Vietnam eager to develop Lien Chieu deep seaport
The government has been urging the authorities to appraise Lien Chieu Seaport, showing strong support and promising smoother sailing for the project.
Deputy Prime Minister Trinh Dinh Dung recently urged the Ministry of Planning and Investment (MPI) to appraise the capital sources and mobilisation methods of investment capital at Lien Chieu port.
Besides, the DPM assigned the Danang People’s Committee to complete the pre-feasibility report for the project after the city studied MPI’ appraisal.
Based on reports of MPI and Danang city, the Ministry of Transport (MoT) was asked to build the investment planning evaluation report to submit the prime minister for approval.
The assignment of the DPM shows Vietnam’s eagerness to develop the Lien Chieu Seaport project, which is considered one of two key projects that aim to boost the central city as a main logistics centre in the ASEAN and the East-West Economic Corridor (EWEC) that links Laos, Myanmar, Thailand, and Vietnam.
Although the construction of Lien Chieu Seaport in Danang has just been appraised, domestic and foreign investors are already interested in the project.
Notably, Boskalis Inter A.V is the newest foreign investor that expressed interest in joining. Wanter Jacobs, regional business manager at Boskalis, said in a document sent to MoT that the investor wants to join component A–general infrastructure.
Boskalis will collaborate with T&T Group to deploy this project, particularly in conducting the feasibility study, design, and build general infrastructure system in component A.
With a massive investment capital and handling capacity, the $1.48-billion Lien Chieu Seaport located in Danang is expected to become Vietnam’s second international gateway port, following Lach Huyen port in the northern the city of Haiphong.
According to the city’s proposal, Lien Chieu Seaport, which would combine five functional areas, including a 50,000DWT (deadweight tonnage) harbour, another harbour which could handle 80,000-100,000DWT container ships with a loading capacity of 5,000-8,000 twenty-foot equivalent unit (TEUs), a liquid cargo harbour handling 10,000DWT ships, and an inland waterway harbour for 1,000-5,000DWT ships, as well as a logistics services area and other infrastructure.
Retail receives a big boost in Vietnam
Vietnam’s growing revenue from retail services and the number of newly-established enterprises have reflected the upward-trend of domestic purchasing power and retail-related activities.
Last week in Tokyo, Japan’s AEON Group was licensed to build a US$180 million mall in the northeastern city of Hai Phong. The 9.3ha project was commenced in mid-May 2018 and is expected to become operational in 2020.
The mall will employ 2,000 local people, and is expected to attract more than 13 million customers per year from Hai Phong and surrounding provinces such as Quang Ninh, Hai Duong, and Thai Binh.
In March, AEON began construction of its mall in Hanoi’s Ha Dong district, with total capital of about US$90.4 billion. The joint venture between Hoa Binh Construction Corporation and Kajima Corporation are the general contractor designing and constructing the project. This is the second AEON mall in Hanoi, and the fifth in Vietnam.
The wave of new builds is not restricted to AEON, over a month ago, Vietnam’s giant retailer Saigon Co.op also commenced the construction of its supermarket Phan Ri Cua in the south-central province of Binh Thuan’s Tuy Phong district. This will be the third supermarket of Co.opmart in Binh Thuan, covering 7,000 square metres and costing VND 70 billion (US$3.1 million). The project is expected to be put into use later this year.
Last November, Saigon Co.op also put into operation its 88th supermarket in Vietnam – Co.op Mart Chu Van An in Ho Chi Minh City’s Binh Thanh district. It is the firm’s 33rd supermarket in Ho Chi Minh City.
The new US$1.82 million supermarket covers more than 3,000 square metres, and sells over 30,000 items.
Also in last November, Saigon Co.op launched its first two Co.op Food stores in Hanoi, laying the groundwork for it to expand its foodstuff business in the country’s northern market. With these two new stores, Saigon Co.op now has 181 stores of this type throughout the country.
In October last, Saigon Co.op opened the 2.27 million Co.op Mart Chu Se, also its second, in the Central Highlands province of Gia Lai. This is a joint venture project between Saigon Co.op and Gia Lai Trade JSC.
According to the General Statistics Office (GSO), AEON Saigon Co.op is one of many firms that expanded operations in the wholesale and retail sector, which sits atop the GSO’s five-month list of sectors with the most newly-established enterprises.
Specifically, in the first five months of the year, about 17,800 enterprises were established in the wholesale and retail sector, accounting for 33.9% of the total of newly-established enterprises nationwide, up 1.6% year-on-year.
The GSO reported that in the first five months of 2018, the country’s total retail service revenue hit more than US$15.73 billion, up 10.1% compared to last year’s corresponding period. Vietnam also received more than 6.7 million international tourist arrivals, up 27.6% year-on-year. This greatly contributed to the rise in total retail service revenue.
Pham Trong Nhan, deputy general director of Binh Duong Construction and Material Co., Ltd. said that Vietnam’s retail sector is growing strongly. Nevertheless, he warned that local retailers are being “seriously threatened by foreign rivals”.
“Foreign retailers are driving local retailers, especially small- and medium-sized ones, into difficulties. All foreign-owned supermarkets are selling the majority of foreign-made products,” said Nhan, who is also a National Assembly member representing the southern province of Binh Duong.
“Within only three years, foreign retailers have grown to hold 70% of Vietnam’s convenience store market, 17% of the supermarket space, and 50% of the online retail sector. That’s unbelievable,” Nhan said. “These rates are continuing to surge, without any controls.”
On September 1, 2017, Korea’s leading distributor, DHI, set up Vietmate – its Vietnamese subsidiary – after a year of exploring Zalo’s potential in e-commerce. Their aim is to use the Zalo platform to distribute Korean products in Vietnam.
For Japanese retailer AEON, this group is targeted to have 20 malls operating across Vietnam by 2020.
