Vietnamese products face stiff competition
Although consumer confidence and trust in Made-in-Vietnam products is on the rise, Vietnamese businesses still face obstacles to sustainability and stiff competition from Chinese and Thai entrepreneurs, eager to encroach in the Vietnam marketplace.
According to recent statistics released by the Central Steering Committee for the campaign “Vietnamese people give priority to using Vietnamese goods”, local products comprise roughly 80% to 90% of products stocking the local supermarket shelves.
Additionally, 71% of Vietnamese consumers say they have faith in the high quality of Vietnamese supermarket products.
However, the Ministry of Industry and Trade (MoIT) reports that sustainability for Vietnamese products is not assured and the import of Thai products is on the rise, ranking third in the local market just after Vietnamese and Chinese products.
The Committee reports that Vietnamese products are also showing weakness in the electronics retail market as imports from Thailand accounted for 70% of market share while fruits from Thailand comprised 40% of market share despite the fact that the Thai products are more expensive, priced 30%-50% higher than comparable products from Vietnam or China.
Vu Thi Kim Hanh – President of the Business Association of High-Quality Vietnamese Goods, said that to more effectively compete, local businesses should renovate technologies and devise improved strategies on marketing, distribution and advertising.
In particular, an improved strategy on the distribution of products is critically important, insuring that goods are distributed to remote areas throughout the country as well as the more populated urban areas, Hanh said.
Deputy Minister of Industry and Trade Do Thang Hai stated that the Ministry has coordinated with relevant ministries and localities to implement improved forecasts of the market and prices of essential goods.
However, to help Vietnamese products secure a solid foothold in the market, it is necessary to raise public awareness and Vietnamese producers should improve competitive edge, and cooperate with distributors to insure goods are effectively distributed throughout the country, Hai said.
First-ever BPO development centre opens in Danang
Vietnam’s first specialised Business Process Outsourcing (BPO) Development Centre was officially opened last week at the Danang Software Park by Vietnamese VBPO Company and the Japanese GROP Company, a local newspaper reported.
According to the Danang Today online, before the new centre began operating, its employees were sent to the GROP Company for training and internship.
Its first project is to implement a customer information management system for one of the largest restaurant chains, with over 700 outlets, in Japan.
In the near future, the centre aims to attract customers in Japan who are using BPO services in China.
The centre is expected to earn US$1 million in revenue by late 2015.
BPO is an inevitable development trend in the era of globalisation. It is predicted to become one of the top technology trends because it is suitable for the wave of global labour division.
Finland looks for new partnerships in Vietnam
Deputy Director General for the Department of Asia and the Americas in Finland, Eija Rotinen, paid a visit to Vietnam from June 9-16 to seek partnerships.
The visit is also part of the framework of Finland’s “Team Finland” business promotion initiative.
During the visit, Rotinen held official negotiations with the Ministry of Planning and Investment on Finland’s development cooperation with Vietnam.
Together with Ambassador of Finland to Vietnam, H.E. Mr. Kimmo Lähdevirta, the delegation from Finland visited Hanoi, Hue, Danang and Ho Chi Minh City in an effort to make new connections and raise Finland’s profile as a business partner.
The topics of development cooperation and strengthened business ties are tightly intertwined, as the relationship between Finland and Vietnam entered a crucial transition period. As traditional bilateral development cooperation is being gradually phased out in the coming years, it is essential that the two countries find new ways to enhance and continue their fruitful cooperation. One of the keys to success are partnerships – between businesses, but also in the fields of culture, science, research and education.
In the second phase of the development cooperation project Innovation Partnership Program (IPP), Finland together with the Ministry of Science and Technology is putting special emphasis on the issues of science and innovation. Finland is also working in collaboration with the Ministry of Agriculture and Rural Development to build a modern Management Information System for the Forest Sector in Vietnam. As a well- known high-tech country Finland has much to offer in the field of innovation and technology, and is prioritising this as one of the areas where new partnerships can be forged for mutual benefit and success.
The fast development of Vietnam towards a dynamic, active and inviting economy is attracting key decision makers and businesses from Finland. The friendship between Finland and Vietnam has very strong roots and is based on nearly forty years of development cooperation in Vietnam. It is now time to look forward and translate that strong foundation into a lasting relationship for the coming decades.
WB approves US$500 million credit to Vietnam
The World Bank’s Board of Executive Directors recently approved a US$250 million credit to the Government of Vietnam, for the Second Economic Management and Competitiveness development policy operation (EMCC-2).
The credit aims to support the Government’s economic management reforms to enhance the country’s competitiveness.
The EMCC-2 is focused on strengthening financial sector governance and fiscal management for macroeconomic stability; enhancing public administration, SOE management, and public investment management for more transparency, efficiency and accountability in the public sector; as well as reforming tax and procurement policies and reducing administrative burdens to create a more enabling business environment.
