PVI confident of prospects after PVN divestment

According to the materials for the shareholders’ meeting to be held on April 27, PVI Holdings is going to submit a plan of expanding the foreign ownership limit to 100 per cent for consideration.

Previously, PVI was a 100 per cent state-owned enterprise with PetroVietnam (PVN) as the representative of the state stake. After implementing the equitisation in 2006 and selling stakes to some foreign investors, PVN’s ownership in PVI has declined to 35 per cent. At present, PVI has two foreign strategic shareholders: HDI Global (belongs to Talanx Group from Germany) holding 35.74 per cent and Oman Investment Fund with 11.58 per cent.

Talanx Group is one of the biggest financial groups in Europe, managing over £100 billion ($108.6 billion) of assets. However, in Vietnam, HDI Global invests in PVI only. A representative of HDI Global said that they pay attention to PVN’s divestment and plan to increase ownership in PVI, but they have to wait for PVN’s final decision.

VIR asked HDI Global, “As a member of PVN, PVI has a lot of advantages arising from an almost monopoly position in the oil and gas insurance field. If PVN divests from PVI, and assuming that HDI Global will purchase these shares and become the biggest shareholder of the company, will HDI Global be concerned over the loss of advantages from PVN?”

U.H. Wollschlager, financial director of HDI Global, answered that previously, when PVN was the controlling shareholder of PVI, PVI benefited a lot from PVN’s network. However, in recent years, PVI’s dependence on PVN has significantly decreased.  

“Five years ago, since HDI Global became a strategic shareholder of PVI, its retail business has gradually prospered. In fact, in a developing market like Vietnam, the potential in retail is huge, because many organisations and individuals need insurance for their own assets, like cars, houses, etc. PVI’s business model is similar to that of HDI Global, as in the past, HDI Global focused on business insurance, but now they also have retail insurance products,” Wollschlager said.

Agreeing with Wollschlager, Nguyen Anh Tuan, chairman of PVI, said that currently, revenue from insurance businesses related to PVN accounted for 25 per cent of PVI’s total revenue, while this proportion used to be as much as 85 per cent.

“The development of PVI over the last few years has showed that it is not heavily dependent on PVN. PVI has submitted the divestment plan for PVN, and if PVN sells 35 per cent of the stakes successfully, PVN will earn a huge amount of money,” Tuan said.

PVN’s divestment from PVI has attracted widespread attention from other insurers, especially those interested in wholesale insurance, which is insurance for oil and gas industry in case of PVI. Some insurance companies think that as PVN is a big shareholder of PVI, PVI seems to have the advantage of monopoly on oil and gas insurance. It seems that contractors wishing to join this field are appointed, a position is not up for public tender.

However, PVI’s chairman denied this and said that the oil and gas industry applies public tender fairly.

“A regulation on bidding to provide insurance was issued in 2014 and PVN encourages all foreign and domestic insurers to provide services for the projects or assets managed by PVN. The biggest advantage of PVI is that as a member of PVN, we understand more than anyone all of PVN’s risks, so we have designed the most appropriate insurance programme and ensured risk management at a reasonable cost for PVN. PVI has developed through its own competitive ability, thus, even after PVN’s divestment and the growth of foreign ownership in PVI, we will flourish,” Tuan said.

Logo design contest to promote Vietnam’s national rice brand

A logo design contest on Vietnam’s national rice brand will be launched by the Ministry of Agriculture and Rural Development (MARD) on April 26.

The contest, open to Vietnamese and foreign individuals and organisations, encourages the participation of businesses, associations and those involved in rice production and trading.

According to the organising board, the entries must feature the prestige, quality, and typical characteristics of Vietnam’s rice brand

They must not violate Vietnamese traditional customs and culture and implicate any inappropriate indication regarding the history, tradition and value of Vietnam’s rice. In addition, they must not be similar to or a copy of any logo that has been used at home and abroad.

Each entry will be judged based on its layout, the use of colours and sketches in order to ensure its aesthetic quality and will be recognisable while leaving impressions on customers.

Entries should be submitted to the Department of Processing and Market Development of Agricultural Products, 10 Nguyen Cong Hoan street, Ba Dinh district, Hanoi by June 26, 2017.

While the winner will be awarded a certificate of merit and VND 100 million (US$4,400) in cash, the winning entry will be the representative image of Vietnam’s rice brand.

The organising board will also present four consolation prizes worth VND 15 million (US$660) each.