Aeon is not only focusing on investing in large-scale trade centres, but also co-operating with Vietnam’s leading supermarket operators – Citimart and Fivimart – to grow its footprint in the lucrative local retail market, while partnering with Japan’s Sojitz Corporation to develop the Ministop brand of convenience stores.
According to the Korea Chamber of Business in Vietnam, foreign firms are finding ways to enter Vietnam’s retail market via mergers and acquisitions with local firms, such as those between CJ and Cau Tre, Lotte and Bibica, Masan and Vissan, F&N and Vinamilk, TCC and Metro Cash & Carry, Vingroup and Ocean Retail, and between Central Group and Casino Group.
Soai Rap Petroleum Service Industrial Zone to be revoked
PetroVietnam Construction Joint Stock Corporation (PVC) will have its Soai Rap Petroleum Service Industrial Zone revoked due to operation inefficiencies and low occupancy rates.
Deputy Prime Minister Trinh Dinh Dung recently asked the Tien Giang People’s Committee to revoke Soai Rap Petroleum Service IZ and called on the investor to transfer the project to other investors.
Besides, the DPM assigned the Ministry of Planning and Investment (MPI) and relevant authorities to monitor the revocation and transfer of the project.
Covering an area of 285 hectares, the project was licensed in March 2011. However, after three years, the IZ had only one tenant.
As a result, in October 2014, the government approved in principle to transfer the IZ to the Tien Giang People’s Committee to manage according to the IZ development planning by 2015, with vision to 2020.
However, the transfer has yet to be completed despite repeated urging from the government.
The Soai Rap project is just one black spot in the bright picture of the local industrial real estate segment.
According to MPI’s Economic Zones Management Department, there are 328 IZs across the country at present, taking up a total area of 96,300 hectares of natural land. Of this, 223 zones have been put in operation and 105 are in the process of site clearance and compensation. Occupancy reached 51.5 per cent overall, and 73 per cent at operating IZs.
In addition, Vietnam also has 17 coastal economic zones (EZs) established on a land and water surface area of approximately 845,000ha, not to mention Ninh Co EZ in the northern province of Nam Dinh, which is included in the planning but has not been established yet.
IZs with high occupancy rates include Vietnam-Singapore Industrial Park III in the southern province of Binh Duong or Que Vo I, Que Vo II, Tien Son, and Yen Phong I in the northern province of Bac Ninh, with the average occupancy rate of 85 per cent.
HDBank promotion offers deposit interest rate of 7.6%
HDBank has relaunched its Bach nien phat tai (100 years of prosperity) programme offering extra interest to several categories of depositors.
The bank will offer extra interest of up to 0.7 percentage points to customers depositing for six months or 13 months and having a minimum balance of VND500,000 (US$22) in their current account.
Besides, the interest rate will also be commensurate with depositors’ ages and deposit amounts.
The maximum interest a depositor can hope to get under the programme is 7.6 per cent.
This is the third installment of the programme, which will run until the end of June.
After two earlier instalments of the promotion this year, HDB had more than 8,600 existing customers renewing their saving accounts and attracted around 20,900 first-time depositors.
Central bank approves VPBank’s capital charter hike
The State Bank of Viet Nam has approved the plan of Viet Nam Prosperity Joint Stock Commercial Bank (VPBank) to increase its current charter capital.
The hike from VND15.7 trillion (US$690 million) to VND25.2 trillion was approved at a VPBank shareholder meeting held on March 19, 2018.
The bank’s management board will take responsibility for the capital increase pursuant to current laws and regulations. VPBank was also required to submit a revised application of their charter capital to the central bank.
The document takes effect within 12 months from the date of signing. However, the document will lose its effectivity if the increase in charter capital is not completed in the allowable time.
In the first quarter of the year, VPBank’s total consolidated assets reached over VND284 trillion, representing a 24 per cent year-on-year rise. The bank’s deposit mobilisation and issued valuable papers stood at VND209.9 trillion, up 13 per cent from the same period last year.
Meanwhile, lending rose 24 per cent from the corresponding period last year to VND185.6 trillion.
BVS sets revenue target of nearly $20m
Bao Viet Securities Company (BVS) has set a target of VND454 billion (US$19.91 million) in revenues and VND143 billion, in after-tax profit, a company document preparing for 2018 shareholders’ meeting on June 5 revealed.
The document from the firm’s upcoming shareholders’ meeting stated that the revenue targets expected a year-on-year increase of 4.83 per cent and 9.44 per cent, respectively.
BVS is oriented towards the deployment of all business operations, focusing on promoting brokerage, advisory, proprietary trading, flexible and suitable for each stage, preparing the necessary conditions for effectively deploying derivative products.
The company also targets brokerage revenue of VND210 billion, up one per cent year-on-year and maintaining the top 10 market share in both exchanges. In case of big market fluctuations, shareholders will authorise the board of directors to adjust the business plan.
In addition, the company will focus on research, development and implementation of different capital mobilisation plans such as stocks and bonds in order to meet the capital needs for business activities as well as meet the capital requirements in the derivatives market.
It is expected that this year, the company will increase its chartered capital to VND1.083 trillion.
BVS, a subsidiary of Bao Viet Holdings, is a Viet Nam-based provider of investment services. The company offers securities brokerage services, underwriting services, custody services and investment advice to investors. It is also engaged in the trading of securities and the provision of corporate financial consulting services for share auctions and listings.
Expos to showcase latest ICT, broadcast, electronic products
International telecom, IT, communications, broadcasting, and electronic expos Vietnam ICT COMM, Broadcast Vietnam, and Electronic Vietnam will be held in HCM City on June 7.
The three expos have attracted more than 300 exhibitors from 20 countries and territories, including technology leaders in Asia such as Japan, South Korea, Singapore, Hong Kong, Thailand, and India.
