Ho Chi Minh City tops nation in FDI attraction

Ho Chi Minh City tops the nation in terms of foreign direct investment (FDI) attraction, 30 years since the first foreign investor was allowed to operate in Vietnam on January 1, 1988.

According to the Ministry of Planning and Investment’s Foreign Investment Agency (FIA), over the three decades, the city has granted investment licences to 7,494 projects worth 44.5 billion USD, accounting for 13.9 percent of the nation’s total FDI.

During the period, the largest economic hub of Vietnam has sometimes lost its top position, but was always in the top ten localities attracting the most foreign investment.

The result has been aided by billion-USD projects, which, experts said, have helped form the first models for FDI attraction in Vietnam. Tan Thuan export processing zone was the first model that the city created. Since its formation in 1991, Tan Thuan has attracted more than 100 investors, and generated big production and export values yearly.

Export processing zones and industrial parks in the city have helped turn more than 3,500 hectares of agricultural soil contaminated with alum and salinity into well-equipped industrial zones, creating jobs for about 250,000 labourers.

Ho Chi Minh City also became the first locality to welcome big names like Intel, Samsung, Toshiba, Mercedes, Isuzu and Nidec, creating breakthroughs in production and development.

The FIA said that the city continued leading the nation in FDI attraction in the first quarter of this year, with a total of 1.7 billion USD – a fourfold increase compared with the same period last year.

Director of the municipal Department of Planning and Investment Su Ngoc Anh said that the number of projects and investment capital will continue to rise in the rest of this year.

He emphasised share purchases, as this type of investment enjoyed a fivefold increase against the same period last year, with a focus on real estate, science and technology and tourism.

Therefore, in the future, the city will facilitate foreign investors, who want to contribute capital to or buy shares of Vietnamese businesses by offering online registration.

Anh added that the city will consider measures to attract more investment in real estate, science and technology and tourism, while seeking to create an equally competitive investment environment.

Vietnam targets 10 billion USD from fruit, vegetable exports

With the positive outcomes from 2017 and the first quarter of 2018, Vietnam is likely to gross 10 billion USD from exporting fruits and vegetables in the foreseeable future, according to Deputy Minister of Agriculture and Rural Development Le Quoc Doanh.

The Southeast Asian country earned a record 3.45 billion USD from fruit and vegetable exports in 2017, a year-on-year rise of 40.5 percent, much higher than traditional staples like rice, crude oil and coffee.

In January-March this year, Vietnam raked in 960 million USD from fruit and vegetable exports, up 35.6 percent against the same period last year.

Doanh said the country is shifting ineffective rice cultivation areas to grow fruits under the national agricultural restructuring programme. 

Provinces in the Mekong Delta region such as Tien Giang, Dong Thap and Can Tho have zoned off large areas for growing fruits, he added.

Furthermore, most farmers in the region are aware of the importance of clean production.

Businesses are investing in technology to increase the quality of products for exports.

Dinh Kim Nhung, director of Kim Nhung Produce Trading Limited Company based in the Mekong Delta, said apart from China, her company is exporting mangoes to the Republic of Korea and Japan.

However, these choosy markets require higher technical procedures, so her business has to invest in processing and irradiation treatment for mangoes, she noted.

Nguyen Ba Tuong, owner of Ba Tuong orchard, in Cai Be district, Tien Giang province, shared that there are still many potential markets in the Middle East. They are willing to pay more to buy Vietnamese fruits such as guavas, dragon fruits, star apples and longans, he said.

Vietnamese fruits and vegetables have been sold across 60 markets worldwide.

Vinacomin aims to produce 9.45 million tonnes of raw coal in Q2

Vietnam National Coal and Mineral Industries Corporation (Vinacomin) aims to produce 9.45 million tonnes of raw coal in the second quarter of 2018, and at the same time, sell 9.54 million tonnes of coal, including 540,000 tonnes for export.

The corporation also hopes to produce 2.2 billion kWh of electricity.

It has been striving to efficiently manage production and distribution to reduce inventory and increase outputs of its products to meet demand of consumers. This quarter, it expects to decrease coal inventory in the west of Quang Ninh by half a million tonnes compared to the first quarter of the year.

It plans to seal a deal with Vinh Tan thermal power plant in Binh Thuan, central Vietnam which will allow the plant to purchase coal at one of its warehouse in Nghi Son port, central Thanh Hoa province. The corporation’s members were urged to work around clock to mine coal before the rainy season arrives.

