-er than in previous years.Do Thu Hang at Savills Vietnam said the low-cost apartment segment has slowed down because investors no longer receive support from the VND30 trillion home loan package. Another reason is the segment generates low profit for those wishing to buy such apartments as an investment.Tran Nhu Trung, deputy general director of Nam Cuong Corporation, said whether real estate projects are successful depends on their locations.http://english.thesaigontimes.vn/56206/Sales-of-low-cost-homes-lackluster-despite-huge-demand.html

Well-known cafe chains beat retreat from Vietnam


In spite of receiving investments from foreign investors with powerful financial capa-bility and strong brands, numerous coffee chains in Vietnam still either closed or scale down operations.Below are some major chains and their progress in VietnamNYDCOn July 20, 2016, after finally closing the last outlet in Metropolitan in downtown HCM City, New York Dessert Coffee (NYDC), a European-American style coffee and des-serts chain officially bid goodbye to Vietnamese customers via Facebook and promised to "come back someday."Earlier in May, Singapore-based NYDC had closed three outlets on Nguyen Trai Street and at the Cantavil and Crescent malls in HCM City.With investment from Singapore's SUTL Group, NYDC arrived to Vietnam in 2009 and young people were quickly attracted to its modern drinks menu and tasty Amer-ican desserts, such as cheesecakes and mud-pies. At its heyday, NYDC owned six out-lets in HCM City. SUTL planned to open 20 outlets in office buildings and malls over a five-year period, with each unit costing $250,000 to $300,000.Though NYDC and SUTL did not give a detailed explanation for the withdrawal, in-dustry insiders believe the expensive menu and locations were among the issues. Meanwhile, Vietnamese customers were getting pickier and NYDC had to compete with Vietnamese-owned chains like Tay Nguyen, Phuc Long, The Coffee House, Ur-ban Station, and Trung Nguyen.Gloria Jean's CoffeesIn April, Australian-owned Gloria Jean's Coffees decided to close its last store in Viet-nam, ending a 10-year stint in HCM City and Hanoi due to slow expansion, high rent, and an unsuitable business model.Entering Vietnam in 2006 via signing a franchise contract with a local firm, Gloria Jean's Coffees expected the business results to develop as well as it did in Thailand and Malaysia.However, the Australian coffee house chain was only able to open six outlets in HCM City and one in Hanoi in the first six years.Nguyen Phi Van, the first franchisee of Gloria Jean's Coffees in Vietnam, told Vnex-press that the demise was due to the adoption of a business model that had been de-veloped in Australia for the local and regional markets.Later on, even after Gloria Jean's Coffees International allowed its franchise in Vietnam


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to make some changes to its products to adapt to local people's taste, the going re-mained really tough due to many reasons, including fiercer competition from both for-eign and domestic rivals.Espressamente IllyIn 2009, Espressamente Illy entered into a cooperation with a Vietnamese partner called Thai Binh Duong Export-Import Co., Ltd officially launched Coffee-Bar Espres-samente Illy in Vietnam. However, after opening two outlets only, the investors went bankrupt.The Coffee InnThe Coffee Inn was another well-known brand since its first outlet was opened in Ha-noi. The Coffee Inn is considered the first brand to bring ice-blended coffee in Vietnam for the first time.The revenue of this chain soared in 2013-2014. However, in mid-2014, operations start-ed to slow down due to the appearance of Starbucks as well as other brands upgrading their menus and the quality of drinks.The business continued to fall after the throne of milk tea brands such as Ding Tea. Al-though The Coffee Inn changed the outlet design and added several food items to its menu, it ultimately failed to lure in customers. As of September 2016, three-fourths of the company outlets were closed.The KAfeFounded in 2013, Dao Chi Anh, a young lady daring to quit her high-rolling job at a big multi-national corporation in Singapore to build her own business, The KAfe was planning an overseas listing, preferably in Hong Kong or London, within two years.The drinks and food chain was rapidly expanding with a dozen outlets in Hanoi and planned to open several stores in HCM City. At the time, people went to The KAfe, a cafe chain selling coffee and Asian-Western snacks, to enjoy the drinks and the food, check in, and take photos.In October 2015, The KAfe received an investment capital fund of $5.5 million from Hong Kong-based private equity firm Cassia Investments. The investment was expect-ed to help The KAfe to expand its operations. However, one year receiving the invest-ment, Dao Chi Anh was forced to leave her business.After her leave, the business results of The KAfe went downhill. In April 2017, the stores in Hanoi and HCM City were closed one after the other. The Facebook fan page of The KAfe has stopped posting updates since the end of March 2017.Saigon CafeIn June 2016, the first outlet of Saigon Cafe chains was launched in HCM City, marking the fast development of this brand in the next months. At the period of prosperity, the chain had seven outlets located in prime locations of HCM City. It lured in a massive volume of customers in a short time and became a favourite check-in place for the city youth.However, only a year after debuting, the volume of outlets decreased to two from the original seven.A representative of Saigon Cafe's founders told Zing that all Saigon Cafe outlets are located on prime locations, however, location is not the deciding factor in a business's effectiveness. Besides, the chain faces fierce competition from other brands as well as increasing land rental prices. Thus, the company decided to maintain the operations of two outlets with the highest revenue.The representative added that scaling down its operations is part of the business re-structuring plan.Coffee BeneIn August 2014, Coffee Bene, a Korean coffee chain, opened its first outlet on Dong Khoi Street in HCM City.It planned to open at least three outlets in Hanoi by the end of 2014 and the figure was expected to hit 300 outlets across Vietnam by 2018.However, it later lowered the target to 100.A co-founder of the chain commented that there are too many 'big players' in the mar-


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ket competing in the same market segment. Meanwhile, the high cost of retail rent was also a problem hindering the chain development plan.The Vietnamese coffee market is considered very promising as it is estimated to grow at 15 per cent through 2020.According to Kantar Worldpanel, a global expert in shopping behaviour, the Vietnam-ese coffee market is growing at 3 per cent in urban areas and 11 per cent in rural areas, mostly thanks to instant coffee.An Euromonitor surveys also showed that the retail turnover of instant coffee in Viet-nam is expected to grow at 18.5 per cent annually, to VND2.4-3.6 trillion ($107-160.7 million) in the 2011-2016 period.http://www.vir.com.vn/well-known-cafe-chains-beat-retreat-from-vietnam.html

Foreign detergent brands corner market, but local brands still thrive

20/SEP/2017 INTELLASIA| VIETNAMNET

Unilever and P&G alone hold up to 80 percent of the domestic detergent market, pock-eting huge profits. With revenue of $600-650 million a year and growth rate of 10 per-cent, the Vietnamese detergent market is very attractive to manufacturers.Several years ago, the domestic detergent market was the playing field for the two big players Unilever and P&G. However, since 2012, the appearance of Vietnamese brands has changed the situation.A branding expert said the two big players can dominate the market partially because of costly advertisement campaigns they launch every year. Unilever spends big money on Omo, Viso and Surf brands, while P&G, after a long period of focusing on Tide, has begun running ad campaigns for Ariel.In May, 2013, Omo launched a programme about 'the greatest number of stains which can be cleaned in the shortest time'. In June 2013, Ariel replied with the programme 'the one step wash power' in Hanoi, Da Nang and HCM City.Later, P&G offered a discount rate of 20 percent for Ariel products, while Unilever ran another noisy marketing campaign. The latter also has a cooperation programme be-tween Omo and the seven largest washing machine manufacturers.A branding expert commented that Unilever is dominant in Vietnam because its prod-ucts are diverse and target different groups of customers Omo for high income earn-ers, Viso for the mid-end market and Surf the lower end. Meanwhile, P&G only has Tide for the high-end market.However, P&G has tried to expand market share launching Tide Simply Clean and Fresh, a product believed to target the mid-end market in February 2014.Though the domestic market is controlled by the two big players, there is still room for Vietnamese manufacturers to make money.The Aba brand began competing directly with Omo and Ariel in 2012. At first, Aba was mostly advertised on billboards and posters, but later, it began appearing in TV ads, which has helped the brand become the third largest shareholder, after Omo and Ariel.Vietnamese detergent brands such as Lix, Net, Vi Dan, Bay, Duc Giang, My Hao and Aka can survive in a competitive market, but most of them target the low-cost market segment and earn money from doing outsourcing for big brands and from exports.Net, for example, reported profit of VND102 billion in 2015, a 96 percent increase com-pared with the year before. And Lix reported profit of VND233 billion in the same year.http://english.vietnamnet.vn/fms/business/186443/foreign-detergent-brands-corner-market--but-local-brands-still-thrive.html

Big dreams for the banana industry


Banana prices have seen sharp increases in the last 30 years, with an estimated market value of $15 billion per annum.Though prices fluctuate all the time, in general they are on the rise, from $300 per tonne in 1980s to $1,100 per tonne in 2012.At Hoang Anh Gia Lai shareholders' meeting, president Doan Nguyen Duc said one