Speaking at a press briefing to introduce the expos on May 31, Ha Thi Phuong Lam, chairwoman of the Adpex Joint Stock Company, one of the events’ organisers, said the number of exhibitors this year has increased by 50 per cent.
The events have attracted leading Vietnamese IT corporations such as Mobifone, LeLong, Zioncom, Du Hưng Technology, Bizentro, TC Technology, and Tung Viet Communication.
They will showcase advanced technologies, equipment and solutions for the aviation industry, digital data systems and centres for libraries, schools, hotels, supermarkets, GPS applications, telecom products, broadcasting technologies, telecom services, Internet services and applications, games, software, electronics, and ancillary products.
They will also have business matching and seminars on dominant technology solutions in 2018, 5G mobile and solutions for online services, and improving commercialisation of research results on IOT solutions and others.
Known for their size and rich and specialised content, the expos forum for businesses in telecom, IT and communications, broadcasting, and electronics to compare notes and explore business opportunities, Nguyen Long, deputy chairman of the Viet Nam Internet Association, said.
To be held by Adpex JSC, the Viet Nam Association for Information Processing, VIA, the National Agency for Technology Entrepreneurship and Commercialisation Development, and the Viet Nam Climate Innovation Centre, the expos will take place at the Saigon Exhibition and Convention Centre in District 7 from June 7 to 9.
Vietjet to open Hanoi – Osaka direct flights
Vietnam’s new-age carrier Vietjet Air will officially launch a direct route linking Hanoi with Osaka in Japan on November 8.
The airline held a special ceremony to announce the new route at the Japan-Vietnam Economic Forum in Tokyo on May 31, attended by Vietnam’s visiting State President Tran Dai Quang, Japanese Government representatives, officials from both countries, and representatives from Vietjet.
“The Hanoi-Osaka route is to be first service in Vietjet’s expansion into Japan – the Land of the Rising Sun,” said Vietjet Vice President Nguyen Thi Thuy Binh. “We believe that this new route and our expanding network will help make the travel dreams of millions of passengers come true.”
As part of Vietjet’s expansion strategy in Japan, Ms. Binh added, the carrier will continue to open new routes between economic and tourism hubs in order to diversify destination choices and better meet the growing demand for air travel between the two countries and beyond to better connect with the rest of the world.
Using Vietjet’s new and modern A320 aircraft, the Hanoi – Osaka route will operate on a daily basis with a flight time of over four hours.
Under the anticipated schedule, flights will depart from Hanoi daily at 1.45am and arrive in Osaka at around 7.50am. Return flights will take off from Osaka at 9.20am and land in Hanoi at around 1.10pm (all local times). The new service brings its total number of international routes to 45, while its domestic routes stand at 38.
Ticket sales for the new route are expected to be available from June 8, at www.vietjetair.com.
Vietjet has already cooperated with Japanese travel agencies to operate direct chartered flights from Vietnam to Osaka as well as to Narita in Tokyo, Sendai, Nagoya, Ibaraki, and Fukushima, demonstrating that the its services and efforts to link the two countries have been very well received.
Vietjet, SBI Leasing Services, Natixis, and some of the Japanese equity arrangers also signed an MoU on aircraft financing totaling nearly $600 million.
Following a “Consumer Airline” model, Vietjet Air continues to open new routes, add more aircraft, invest in modern technology, and offer more added-on products and services to meet the requirements of millions of passengers.
Hanoi apartment project accused of cheating customers
Hundreds of customers of an apartment building project in Hanoi’s Ha Dong District have complained about being cheated by the investor who is accused of telling lies in their contracts.
Many people have hung banners or carried posters at the Anland Complex in To Huu Street, Ha Dong District to protest against the investor. They said that their nearly-completed apartments were not like what the investor showed in their advertisements and contracts.
Some of the banners and posters said, “The Anland Complex investor not follow contract with customers”, “The Anland Complex investor tells lie”, or ” The Anland Complex investor please stop stealing from our furniture”.
Nguyen P. N, a customer of the project said that she and many other customers were very disappointed when visiting their nearly-completed apartments.
“They were so different with what they showed us in the model apartment,” N said. “The design had been changed a lot and the materials or furniture were from cheaper brands.”
According to some customers, the investor said in the contracts that they would use 600×600-centimetre floor paving stone from Dong Tam, Viglacera, Prime or others brands of the same quality with estimated cost of VND275,000 per square metre. However, the paving stones they use have size of 300×300 centimetres and priced at only VND 151,000 per square metre. The colour of the stones were not like that shown in the model apartments.
“The contract said the wood floors are 12-millimetre thick but they were just 8 millimetres at apartments on the 12th floor of the HH01 Block,” a customer said.
“The bathroom sink shown in the contract was ToTo LT710CS with price of VND 2.1 million but in our apartment now it is the ToTo L501C with price of just over VND 800,000,” another customer said.
Some other customers also complained that the quality of the locks, doors, bells or ceiling decorations is also lower than what is shown in the contract.
Pham. N. P, another customer, said that they have sent complaints to the investors but received no reply.
“We’ve gathered here to voice our protest for more than a month but the investor has not shown up to answer our questions yet,” P said.
South Korea travel firms seek more Vietnamese arrivals
Given the strong growth in the number of Vietnamese tourist arrivals, South Korean travel companies are seeking cooperation with more partners to bring more Vietnamese tourists to the beautiful city of Seoul.
A number of South Korean tourism companies, including Honey Moon, Lotte Hotels & Resorts, Travolution, SM Entertainment, and Football Faentasium visited Hanoi yesterday to look for Vietnamese partners.
“We saw a significant rise in the number of Vietnamese tourists in the recent three years. We upgraded our museums with technologies and services to serve international visitors. With the marvellous victory of the Vietnamese football team and its South Korean coach Park Hang Seo, we hope to partner with Vietnamese travel firms to attract more tourists,” Shin Yeongeun, deputy general manager of Football Faentasium, told VIR.