In the first three months of 2018, Vinacomin produced 9.66 million tonnes of raw coal, 27.3 percent of the yearly target and up 2 percent against the same period last year. 

It sold some 9.54 million tonnes of coal, a year-on-year increase of 11 percent. Of the amount, 9.07 million tonnes were distributed domestically while the remainder was exported.

The group earned approximately 30.3 trillion VND (1.33 billion USD) in revenue, up 23 percent year on year, including more than 14.95 trillion VND (657.8 million USD) from coal, 4.38 trillion VND (192.72 million USD) from mineral products and 3.3 trillion VND (145.5 million USD) from electricity.

Thai Nguyen develops business-friendly environment

The northern province of Thai Nguyen wants to become one of the localities with the best investment environment in the country by 2020.

The province aims to enter and maintain its ranking in the top 10 of the Provincial Competitiveness Index (PCI) with annual average economic growth of 10 percent, industrial production expansion of 15 percent and per capita average income of 86 million VND (3,775 USD).

According to Director of the provincial Department of Planning and Investment Hoang Thai Cuong, to improve the investment environment and increase provincial competitiveness, authorities have stepped up administrative reform and publicised socio-economic development plans, especially regarding urban development, transport, industrial areas and tourism.

Apart from offering investment incentives, the province has worked to cut time spent on administrative procedures, he added.

Under a local plan to improve investment climate and increase its PCI ranking, the province has used science technology to build an e-government system and implement the one-stop-shop model for investment licenses.

Planning schemes on transport connectivity and technical infrastructure investment for large-scale projects have also been revised, Cuong said.

The province hopes to improve quality of human resources and vocational training and encourage investment in agriculture, he added.

The investment climate and competitiveness index of Thai Nguyen have significantly improved over the past five years, helping boost annual economic growth of 16.5 percent and generating jobs for about 23,800 workers.

Per capita average income in 2017 was estimated at 68 million VND (2,992 USD). Total import-export turnover reached 37.5 billion USD in 2017, up 44 times against 2013.

Thai Nguyen was among the top 10 cities and provinces nationwide in PCI in 2014 and 2016. In 2017, it was 15th out of the 63 cities and provinces.

Central Highlands localities earn higher income from fruits

The Central Highlands provinces of Dak Lak, Lam Dong, Dak Nong, Gia Lai and Kon Tum have encouraged the growing of high-demand fruits such as durian, avocado, jackfruit, longan and litchi to help farmers raise income. 

Ethnic groups in Buon Don, Ea Kar and Ea Sup districts in Dak Lak province have switched their farming on impoverished and water-scarce land to cultivate perennial fruit trees. 

Farmers in Dak Lak, Dak Nong and Lam Dong provinces also planted durian and avocado in coffee gardens. 

Dak Lak leads in diversifying plants in coffee gardens, with more than 4,000ha of durians and avocados that yield tens of thousands of tonnes per year. 

The family of Y Blet Nie in Yung village, Krong Pak district grows 120 durian trees between coffee trees in their garden, and has earned 600 million – 1 billion VND (26,600 – 44,500 USD) each year from the fruit since 2015, not to mention income from coffee.

The Central Highlands region is home to more than 35,000ha of perennial and high-demand fruits, more than 12,000ha of which are in Dak Lak.

The region comprises five provinces: Dak Lak, Gia Lai, Kon Tum, Dak Nong and Lam Dong, with total population of about 5.64 million and 47 ethnic groups.

Con Co island district wakes up tourism potential

The rich potential for marine tourism development in Con Co island district in the central coastal province of Quang Tri has been awaken through investment in infrastructure.

Con Co island, about 17 nautical miles offshore Cua Viet town, is at the southern mouth of the Gulf of Tonkin and considered an outpost watch of the country.

It takes about two hours for visitors to reach the island by boat. With many beautiful pristine beaches, the 2.3-square-kilometre Con Co is an ideal place for sea bathing and fishing.

Coral reefs including the rare red ones are found in the sea around the island.

Con Co is also covered by vast areas of primeval forests that make up 70 percent of the island’s total area with floral diversity.

The island is renowned as a fierce battlefield during the wartime in Vietnam, with many relics still remaining such as a thousand-metre long tunnel.

When the night falls, visitors could stroll along coastal roads to enjoy the fresh air and quiet atmosphere. 

Tourists could experience homestay services in the island to explore the local daily life and learn to make seafood dishes by themselves.