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hectare of bananas brings revenue of VND1.9 billion, much higher than that brought by sugar cane. It is estimated that the group earns VND2.3 billion from fruit, and ba-nanas account for a large proportion.However, despite the great potential, Vietnam still cannot develop an effective banana industry.Banana have one of the largest fruit growing areas in Vietnam, accounting for 19 per-cent of total fruit-tree cultivation, and the highest output, about 1.4 million tonnes a year. However, banana has never been considered a key fruit tree and has never been included in local fruit development plans.The link between farmers and enterprises is loose: farmers don't have information about the market, while enterprises have to collect products from many different sources with no clear origin.Several days ago, 20 tonnes of bananas from Hung Yen received customs clearance at Vladivostok port in Russia. Globally, the company which imported Vietnam's bananas noted that bananas have good prices while the quality is not inferior to any product from other countries. He said that many companies had contacted Global to buy Viet-nam's bananas.The demand for bananas in Russia's eastern areas is very high, while some Russian companies said they can pay 70 percent or 100 percent of the value of consignments in advance.The Manila Times last year quoted experts saying that Vietnam may become a big rival for the Philippines' banana industry. However, Vietnam will need to industrialise ba-nana production. It needs to start the process by developing varieties favoured in in-ternational markets instead of some traditional varieties.An expert said that it is necessary to improve varieties to create products with high yield which can be preserved for long shipping time.It is estimated that 30 percent of bananas going to the EU market are refused because of the lack of aesthetics. Therefore, there must be officers in charge of ensuring quality control in all phases of the production chain, including cultivation, harvesting, clean-ing, labeling and packing.Hand&Hand, a farm produce company from South Korea, is developing a banana farm in Can Tho. It plans to have a farm with an area of 300 hectares at least in Vietnam by 2022.http://english.vietnamnet.vn/fms/business/186440/big-dreams-for-the-banana-indus-try.html

Vietnam's 127 wish-listed projects fail to attract foreign investors


Many of the 127 wish-listed projects in the fields of infrastructure and industrial man-ufacturing on offer for more than three years, but have yet to captivate foreign inves-tors due to poor feasibility and planning.In April 2014, the Vietnamese government issued a list of 127 projects in various indus-tries. These projects await foreign investors through both foreign direct investment (FDI) and public-private partnership (PPP) investment opportunities for the total esti-mated investment capital of roughly $60 billion.Specifically, some national-scale projects that failed in calling for foreign investment in time include Long Thanh International Airport, Dau Giay-Lien Khuong Highway, and South Van Phong Refinery.Long Thanh International Airport has seen harsh criticism for its huge investment, Dau Giay-Lien Khuong Highway remains in the first phase of the preparation process, while South Van Phong, in which Petrolimex partnered up with Japanese investor JX Nippon Oil and Energy, has been delayed for ten years since it received the investment decision and three years since recalling investment.Another example of a project going awry is Binh Dinh Power Centre. Its previous de-veloper was Saigon-Binh Dinh Energy JSC who failed to carry out the project, so Binh Dinh authorities have been considering calling for other interested foreign investors.The most urgent issue for Vietnam's current investment climate is for sizable and me-


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dium-scale projects to rework the investment attraction schemes, customising them for each particular project, mechanisms, and preferential policies in order to attain win-win situations between Vietnam and foreign investor partners. By doing this, the 2020 target might well be within reach.Some large-scale projects on the Vietnamese government's listName Total estimated investment capitalLong Thanh International Airport phase 1 $5.6 billionDau Giay-Lien Khuong Highway $3.5 billionNorth-South Highway (Ninh Binh-Thanh Hoa and Thanh Hoa-Nghi Son sections) $1.9 billionBien Hoa-Vung Tau Railway $5 billionHanoi-HCM City railway refurbishment $2.3 billionBinh Dinh Power Centre $4 billionSouth Van Phong Refinery $8 billionDankia-Da Lat Resort $2 billionUrban Rail Transit No.6, HCM Cityhttp://www.vir.com.vn/vietnams-127-wish-listed-projects-fail-to-attract-foreign-in-vestors.html

Vietnamese to develop support industries with VinFast


Increasing the localisation ratio in industrial products and becoming more involved in the global production and supply chain are the top concerns of Vietnamese enterpris-es.Dau Thau cited a JETRO (Japan External Trade Organisation) report as showing that the locally made content rate in industrial products in Vietnam was 34.2 percent in 2016, far lower than China's 67.8 percent, Thailand's 57.1 percent and Indonesia's 40.5 percent.Jun Yanagi, Japan's deputy ambassador to Vietnam, said there are 1,600 Japanese com-panies operating in Vietnam, half of which are in the manufacturing sector. However, the proportion of industrial products the companies order from Vietnamese enterpris-es is very low.The number of business transactions between Vietnamese and Japanese companies is still limited.Earlier this year, Takimoto Koji, chief representative of JETRO HCM City, warned that some Japanese automobile manufacturers were considering leaving Vietnam. One of the reasons was Vietnam's weak supporting industries.The Ministry of Industry and Trade (MOIT) admitted the underdevelopment of the domestic supporting industry. Local newspapers cited a report from the ministry as showing that Vietnam was aiming to obtain a 40 percent localisation ratio for fewer-than-9-seat cars by 2005 and 60 percent by 2010.However, the average locally made content rate is just 7-10 percent now. The highest localisation ratio, 37 percent, is for Toyota Vietnam's Innova.Vingroup has announced a plan to develop VinFast, a Vietnamese automobile brand. The manufacturer stated that by 2025, the localisation ratio would be 60 percent.Vingroup, an investor, is a powerful conglomerate owned by Pham Nhat Vuong, the first Vietnamese dollar billionaire recognised by Forbes. Vuong has had investments in many fields, from real estate and retail to education and healthcare.Vingroup has appointed Vo Quang Hue, who was CEO of Bosch Vietnam as deputy general director, to be in charge of the VinFast project.The decision by Vingroup to choose Hue, who was trained in automobile technology in Germany and worked for BMW and Bosch, in analysts' eyes, shows the determina-tion of the conglomerate to increase the localisation ratio of auto products.Nguyen Tuan, director of Thien An Phuc, commented that VinFast chose Hue as he is the right person to carry out the localisation plan because of his extensive knowledge.According to Phan Dang Tuat, an expert, the 60 percent localisation ratio would be a big challenge. A sedan has 24,000 car parts. If one enterprise provides six parts, VinFast


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would need 4,000 enterprises that provide car parts.http://english.vietnamnet.vn/fms/business/186586/vietnamese-to-develop-support-industries-with-vinfast.html

Hau Giang calls for investment in 7 projects


The southern province of Hau Giang is calling for total investment of some $300 mil-lion in seven projects, with more than 6,500ha of land expected to be leased.Pham Van Tuu, director of the Department of Information and Communication, in-formed a press meeting on Tuesday of an investment promotion conference which would be held in the province on September 27.Accordingly, the seven projects consist of a high quality rice processing area for ex-ports, investment into infrastructure of the first phase of the Dong Phu concentrated industrial cluster, the Nhon Nghia A industrial cluster and the third phase of Phu Huu A industrial cluster, as well as Vi Thanh City's residential area, the Lung Ngoc Hoang ecotourism area and the Hau Giang hi-tech agriculture area.Hau Giang has offered corporate income tax exemption and reduction policies in two to four years, reducing by half the taxes to be paid in the following four to nine years, with preferential lending interest rate of 10-17 per cent per year. Investors whose agri-cultural projects are part of the province's plans would be cut their land rental by half.Tran Thi Xuan Trang, deputy director of the department, said the investment promo-tion conference aimed to introduce potential, strengths, key projects and support pol-icies to both local and foreign investors.In addition, the event would create conditions for organisations, investors, businesses and State management agencies to exchange ideas on policies and investment environ-ment for socio-economic development.Exhibitions and forums would also be held.Located 240km from the southern socio-economic hub of HCM City, Hau Giang has increased investment in transport, connecting with six national highways, and in high quality agriculture processing zones of sugarcane, pineapple and rice.Nguyen Huu Nghia, director of the province's Department of Planning and Invest-ment, said Hau Giang has 4,300 operating businesses with total registered capital of some VND45 trillion (nearly $2 billion).The department recently granted investment licences to 488 projects with total invest-ment of VND123 trillion.The province has attracted 29 foreign investment projects with total registered capital of $808 million.It has striven to facilitate firms by granting investment licence in just three days and business registration in 1.5 to three days.http://bizhub.vn/news/hau-giang-calls-for-investment-in-7-projects_288972.html

Vietnamese, Chinese businesses seek cooperation opportunities


Nearly 50 businesses from Fujian province of China and Vietnam's northeastern prov-ince of Quang Ninh gathered at a seminar in Ha Long city on September 19 to seek in-vestment and trade cooperation opportunities.The Fujian enterprises are operating in industrial production, trade, finance, transport infrastructure, export-import, logistics, IT, high-tech and green energy. Meanwhile, firms from Quang Ninh province specialise in tourism, material production, infra-structure construction and real estate.Ta Duc Quyet, director of the Mai Quyen Tourism One Member Company Limited, said over the past decade, apart from tourism, his company has cooperated with sev-eral Chinese businesses in mining.He expressed his hope that through the seminar, Quang Ninh will further simplify its administrative procedures to facilitate the operation of businesses.Nguyen Duc Tuyen, Chair of the Managing Board of Dong A Group which specialises in metallurgy, said his group has partnered with foreign counterparts, including those from China, in order to improve product quality.