Bag, suitcase and umbrella exports obtain sharp growth in March

Exports of bags, suitcases and umbrellas hit US$303.5 million in March, up 80% against the same period last year, bringing the total export revenue in three months to US$757 million, up 2.8%, according to the General Department of Vietnam Customs.

The US came first among 28 consumers of Vietnam products in the period with US$305.5 million (up 5.4%), trailed by Japan with US$95.4 million (up 1.1%), the Netherlands with US$70 million (up 4.2%), Germany with US$39 million (up 3.4%), and the Republic of Korea with US$3.3 million (down 9.7%).

In general, exports to most markets enjoyed a growth in terms of revenue, particularly Denmark (up 122.5%) and Mexico (up 40%). Some markets suffered a sharp decline, for example the Czech Republic (down 67.5% to US$0.6 million), Norway (down 37% to US$1.4 million), Taiwan (down 21.6% to US$3.9 million) and Thailand (down 25% to US$3.5 million).

AirAsia opens Danang-Bangkok direct route

Low-cost airline AirAsia has announced the opening of the direct air route from Danang to Bangkok, Thailand to facilitate passengers’ travel demand as from June 9.

The daily flights will depart from Danang at 12pm and arrive in Bangkok at 13:20pm. Meanwhile, flights from Bangkok will depart at 10:10am and arrive in Danang at 11:30am.

Mr Santisuk Klongchaiya, Director of Commercial Affairs for Thai AirAsia emphasized that Danang is Vietnam’s third largest city after Hanoi and HCM City, noting that it is also one of the nation’s economic and tourism hubs which attracts many international and Thai tourists. The city is known for many world cultural heritage sites such as Hoi An, Hue and My Son relics.

Ms Pornpun Ratanapitakul, regional Marketing Manager at Air Asia underscored the importance of the new route in boosting travel demands to discover cultural characteristics of the city.

Marking the occasion, Air Asia has offered a discount on Da Nang-Bangkok airfares starting from VND220.00 for one-way ticket (excluding tax and other additional fees). Duration for booking cheap tickets is from April 24 to May 7 for flights departing between June 9, 2017 and June 5, 2018.

HCMC to relocate construction material facilities

The HCMC Department of Construction has unveiled a master plan for construction material by 2020 in which cement grinding stations and other building material facilities will be moved out of the city in the next four years, while more trading venues for construction materials will be set up in the city.

The production value of the construction material sector accounts for a very low proportion of the city’s overall industry, falling from 1% in 2010 to 0.57% in 2015, the department said at a seminar here last Friday. This suggests the sector is not the city’s strength, according to deputy manager of the removal project Nguyen Thi Thu Ha.

Besides, the city’s natural resources and minerals used for building material production are limited in types. Therefore, the city will become a large-scale trading and exhibition center of building material products, instead of focusing on production in the coming time.

The city will have relocated cement grinding stations to other localities with appropriate planning by 2020. Besides, the majority of material production facilities that are not in line with the master plan will be moved into industrial parks or out of the city.

She said the city has great demand for construction materials like stone and sand but they have yet to be produced in the city.

The city is expected to have 20 ports and six supermarkets specializing in construction materials to keep up with the rising demand citywide.

Le Hoang Chau, chairman of the HCMC Real Estate Association, urged municipal authorities to strengthen the management of the construction material market. He said the price of sand has skyrocketed for the past several weeks, making life more difficult for housing investors and local residents.

Ngo Minh Lang, deputy general director of Ha Tien 1 Cement Joint Stock Company, urged the city’s leaders to rethink the relocation plan, saying the cement transport cost from the north to HCMC is higher than on-site production.

“Each ton of cement shipped from the north will cost an extra VND200,000, multiplied by 4.8 million tons according to the master plan – the city will have spent an additional VND1 trillion (US$44.1 million) by 2020,” he said.

Japanese firms want Circular 23 modified

The Japan Business Association in Vietnam has written to the Ministry of Science and Technology and relevant agencies seeking further amendments to Circular 23 on the import of used machinery and equipment that has been controversial for years.

In this letter, Chairman Hiroshi Karashi of the association says: “We hope machinery and equipment imported by manufacturers to serve their production activities will face no age limits.”

When Japanese enterprises relocate their manufacturing facilities to other countries, the use of machinery at such facilities for production is popular, he explained.

Moreover, machines that have been used for over 10 years have “no problem”. Therefore, import restrictions based on the age of machinery and equipment are impractical, the chairman said.

In addition, he says that when importing machines of 10 years old or older, apart from Article 13 of Circular 23, enterprises have to adhere to Clause 2, Article 6. Still, the relationship between these two is ambiguous.