The Con Co island district was established in October 2004. 

Over the past time, Quang Tri province has focused investment on building water supply systems, medical centres, schools, residential areas and other facilities to improve local lives.

The Electricity of Vietnam (EVN) has connected the island has been connected with the national grid since August 2017.

Chairman of the district People’s Committee Le Minh Tuan said the connection with the national grid has created positive changes for local socio-economic development, especially tourism.

In 2017, Quang Tri announced a project to open the Con Co island tourism route. In January 2018, the district’s People’s Committee signed a contract building a high-speed boat to carry passengers to the island with a total investment of over 22 billion VND (961,400 USD). The ship will be put into use in August 2018. 

Con Co district aims to open 3-4 high-quality tour packages by 2020.

According to Vice Chairman of the Quang Tri People’s Committee Ha Sy Dong, the province has called on investors to build infrastructure systems in Con Co and develop various tourism activities such as coral snorkeling, visiting forests and special species.

Hoa Phat exports wire drawing steel to Laos, RoK

Hoa Phat Equipment & Accessories Co., Ltd, a subsidiary of the leading Vietnamese steel maker Hoa Phat Group (HPG), sold 3,000 tonnes of wire drawing steel in the domestic and foreign markets, namely the Republic of Korea (RoK) and Laos, in the first quarter of 2018.

The product was certified by the Standard Approval Centre No 1 (Quacert 1) to meet standards of Vietnam (TCVN), the American Society for Testing and Materials (ASTM) of the US, the British Standards Institution of the UK, and the Japanese Industrial Standards. 

With nine production lines of wire drawing steel and one galvanizing line for the first phase, the plant’s capacity is estimated to reach 40,000 tonnes each year.

The group targets revenue of 55 trillion VND (around 2.42 billion USD) and after-tax profit of 8.05 trillion VND (354.6 million USD) in 2018.

Its accumulated revenue in 2017 reached 46.8 trillion VND (some 2 billion USD), posting an increase of 38 percent year-on-year. After-tax profit also hit a record high to reach 8 trillion VND (352.4 million USD), surpassing the set target by 33 percent and increasing 21 percent over the previous year.

The group’s steel business played the key role, contributing some 90 percent of its total revenue and after-tax profit.

Last year, Hoa Phat exported some 200,000 tonnes of steel products. They included 161,000 tonnes of steel bars and rolled steel to the US, Canada, Australia, Malaysia and Cambodia.

With its positive business results, the group contributed 5 trillion VND (220 million USD) to the State budget in 2017, an increase of 40 percent from 2016.

EVN’s electricity output and imports rise by 11.2%     

Electricity of Viet Nam (EVN) posted total electricity output and imports of 48.96 billion kilowatt hours in the first quarter of the year, representing 11.2 per cent yesr-on-year.

EVN on Thursday said it would manage to ensure stable electricity supply in the country in the first quarter of the year.

EVN has started construction of 28 power projects and has completed 41 power grids of 110-500kV capacity.

The group targets to meet the increasing power demand of 12.5 per cent in the second quarter of the year.

It will also continue to exploit thermopower and gas turbine power resources as well as ensure water supply for downstream regions. It aims to ensure stable operation of its thermopower plants, such as Vinh Tan 2, Vinh Tan 4, Duyen Hai 1 and Duyen Hai 3.

The group said it would continue to divest investment in its Power General Corporations (Gencos) in the upcoming time.

EVN implemented restructuring at Gencos in the first quarter of the year. Among the subsidiaries, Genco 3 started trading shares on the Unlisted Public Company Market on March 21 and is preparing for its first shareholders’ meeting.

It has submitted a report of Genco 2’s privatisation to the Ministry of Industry and Trade for approval.

On February 13, Prime Minister Nguyen Xuan Phuc approved EVN’s production and business plan for 2016-20.

EVN is under State ownership, with an expected charter capital of VND205.4 trillion by the end of this year.

New science and technology business opened in HCMC

The Ho Chi Minh City (HCMC) Department of Science and Technology has just approved and presented a certificate of science and technology business to Hoang Linh Biotech Limited Company.

Hoang Linh Biotech Co., Ltd is a business to manufacture and sell products from the commercialization of scientific research and technology transfer. Their major merchandise is in the fields of growing, making, and processing mushrooms and cordyceps roberti.

Statistics from the HCMC Department of Science and Technology show that until the second quarter of 2018, there have been nearly 50 companies in Ho Chi Minh City receiving the certificate of science and technology business.