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SVietnam finance & business 20 September

The seminar created an opportunity for the participating enterprises to expand the market and seek cooperation opportunities in trade and investment, thus improving their competitiveness and ability for international integration.http://en.vietnamplus.vn/vietnamese-chinese-businesses-seek-cooperation-opportu-nities/118122.vnp

BUSINESSIZ NEWSBusiness Briefs 20 September, 2017

20/SEP/2017 INTELLASIA |

* Viet Dragon Securities Company (VDS) obtained VND222.3 billion in revenue and VND83.6 billion in pre-tax profit this year to August, meeting 83.6 percent of the full-year profit target. The enterprise reported VND29.06 billion in revenue last month, in-cluding VND 13.7 billion from securities services, VND7.5 billion from the brokerage service and VND5.1 billion from financial investment. Its pre-tax profit was over VND7 billion in August.* Khang An Investment Real Estate Company (KAC) has announced to. spend VND9.8 billion investing in Khai Hoan Land Khang An Project Development Co Ltd KAC will hold a 49 percent stake in the enterprise, which has a chartered capital ofVND20 bil-lion.* Dong Phu Rubber Company (DPR) will spend V D80 billion paying a third round dividend ofVND2,000 per share for 2016 on the record date of September 27. The com-pany will make the payment on October 10. DPR made a gross profit ofVND168.6 bil-lion between January and July, or a 2.4-foldjump and meeting 88.2 percent of the year's target.* Bac Minh Development Investment Company (SBM) has received approval from the Hanoi Stock Exchange to float 39 million shares on the market for unlisted public com-panies, or UPCoM, on September 21. The initial price is set at VND16,500 per share. SBM made a net profit ofVND50.7 billion on revenue ofVND148.8 billion in the first half of this year, down 25 percent and 4.9 percent year-on-year respectively.* Tien Phong Banking Equipment Company has bought 740,000 shares of Ben Tre Pharmaceutical Company (DBT) to secure a 6 percent stake in the enterprise.* Education Cartography and Illustration Company (ECI) made a pre-tax profit of VND3.3 billion on revenue of V D47.6 billion in the January-August period, meeting 91.9 percent and 86.5 percent of the full-year targets, said Viet Capital Securities Com-pany.* The State Capital Investment Corporation has sold nearly 1.2 million shares of Trans-port and Chartering Corporation (VFR). According to vietstock.vn, the enterprise was delisted from the Hanoi Stock Exchange on June 2 after racking up losses for three years in a row. It debuted on the market for unlisted public enterprises, or UPCoM, on June 9 and closed at VND9,300 a share yesterday.

Market corrects on sell pressure


Shares declined on the two exchanges on Tuesday as investors increased selling to cap-italise on profits after a long rally.On the HCM Stock Exchange, the VN Index erased Monday's gains, edging down 0.24 per cent to end at 805.93 points. The key market index increased 0.25 per cent in the previous session.On the Hanoi Stock Exchange, the HNX-Index dropped 0.38 per cent to end at 104.73 points. The northern market index gained 0.62 per cent on Monday.The overall market breadth was negative with 249 stocks falling, 201 rising and 263 re-maining unchanged.There was no consensus among large-cap stocks as 17 of the top 30 largest shares by market value and liquidity on the southern bourse (VN30) declined and 11 advanced.Vinamilk (VNM), brewer Sabeco (SAB), Vietcombank (VCB), Mobile World Group (MWG), Masan Group (MSN) and PV Gas (GAS) were among losers.Stocks which maintained an upward trend included VinGroup (VIC), FLC Faros Con-struction (ROS), Vietinbank (CTG), BIDV (BID), insurer Bao Viet Holdings (BVH), IT group FPT (FPT), steelmaker Hoa Phat Group (HPG) and PetroVietnam Drilling and


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Well Services (PVD)."The fact that many stocks corrected today had created strong pressure on the market, which is proven by the decrease in the afternoon trade," analysts at BIDV Securities Co wrote in a note.Profit-taking pressure increased after the VN Index touched the 810 resistance level in early afternoon trade. However, the positive signal was that money shifted from large caps to speculative stocks in the real estate, construction and building materials.The most active stocks on Tuesday included FLC Group (FLC), Sai Gon Thuong Tin Real Estate (SCR), KLF Joint Venture Global Investment (KLF), Kim Vi Inox Import Ex-port Production (KVC) and C.E.O Group (CEO) with trading volume of between 2-19 million shares each.According to analysts at Vietnam Investment Securities Co, cash flows tend to look for stocks that are expected to have positive third-quarter earnings. However, there is still a long time to go before the reporting season so the market will likely see large diver-gence."Thus, the selection of stocks is very important and investors should be consistent when looking for stocks to increase," analysts said.Liquidity decreased slightly with a total of 230.4 million shares worth a combined VND4.5 trillion (US$198.2 million) being traded in the two markets, down 9.3 per cent in volume and 2.2 per cent in value compared to the previous session.http://bizhub.vn/markets/market-corrects-on-sell-pressure_288982.html

Stocks bounce back slightly


The local stock market resumed its uptrend after one session of correction on Septem-ber 18 but cautious sentiment kept turnover at a low level.According to tinnhanhchungkhoan.vn, small stocks and large caps such as dairy group VNM and brewery firm SAB sent the market up to 810 points in the afternoon phase. However, as selling pressure increased at the psychological resistance level and buyers became cautious, the VN Index retreated with turnover declining.At the close, the main index still rose a slight 2.05 points, or 0.25%, against last Friday at 807.87. Trading volume on the HCM City market gained 14 percent at 173.9 million shares but value dropped around 10 percent at VND3.7 trillion.Real estate company FLC remained the most actively traded stock with 11.9 million shares changing hands, adding nearly 2.4 percent at VND7,700 a share, followed by FIT and OGC, which were active in the finance sector, with 9.2 million shares and 7.9 million shares respectively.Having advanced for four consecutive sessions, the textile stock TCM tumbled after its fabric warehouse in HCM City's Tan Phu caught fire on Sunday. The textile and gar-ment enterprise lost 5.6 percent at VND28,600 a share with volume soaring to nearly 3.4 million shares.The HNX-Index increased for the second straight session, rising 0.62 percent at 105.13. Turnover on the Hanoi market sharply improved, with volume and value surging 47.5 percent and 44.3 percent at 80 million shares worth VND807.7 billion.Among bank stocks, SHB took the lead for liquidity with 19.6 million shares traded, gaining 2.6 percent at VND7,900 a share. ACB increased slightly at VND28,200 per share on volume of 1.2 million shares.Foreigners stayed on the selling side, net selling over VND66.2 billion on the southern market and VND16.2 billion on the northern exchange.Asean Securities Company expected the VN Index to test the nearest resistance zone from 810 to 815 points today.For a negative scenario, the main index may drop to 800 to 805 points and investors can consider buying more shares. Otherwise, they may offload shares if the index breaks below the level.Meanwhile, Saigon-Hanoi Bank Securities Company forecast a positive scenario due to a high number of rising stocks on September 18. The VN Index is projected to ap-proach the psychological resistance of 810 points today.