Lotte Hotels and Resorts, a South Korean luxury hotel chain operated by Lotte Hotel Co., Ltd., the hospitality arm of Lotte Group, is also turning more to the Vietnamese market.
“We visit Vietnam every year to promote our services and products, thus contributing to a rise in Vietnamese tourism at our hotels and resorts. We now want to work with Vietnamese and South Korean companies operating in Vietnam to introduce our hotels and resorts in South Korea and abroad,” said Sean OHM, regional director of the Singapore Branch of Lotte Hotels and Resorts.
Travolution came to Vietnam for the first time with similar intentions. As a startup company, it has so far attracted only a handful of Vietnamese tourists and is striving to increase this figure.
“We are going to translate our website to Vietnamese and work with more Vietnamese companies,” said Inho Bae, CEO of Travolution.
Not only travel companies, but also South Korean districts are targeting Vietnamese tourists. SongPa-Gu—a district of Seoul—is a member of the working group to Vietnam this time. This was the first official visit to Vietnam by the district.
“Every year, we attract about three million tourists, 15 per cent of whom come from Southeast Asia. As the number of Vietnamese visitors remains modest, we want to lure in more of them,” said Dae San Lee from SongPa-Gu’s Global Tourism Division.
Seoul, which was ranked seventh among the most attractive tourism spots in 2017 by Lonely Planet, is famous for innovative tourism products and services. Last year, the city opened 20 new tourism sites.
Seoullo 7017, Seoul’s recently opened overpass-turned-park, is not only one of the city’s newest landmarks, but one of the best places to explore the city’s unique history and culture.
Other places to visit include Oil Tank Culture Park in Mapo, Seoul Night Markets, and Seoul Lantern Festival, just to name a few.
The promotional move proves how attractive the Vietnamese tourism market is to South Koreans. According to the Korea Tourism Organisation (KTO), the number of Vietnamese tourists to South Korea reached 302,260 in 2017 by November 19, up 29.9 per cent on-year. At the time, it forecast that the figure would hit 330,000 at end of 2017.
“Vietnam is a very promising tourism market. With strong growth, Vietnam ranked 8th among South Korea’s tourism markets, up two notches from 2016,” said Jung Chang Wook, director of KTO in Vietnam.
Nawaplastic reports immense savings on BMP acquisition
Nawaplastic Industry Co., Ltd. makes massive savings by acquiring the shares of Binh Minh Plastic (BMP) step-by-step rather than buying a major share volume in a single purchase.
Nawaplastic completed the purchase of an additional 401,010 BMP shares to increase its holding to 42.75 million shares.
The transactions were conducted on May 23-25. The deal took the Thai investor closer to dominating BMP by increasing its stake to 52.23 per cent.
During the transactions on May 23-25, the highest price of BMP’s shares was VND60,300 ($3.11), thus, Nawaplastic spent approximately VND24.18 billion ($1.06 million) on the deal.
Most recently, on May 14-15, Nawaplastic spent approximately VND10 billion ($438,692) on buying an additional 170,000 BMP shares to increase its holding in the firm from 50.89 to 51.1 per cent. The highest price of the share on May 14-15 was VND60,000 ($3.10).
Following the recent value of the BMP ticker, it is easy to see that the share value was lower than the initial price at the auction organised on March 9.
Notably, according to information published by the Ho Chi Minh City Stock Exchange (HSX), at the auction on March 9, two investors joined the auction: Nawaplastic and a domestic individual. As a result, Nawaplastic spent approximately VND2.329 trillion ($102.33 million) on buying 24.139 million of the 24.159 million shares on offer at the initial price of VND96,500 ($4.24).
If we compared the price of VND96,500 ($4.24) that Nawaplastic paid at the auction and the VND60,000 ($3.10) paid in recent purchases, we can see that Nawaplastic saved a massive amount of money.
In case BMP share’s value on the stock exchange continues to decrease and Nawaplastic keeps increasing its holding in the firm, it will make even higher savings compared to a one-time bulk puchase.
Lazada E-logistics to open automatic sorting centre in Hanoi
Lazada E-logistics Vietnam will officially open its automatic sorting centre in Hanoi on June 12 in a move to achieve sustainable growth and meet the boom in e-commerce.
The centre, which uses robots to sort parcels, is the second of Lazada E-logistics Vietnam, following the first in Ho Chi Minh City. The new facility has a capacity of tens of thousands of parcels per hour.
The move is part of Lazada E-logistics Vietnam’s strategy towards going green and sustainable by investing in environmentally friendly vehicles and technology.
“We operate dozens of e-bicycles for delivery services and are planning to increase the number of this kind of vehicle to several hundreds by the end of 2018. We are studying investment in electrically-run three-and four-wheeler vehicles for distribution in the future,” said Vu Duc Thinh, country manager of Lazada E-logistics Vietnam.
The green path is thus set, but developing it remains a big challenge, as three-wheeler vehicles are banned in Vietnam.
“We need support and detailed guidelines from government agencies to encourage Lazada E-logistics and others to widely develop electrically-run three- and four-wheeler vehicles in Vietnam in the future,” he added.
Lazada E-logistics and Lazada Group have recently sprouted wings to fly high, as they have received an additional investment of $2 billion from Chinese tech giant Alibaba, thus increasing its total investment in the firms to $4 billion to date.
BASF and BIOMIN to introduce new phytase for Vietnam’s feed industry
BASF ties up with BIOMIN to introduce new phytase to unlock vital nutrients for Vietnam’s feed industry.
BASF, the first company to market a phytase for feed almost 30 years ago, has once again set a new standard in phytase technology with Natuphos® E. As a new generation phytase which helps pigs, poultry and aquaculture better utilize phosphorous and other key nutrients, Natuphos E ensures more productive and sustainable output for the animal feed industry and local farmers.