“This program supports reforms that should help address some of the binding constraints to private sector investment. Promoting a stronger role for the private sector in the economy is critical for Vietnam’s future growth.” says Victoria Kwakwa, the World Bank Country Director for Vietnam.
In another development, the WB’s Board of Executive Directors also approved a US$250 million credit to fund the Results-Based National Urban Development Program in the Northern Mountains Region (RBNUDP-NM), using an innovative approach to financing that links funds directly to results.
Seven cities in the Northern Mountains of Vietnam, a lagging region with the highest concentration of extreme poverty, will participate in a new performance-based program to strengthen their capacity as engines of regional economic growth.
“The growing urban centers in Vietnam’s Northern Mountains region play a key role in local area development, serving as economic and administrative hubs and commercial centers for regional or cross-border trade,” said Victoria Kwakwa, WB Country Director for Vietnam.
Cities participating in the Program will receive funds for specific measures to enhance their management capacity and for developing local infrastructure such as roads, bridges and drainage, as well as for upgrading low-income areas. The Ministry of Construction will coordinate and oversee the Program and provide technical assistance to the participating cities.
Overall planning for southern economic zones announced
The Ministry of Planning and Investment recently announced overall development plans for two southern economic zones through to 2020, which are focused on expanding key fields and boosting GDP growth.
Under the plans, approved by Prime Minister Nguyen Tan Dung, the Southern Key Economic Zone is expected to lead localities throughout the country in broadening electronics and software production and a range of services, including trade, logistics, finance, telecommunications and tourism. These are expected to boost national socio-economic development.
Ho Chi Minh City, the core of the zone, will strive to become a regional-level service hub and provide high-skilled human resources to surrounding localities and others.
The zone targets GDP growth ranging from 8.5-9% in the 2016-2020 period. The industry-construction-service sectors will account for 95-96 percent of the GDP.
The GDP per capita will reach US$3,900-4,000 by 2015 and over US$5,000 by 2020. The figure is expected to climb to US$12,200 by 2030.
The zone groups HCM City and seven provinces, including Binh Phuoc, TayNinh and Dong Nai.
Meanwhile, the Mekong Delta Economic Zone, constituted by Can Tho city and the three provinces of Ca Mau, An Giang and KienGiang, will be developed into a large-scale tourism and service centre in Vietnam, focusing on expanding Nam Can national tourism area.
PhuQuoc Island will be built into an international trade centre as well as a national and international high-end ecotourism and entertainment centre, fostering Vietnam’s integration in the regional economy.
At the announcement ceremony, Deputy Minister Dang Huy Dong required the aforementioned localities to work more closely with ministries, agencies and research institutes to specify the investment in key fields and utilise policies and mechanisms in realising the goals in a flexible manner.
Ministries and agencies should direct the localities to step up their key programmes and projects, particularly traffic and irrigation systems and those designed to cope with climate change, the official added.
Rice exports to China up in volume, value
Vietnamese rice exports to China increased 2.39% in volume and 4.94% in value during the first four months of the year, according to statistics from the Ministry of Agriculture and Rural Development.
Vietnam grossed US$392.46 million in revenues from shipping 913,957 tonnes to China, which accounted for 41.75% of the country’s total rice export volume in the four-month period.
The price of rice also rose 4.4%, hovering around US$456.19 per tonne on average.
Vietnam’s rice exports to Malaysia dipped 62.24% in volume and 61.8% in value, Ivory Coast down 52.3% and 46.55%, and Singapore down 31.71% and 30.7%.
The Vietnam Food Association (VFA) forecasts Vietnam’s rice export markets will be shrinking this year due to tough competition from Thai rice.
Vietnam, Russia accelerate interbank payments
Russia is making significant progress in bringing its commercial banking settlements up to international standards, a Vietnam-Russia Working Group for Inter-Bank Cooperation in Moscow announced last week.
A group representative announced that Interbank payments between Vietnam and Russia hit more than US$4 billion in 2013 and more than US$1 billion in the first quarter of this year.
Studies show that accelerating the settlements of payments has a positive impact on gross domestic product of a country, the representative said.
At the meeting, Deputy Governor of State Bank of Vietnam Le Minh Hung and Deputy Governor of the Central Bank of Russia Skobelkin Dmitry exchanged views on the operation of the two countries’ banking system and the implementation of reached agreements.
The Russian side was committed to encouraging its commercial banks to use available tools for boosting bilateral payment, especially national currency and retail payment methods.
The two central banks will increase information exchange on related policies, particularly the development of the Russian payment system and experience in using local currency in payment with China.