Furthermore, the procedures and documents required for the import of machinery and equipment at the age of 10 years or older are unclear, and so are the grounds of the Ministry of Science and Technology for approval or disapproval. Thus, there have cases in which businesses are not permitted to import machines without explanations.

“We think this could lead to a fall in new investment as well as investment expansion in Vietnam,” the Japanese business official warns.

He suggests the Ministry of Science and Technology give these recommendations a “written” response.

Circular 23 dated November 13, 2015 of the science ministry has long been complained by many business associations. Resolution 19 of the Government has requested this circular to be modified.

The science ministry is asked to coordinate with the Ministry of Industry and Trade and other agencies to develop criteria for the import of specialized machinery and equipment according to their age, depending on each specific area, rather than imposing the wide limit of “no more than 10 years”.

Currently, the science ministry is consulting the concerned parties.

Local firms unprepared for climate change adaptation

Although many enterprises to some extent show their awareness of the impact of climate change on business and production activities, they have not taken specific actions to deal with climate change.

Speaking at a conference on climate change in HCMC on Friday, Nguyen Tri Thanh, senior executive at the Asia Foundation, said a recent survey on more than 500 enterprises in 18 industrial parks showed that most enterprises have absolutely no plan for environment protection, emergency response or recovery after natural disasters.

The effects of climate change in recent years include temperature rise, rainfall decrease in the north and increase in the south, more frequent droughts in the dry season and more devastating storms.

According to Thanh, the most noticeable impacts of natural disasters and climate change on business and production activities are increasing production costs, bankruptcy after disasters, decreasing demand for goods and services, instable supply chain, and high recovery costs among others.

Tran Thi Hanh, director of Khai Thinh Transportation Co., Ltd, said unpredictable storms have caused great damages to the shipping business of her company in recent years. Specifically, a sudden storm in Phan Thiet in 2014 sank the company’s newly built US$3 million passenger ship.

In the field of agriculture, droughts in recent years have led to a shortage of materials for many factories and salt water intrusion has caused great damages to farmers in the central region, the Central Highlands and southern areas.

For many enterprises, actions to mitigate the effects of climate change on production are mainly limited to saving on electricity, water and materials and using environmentally friendly equipment and technology.

Statistics show that in 2016, natural disasters caused damage of up to VND39,700 billion in the country.

HCMC transport authority comes up with new parking fee plan

The HCMC Department of Transport has proposed a plan in which the nearer the city center, the higher the parking fees will be.

According to the plan which the department presented at a conference on traffic management last week, the parking fees in the heart of the city would be the highest and the farther from the city center the lower the parking charges would be.

Some types of vehicles would be banned on certain main roads permanently or at peak hours.

The city would provide public bicycle rental service downtown, reorganize the commuter bus system, launch river buses, build parking lots and develop new interprovincial-bus stations this year.

In 2018-2020, the city will continue finding ways to reduce traffic congestion such as launching a new river bus route connecting the Bach Dang Wharf in District 1 and District 8, putting more eco-friendly buses running on compressed natural gas into service, establishing a public transport management center, inviting tenders for bus services, and opening more pedestrian streets in the center of town.

Bui Xuan Cuong, director of the Department of Transport, said the city will complete the formulation of a public transit development strategy in October 2017 with detailed mechanisms, solutions and roadmaps for coping with traffic congestion in the coming years.

The city has 4,870 roads with a total length of more than 4,000 km and over 7.9 million motorcycles and automobiles registered in the city, plus more than one million vehicles registered in other provinces but in circulation in the city.

Samsung enhances smartphone checks after last year’s Note 7 fires

Samsung Electronics has enhanced checks on its new smartphones manufactured in Vietnam after Note 7 fires last year, said a leader of the company.

Nguyen Van Dao, deputy general director of Samsung Electronics Vietnam, said that after Galaxy Note 7 fires in 2016, the production process and quality control of Galaxy S8 and S8 Plus models have been made more stringent.

Dao said at Samsung Thai Nguyen factory, Samsung Galaxy S8 and S8 Plus smartphones are put to trial run for 72 consecutive hours after completion to ensure quality before packing. Previously, the test-run of Samsung’s products usually took only two hours but after the incident of Note 7s, this stage has been strengthened and the company has used more machines for quality test.

Dao said that currently, 90% of the manufacturing processes of Samsung phones are done by machines and robots and the remaining 10% are done by hand in the last steps such as packaging.