BASF will be launching the product in Vietnam, and BIOMIN Vietnam will be responsible for the distribution in the country.
“BIOMIN is honored and excited to bring Natuphos E to the Vietnamese market with BASF. This cooperation has been built on a strong relationship and trust that we developed over time. Innovation and quality are our focus and we look forward to building our partnership and further developing the business footprint of both BIOMIN and BASF in the region,” said Marc Guinnement, managing director of BIOMIN Asia Pacific.
“High quality products, good access to the market and sound technical support are the keys to success in any market,” said Stephen Crisp, regional sales head of BASF Animal Nutrition Asia Pacific. “BIOMIN is a multinational company with a strong market presence and penetration in Vietnam. Through our partnership with BIOMIN, feed manufacturers and farmers will benefit from considerable cost savings through a more efficient diet. Natuphos E releases phosphorus, amino acids and energy which can be utilised by the animal. This makes Natuphos E the most efficient choice available in the market.”
The majority of phosphorous in grains and oilseeds is bound to phytic acid, an anti-nutritive factor found in feed. Phytate-bound phosphorous cannot be absorbed well by animals such as pigs and poultry, and is therefore excreted and lost as a potential nutrient.
As a result, manufacturers need to supplement the feed with either inorganic phosphates or very effective phytases to make sure the animals are supplied adequately with the required amounts of the essential phosphorous.
Natuphos E also releases other valuable nutrients, making animals generally more efficient at digesting their feed. This leads to less excretion of undigested phosphate, which, as a result, helps reduce water pollution.
In addition to Natuphos E, BIOMIN Vietnam will also be responsible for the distribution of Natugrain® TS, a feed enzyme containing highly purified NSP-degrading enzymes, in the Vietnamese market.
The two companies officially announced the partnership as part of the 20th anniversary celebration of BIOMIN Vietnam.
Manufactured by BASF in Germany, Natuphos E delivers superior pelleting and premix stability in challenging environments and feed-production processes, in addition to a long-term shelf life stability. To date, the new phytase has been launched in some 10 countries in Asia Pacific and recently in the European Union market.
Vingroup expects to get breakthrough on comprehensive sectors this year
Vingroup, the leading real estate developer in Vietnam, targets creating breakthroughs in all sectors, while simultaneously focusing on developing Vinfast products.
According to the report of Le Khac Hiep, deputy chairman of the Board of Directors of Vingroup, at the 2018 annual shareholders’ meeting, the group’s revenue and profit soared last year in older business sectors and new ones that Vingroup has joined last year.
Accordingly, in 2017, the group earned VND89.35 trillion ($3.93 billion) in revenue and VND5.65 trillion ($248.2 million) in after-tax profit, signifying increases of 55 and 27 per cent.
In 2018, Vingroup’s shareholders approved the plan for VND120 trillion ($5.27 billion) in net revenue and VND8.5 trillion ($373.4 million) in after-tax profit, signifying increases of 34 and 50 per cent.
Notably, the highest-growth sector was real estate trading with the revenue of VND62.48 trillion ($2.74 billion), up 68 per cent on-year. Another sector that achieved impressive revenue was real-estate leasing and relevant services with VND4.41 trillion ($193.7 million), up 33 per cent on-year.
In addition, last year Vingroup joined numerous new sectors, including the heavy industry via manufacturing automobiles and motorcycles.
With these positive business results, Vingroup offered its shareholders 21 per cent dividend.
In the framework of the AGM, Vingroup sought shareholders’ approval to issue preferential shares to mobilise capital for its new sectors or operation.
Vingroup expects to offer these shares to foreign investors. The firm plans to conduct the sale this year and expects to acquire VND20 trillion ($878.66 million) in proceeds. If successful, the deal will increase Vingroup’s charter capital to VND52 trillion ($2.28 billion).
This year, Vingroup will increase the presence of its brands across the country, especially the Vincom shopping centre chain and the Vinmart and Vinmart+ retail chains. Simultaneously, the group will focus on developing new sectors, including automobile and motorcycle manufacturing.
Pham Nhat Vuong, chairman of the Vingroup Board of Directors, stated that at first, Vinfast will focus on the local market. Despite the strict competition in the local automobile market, Vinfast is still optimistic thanks to the quality of its products.
Notably, according to Vuong, the quality of automobiles assembled in Vietnam is still not high and the rate of automatic assembly is still low, while at Vinfast almost all assembly processes will be automated.
Vuong also stated that in the first period, Vinfast will focus on dominating the local automobile market, instead of running after profit and will run promotion campaigns with every new model. Besides, Vinfast will also focus on after-sale and customer services.
Regarding business targets, this year Vingroup’s shareholders approved the plan for VND120 trillion ($5.27 billion) in net revenue and VND8.5 trillion ($373.4 million) in after-tax profit, signifying increases of 34 per cent and 50 per cent.
Vinalines on firmer ground for IPO and strategic stake sale
Positive responses from ministries on its equitisation plan will accelerate Vinalines’ IPO and place it in a better position to look for strategic foreign investors, adding to its considerable business results and influence in the shipping industry.
MoF has pointed out good assessments for most major contents in the equitisation plan of Vinalines. This is one of four ministries to be consulted on the plan before it can be submitted to the prime minister.
In Document No.5824/BTC-TCDN, Deputy Minister of Finance Tran Van Hieu assessed that the VND14 trillion ($618.8 million) charter capital after equitisation is higher than the book value of VND11.946 trillion ($526.3 million).
Thus, the corporation should issue additional shares to raise charter capital by VND2.1 trillion ($92.5 million). After equitisation, state capital in Vinalines will remain at 65 per cent, equivalent to 913 million shares. From the remaining 35 per cent 208 million shares (14.8 per cent) will be sold to strategic investors, 2.3 million shares (0.16 per cent) at a preferential price to employees, and 0.04 per cent to the trade union.