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Bao Viet Securities Company said that the September 18 recovery brought about better signals than last week. The market may continue rising in the short term with cash flow focusing on stocks having supporting information and bright business prospects in the third quarter.http://english.thesaigontimes.vn/56198/Stocks-bounce-back-slightly.html

Profits of many companies 'evaporate' after auditing

20/SEP/2017 INTELLASIA| DTCK

Up to the time to release the reviewed semi-annual financial statements this year, the cases of "being profitable turning to loss-making" and "insignificant losses turning to major losses" are again massively seen. This once again gives warning about the qual-ity of financial statements as well as the transparency in accounting data self-made by enterprises.Many companies "forget" provisionsThe reviewed semi-annual financial statement in 2017 of Vegetexco Port Joint Stock Company (VGP) showed that the company only achieved 752 million dong of profit, down by nearly 8.3 billion dong compared to the self-made report.As explained by VGP, the company had to provision for the overdue receivables of Otrans South Vietnam Joint Stock Company, and partly account for the projected spending on the additional land rental for the building line and river safety corridor of Saigon River.In a worse situation, PetroVietnam Real Estate Joint Stock Company (PVL) recorded a loss of up to 128 billion dong after the review, while the self-made figure was over four billion dong (equivalent to the same period of 2016). According to PVL, in the first six months of the year, since the company had to account for the loss worth about 100 bil-lion dong of the handed-over apartments of the two projects Linh Tay and District 2 and provision for the irrecoverable debts of about 20.5 billion dong, that led to a large difference in data compared to the same period of 2016.Provisioning issue was also the main cause for the loss in the first half of the year of Pacific Infrastructure Project Development & Investment Joint Stock Company (PPI) of nearly 15 billion dong after auditing while it was only 2.6 billion dong in the same pe-riod of last year.In particular, after provisioning for the doubtful receivables in accordance with regu-lations based on the maturity date of the receivables, PPI suffered a loss of up to 12.2 billion dong. In addition, the net loss of PPI rose due to the slow budget allocation in 2017, resulting in slow project implementation and rising costs of corporate manage-ment.A year ago, PPI announced the audited consolidated after-tax profit in the first half of 2016 at less than 300 million dong, while the number stated in the self-made financial statement was nearly 17 billion dong.Chuong Duong Beverage Joint Stock Company (SCD) draws more attention with the change from being profitable to loss-making. With the reason that the distributors and agents did not pay on time since PPI issued the sales invoices, the net revenue of SCD fell from 178 billion dong to 153 billion dong after the review, significantly pulling down the gross profit. Since profit could not offset spending, SCD suffered a loss of 3.3 billion dong instead of a net profit of nearly four billion dong as posted in its self-made report. SCD recorded an after-tax profit of 13.7 billion dong in the same period of 2016.In similar situation, Saigon Telecommunications and Technologies Corporation (SGT) had to adjust many data. Specifically, its consolidated revenue increased by nearly 55 billion dong to 515.8 billion dong, while the deduction of revenue was only 3.5 billion dong, which means that a reduction of 12 billion dong was made due to the re-deter-mination of the deduction of internal transactions. In addition, the company's costs of goods sold rose from 265.8 billion dong to 332.8 billion dong; and the selling expenses increased by 22.8 billion dong due to the re-classification of costs.As a result, the consolidated net profit after reviewing of SGT dropped by 17.26 billion dong (down by 17%) to 82.8 billion dong, while the self-made number of the company before the review was 100 billion dong.


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Some other influential listed companies also had to lower their profits after reviewing, including NBB (down by 25.3%), TDH (down by 16%), FLC (down by 10%), HAG (down by 10.4%), and GTN (down by 4.6%), etc.Sanctions needed for companies with regular violationsIt can be seen that the difference between the financial statements before and after re-viewing of companies is often related to accounting estimates, such as provision, de-preciation, allocation, inventory, or recording revenue inappropriately in terms of period, etc. However, in addition to the reasons from professional background, skills and experiences of the accounting department, the transparency of companies is the matter worth discussing.Currently, listed companies self-make their quarterly financial statements and only the semi-annual and annual financial statements are audited. Therefore, the difference in data shows the lack of transparency of companies, and companies many have hidden negative information for their self-interest in order to maintaining the stock prices, etc.The financial statement has its own accounting standards which are regulated. Thus, once the data on the performance is still largely different, investors are not only wor-ried but may also lose their capital following the fall of stock prices.To have clearer and more accurate information, many investors believed that the man-agement authorities should take heavy-handed measures to the companies in which violations are often recorded, in order to ensure deterrence, helping the stock market become more transparent.

HCM Stock Exchange warns TTF could be delisted


The HCM Stock Exchange has warned that shares of Truong Thanh Furniture Corpo-ration (HOSE: TTF) could be delisted as its accumulated losses might have exceeded the company's charter capital.According to the company's revised first-half financial report, Truong Thanh Furni-ture recorded negative VND1.46 trillion (US$64.9 million) in the undistributed post-tax profit as of June 30, equal to 98 per cent of the company's charter capital.The report was released in late August after the State Securities Mission rejected the company's request to extend the deadline for financial report submission to Septem-ber.According to auditors Ernst & Young, the amount of VND84.6 billion in loan interest included by the company in its financial report as income was ineligible under current regulations.Truong Thanh Furniture said in a note to the State Securities Commission and the HCM Stock Exchange in late August that the loan interest was erased by its creditors as they found the firm's business plan was possible to achieve.The lenders were Viet A Commercial Joint Stock Bank, Kien Long Commercial Joint Stock Bank and Sai Gon-Hanoi Commercial Joint Stock Bank.If Truong Thanh Furniture had failed to record that amount of money as its income in the financial report, the company would have suffered a net loss of VND83 billion for the first six months of 2017, raising its undistributed post-tax profit to negative VND1.5 trillion.The potential amount of undistributed post-tax profit could exceed the firm's charter capital by VND55 billion.The HCM Stock Exchange said in its statement last week that the company's share could be delisted from the stock market in accordance with the Article 60, Decree 58/2012/ND-CP issued by the government on July 20, 2012.The article states that a company's shares will be delisted if that company suffers losses for three consecutive years or its accumulated loss exceeds its charter capital, accord-ing to the firm's latest financial report.In order to avoid being delisted, the company has to either reduce its accumulated loss, which was reported in the six-month financial report, or increase its charter capital.At the end of May, the company announced it would increase its charter capital in the second half of 2017 to restructure the firm's financial system and provide an increase


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in its working capital, improving the company's performance.The company planned to issue about 100 million shares in the third quarter of this year in an attempt to collect at least VND1 trillion.The share issuance plan was submitted to the company's shareholders in mid-June 2017, but no decision has been made up to now.Shares of Truong Thanh Furniture, listed on the HCM Stock Exchange as TTF, fell 3.6 per cent on Monday to close at VND8,000 per share. The company's shares have fallen about 81 per cent from its all-time high of VND43,600 per share hit on July 18, 2016.The sharp fall of Truong Thanh Furniture's shares came after the firm in mid-2016 failed to sell a part of its capital to Tan Lien Phat Construction Investment Company, a member of property developer Vingroup.VNShttp://english.vietnamnet.vn/fms/business/186706/hcm-stock-exchange-warns-ttf-could-be-delisted.html

Habeco to wrap up talks on stake sale to Carlsberg in November


Hanoi Alcohol Beer and Beverage JSC (Habeco) will end negotiations over sale of more shares to Denmark's Carlsberg in November.At a conference on State-owned enterprise equitisation in Hanoi City, a Habeco senior official said the company has tumbled on numerous obstacles in the negotiation proc-ess.Vuong Toan, deputy general director of Habeco, said Carlsberg had bought 16 percent of Habeco's shares to become a strategic partner as stated in a cooperation agreement signed in 2009. The deal offers Carlsberg a priority option to acquire more shares at the State-owned company.Habeco had conducted nine rounds of talks with Carlsberg before the government al-lowed Habeco to proceed with the stake sale at the end of this year.Carlsberg, which now owns 17.5 percent of Habeco, wants to increase its stake to at least 51%. However, the Vietnamese government does not allow foreign companies to own more than 49 percent of Vietnamese companies trading in alcohol, food and real estate.A source told the Daily that the share price is the biggest problem that remains to be solved. Last month, the price of the Habeco stock on the Hochiminh Stock Exchange (HOSE) averaged out at VND85,000 (US$3.74) per share, meaning its market capitali-sation amounted to VND19.35 trillion.This price is double the level in October last year when the company listed on the bourse and 50 percent higher than in the initial public offering (IPO) in 2008. However, Carlsberg has insisted on acquiring Habeco shares at the IPO price, making it tough to reach common ground.Meanwhile, the Ministry of Industry and Trade, the administering agency of Habeco, has yet to officially announce how many shares would be offered and whether shares would be sold at once or in stages. And the ministry has not informed Carlsberg and other investors of a Habeco share sale cap.If Carlsberg acquires an extra stake at Habeco as planned, it would hold 30 percent of Vietnam's beer market, the second largest market share after Saigon Beer-Alcohol-Bev-erage Company (Sabeco) with 40%.http://english.thesaigontimes.vn/56196/Habeco-to-wrap-up-talks-on-stake-sale-to-Carlsberg-in-November.html

KIDO Food to trade on UPCoM by end of month

20/SEP/2017 INTELLASIA| VN ECONOMIC TIMES

56 million shares under the code KDF to trade on Unlisted Public Company Market by end of September.KIDO Food, the frozen food arm of the KIDO Group Corporation (KIDO), will trade on the Unlisted Public Company Market (UPCoM) by the end of this month, with 56 million shares trading under the code KDF.Vietnam Securities Depository (VSD) recently announced the issuance of a certificate