These companies will gain various benefits and be exempt from income tax during four years, pay a 50-percent-off income tax in nine years, and then pay a 10-percent income tax as long as the certificate is still valid.

Danang aims to turn Tien Sa into tourist port

The government of Danang City has urged its tourism department to start a plan for transferring Tien Sa Port into a facility for tourist ships.

The central coastal city has also asked the department and other relevant agencies to draw up a plan to raise the capacity of Danang International Airport, especially its domestic passenger terminal, thereby meeting the increasing travel demand among foreign and local tourists.

The airport frequently struggles with passenger overload between April and September, especially on the occasion of the annual fireworks festival. Therefore, it normally takes a long time for tourists to go through procedures.

Meanwhile, Tien Sa Port has long been seen as a temporary berth for cruise ships, so tourism services have yet to be developed there.

The local government is embarking on the second phase of a project to expand Tien Sa Port. The VND1 trillion (US$43.8 million) project is scheduled for completion late this year.

The city will transfer a certain volume of cargo transshipment to another local port called Lien Chieu by 2020, thus reducing pressure on Tien Sa and gradually changing it into a tourist port.

The municipal Department of Transport is told to carry out plans to cut the number of private vehicles, and traffic congestion to facilitate tourism. Besides, the agency will team up with the municipal police to guarantee security and traffic safety, especially for tourists.

Meanwhile, the Danang Food Safety Board and the municipal Department of Industry and Trade will work together to ensure food safety and hygiene, and check product prices among others.

The city served around 6.6 million tourists last year, up 19% against 2016. As many as 120,000 travelers came to the city by sea, up a staggering 46%, of which 78 cruise ships called at Tien Sa Port, according to the local tourism department.

Tax reductions to boost consumption of E5 bio-fuel

The roadmap to bring E5 bio-fuel to the market has reached its intended target and will continue to be promoted in the future, including the proposed reduction of the environmental protection tax on E5, in order to create a price gap and stimulate consumption of this bio-fuel, according to the Ministry of Industry and Trade (MOIT).

Deputy Minister of Industry and Trade Do Thang Hai said that according to the roadmap outlined by the Government, E5 bio-fuel has been sold nationwide instead of RON92 petrol since January 1, 2018, in a bid to protect the environment.

However, several enterprises have claimed that the consumption of E5 has not been as high as RON92 and recommended that the sale of E5 was suspended.

For instance, Ho Chi Minh City One Member Limited Liability Oil and Gas Company (Saigon Petro) said that the consumption of E5 in the first two months of 2018 accounted for less than 30% of its total petrol consumption, while the consumption of RON92 accounted for over 65%.

Deputy Minister Hai emphasised that the MOIT's purpose is to sell E5 nationwide, however, it is not compulsory for consumers to use this type of product nor has the ministry set detailed targets on achieving specific consumption figures of this bio-fuel. By successfully launching the product to markets in all 63 provinces and cities, the roadmap can be confirmed as successful, Hai added.

According to the latest reports of petrol companies, after two months, approximately 593,000 m3 of E5 was sold, accounting for 42% of the total types of petrol distributed in the market, while the consumption of RON95 made up 58% of total petrol consumption. This figure has risen sharply as the percentage of consumers using E5 was only around 8 - 9% in 2017.

Several petrol companies have posted large consumption of E5, including Thien Minh Duc Petro with an increase of more than 70%; Military Petroleum Corporation, up 64.3%; and Petrolimex, up over 48%.

According to economists, bringing new kinds of commodities to market requires a relatively long period of time to control the market. E5 has been put into service for about three months, therefore, the figures cannot reflect the situation adequately. Requiring this new product to completely replace an old product which had been sold in the market for several decades is impossible.

The most important thing is that the product has been successfully launched to the market and the next task is how to increase its consumption and win consumer trust, Hai noted.

Agreeing with the policy to put E5 into use, Deputy Director of Hanoi Department of Industry and Trade Tran Thi Phuong Lan said that Hanoi will continue fostering the trading of this type of fuel to promote domestic production and environmental protection. However, one of the problems that should be handled is consumer concerns about the quality of the product and the locations of E5 stations.

"Petrol companies have coordinated with the media to promote the consumption of E5 but people remain worried about the quality and safety of E5. Moreover, several petrol companies have placed E5 pumps in hidden positions, causing difficulties for consumers to observe and buy the product, "Lan said.