Additionally, Vinalines will auction 281 million shares (20 per cent of the charter capital) at the Hanoi Stock Exchange (HNX) at the initial price of VND10,000. This volume is four times higher than the plan set forth in December 2017, decreasing the share volume offered to strategic investors by 15.2 per cent.
Tran Tuan Hai, head of Vinalines’ development strategy and communications division, said: “All four ministries have basically finished their assessment of Vinalines’ equitisation plan, agreeing that it is possible and complies with current regulations and the directions of the prime minister.”
If the prime minister approves the plan in June, Vinalines will conduct its IPO in August and will officially start operating as a joint stock company in October. The corporation intends to hire Saigon Securities INC (SSI) for IPO consultancy.
As of December 31, 2017, Vinalines owned ten subsidiaries in shipping, with the total investment value of VND1.52 trillion ($67 million). The corporation holds 91 vessels with the total capacity of 1.85 million DWT. Vinalines also owns 15 subsidiaries in seaport exploitation, with the total investment of VND6.86 trillion ($302.25 million).
Although this sector is still under depression, Vinalines holds stakes in high-profit companies in seaport, shipping, and maritime services. The business results of these subsidiaries are included in Vinalines’ consolidated financial statement.
The prime minister also allowed Vinalines to keep at least 65 per cent of the charter capital in joint stock companies like Port of Haiphong, Saigon Port, and Danang Port. Vinalines will maintain its share in logistics companies and divest as much as possible from shipping companies.
“The short- and long-term potential of the seaport sector will make the parent company’s equitisation more attractive,” confirmed Nguyen Canh Tinh, Vinalines’ acting general director.
CISS refutes information on foreign acquisition
Canadian International School System (CISS) in Ho Chi Minh City refutes the information published by Bloomberg that International Schools Partnership Ltd. (ISP) will acquire it for $150 million, according to vtc.vn.
Nguyen Thi Kieu Oanh, chairwoman of CISS, told vtc.vn that the acquisition is just a rumour.
Oanh stated that previously, through the introduction of a consultancy firm from Singapore, representatives of ISP met the major investor of CISS and expressed interest in co-operating, to expand the operations of CISS in Vietnam as well as Southeast Asia.
She added that at present, CISS is busy with the student recruitment for the 2018-2019 school year, thus it has no plans to either co-operate or transfer a stake to any partner.
Previously, Bloomberg reported that UK-based ISP, which is backed by Swiss buyout firm Partners Group Holding AG, is conducting due diligence on the school and may purchase a majority stake for about $150 million, including CISS’ debts, according to a source who wished not to be named. The parties could sign an agreement as soon as next month, the source added.
According to Bloomberg, the representatives of CISS and Partners Group declined commenting. ISP said in a statement that the company has been growing rapidly through acquisitions over the past few years and is continually in dialogue with school owners in many different parts of the world. It declined to comment on specific deals.
VIR contacted a representative of the legal division of CISS to verify the information once more, however, a comment was not available at the time.
Established in 2009, CISS operates a number of kindergartens, Canadian International School (CIS), Bilingual Canadian International School, as well as the Albert Einstein primary, secondary, and high schools.
Toronto District School Board, a key partner of Canadian International School System, is the consultant in matching and integrating Vietnamese and Canadian curricula to guarantee the effectiveness of the bilingual programme.
Siemens Healthineers inks MoU to foster education collaboration
A Memorandum of Understanding was signed yesterday between Siemens Healthineers – part of German industrial conglomerate Siemens AG, Pham Ngoc Thach Medial University, and Imed Medical Equipment JSC in Ho Chi Minh City.
The MOU aims to foster educational collaboration between three parties in order to leverage the quality and content of continuing medical education in the field of diagnostic imaging, especially ultrasound.
In the initial phase, all parties will organise the continuous ultrasound training programme. Workshops shall take place monthly with focus on clinical topic and know-how techniques such as elastography, pediatrics ultrasound or application of 4D utrasound on cardiac cases.
Principal of Pham Ngoc Thach Medical University Ngo Minh Xuan said, “One of our missions is to continuously develop and leverage our educational and training delivery.
“I believe the collaboration with Siemens Healthineers and Imed play an important role in fulfilling such mission because Siemens Healthineers is well known for their state-of-the-art technology and proven experience in education and training and knowledge transferring, while Imed is a strong supporter.”
New challenges to Vietnamese customers’ faith in Mercedes-Benz
Whether German car manufacturer Mercedes-Benz’s car sales in Vietnam will be narrowed due to the impact from German authority’s investigation on it and its constant recalls in this year’s first months.
23 years after being launched in Vietnam, Mercedes-Benz is one of the country’s favourite car brands. Despite difficulties, such as the market putting on hold cap purchases in 2017 to wait out more reasonable prices in 2018, reducing consumption in the segment by 10 per cent, Mercedes-Benz Vietnam (MBV) recorded total sales of 6,000 vehicles, up 40 per cent against 2016.
Even after the recent recalls throughout the country, MBV seems to be going strong with sales in the first three months exceeding 1,400 units.
However, after numerous rounds of recalls in Vietnam earlier this year as well as the German authority’s investigation, it remains to be seen whether MBV’s sales growth will continue in Vietnam.
According to Consumer Report, C-Class vehicles “enjoyed” the highest rates of recalls in the Mercedes-Benz portfolio in 2013-2017. Specifically, the firm recalled 5.77 vehicles out of every 100,000 sold.
German newswire Bold stated that, Daimler, the owner of Mercedes-Benz, is being investigated for using illegal software to manipulate diesel emissions. 40,000 Vito vehicles and 80,000 C-Class vehicles had to be recalled for investigation.
Newswire Reuters stated that the investigation has been going since 2017, after which the German authorities have multiple times called on Daimler to explain its violations.