They pledged to cooperate in developing infrastructure for credit payment links, building Vietnam-Russia information gateway, using national currency in payment and encouraging commercial banks to accelerate payments through accounts, credit and money transfer.
The two sides signed the minutes of the meeting and agreed to hold the following session in Vietnam in 2015.
Samsung invests over US$1 billion in HCM City factory
Ho Chi Minh City has approved the application by the Republic of Korean Samsung Group to construct a US$1 billion electronics manufacturing facility at the city’s Hi-Tech Park.
Vice Chairman of the municipal People’s Committee Le Manh Ha said the decision by Samsung to proceed with the project is a strong signal that investor confidence remains unaffected by recent social disorder, which sprung out of the East Sea dispute.
It demonstrates investors’ continued faith and trust in the city’s effort to accelerate administrative reforms, simplify investment procedures and offer incentives to facilitate foreign businesses operating in the city.
Regarding the social disorder earlier in May, a number of workers and people demonstrated against China’s illegal deployment of its oil rig Haiyang Shiyou-981 in Vietnam’s Exclusive Economic Zone (EZZ) and continental shelf.
A handful of extremists took the occasion to violate the law and vandalize some foreign direct investment (FDI) businesses, causing property damage and loss of profits as business had to temporarily shutdown.
The city timely responded to the incidents, directed forces to take control of the situation, restoring law and order enabling the business to resume full-unimpeded operations.
Samsung’s investment in the electronic factory is in line with the city’s guidelines encouraging investment in high-tech products so the city will soon complete procedures, clearing the pathway for the Samsung to proceed, Ha affirmed.
In 2009, Samsung Group inaugurated a US$2.5 billion factory in Bac Ninh province manufacturing mobile phones.
In March 2013, it started construction of a second high-tech complex in Thai Nguyen on 100ha at a cost of US$2 billion. Once completion, the factory will produce and assemble mobile phones and other hi-tech products.
Vietnam endorses investment protection agreement with Palestine
The Government has approved an agreement on reciprocal investment promotion and protection between Vietnam and Palestine.
Under a resolution dated June 5, the government asked the Ministry of Foreign Affairs to complete external procedures and inform relevant agencies of the effective date of the agreement.
The agreement was signed in Hanoi in November 2013 by Deputy Minister of Planning and Investment Dang Huy Dong and Palestinian ambassador to Vietnam Saadi Salama.
The document helps create sound legal foundations for the two business communities to expand investment, stimulate business innovations, generate jobs, and bring quality products for their consumers.
The two business circles will have the chance to share investment experience in the areas of their strength.
Hanoi named in Asia-Pacific top crowded retail markets
Hanoi has been listed in the top three cities with the most crowded retail market in the Asia-Pacific region in 2014, after China’s Beijing and Shanghai.
A new study on Crowded Level of retail markets in the Asia-Pacific region by commercial real estate firm CB Richard Ellis, showed that China’s Beijing and Shanghai took first and second places in the rank respectively.
Vietnam’s capital – Hanoi – was also ranked 13th in the list of 19 most crowded retail markets in the world. The French capital –Paris – tops the list, followed by Tokyo and Hong Kong.
The study also revealed that Hanoi, HCM City and Danang City were among 10 cities where retailers planned to open the highest number of shops in 2014. Hanoi accounted for 36% of those, which was equal to Berlin and Shanghai.
This is the third consecutive year that Hanoi has been listed in the top 10 cities which attracted new brands.
The firm said retailers overall have been focusing on more mature markets that already have a strong retail footprint. Only one of 19 global cities – Hanoi – that CBRE ranked was not a mature retail market.
There were 18 mature retail cities on the list in 2013 as compared to 14 in 2012. The firm defined mature retail cities as those with 25% or more of the 334 retailers that CBRE tracks.
Hong Kong group set to further investment in Binh Duong
Hong Kong’s Esquel Group – one of the world’s leading producers of premium cotton shirts – plans to expand investment and production in the southern province of Binh Duong in the coming time.
Esquel CEO and chairwoman Marjorie Yang revealed the information during a meeting with Chairman of the provincial People’s Committee Le Thanh Cung last week, during which she also expressed her hope that the local authorities will work harder to ensure the legitimate interests for investors operating in the locality.
According to Yang, Esquel opened three plants in Vietnam’s Binh Duong, Dong Nai, and Hoa Binh provinces, contributing to the localities’ socio-economic development, as well as creating a large number of jobs for local people.
For his part, Cung pledged to create favourable conditions for Esquel to foster its production and investment, vowing to ensure public order and safety for the businesses.
In March this year, Esquel inaugurated its third garment factory in Hoa Binh province, which is expected to produce about 7 million shirts for export a year.