Deputy Minister Do Thang Hai noted that after the successful launch of E5, the MOIT is working to implement the next step of the roadmap to encourage consumers to use more E5 to help protect the environment. Accordingly, the MOIT has proposed that the Government reduces the environmental and special consumption tax imposed on E5, thereby creating a price gap to continue stimulating consumers to buy E5.

Deputy Minister Hai added that when a kind of fuel is good for the environment, it is unreasonable to apply the same environmental tax on this fuel as for other types of petrol. This is the basis for the MOIT to ask for a reduction in environmental taxes.

Similarly, E5 is an item that Vietnam is promoting the consumption of, so the government should not impose excessive excise tax on it. When the two types of taxes are reduced, the price gap between the two types of petrol will be expanded, thus stimulating E5 consumption.

In addition, the MOIT has required petrol traders to put E5 pumps in appropriate places for consumers to identify, avoiding blocking the consumer’s view. In particular, it is advisable to promote the dissemination of information for consumers and businesses to have a better understanding about the benefits, features and safety of E5 so that they will feel secure to use this type of fuel.

Thai Binh sees good economic signals in Q1

The northern province of Thai Binh saw positive economic signs in the first quarter of 2018, including a 20.7% rise in industrial production, 1.7 times higher than the growth of the same period last year.

According to the provincial People’s Committee, the province jumped six places in the provincial competitiveness index in 2017. Since the beginning of this year, the province attracted nearly VND600 billion poured into 18 new projects and some ongoing ones.

Currently, Thai Binh is hosting 74 foreign direct investment projects and 10 official development assistance projects.

In the first three months of this year, Thai Binh earned nearly US$300 million from exports, a rise of 10.8% year on year. Meanwhile, its imports were US$290 million, up 7.5% year on year.

In the second quarter of this year, the province will focus on guiding localities in cultivating the spring-summer rice crop and implementing new-style rural area building programme in 2018. 

The localities will also concentrate on removing obstacles facing industry and service development, while speeding up the formation of Thai Binh economic region as well as the investment of coastal road system and several other infrastructure projects.

The province will work to lure more investment in industry and service as well as boost production and business.

At the same time, the province will strengthen the management over land use and exert more efforts in ground clearance for investment projects.

FiinPro Talk #6 to launch in HCM City

FiinPro Talk #6 “Vietnamese Banking Stocks: Investment Opportunities and Risks” will take place in HCM City on April 19.

The event will be attended by senior experts in the banking and financial industry and some 150 participants, including fund and asset managers, financial investors, banking executives and analysts. They will share their knowledge and insight on the important trends of Việt Nam’s banking industry and finance companies, macroeconomic or monetary policies affecting the banking system and the stock market in Việt Nam, as well as chances and threats when gaining exposure in banking stocks.

Key themes to be addressed during the event include the banking sector landscape; key growth drivers in 2018 and the near future; major policies and their implications for banking stocks and IPOs; key investment considerations in listed stocks and upcoming listings; and upside opportunities and risks in select banking stocks. 

After going through the difficult period of 2008-12, the Vietnamese banking system has made a strong comeback since 2013, supported by a gradually improving economic environment and the recovery of the real estate market.

Over the last four years from 2013 to 2017, the credit outstanding balance has increased at an annual growth rate of 17.2 per cent, of which personal loans grew by 40.8 per cent annually, as calculated by StoxPlus. Consumer finance companies also experienced a strong growth in the loan book at an annual average of 66.5 per cent over the same period and are now considered "counterweights" to the traditional banking model.

These days, the banking industry is reaping impressive results. There used to be only nine listed banks with total market capitalisation of US$11.8 billion in 2013. Now, 15 banks are listed on the two stock exchanges, with total capitalisation of $40 billion, accounting for 21.5 per cent of total market capitalisation. The stock price of the banking sector increased by 73.2 per cent in 2017 and recently rose by 40 per cent in the first quarter of 2018, while the VN-Index rose by 48 per cent and 19.3 per cent, respectively.

By March 30, 2018, the banks’ stocks are trading at 3.2x its Book Value and 20.3x its trailing earnings. It also witnessed a number of M&A transactions between foreign partners and consumer finance companies.

In the coming months, market players and the investor community are looking forward to a series of listings from banks and consumer finance companies, including Techcombank (TCB), Tiền Phong Bank (TPBank), Oriental Commercial Bank (OCB) and FE Credit. Some of them have just seen soaring share prices on the OTC market.