This scandal had a marked impact on Mercedes-Benz’s business. Reuters also stated that Daimler’s shares fell 2.1 per cent to EUR70.98 at the beginning of the trading session on February 19.
Phapluatplus.vn stated that in MBV announced eight rounds of recalls this year. The latest recall was in early May, when MBV announced recalling 7,000 vehicles between May 14 to December 31, 2022 to handle electric system flaws.
While Mercedes-Benz has been going strong despite its recent difficulties, none of the previous issues had direct relevance to Vietnamese customers’ faith in the brand. However, the newest recalls all over the country as well as the investigation in Germany are new challenges and it remains to be seen how MBV will weather the storm.
Posco VST-Thanh Nam Group judgement overruled
The Hanoi People’ Court has announced that it was unlawful for the South Tu Liem Court to dismiss the lawsuit between Posco VST and Thanh Nam on the grounds that the statutory limitation has expired.
According to Posco VST‘s petition, Posco VST and Thanh Nam Group signed a contract under which Posco VST was to supply stainless to Thanh Nam Group in 2010-2013. However, Thanh Nam Group could not meet the payment plan committed in a document released in December 2013 for a debt of more than VND58 billion.
Thus, Posco VST sued Thanh Nam Group at the South Tu Liem Court where Thanh Nam Group’s office is located since April 2014. However, “The consideration for admission of the lawsuit and the determination of the case at the Nam Tu Liem Court created an opportunity for Thanh Nam Group to evade its debts to us,” said Posco VST’s document sent to the prime minister.
The South Tu Liem Court decided to dismiss the case on the grounds that the statutory limitation has expired. In total, Posco VST sued Thanh Nam Group at the South Tu Liem Court three times with the same content.
The Hanoi People’s Court pointed out that South Tu Liem has delayed the admission of the lawsuit for consideration and was slow to reach a decision. Thus, the Hanoi People’ Court overruled the verdict of the South Tu Liem Court and returned the documents for further carefully consideration.
Authorities urge Bisuco’s more mitigation efforts
While Binh Dinh Sugar JSC (Bisuco) has been working to mitigate the environmental impacts of its violations, the results have yet to meet the authorities’ expectations.
Huynh Quang Vinh, deputy director of the Binh Dinh Department of Natural Resources and Environment (DoNRE), told VIR that according to the latest monitoring result conducted approximately two weeks ago, the local authorities have urged Bisuco to quickly deal with its environmental violation.
“In the upcoming times, the authorities will direct Bisuco to compile a pollution treatment plan with a specific deadline. However, both the Binh Dinh People’s Committee and DoNRE understand the financial difficulties of the firm and that treatment is costly,” Vinh added.
Previously, after Bisuco’s environmental violations were reported by VIR, VIR tried to contact Bisuco via email and the telephone numbers taken from the document the company sent to VIR so many times, but received no reply (one phone number was wrong, while the other was simply not picked up). The company’s website bisucovn.com does not even work.
Bisuco, 97 per cent of which is owned by India’s NIVL JSC—a subsidiary of Singapore-based Indo China Food Industries Pte., Ltd., reportedly carries VND800 billion ($35.56 million) in unsettled debts to creditors, local farmers, its employees, and local tax authorities.
MEF III invests in Vua Nem JSC
Mekong Enterprise Fund III (MEF III), an arm of Mekong Capital, has announced it has completed an investment in mattress and bedding provider the Vua Nem JSC.
The investment will allow Vua Nem to merge its two brands – Dem.vn and Vuanem.vn – into one single brand called Vua Nem, build a new e-commerce website, and expand its network to 300 stores around Vietnam by 2022. It currently has 40 stores in 23 cities and provinces, including in Hanoi, Ho Chi Minh City, Hai Phong and Da Nang.
“Our vision is to become the biggest retailer for mattress and bedding products in the country,” said Mr. Hoang Tuan Anh, Founder and CEO of Vua Nem. “Thanks to the partnership with Mekong Capital, we have access to their value creation framework of Vision Driven Investing and best practice in the retail industry.”
“What makes us confident in this investment is the founders’ openness to building up the management team,” said Ms. Nguyen Thu Thuy, Mekong Capital’s Deal Leader for Vua Nem. “The team today is far from where we first met. This team will be able to make Vua Nem the biggest and most trusted expert in providing sleep products and solutions to local customers.”
Vua Nem is the seventh investee company announced by MEF III.
It was founded in 2007 by two Vietnamese entrepreneurs, Mr. Anh and Mr. Nguyen Vu Nghia, who had a firm belief in the model of US company Mattress.com. They bought the Dem.vn domain name, which until recently was one of the two brands the company had been operating, before merging to become Vua Nem.
Unlike other mattress retailers in Vietnam, which are showrooms for a single brand, Vua Nem provides a wide range of products from many brands, in order to offer the perfect solution to each customer.
Established in 2001, Mekong Capital is a Vietnam-focused private equity firm that has the most extensive private equity track record in the country. Its investee companies are typically among the fastest growing and market leading companies in Vietnam’s consumer-driven sectors, such as retail, restaurants, consumer products and distribution.
Mekong Capital commits substantial time and resources to adding value to the companies in which its funds invest and has played an important role in the success of many of its past investments.
Launched in May 2015, MEF III is a private equity fund and currently has $112.5 million in committed capital. It typically targets investments ranging from $8 to $15 million and makes both minority and buy-out investments.
It applies Mekong Capital’s well proven approach towards adding value as a shareholder, which is grounded in the Vision Driven Investing framework and Mekong Capital’s extensive network of international experts and resources.
FPT signs digital convergence deals in Japan
FPT signed two cooperative agreements on digital convergence with two Japanese companies – ISE Foods Inc. and Toppan Printing – on May 31 in Japan.