Apart from Vietnam, Esquel also has many plants in other Asian nations and Africa. With a total of about 60,000 employees, the group manufactures garment products for the world famous brands such as Ralph Lauren Tommy Hilfiger, Nike, Hugo Boss, Brooks Brothers and Lacoste.
The group now earns more than US$200 million each year from exports produced at its factories in Vietnam and generates jobs for 10,000 Vietnamese workers.
Pilot programme increases agriculture connectivity
A pilot programme will aim at financing connectivity models between businesses and farmers in order to promote high-technology application in agricultural production and exports.
The State Bank of Vietnam (SBV), the Ministry of Agriculture and Rural Development and the Ministry of Science and Technology are considering cooperation on the pilot programme.
Director of the Credit Department under the SBV Nguyen Viet Manh stated that there have been many agricultural production models promoting connectivity between businesses and farmers across the country.
A number of these models have proved to be successful, including the large-scale rice field model in the Mekong Delta province of An Giang and some other localities, the high-tech vegetable and flower cultivation model in the Central Highlands province of Lam Dong and the dairy farming and milk product production model in Nghia Dan in the central province of Nghe An.
Using these models, businesses have not only created large-scale rice fields and mechanised agricultural production, but also had stable raw material production areas and constructed trademarks and geographical indications for their products in both domestic and foreign markets. The models benefited both farmers and businesses.
At a government’s regular meeting in February this year, SBV Governor Nguyen Van Binh suggested the construction of a credit programme for connectivity models and high-technology applications and farm export promotion projects.
The SBV, the Ministry of Science and Technology and the Ministry of Agriculture and Rural Development are working together to survey, research and construct experimental policies for a large-scale application of this pilot credit programme.
According to Manh, the pilot credit programme will reduce the input costs of the products of the connectivity models by offering preferential credit for the models.
The programme could provide unsecured loans for businesses and farmers as members of a connectivity model.
With this pilot programme, the banking sector can not only increase credit growth related to agricultural production but also promote large-scale, competitive agricultural production, contributing to gradually improving farmers’ living standards and constructing and developing new rural areas.
Manh reported that about 20 connectivity models would be selected as the pilot credit programme’s beneficiaries.
These include the large-scale rice field model, the product value chain-based connectivity model and the high-technology application business model, among others, with priority given to rice, seafood, livestock breeding, vegetables and fruits.
Two years after the completion of the pilot credit programme, the SBV will consider policy improvements and multiplication of the models.
Manh added that agricultural insurance policies, farm produce planning and its management, farm export promotion and law-based assistance and market information are important for the success of the pilot credit programme.
Dung Quat EZ calls for investment worth US$2 billion
The Dung Quat Economic Zone (EZ) in the central province of Quang Ngai will intensify investment promotion in 2014-15, aiming to attract an additional 10-15 projects, with total registered capital of US$2 billion.
Pham Nhu So, vice chairman of the Quang Ngai provincial People’s Committee, who is also head of the management board of the EZ, says that the EZ will have licensed 125 projects worth US$10 billion by 2015 and another 40-50 projects capitalized at US$4-5 billion by 2020.
From 2011-2014, the management board has received more than VND781 billion from the state budget for infrastructure construction to attract investors.
In the reviewed period, it has granted investment licenses to 21 projects totaling over VND15,000 billion (roughly US$730 million), and Quang Ngai is one of the leading investment attractor in the central region.
So far, Dung Quat EZ has approved 113 projects with total registered investment capital of more than US$8 billion.
To lure more investment, the zone is advised to further improve its investment environment by upgrading infrastructure and timely addressing investor concerns.
Timber exports to hit US$10 bln by 2020
Wood and timber product exports are expected to hit US$10 billion by 2020, according to an action plan for developing the wood market, approved by the Ministry of Agriculture and Rural Development (MARD).
Nguyen Ton Quyen, General Secretary of the Vietnam Timber and Forest Products Association (Vietfores), believes Vietfores will beat this goal, reasoning that the US, Japan and China are keen on Vietnam’s wood products, and the European Union has weathered the storm.
Wood and timber product exports are now fifth among the ten main export industries of Vietnam. Effective solutions and support policies will enable the sector to potentially earn US$15-20 billion in the next ten years, Quyen says.
Ministry of Industry and Trade statistics show that wood and wood product export earnings reached US$2.42 billion in the first five months of this year, a 17.5% rise compared to the same period last year.
The US, Japan and China are Vietnam’s largest consumers of this kind of commodity, making up 66.16% of total export value, with growth rates of 25.58%, 16.96% and 28.78% respectively.
Over US$200 mln invested in VSIP Quang Ngai
The Quang Ngai-based Vietnam-Singapore Industrial Park (VSIP) has attracted 8 FDI projects capitalized at US$200 million in total since it got off the ground nine months ago.