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of securities registration and granted a code to KIDO Food.In March this year, KDF sold 11.2 million shares, or 20 per cent of charter capital, at an offering price of VND52,000 ($2.3) per share, to reduce KIDO's holding and publicise the company.The latest report from Euromonitor shows that the KIDO Group has maintained its leading position in ice cream and frozen desserts, with a 40 per cent share so far this year.Ice cream and frozen desserts have seen retail volume growth of 7 per cent and retail value growth of 15 per cent this year, reaching 26,600 tonnes and nearly VND3.1 tril-lion ($136.4 million).More new product developments from big players have diversified the ice cream and frozen dessert category. Multi-pack dairy ice cream is enjoying the strongest retail val-ue growth this year, of 19 per cent, albeit from a low base, and from efforts to increase the accessibility of such products, especially by leading players such as KIDO and Uni-lever Vietnam International.The KIDO Group has continued to successfully strengthen its leading position in ice cream and frozen desserts, with 38 per cent and 40 per cent value shares in 2016 and 2017, respectively.The company was officially renamed from the Kinh Do Corp. to the KIDO Group last year, after the sale of its confectionery and biscuit business unit to Mondelez Interna-tional Inc.Its strong brand names Celano and Merino, its nationwide distribution network, active marketing activities, good flavors, competitive prices and wide range of products in ice cream are its competitive advantages.In 2016 and 2017 the company not only continued to lead the category but also enjoyed the strongest value growth.KDF targets holding a 50 per cent share of the ice cream market in Vietnam by 2020. It currently has more than 70,000 points of sale around the country and plans to increase this by 10,000 to 20,000 each year.http://vneconomictimes.com/article/business/kido-food-to-trade-on-upcom-by-end-of-month

Kido holds 40pct of market share in ice cream industry

20/SEP/2017 INTELLASIA| BAO DAU TU

Retail output and value of cream and dairy products in Vietnam in 2017 reached seven percent and 15 percent respectively, equal to 26,600 tonnes and over 3.032 trillion dong respectively, according to a report by Euromonitor. KIDO continues to lead the indus-try with the market share of 40 percent instead of 38 percent in 2016.As per Euromonitor, many new cream products such as Kit Kat, Milo and Twin Cows have been introduced in 2016-2017, helping to diversify products and boost customers' demand. However, the distribution system for this product is still quite limited in 2017, most are available in HCM City only.In the period of 2015-2017, green tea flavor gradually became popular in the ice cream industry in Vietnam under the influence of Japanese food and culture. Many consum-ers have started to favour this flavor because the products from green tea are bitter sweet.Many companies have launched cream product with green tea flavor to catch up with customers' demand like Nestle with Kit Kat Green Tea or Twin Cows of Vietnam Dairy Products (Vinamilk).Domestic players continue to lead the ice cream and frozen foods sector in 2017, ac-cording to Euromintor. However, the competition from foreign ice cream brands such as Cornetto, Paddle Pop, Haagen-Dazs and New Zealand Natural has begun to in-crease significantly, especially in big cities such as HCM City, where consumers prefer products in the high-end segment.By the end of 2015, two new cream products were churned out i.e. Milo and Kit Kat of Nestle, which had certain impact in the industry. These products are imported from Thailand, thereby gaining rapid access from customers. However, comparing with the


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current leading companies, the revenue of this product is not significant.Besides, in 2016, Vietnam Dairy Products (Vinamilk) introduced Twin Cows in the field of dairycream products, targeting at the upper class with eye-catching premium packaging and good taste. Same for Milo and Kit Kat whose brand also has certain im-pacts in the industry.It is forecasted that the ice-cream and made-from-dairy dessert food sectors with pre-mium products and green tea flavors will continue to affect consumer demand in Vi-etnam.Modern distribution channels such as convenience stores, supermarkets and hyper-markets of the ice cream industry will develop more positively. In 2017, the online re-tail channel began to grow better even though sales were not significant. It is forecasted that online retail channel is becoming more and more familiar to Vietnam-ese consumers in the future.New products from Nestle and Vietnam Dairy Products (Vinamilk) will have greater impact in the industry as well as have changes in brand status as both companies own good brands and nation-wide distribution network.

Consumption of mid-end apartments to increase to 60pct

20/SEP/2017 INTELLASIA| BIZLIVE

As per the warning of HCM City's Real Estate Association (HoREA), the apartment market in HCM City is seeing the abundant supply of mid-end and high-end apart-ments while there really needs housing projects that are suitable for most Vietnamese people."Housing prices in Vietnam are out of reach for most people, 22-25 times higher than the average income of the society," said Le Hoang Chau, chair of HoREA.However, the Vietnamese real estate market still attracts foreign investors despite housing prices being many times higher than the people's income.As per the data of the General Statistical Office (GSO), in the first six months of 2017, the foreign direct investment (FDI) into Vietnamese real estate market always ranked the second compared to other sectors, with $19.2 billion, up 54.8 percent over the same period last year. Real estate business increased 3.86 percent over the same period of 2016.Savills' report also shows that the housing price index in August in HCM City in-creased at a record high level. The mid-end apartment market saw the sales of approx-imately 11,700 units, up 36 percent from the first quarter of 2017 and 68 percent over the same period of 2016. This was the highest sales volume within five years.As per Oliver Do Ngoc Dung, CEO of EZ Land, an investor from Luxembourg who has just poured $200 million into District 9, HCM City, the company plans to launch 1,500-1,800 apartments within the next 5-8 years because the prospect of Vietnamese real es-tate market is very optimistic with the consumption rate of mid-end apartments to in-crease rapidly from 40-50 percent to 60 percent in 2017.

Major bridge in Mekong Delta ready late this year


Vam Cong Bridge, which connects Can Tho City and Dong Thap Province, will be opened to traffic in late December this year.Nguyen Dinh Vien, deputy general director of Cuu Long Corporation for Investment, Development and Project Management of Infrastructure, the developer of the bridge, told the Daily on the sidelines of his working session with Can Tho City on September 18 that the bridge is 95 percent complete.The corporation is trying to finish the bridge by November 31 and access roads by De-cember 31. The final spans of the bridge will be put in place late this month.Vam Cong Bridge spans the Hau River and connects Dong Thap's Lap Vo District and Can Tho's Thot Not District. The bridge alone is around three kilometers long and if the access roads at both ends of the bridge are included, the total length of bridge and road will be 5.75 kilometers.The six-lane bridge, which got off the ground in September 2013, allows for a maxi-mum speed of 80 kilometers an hour.


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The cost of the bridge is more than $271 million, funded by South Korea's official de-velopment assistance (ODA) loans and Vietnam's reciprocal capital.He said the bridge's final spans would be put in place on September 29, not September 1 as stated by deputy minister of Transport Nguyen Nhat during a working session be-tween vice Chair of the National Assembly Phung Quoc Hien and Can Tho City on August 31.Vam Cong is the largest bridge in the Mekong Delta connectivity plan, followed by Cao Lanh Bridge. The delta is divided by Tien and Hau rivers, with traffic between the regional centers relying on Vam Cong ferry service across the Tien River and Cao Lanh ferry service across the Hau River.Once in place, the two bridges will make travels faster and more convenient between HCM City and Mekong provinces like An Giang, Can Tho and Kien Giang.http://english.thesaigontimes.vn/56209/Major-bridge-in-Mekong-Delta-ready-late-this-year.html

HCM City-Can Gio-Vung Tau high-speed boat service ready next month


A high-speed boat service connecting HCM City's Bach Dang Wharf and Can Gio Dis-trict, and neighbouring Vung Tau City will be launched in October, said the HCM City Department of Transport.On September 14, the department and other relevant agencies conducted a technical operation of the boat to see whether it meets safety requirements.Greenlines DP Technology Co Ltd, the operator of the new boat service, plans to oper-ate four daily services from Bach Dang Wharf in District 1 to the outlying coastal dis-trict of Can Gio and eight daily services from Can Gio to Vung Tau.The Bach Dang-Can Gio trip will last an hour and 15 minutes while it will take 30 min-utes to travel from Can Gio to Vung Tau.The ticket price is VND200,000 (US$8.78) for the Bach Dang-Can Gio trip. Especially, Can Gio District residents just pay half the price to commute between their district and downtown HCM City and those disabled people holding a free public bus pass in HCM City are exempt from the Bach Dang-Can Gio boat service charge.The boats are equipped with air-conditioners, televisions, wifi and life-jackets.HCM City is promoting passenger transport by water to ease pressure on the roads which are increasingly crowded.http://english.thesaigontimes.vn/56210/HCM City-Can-Gio-Vung-Tau-high-speed-boat-service-ready-next-month.html