During his first State visit to Japan, State President Tran Dai Quang attended an Investment Promotion Conference entitled “Towards a New Era in the Friendship between Vietnam and Japan” and witnessed the signing of memoranda of understanding (MoUs) between Vietnamese and Japanese enterprises and representatives from Vietnamse cities and provinces and industrial parks.
The two FPT agreements are worth a total of over $30 million. It will cooperate with ISE Foods on the application of new technologies to develop smart egg production plants in Japan and Vietnam. As a technology pioneer in digital convergence, FPT will apply new technologies to help ISE Foods develop smart plant models that increase productivity and efficiency. ISE Foods operates a farm system in Japan and the US with more than 130 million chickens.
FPT will conduct digital conversion for Toppan Printing’s business operations, cooperating in IT human resources training and business process outsourcing (BPO) over three years. The two sides also plan to set up security centers and a BPO center in Vietnam and the ASEAN region. Toppan Printing is one of FPT’s strategic customers in Japan.
Mr. Truong Gia Binh, Chairman of FPT, said that these represent practical contributions by FPT in tightening relations and promoting trade and investment between Vietnam and Japan. The two MoUs also mark FPT “transforming” itself in its relationship with leading partners in the world. It will move to become a core partner in deploying important IT projects for clients, ranging from consulting, research, deployment, and maintenance to acting as a Systems Integrator (SI).
FPT’s revenue in Japan reached VND3.6 trillion ($157.7 million) last year, accounting for 50 per cent of total revenue from its overseas markets and was 25 per cent higher than in 2016. FPT Japan has 1,000 employees in six offices, in Osaka, Nagoya, Fukuoka, Okinawa, and Shizuoka, and more than 7,000 employees in Vietnam.
FPT Japan aims to record $200 million in revenue this year and have 1,400 employees, while orienting to transform into a Japan-based company operating under the group model, with a head office in Japan and member companies in each business field.
Established in 2005, FPT Japan’s long-term goal is to become one of the Top 20 ICT companies and SI Tier 2 companies in the country, with estimated annual revenue of $500 million and 3,000 employees.
KN Golf Links Cam Ranh to open in September
Long considered just a gateway to the bustling bayside city of Nha Trang, Cam Ranh is rapidly becoming a destination in its own right due to the evolution of Long Beach, an idyllic, 8-km sweep of white sand less than five minutes from the airport.
Indeed, since 2015 more than 30 hospitality projects have been licensed for development along the strip. Many are hotels that do or will carry an international brand name.
The biggest venture is KN Paradise, an 800-ha resort slated to include a suite of hotels and an array of real estate opportunities and entertainment options.
Its first components – a Greg Norman-designed golf course called KN Golf Links Cam Ranh and a 572-key Wyndham Grand hotel – are scheduled to officially open in September.
“Cam Ranh has the potential to be a world-class tourist destination,” said Mr. Le Van Kiem, KN Paradise’s developer and a former military man who trained in the dunes of Cam Ranh when he was in the army. “With the airport expansion, we’ll now get to see just how long it takes.”
Designed to mimic a type of bird’s nest common in the local area, the new terminal at Cam Ranh International Airport is a two-story structure with almost 52,000 sq m of floor space.
Contractors on the project include the Singapore-based architects CPG Consultants, Pacific Architects & Engineers from the US, and the Vietnamese construction company Airport Design & Construction Consultancy.
The airport welcomed more than 30 international flights each day in May, with the majority coming from China, Russia, and South Korea.
The number is expected to increase significantly by the end of the year, with the addition of regular services from Singapore, Thailand and Japan and more flights from domestic destinations such as Phu Quoc Island.
Agoda reveals tourism hotspots for international visitors
With the Vietnam National Administration of Tourism’s May figures showing a 27.6 per cent year-on-year increase in visitor arrivals for the first five months of 2018, global online booking platform Agoda 1 has recently published its own findings examining where in Vietnam visitors from the Top 5 international origins head upon arrival.
Since 2016, Ho Chi Minh City has remained the “most booked” destination for travelers booking with Agoda. The southern metropolis is a magnet for business and leisure travelers and often used as a “jumping off point” for tourists to begin their Vietnam adventure.
2018 saw Da Nang become the country’s “most liveable city”, nudging out the capital Hanoi, which has held second place in both of the previous years. Neighboring Hoi An then led the charge as the country’s best recognized tourist hotspot, with Nha Trang, Phan Thiet, Da Lat, Phu Quoc Island, Hue and Ha Long Bay all holding places in the Top 10.
China is Vietnam’s number one origin market for travelers, with Ho Chi Minh City the top destination for Agoda’s China visitors in 2017 and so far in 2018, claiming the top spot previously held by Nha Trang. This augurs well for the Ho Chi Minh City Tourism Board’s recently announced goal of nearly tripling the number of Chinese visitors it welcomes annually to 1.5 million by 2020.
Vietnam’s beaches are a clear drawcard for visitors from its northern neighbor, with the various direct and charter services to Nha Trang ensuring the popularity of the bayside city. Surprisingly, the coastal town Phan Thiet displaced both Da Nang and Hanoi for bookings from China so far in 2018, which were placed fourth and fifth.
Australia assists Vietnam in economic reformsIndustrial production soars 9.7% in five months
- Business briefs: MMC earns reaccreditation
- Stormy Daniels, India, North Korea: Your Friday Briefing
- Getting the Most from Your Business Network
- Stormy Daniels, Russia, Yemen: Your Friday Briefing
- Michael Cohen, Ticks, ‘Deadpool 2’: Your Weekend Briefing
- North Korea, Stormy Daniels, Ahsan Iqbal: Your Monday Briefing
- UK Business Secretary warns British jobs at risk unless post-Brexit customs deal agreed
- France, Prince Louis, Iceland: Your Monday Briefing
- Rudolph Giuliani, Hawaii, Vegas Golden Knights: Your Monday Briefing
- North Korea, Taliban, Cambodia: Your Tuesday Briefing