These projects focus on food processing, garment making, and footwear manufacturing, with some having quite high investments.
A case in point, the UK’s King Riches Company opened a factory in late May to make shoes for export. Its second factory in Vietnam covers an area of 25 hectares and has investment capital of US$50 million.
Among the 8 projects, three plants specializing in footwear, garments and food, are under construction and due to be put into operation this September, creating 5,000 jobs for labourers.
VSIP Quang Ngai has set a target of generating 20,000 jobs for local people in central Vietnam in 2015.
As planned, VSIP Quang Ngai is divided into two areas: one for production covering approximately 600 hectares in expanded Dung Quat Economic Zone, and the other for urban and services centres covering more than 600 hectares along the Tra Khuc River.
VSIP Quang Ngai is the fifth Vietnam-Singapore industrial park built in Vietnam after similar models in Binh Duong, Bac Ninh and Haiphong.
Taiwanese investor Chung Jye invests in Hai Duong
The northern province of Hai Duong has granted an investment permit to the Chung Jye Vietnam Co., Ltd, a Taiwanese investor specialising in producing footwear for exports.
The US$13 million shoe factory project will cover nearly 77,757 square metres in Kim Thanh district. Once finished, the factory is expected to produce around 3.6 million products a year and generate jobs for 2,500 local labourers.
According to provincial officials, Hai Duong is sparing no effort in collaborating with ministries and agencies in investment promotion activities to lure funding from multinational and trans-national groups.
Various incentives have been given to underway foreign-invested projects, while the province has eased difficulties facing the developments and built investor trust in the local business climate.
The province has further boosted its administrative reforms by simplifying regulations across a wide range of fields, including investment, construction, land use, import-export, labour management and environmental issues.
It has worked closely with relevant agencies and other stakeholders to ensure security and safety for foreign investors in the locality.
Since the beginning of this year, Hai Duong has lured newly registered and additional investment of US$319.4 million from 15 FDI projects, up 116% year-on-year in value.
The locality now has 264 FDI projects invested by 23 countries and territories with a total capital of more than US$6.1 billion, of which US$2.7 billion has been disbursed.
Vietnam included in new FTSE ASEAN Index series
ASEAN Exchanges have introduced an expanded FTSE ASEAN index series which will include Vietnamese stocks for the first time, in a bid to provide a comprehensive suite of indices covering the growing ASEAN equity market.
Vietnam’s market will join the five markets of Thailand, Malaysia, Singapore, Indonesia and the Philippines. The new FTSE ASEAN index series benchmark will also represent up to 95% of the region’s market capitalization.
ASEAN Exchanges said the creation of broader benchmark indices, meaningful sector indices and new ASEAN centric products would generate more ASEAN-based opportunities for investors and increase liquidity flows between exchanges.
The three new tradable ASEAN indices are the FTSE ASEAN All-Share Index, FTSE ASEAN Stars Index and FTSE ASEAN All Share Ex-Developed Index.
The FTSE ASEAN All-Share Index represents the performance of large, mid and small cap ASEAN companies.
The FTSE ASEAN Stars Index comprises the 30 most salient companies of each ASEAN country as ranked by market capitalisation and liquidity, with the exception of Vietnam where 15 companies will be selected from the HCM City and Hanoi stock exchanges. The index is also expected to act as a barometer for growth rather than a recommendation for investors.
The existing FTSE/ASEAN 40 Index, which reflects the performance of the largest companies in the ASEAN market, will continue to be calculated as part of the series.
All the indices are free-float adjusted and calculated in accordance with the Industry Classification Benchmark (ICB).
BIDV branch in Myanmar in the pipeline
The Bank for Investment and Development of Vietnam (BIDV) recently signed a deal with Yagoon-based Small and Medium Industrial Bank (SMIDB), paving the way for the establishment of a BIDV branch in Myanmar.
With this agreement, BIDV and SMIDB will be fellow partners ensuring long-term and unshakeable cooperation through close supports in order to promote each side’s strengths and potentials in such fields as information exchange, service development, monetary and foreign exchange.
In addition, the two sides will regularly meet to explore opportunities for enhanced cooperation in other areas. BIDV will support SMIDB in information technology application, career consulting, training and surveys in Vietnam.
BIDV CEO Tran Bac Ha said that the agreement will help BIDV establish firm relations with Myanmar’s financial institutions and facilitate expansion of the bank’s business operation in Myanmar in the future.
Vietnam ambassador to Myanmar Pham Thanh Dung proposed that Myanmar’s Government continue to create favourable conditions for BIDV to boost cooperation with other financial institutions, including founding a BIDV branch in Myanmar.