Nghe An to get $440.5 million resort complex


Property developer FLC Group has proposed its intention to build a VND10 trillion (US$440.5 million) FLC Beach & Golf Resort in the central province of Nghe An's Nghi Loc District.The group on Monday had a meeting with the Provincial People's Committee on its investment plans for the resort.FLC's deputy general director Dang Tat Thang said they worked with foreign consul-tancy firms and conducted over 10 surveys at Tien Phong, Hai Don and Lu beaches in the province over the past three months.According to the investment plan, the complex would cover an area of 460ha and in-clude 24 international standard constructions of 18-hole golf courses, a hotel and con-dotel with 1,000-2,500 rooms, a 1,000-seat international convention centre, villas, a shop house, a park, adventure sports and camping.The FLC group asked the People's Committee and relevant agencies and departments to facilitate the group in securing land clearance. It plans to begin construction in March 2018.Speaking at the meeting, Nguyen Xuan Duong, deputy secretary cum chair of the Peo-ple's Committee, lauded the investment plan and said it would give the province a new appearance and help promote tourism in the future.He assigned the relevant agencies to quickly complete procedures to ensure the


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project's progress.At the meeting, FLC also donated VND9 billion to help people affected by the recent storm in the province.http://bizhub.vn/property/nghe-an-to-get-us4405 million-resort-complex_288977.html

Starbucks unveils new Teavana frozen teas exclusively in Asia


US coffee giant Starbucks on Thursday launched a new product called Teavana frozen teas in the Asia market, including Vietnam.The event follows the initial launch of Teavana last year, which brought Starbucks' modern tea experience brand to Asia for the first time.The new beverages combine Teavana teas and botanical blends with premium ingre-dients like matcha and yuzu, hibiscus and pomegranate.Starbucks Teavana frozen teas are available at Starbucks stores across Vietnam with two flavours of teavana: frozen hibiscus tea with pomegranate pearls and teavana fro-zen matcha lemon yuzu."We want our customers to experience tea like they've never imagined. Drawing our inspiration from a love of tea in Asia and from popular new flavors," Patricia Marques, general manager of Starbucks Vietnam, said."This year, Starbucks takes innovation in flavors and texture to the next level with a unique frozen tea platform to satisfy the growing sophistication of consumer prefer-ence," she said.Starbucks Teavana frozen teas have been developed exclusively for customers across Asia, delivering a sophisticated and modern tea experience.Commenting on the growing interest in frozen beverages, Davina Patel, global food and drink analyst at Mintel, a global market intelligence agency which follows food and beverage trends in Asia, said: "Our research shows that consumers in Asia contin-ue to gravitate towards beverages with textural and visual appeal, which has led to a growing interest in frozen products. Moreover, consumers are increasingly exploring the world of tea through flavor and variety, with preference shifting towards botanical teas such as herbs, fruits and spices."http://bizhub.vn/corporate-news/starbucks-unveils-new-teavana-frozen-teas-exclu-sively-in-asia_288978.html

Traveloka strikes tourism deals with Danang and Hue


Traveloka, an online tourism platform, has clinched memorandums of understanding on cooperation with the Danang Tourism Promotion centre and the Tourism Depart-ment of Thua Thien-Hue Province.The two agencies will act as a supporting media sponsor of Traveloka programmes on every promotion channel, and give the company advice on how to promote travel des-tinations. Traveloka, meanwhile, will find ways to promote the reputation and image of the two Vietnamese localities through online marketing activities.The deals will help local businesses lure more tourists to Danang and Thua Thien-Hue, and increase bookings on the Traveloka platform.Danang is a major tourist destination in Vietnam. According to a report from the mu-nicipal tourism department, the city attracted 3.3 million visitors in the first half of this year, rising 33.2 percent year-on-year and making up 51.3 percent of the year's target.Meanwhile, Thua Thien-Hue Province served about 1.7 million visitors in the six-month period, up 1.9 percent year-on-year, with revenue estimated at $76.3 million.Traveloka Vietnam is a leading flight and hotel booking platform in Southeast Asia. It is working with more than 100 airlines, offering information about more than 200,000 routes across Asia-Pacific and Europe, and 300,000 hotels in 28 countries.It provides more than 40 payment options for customers in Indonesia, Thailand, Viet-nam, Malaysia, Singapore and the Philippines, with 24/7 assistance from local custom-er service centers. Its mobile app has been downloaded more than 20 million times.


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Vissai Cement to launch eco-friendly packages


Vissai Cement Corporation, part of Vissai Group, officially launched the QuickFill(R) Clean (QFC) eco-friendly cement paper bags on Monday at the Vissai Ninh Binh ce-ment plant.The QFC cement sacks are produced by leading Swedish packaging company Biller-udKorsnäs."Vissai has studied and tested many types of cement sacks produced in different coun-tries for both the domestic and export market. However, BillerudKorsnäs' product is by far the most competitive in terms of technology and cost," Vissai's deputy general director Nguyen Tien Dt told Vietnam News.In April 2017, Vissai and BillerudKorsnäs signed a Letter of Intent on QuickFill(R) Clean cement paper sacks, positioning Vissai as a pioneer in adopting the eco-friendly packaging product for Vietnam's cement sector.Under the agreement, Vissai will become the only unit to use BillerudKorsnäs cement packaging in Vietnam for a period of two years.The current use of KPK sacks in Vietnam is estimated to cause economic losses due to leakage during the packaging and transportation process. This leakage means that ce-ment producers regularly have to pack extra cement in every 50kg bag to ensure the correct amount reaches the final consumers. This leakage is also a threat to cement fac-tory workers, construction site workers and the environment."One of the biggest advantages of the QFC paper sack is that it is very clean and doesn't waste cement like the current packaging used in Vietnam, resulting in significant fi-nancial saving for the company. Besides this, it is also advantageous for workers be-cause they don't have to breathe cement dust,"Mark van der Merwe, BillerudKorsnäs business development directorsack solutions, told Vietnam News.With the widespread use of new high-porous paper cement bags worldwide, cement leakage can be virtually eliminated, minimising economic losses and worker and en-vironmental hazards. However, these new solutions also require changes in the han-dling of sacks throughout the supply chain."Paper sacks have been used in many of the neighbouring countries such as Thailand and Indonesia for many years, so they know how to handle them. However, in Viet-nam, workers used to be familiar with handling the plastic sacks with the hooks. So the paper sacks that we are introducing in Vietnamese market are 70 per cent stronger than the sacks we use in Indonesia and Thailand," Stefan Andersson, Billerud-Korsnäs's technical service manager sacks solutions told Vietnam News.According to the 2015-35 plan, Vietnam's cement industry will grow at a rapid rate of some 10 per cent annually. With large-scale investment in the infrastructure sector, ex-pected financial expenditure is above $100 billion.With the rapid development of the cement industry, the use of green packaging is con-sidered one of the most effective solutions to ensure safety of workers and minimise environment pollution.http://vietnamnews.vn/economy/394024/vissai-cement-to-launch-eco-friendly-pack-ages.html

H&M stirring up a fast fashion fever in Vietnam


Undeniably, fast fashion brands are enjoying great success in one of the two largest cit-ies in Vietnam. However, while they are toasting success, local retailers are stepping back in the game.Not just a trendAs a passionate trend follower, Thuy Linh (26), a PR staff at Le & Brothers Co., Ltd ad-mits she usually spends about VND6 million ($264) per month buying clothes, not to mention cosmetics and perfumes. Apart from H&M and Zara, the two brands suitable for the general public, a few Vietnamese high-end designer brands, such as Rap Thiet Ke, Magonn, Design, Up to Seconds, and LIBE, are some other names often coming up on Linh's shopping list."I follow the fashionistas (someone with a great sense of fashion and always updated