Samsung launches Enterprise Experience Centre in Hanoi
Samsung Electronics Co opened a centre in Hanoi last week, introducing its latest products and technologies for businesses in nine different areas.
The centre, the first of its kind in Hanoi and the second in Vietnam after the HCM City facility, focuses on major areas such as food catering, hotel services, education, health care, and entertainment.
Utilizing the services of the centre, customers can access over 200 of the latest high-tech products such as LED lighting, air conditioners, digital screen, mobile devices and printers in researching and solving business problems.
The centre also will enable users to learn and share in advanced technological knowledge and experiences, including Samsung’s school education and training programmes.
In June and July this year, Samsung plans to open four more centres in Hanoi, HCM City and Danang.
Japanese businesses invited to purchase Vietnam NPLs
The State Bank of Vietnam (SBV) governor Nguyen Van Binh has expressed hope that the Japan Financial Services Agency (JFSA) will encourage Japanese businesses to purchase Vietnam’s non-performing loans (NPLs).
Binh made the proposal at a working session in Hanoi last week with Ryutaro Hatanaka JFSA Commissioner, adding the purchase is part of key cooperation between SBV and JFSA.
The Vietnam Asset Management Company (VAMC), an arm of SBV, was set up last July to acquire NPLs from commercial banks, providing much needed capital to enable the banks to lend again.
This is part of the central bank’s efforts to overhaul Vietnamese lending institutions and spur economic growth.
VAMC is developing a roadmap for selling loans it has purchased in recent times. However, incomplete legislation prevents the company selling loans to its partners.
According to a recent draft circular of the Ministry of Justice, the VAMC is only allowed to sell the assured debts worth less than VND10 billion to financial institutions. If the circular is approved, it would cause extreme difficulties for VAMC in solving NPLs.
On June 6, SBV and JFSA signed a cooperation document under which the latter will provide experts for SBV’s technical assistance projects.
JFSA has invited Vietnam to join the Asian Financial Partnership Center (AFPAC) – an initiative put forward by JFSA to share experience among Asian financial institutions.
JW Marriott Hanoi wins Asia-Pacific Property Award
JW Marriott Hanoi, a leading five-star hotel, has received top honors for excellence in the Asia-Pacific Property Award Winners 2014-2015, the world’s most prestigious real estate industry accolades.
The hotel was selected overall best in the Asia-Pacific region for new hotel construction and design, voted on by 70 of the world’s leading experts.
JW Marriott Hanoi hotel was inaugurated in the third quarter of 2013. It has total investment capital of US$250 million.
It is designed with nine storeys and 450 rooms and is one of the largest hotels in the capital city.
The hotel offers 2,400 square meters for workshop space, including two Ballrooms, a studio area for senior events and major forums, as well as space to organize outdoor events with a chain of Europe-Asia restaurants, healthcare area and facilities meeting five-star standards.
Ministry facilitates exports to Africa
The Ministry of Industry and Trade (MoIT) will continue to provide domestic companies with latest trade information about potential markets in Africa while updating import-export regulations in these markets.
This will help the firms accelerate their exports to the continent, the ministry’s Africa, West Asia and South Asia Market Department has said.
The ministry will also join hands with commercial banks both in Vietnam and Africa to facilitate payments for businesses and support local firms in opening warehouses, as well as establishing representative offices, branches and affiliates in the region’s large markets.
Cooperation with Vietnamese Commercial Offices in the region, in introducing business opportunities and prestigious customers to Vietnamese companies will also be included.
Statistics from the General Department of Customs showed that Vietnamese exports to most large markets in Africa have experienced growth over the past four months in key items. These include seafood, coffee, electronics and components and mobile phones. Means of transport and spare parts, machine equipment, apparel and construction materials, have also got a boost.
During the reviewed period, South Africa remained the continent’s leading importer of Vietnamese goods with a turnover of US$230 million, up 20% year-on-year. Egypt came second with US$110 million, up 36%.
Three other markets with high growth rates include Algeria with US$97.6 million, (up 45%); Ghana with US$74 million, (up 54%) and Nigeria with US$67 million, (up 83%).
Conversely, export turnover to some markets declined sharply. Exports to Angola, Senegal and the Ivory Coast went down by 47% to US$23.2 million, 38% to US$11.3 million and 14% to US$38.5 million, respectively, mainly due to significant decreases in turnover of rice and garments.
Experts have urged Vietnamese businesses to be proactive in overcoming obstacles such as geographic distance, high transport costs, trading through intermediaries and language barriers.
They suggest that in the future, firms should boost shipments of high-value electronics, electric devices, household goods and consumer items. Shipment of foodstuffs, canned foods, and mechanical and plastics products besides traditional items should also be increased.
HCMC seeks to ease business difficulties
Businesses in Ho Chi Minh City have proposed the support of loans’ interest to replace outdated machinery and equipment imported from China.
The proposal was made at a meeting on June 9 between HCM City authorities and representatives from various business and industrial associations, to discuss removing barriers against material imports.
Currently, HCM City-based businesses import machinery, equipment, spare parts, garment accessories, footwear and pesticides from China.
Since the beginning of this year, HCM City’s import value from China has reached US$2.35 billion, up 14.7% compared with last year, while its exports fetched just US$840 million.
To reduce dependence on the Chinese market, local enterprises are gradually diversifying import-export markets.
Businesses are keen to be proactive in finding sources of materials for production to replace those Chinese imports which are inefficient on fuel and require intensive labour.
City leaders said that they would monitor the situation closely to assist businesses in capital, market access, tax policy and customs services.
Vietcombank makes Forbes Vietnam’s top 50
Forbes Vietnam, the Vietnamese edition of the international Forbes magazine, has announced a June list of the top 50 companies on the country’s stock exchange, led by Vietcombank.
Surpassing other large commercial banks, the Bank for Foreign Trade of Vietnam has become the only representative in the Forbes list for two years in a row.
On the list are companies that have outstanding performance, hold key positions in the market, and bring great benefits for investors.
As of April 25, 2014, total market capitalisation of these 50 companies reached VND741 trillion, accounting for 65% of the combined capital of the HCM City Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX).
Forbes Vietnam used Forbes international criteria to evaluate companies operating in Vietnam. The data is based on financial reports audited over three consecutive years, including the most recent financial year, which ended on December 31, 2013.
With revenue of VND31,040 billion, Forbes holds that Vietcombank is known for its increased trust amongst businesses, international payment and trade, and it plans to get the lion’s share of the domestic retail market.
Vietcombank has been recognised as the “Best Retail Bank in Vietnam 2014” by the Asian Banker magazine, with an awards ceremony held in Australia in April.
Forbes magazine (USA) launched the Vietnamese version in June 2013- its 29th edition published worldwide, and is considered the new reference point for entrepreneurs beginning careers in Vietnam, as well as sharing lessons and experiences for Vietnamese businesses to reach out to the world.
Japanese enterprises eye Hanoi market
A number of Japanese companies will attend two exhibitions on machinery and technology for support industries, at the Cultural Friendship Palace in Hanoi on August 27-29.
The Vietnam Manufacturing Expo 2014 (VME) and “Industrial Components and Subcontracting (ICS) Vietnam 2014 are seen as the most important manufacturing industry events.
Masato Hayashi, Head of Business Office of Hitachi Cable Company Vietnam, said that the events provide an opportunity for the company to seek business opportunities in Vietnam, especially in the fields of industry and social infrastructure.
He added that the company has also spent time studying the Vietnamese government’s policy and even culture.
According to Seiji Masuda, general director of Sanko Fastem company, Japan considers Vietnam as one of the most attractive investment destinations.
“We are the largest anchor bolts manufacturer in Japan and Vietnam will need us to repair production lines,” he said. “This is the second time we have attended VME in Vietnam, after reaping healthy revenues at the previous event.”.
“The exhibition is an effective marketing tool for us. Moreover, it provides a golden opportunity for us to explain and offer guidance to Vietnamese customers using the product”, he added.
There are 520 Japanese invested projects operating in Hanoi with a total capitalisation of US$$4.6 billion, accounting for 22% of the city’s total foreign direct investment, generating 130,000 jobs and contributing US$109 million to the city’s budget every year.
However, Japanese investors say Hanoi needs to accelerate administrative reform and introduce more incentives to attract foreign investment.
Pangasius exports to reach US$1.6 bln in 2014
The export value of Tra fish (Pangasius) is expected to fetch US$1.6 billion by the end of this year, falling by 5% compared with 2013.
According to the Ministry of Agriculture and Rural Development (MARD), in the first five months of this year, the Mekong River Delta set aside 2,954 hectares for Pangasius farming, down 19% from a year ago.
Local farmers have caught 335,023 tonnes on 1,487ha, a year-on-year decrease of 20% in output.
Between January-April 2014, Tra fish businesses earned US$546 million from exports, an increase of 2% compared to the same period last year.
Several markets experiencing high growth of Pangasius imports include Brazil-36.7%, Mexico-13%, ASEAN countries-11% and China-25%. In contrast, the EU and USA showed declines of 10% and 8.7%, respectively.
Due to shrinking markets, the price of Pangasius is currently decreasing to VND22,000-23,000 per kilogram.
Vietnam-Turkey trade up 38.2%
Vietnam Customs statistics show that two-way trade between Vietnam and Turkey hit US$442.4 million in the first four months of this year, an increase of 32.9% compared with the previous year.