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on the latest trends), see what style they wear and follow the changes immediately. The outfits of H&M and Zara suit me because the designs are simple and do not show too much skin," Linh said.Many people share Linh's hobby, making the opening of the first H&M store in HCM City on September 9 a super magnetic event attracting thousands of visitors. The heat keeps escalating as H&M offers a 20 per cent discount on all its new season clothing.Being born in the late 90s, Le Thai Son, a private entrepreneur in the fields of food and entertainment, admits to being a Zara fan. "30 per cent of my wardrobe is occupied by Zara clothes and there are some H&M products also," Son said.These items were collected by Son on trips abroad or ordered from the brands directly. "When I next have a business trip in HCM City, I will definitely visit H&M and Zara."Having studied in Switzerland and travelled to many countries in the world before, Son is ecstatic over the presence of these prestigious and well-known brands in Viet-nam and loves to see the warm welcome they receive."Without such a change, surely, Vietnamese fashion brands of the same segment would still be hesitant to invest more in their products and communications strate-gies," Son said.For young people who already have jobs like Linh and Son, the prices of H&M and Zara products are quite reasonable. This is also the reason why these brands decided to enter the Vietnamese market directly, bypassing third agencies.More importantly, these brands are really wise in satisfying the needs of their custom-ers. When shopping in one of these stores, most customers will feel a little dizzy be-cause of the choice in colour, material, and style waving at them from the shelves."Perhaps this is their intention. A customer might ignore a particular product when stepping into a store. Yet he will still find similar ones on the next shelves. Or if certain styles and sizes sell out, there will always be similar items for customers to open their wallets," said Son.Son's admiration for Zara also comes from some of the "magical" business strategies of the popular fashion brand. He noted that every time any world-famous brand comes out with a popular product, Zara will immediately craft an item that is nearly identical but will be sold at a much lower price for lower-income or budget-conscious custom-ers.Additionally, Zara rarely has inventory because they strictly control the quantity of products for each season, making sure that there will be only enough to sell. This brand has been pressing customers to buy the products they like immediately or they will never be able to buy them again.Each month, Son spends about 30-50 per cent of his income shopping for fashion. In Zara or H&M clothing, just about VND10 million ($440) is enough to purchase a lot of items. However, Son also tries luxury brands, such as Gucci, Off White, Givenchy, and Saint Laurent for special occasions."High-end brands routinely craft trendy products that match the style and the age of customers like me. Maybe in 5-7 years, I will use fewer products of fast fashion brands like Zara or H&M," Son said.At present, Vietnamese youth spend quite a lot of money on fashion and entertain-ment. Clearly, they are more interested in fashion and trends than ever before. Thus, although H&M and Zara are not a brands with special charisma or a colour of their own as they target the majority, their cheap prices, good quality materials, and con-stantly evolving clothing styles to suit most demands will surely attract plenty of young Vietnamese consumers.The fast fashion effectThe term fast fashion or instant fashion typically refers to a fashion line of popular and affordable clothes which are mass-produced. The basic principle of such a fashion line is to produce clothing inspired by catwalk designs at medium price and sell them as fast as possible to meet the latest fashion trends. This means fast production, fast de-livery, and fast purchasing speed.This model was developed in the late 1990s, with Zara leading the revolution, followed


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by other well-known retailers such as H&M and Topshop. At present, other typical brands successfully exploiting this trend include Uniqlo, Forever 21, and Mango, among others.The Vietnamese market has long been considered a fertile and prosperous land in the eyes of foreign big names. Zara, H&M, and Uniqlo have long expressed the desire to tap into the market. After Zara and H&M's impressive debuts, the next announcement might come from Uniqlo, even though this brand is still exploring the market.Fredrik Famm, H&M managing director of the Southeast Asia region, did not hide his joy when H&M's products were warmly welcomed in Vietnam."H&M considers Vietnam a potential market and this is the best time to make Vietnam the 68th market of the global H&M family," Fredrik Famm said.The warm welcome and support of Vietnamese customers will definitely help H&M and Zara grow more confident in the added value they bring to customers through fashion, quality, price, and delivery, which comes with a strong desire to become the No. 1 fashion brand in Vietnam.Owning a lot of fashion lines, from the timeless favourite basic ones to the most up-to-date designs, not to mention high-end collections, such as Studio collections or cloth-ing lines created in collaboration with other designers, these brands are promoting the fast fashion trend to meet the different fashion needs of different customer groups."You will always find something for yourself in our store," said Famm.It is noteworthy that since the need to create a personal fashion style has gradually re-placed the strong demand for durable goods in Vietnam after a long period of stable economic growth and started to increasingly dominate the purchasing decisions of young people, fast fashion is now indispensable.A few domestic fashion brands, such as Canifa, have made efforts to follow this trend and are beginning to gain more attention from young people. Compared to the world's best-known brands in this segment, Canifa and other Vietnamese businesses have the advantage of price due to domestic production.Hence, all the design-production-delivery stages are more economical in terms of time and costs. Most recently, Canifa also launched a number of pretty decent collections which are quite similar to Uniqlo's clothing lines, although not as "fashionable"."Canifa's designs and materials are improving, which is a good sign, but I still rarely step into the store, even with a 50-60 per cent discount. If possible, I prefer the more popular brands from abroad," Do Thuy Linh admitted.Nobody knows for sure how fashion will evolve in the next few years, but customers will determine the market shares of the brands. Currently, the presence of foreign fast fashion retailers with new forms of advertising and clothing designs are forcing Viet-namese brands to be more aggressive with their investment strategies."We also look forward to taking part in a more sustainable future for the Vietnamese fashion industry through sustainable development programmes and activities that customers can easily join and contribute to," said Famm.http://www.vir.com.vn/hm-stirring-up-a-fast-fashion-fever-in-vietnam.html

A year of huge success for Shopee Vietnam


Shopee, the leading e-commerce platform in Southeast Asia and Taiwan, has become the most popular shopping application in Vietnam after one year of launching. PineKyaw, Managing director of Shopee Vietnam, talked with VietNamNet about the successful story of Shopee Vietnam.VietNamNet: Could you share with us some initial successes of Shopee in Vietnam af-ter one year of operation? Pine Kyaw: I think over the past year our success is just getting people in Vietnam to know about Shopee.Since the official launch, we have had five million downloads and a 133 percent in-crease in listings, culminating in a total of four million listings to date.Regionally, the company has achieved an annualised gross merchandise volume of over $3 billion, with more than 40 million downloads.


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So I think for us, our performance has far exceeded our expectations.VietNamNet: What success of Shopee Vietnam are you most proud of? Pine Kyaw: We started on the best mobile platform for usage and invested a lot in mo-bile efforts.Shopee tries to solve the trust of online shopping. To protect the buyers, we have "Shopee Guarantee". We display the seller's reputation indexes such as Shop Rating, Response Rate and reviews from previous buyers to give the customers visibility be-fore making buying decisions.We allow buyers and sellers to chat so that buyers can feel confident about the seller they are transacting with.For sellers, we have a regular offline event named 'Shopee University' where we bring together sellers to share with them the latest trends and feedback from buyers as well as tips to improve sales and instill good online behaviors. They get training on selling skills, customer service skills.I think, we will continue to focus on making buyers and sellers happy.VietNamNet: Compared to other countries in Asia, what is different and difficult in e-commerce in Vietnam? Pine Kyaw: One of the challenges in Vietnam is the payment method.A lot of consumers in Vietnam still have very strong reference for cash and delivery in terms of payment method.The percentage of COD payment in Vietnam is 65 percent, 8 times higher compare to the world's average (about 8 percent), meanwhile the figures for debit and credit card payment are trivial. But in Singapore, there's very high credit card penetration and people there usually use credit card, internet banking or even bank transfer for pay-ment.Secondly, e-commerce in Vietnam is still at its infancy. Both businesses and consumers are still trying to reap the full benefits of this model. For consumers, it is about sustain-ing competitive prices at large volumes, and gaining full confidence in the transaction process.For businesses, while short term measures such as vouchers and discounts are effec-tive in acquiring users, the big question is how to eventually sustain an operating mod-el that makes economic sense.VietNamNet: You know that e-commerce is very competitive in Southeast Asia, so what is Shopee's direction in the future? Pine Kyaw: After more than one year joining the market, we've observed that the e-commerce market changes very quickly and it's dependent on several things, includ-ing payment, infrastructure, logistics, infrastructure, Internet penetration and plat-form penetration.So the key for us is to listen actively to our buyersWhat do they want and how can we meet their needs? So that is our strategy. To be honest, it's not very sexy, but that has been our focus over the year: What do customers want, when do they want it, how do they want it?We are looking at a couple of things to increase Vietnam's contribution to the compa-ny. For example, we are seeing a lot of big brands starting to work with us; we are see-ing a lot of buyers wanting to buy online. So we are piloting a section to cater to the big brands and also buyers who want to buy random stuff.VietNamNet: Shopee is a successful startup in Singapore, can you share some experi-ence for Vietnam's startups? Pine Kyaw: I think there is no difference from any startup in any region. First thing is a lot of hardwork; it secondly is a lot of persistence, you need to keep trying, and the third thing is that you need of very new ones understanding on the market.Any startup needs to understand their problems, figure out which ones are important and find ways to solve them. By doing that, they can be successful for growth.VietNamNet: The last one, what is Shopee's plan to grow in Vietnam in the future? Pine Kyaw: Well, we just made new record on Shopee 9.9 Online Shopping Day with a more than three-fold increase in orders. The biggest online shopping festival in