Of the total, Vietnam’s exports shot up 38.2% to US$407.7 million, while its imports rose by 20.5% to US$34.5 million.
Telephone handsets and components topped the list of export commodities to Turkey, grossing US$190.6 million in value, up 159.3%.
Other products with high growth included garments and textile, computers, electronics and components, machinery, equipment and tools, rubber, footwear, and wood and timber products.
Recently, telephone handsets and components surpassed textile to rank first on the list of exported products, helping drive up export growth and bilateral trade value.
In the reviewed period, Vietnam predominantly imported industrial materials for production from Turkey, of which cotton fetched the highest value of US$9 million, up 84.4%.
Other imported products experiencing high growth were machinery, equipment and tools, pharmaceuticals, ore and other minerals, chemical products and plastic products.
Exports to Spain enjoy strong growth
Vietnam’s export turnover to Spain in the first four months of this year hit nearly US$799 million, 31.42% higher year-on-year, according to the Ministry of Industry and Trade.
Vietnam’s main exports to Spain are electric equipment, electronics, footwear, garment-textiles and aquatic products.
Spanish Ambassador to Vietnam Alfonso Tena Garcia has said enterprises from his country are satisfied with their business in Vietnam as they have been offered favourable conditions for applying for business and investment licenses.
He also said that Spain wants to further promote its cooperation with Vietnam in the domains of technology transfer and education in the coming time.
Two-way trade between the two countries surmounted a record EUR2.16 billion (US$2.98 billion) last year, with a rise in exports from both sides.
Spain now ranks 59th among foreign investors in Vietnam, with a total registered capital of US$30.3 million.
Foreign investment helps revive housing market
Liberal policies and incentives from the Government and huge foreign investment are gradually pulling the property market out of its long slump.
Phan Thanh Huy, General Director of developer Novaland, said in the first four months of 2014 his company sold some 2,300 apartments in three projects in Ho Chi Minh City.
These include 1,600 in Sunrise City in District 7, nearly 500 in Lexington in An Phu ward, District 2, and nearly 200 in Galaxy on Nguyen Khoai street, District 4.
Huy said these projects sold well despite the stagnancy in the housing market because of their “good prices” and prime locations.
A spokesperson for the National Housing Organisation Company (NHO) said the Korean company would soon invest over VND20 trillion (US$950 million) in 14 property projects in Hanoi, Hue, Quang Ngai, Danang, Ho Chi Minh City, and An Giang.
NHO will invest some VND4 trillion (US$188.67 million) in a 79ha residential complex in Ho Chi Minh City’s Binh Chanh district and develop its 51ha An Phu Sinh Residential Complex in Quang Ngai into one of the best in the central region.
The NHO management has said that the US$950 million investment will fulfill the company’s commitment to the Ministry of Construction to sell some 100,000 apartments in the next decade.
Property services firm CBRE said the Vietnamese housing market is attracting the attention of foreign investors. In 2013 FDI in the sector amounted to around US$1 billion. This year it ranks only behind the manufacturing sector in terms of investment.
The biggest foreign-invested property projects this year include a US$200 million residential complex in Ho Chi Minh City’s Binh Thanh district to be built by Sunwah Vietnam, a US$2.5 billion resort complex in Vung Ro, Phu Yen province, by US developer Rose Rock and Vung Ro Oil and Gas Co Ltd, and the US$300 million Alma Resort in Khanh Hoa province.
The latest report on the housing market from the construction ministry confirms that the market is rebounding with the number of properties traded in both Ho Chi Minh City and Hanoi being much higher than last year.
In Ho Chi Minh City, 1,300 transactions were reported in the first four months. Bank lending for property transactions amounted to over VND266 trillion (US$12.547 billion).
Cambodian market lures Vietnamese investors
Vietnamese enterprises are running 128 valid investment projects in Cambodia with a combined registered capital of more than US$3 billion, according to the Ministry of Planning and Investment.
Agro-fishery projects account for 50.58% of the funding, energy 27.05%, banking-finance and insurance 8.7%, and telecommunications 5.1%.
Vietnam and Cambodia share a borderline of more than 1,000 kilometres, with 10 international border gates, 12 main and 25 auxiliary checkpoints and nine border gate economic zones. These help facilitate two-way trade and investment activities.
The investment climate in Cambodia has become increasingly attractive thanks to the incentives designed for investors. Specifically, foreign investors are immune from paying income tax from their first operation for 6-9 years, after which they will have to pay corporate income tax at only 20%.
Additionally, investors in Cambodia are exempted completely from tax when transferring the profits back to their homeland.
The Cambodian Government has planned to lure investment inflow in its agriculture, infrastructure, banking, and telecommunications sectors.
BUSINESS IN BRIEF 15/6