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Southeast Asia and Taiwan has set a new record with a 3.5 times increase in orders and a 5 times increase in daily visits, recorded an average of 21 minutes. In collaboration with over 30,000 sellers, the event amassed a total of 88 live chats per second.Top 9.9 sellers enjoyed a significant increase in orders of up to 1,500 times their daily average, and the highest number of items purchased by a single buyer was 218. For Shopee Vietnam, the top three categories were health and beauty, toys, kids and ba-bies, electronics.The Shopee 9.9 Online Shopping Day made a new record with a more than three-fold increase in ordersShopee 9.9 Online Shopping Day was a huge success across the region, with over seven million live chats on that day. We hope that this event will be remembered as an iconic day which has helped to push forward Vietnam'se-commerce scene. Shopee Vietnam will also be launching several key initiatives in the upcoming months to further en-hance our platform, so keep a lookout for more information which will be released soon.VietNamNet: Thank you very much!http://english.vietnamnet.vn/fms/business/186694/a-year-of-huge-success-for-shop-ee-vietnam.html

Vietnamese firms promote exports at Wire and Tube Southeast Asia 2017


Wire and Tube Southeast Asia 2017 was officially opened today at Bangkok Trade & Exhibition Centre (BITEC) in Thailand, attracting the participation of many Vietnam-ese firms.Aiming to seek more export opportunities, Vietnamese exhibitors include Dong Viet Non-Ferrous Metal & Plastic JSC, Hong Vu Trading Engineering & Sevices Company Limited, and Thinh Phat Cable JSC (ThiPha Cable), among 400 leading exhibitors from 30 countries."We are developing strongly in Vietnam and are now a leading manufacturer of wire and cable in the country, with a 40 per cent market share. We are seeking more oppor-tunities to access more international markets, including Europe and the US," Nguyen Xuan Phong, sales manager of ThiPha Cable, told VIR.At present, ThiPha Cable's products are exported to ten markets, including the Philip-pines and India.Like ThiPha Cable, other Vietnamese exhibitors also attend the exhibitions to promote their products and boost sales.The co-staging of the 12th International Wire & Cable Trade Fair for Southeast Asia and the 11th International Tube and Pipe Trade Fair for Southeast Asia held at BITEC will present an impressive line-up of machinery as well as innovative products and so-lutions from the synergistic sectors of wire, cable, tubes, and pipes.Organised by Messe Dusseldorf Asia, a subsidiary of Messe Dusseldorf in Germany, one of the world's leading trade fair organisers, over the three days, the event will fea-ture 400 leading exhibitors from 30 countries, including seven national pavilions and country groups."With rapid infrastructure development taking place across emerging Asian countries, it is an exciting time to be in this region, particularly in Southeast Asia, and to be in-volved in the wire, cable, tubes and pipes sectors, which are essential components and the backbone of many industries," said Kobchai Sungsitthisawad, deputy Permanent Secretary of Thailand's Ministry of Industry."This is certainly noteworthy and demonstrates Thailand and Southeast Asia's rele-vance on the global marketplace," he added.Research has shown that Asia will require $26 trillion of investment in various infra-structure areas, including building and construction, power, transport, telecommuni-cations, and water and sanitation, by 2030.According to Chanatip Surachaisitikul, president of the Thai Subcontracting Promo-tion Association, wires and tubes are in rising use in the world's major industries, in-cluding telecommunications, power generation, infrastructure, and construction in


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many countries that are going through vast industrial development and urbanisation."Within Thailand itself, the government's economic and infrastructure blueprint, as in-dicated in the Industry 4.0 plan, will spearhead a developmental revolution that calls for almost every industry to move towards smart manufacturing systems and digital-ly-driven operations at factories," Surachaisitikul added.Messe Dusseldorf in Germany is responsible for organising more than 20 global No.1 exhibitions in various industries, including medicine and health. Particularly success-ful events include MEDICA, COMPAMED, and REHACARE International held in Dusseldorf, Germany.With extensive expertise in organising trade fairs in Southeast Asia, Messe Dusseldorf Asia has been running numerous trade fairs in the region since 1995.http://www.vir.com.vn/vietnamese-firms-promote-exports-at-wire-and-tube-south-east-asia-2017.html

Conference discusses difficulties, solutions in making HCM City a smart city


The difficulties involved in developing smart cities and possible solutions were on the agenda of a conference on "General Solutions for Smart City" (Smart City 360 Degrees) held in HCM City on Tuesday.Speaking at the opening, Prof Dr Nguyen Ky Phung, deputy director of the city's De-partment of Science and Technology, said in general a smart city is a city that uses in-formation and communication technology to enhance quality, performance and interactivity of urban services, reduce cost and resource consumption, improve con-tact between citizens and the government and ensure sustainable development.In the technology-driven trend of connectivity and interaction, many technologies of Industry 4.0 have become the core technologies for a smart city, Phung, who is also di-rector of the Institute for Computational Science and Technology, said.The need to use automated and human- interactive devices in management (such as security, energy, transportation, and others) and social security (such as healthcare and education) is also growing rapidly, he said.HCM City has drafted a master plan for turning into a smart city in 2017-20 period and is seeking contributions and feedback from experts and scientists, he said.Le Quoc Cuong, deputy director of the city's Department of Information and Commu-nications, said building a smart city and the city's seven breakthrough programmes aim to meet four basic goals: ensure economic growth; improve the quality of living and working; efficient urban management based on forecasts; and enhance public par-ticipation in urban management.A lack of a common database for departments and agencies to share information is among the hurdles to make HCM City a smart city, he said.Therefore, the city would focus on e-governance and connecting and sharing informa-tion and data among departments to improve management efficiency in various sec-tors, he said.The database would contain information about socio-economic development policies that can be accessed by businesses, citizens and investors.The city also plans to enhance interaction between the government, the public and public service providers, create a level playing field for all companies and improve competitiveness and attract more investment, he said.Phung said, there is a difference between smart and modern cities, he said, pointing out that developed countries like the US, France and the UK have good infrastructure and so are modern cities.A smart city requires the use of ICT to serve the government, public and businesses, he explained.Dr Nguyen Trong of the HCM City Computer Association said five things are needed to build a smart city: defining the basic information the public needs to be provided, creating technologies and the requisite social environment, building common databas-es, creating a mechanism for getting and analysing information and enabling easy ac-cess to technical infrastructure and information services for everyone.


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Dr Doan Xuan Huy Minh of the Institute for Computational Science and Technology (ICST) said a smart city is a relatively new field in Vietnam, and so many issues need to be studied and resolved.Delegates called for creating close linkages between the government, businesses and science and technology professionals for creating the smart city.At the event, Da Nang shared its experience in implementing e-governance and taking the initial steps for turning into a smart city.Held by the ICST in collaboration with the HCM City Computer Association and PC World Vietnam magazine, the conference brought together government agencies in HCM City and other cities and provinces, institutes and universities, businesses and others.http://bizhub.vn/news/conference-discusses-difficulties-solutions-in-making-hcm-city-a-smart-city_288985.html

Investment promotion forum held in Brussels


A forum was held in Brussels, Belgium on September 18 to promote economic ties be-tween Vietnam and Belgium and other European nations, with more than 100 business representatives in attendance.Deputy prime minister Vuong Dinh Hue, who chaired the event, detailed Vietam's so-cio-economic development plans and highlighted the country's role in connecting Eu-ropean firms with the AsiaPacific market.The Vietnamese government pledges to continue building a transparent, and friendly investment environment for investors, Hue said.Hue encouraged Belgian and European firms to hasten the signing and ratification of the Vietnam EU Free Trade Agreement (EVFTA), which is expected to create oppor-tunities for enterprises of both sides, adding that they should invest in the sectors of common interest, particularly manufacturing, hi-tech, infrastructure, environment, fi-nance banking, agro-forestry-fishery, food processing, energy, ICT, and pharmaceuti-cals.The deputy PM called on investors to study opportunities to become strategic partners of Vietnamese state-owned enterprises during the equitisation and divestment proc-ess."Nothing can get in the way of boosting relations between Vietnam and Belgium and the EU in general in a stronger manner", he said.Belgian and European enterprises expressed their impression at the socio-economic achievements Vietnam has made over the years.They also showed interest in investment opportunities in Vietnam, and noted the country's important position in business links between the EU and Asia Pacific.They also made recommendations to improve the Vietnamese investment climate, in-cluding strengthening dialogues between the government and enterprises.Most participants lauded the potential role of EVFTA in creating a legal framework and opportunities for both sides' firms.The same day, the Vietnamese official had separate meetings with leaders of a number of groups, namely the Beverage AB InBev Group and the steel wire transformation and coatings Bekaert S.A Group of Belgium and Pharma Group Vietnam.During the meetings, he informed the groups of Vietnam's policies on developing sec-tors relevant to them, and encouraged them to connect with Vietnamese firms to ex-pand operations in the country.The groups praised the measures Vietnam has taken to create a favourable business environment for foreign investors.They also reiterated their support for putting the EVFTA into effect soon and will con-vey this message to the governments of EU member states.http://en.vietnamplus.vn/investment-promotion-forum-held-in-brussels/118078.vnp End


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Transcript of finance & business news 20 September · Vietbank named among Top 100 Apec Brands 7 AIPA: Vietnam...