Production processes and product quality are the same for Vietnam and other markets around the world such as the U.S. and Europe. After production, some specifications of the phones will be customized to meet the specific requirements of each market.

Dao said that the company’s two factories in Thai Nguyen and Bac Ninh provinces are producing 50% of the Samsung smartphones sold globally, including the latest models Galaxy S8 and S8 Plus that were launched in Hanoi on Saturday.

In 2011, Samsung operated the first cellphone factory in Bac Ninh Province and in 2014, the second one in Thai Nguyen Province was put into operation. Samsung Electronics Vietnam’s cellphone export value jumped from US$6 billion in 2011 to US$36.2 billion in 2016.

Currently, two factories of Samsung Electronics Vietnam in Thai Nguyen and Bac Ninh employ 110,000 people.

Vietnam seeks to export pork to China amid sharp price fall

The Vietnamese Ministry of Agriculture and Rural Development (MARD) has sent its representatives to China to seek outlets for local pork amid the product’s considerable price decline.

The information was given by Minister of Agriculture and Rural Development Nguyen Xuan Cuong at a seminar on April 24 on ways to save domestic pig breeders who are on the verge of bankruptcy.  

Vietnamese pork prices have reached a record low and are also the lowest in the world

According to Cuong, Vietnamese pork prices have reached a record low and are also the lowest in the world. At present, a pig is sold at between VND25,000 (USD1.13) and VND28,000 a kilo.

He blamed the situation for the oversupply of pork in the local market. Meanwhile, the processing technology remains weak, restricting preservation. To date, pork products are mainly domestically used, and just a small amount is exported.

The minister instructed to improve the pork processing technology to focus on export to foreign countries. In addition it was important to reduce livestock from the current 4.2 million sows to three million by 2020.

Pork demand in many ASEAN countries and China is quite big, so Vietnam should take advantage of this to boost exports. The ministry has sent its representatives to China to work on this. 

A delegation from the Chinese Ministry of Agriculture will come to Vietnam to discuss the issue during APEC meetings in Vietnam.

Transport infrastructure boosts Central Highlands’ development

Transport infrastructure upgrades have boosted socio-economic development in the Central Highlands region.

According to the Steering Committee for the Central Highlands Region, since 2010, the State has invested about 64 trillion VND (2.8 billion USD) in the region’s infrastructure, a 1.62-fold increase compared with 2006-2010.

Many important transport works in the region, including the 663-km Ho Chi Minh road section through the region, have been built, while three airports, namely Lien Khuong in Lam Dong, Buon Ma Thuot in Dak Lak, and Pleiku in Gia Lai were upgraded.

In 2016, the region’s total gross domestic product reached 151 trillion VND (6.64 billion USD), up 7.47 percent from the previous year, and the average per capita income was 39.56 million VND (1,740 USD).

The region’s economic structure was shifted and the number of newly-established enterprises and total registered capital surged.

Convenient road links attracted more investors, both inside and outside the country, to the region, while shortening travel times.

However, the Steering Committee for the Central Highlands Region said that the region’s transport infrastructure has yet to receive investment in keeping with its important strategic position.

The committee proposed the establishment of a fund to develop the region’s transport infrastructure to boost regional and international linkages, and encourage domestic and foreign investors to pour capital into the region’s key projects.

It suggested the Ministry of Transport consider investing in completing the Ho Chi Minh road section linking Kon Tum province’s Tan Canh commune with the central city of Da Nang as the road remains sloping and bendy.

It also asked the State to invest in railways and waterways to develop multi-modal transport to reduce transport costs.

The Central Highlands comprises of Lam Dong, Dak Lak, Kon Tum, Dak Nong and Gia Lai provinces.

2017 Vietnam Property Awards short list to be announced     

Following several months of deliberations, the jury of the PropertyGuru Vietnam Property Awards will announce the short list of nominees for the annual awards in HCM City on April 26.

To be given away by Kohler this year, the third edition of the awards will honour the best developers, developments and designs in HCM City and Ha Noi.

More awards will be given for outstanding residential development in Phu Quoc, Danang and Nha Trang, the country’s emerging resort destinations.

The awards are given in the three categories of Developer, Development, and Design.

New categories this year include Best Mixed Use Development and Best Universal Design Development, with the latter being open to residential and commercial developments across the country.

Nominations are judged by experts based on comprehensive and equitable criteria.

Winners and up to four Highly Commended awardees will be then revealed at a black-tie gala dinner on June 2 at the InterContinental Asiana Saigon.

The recipient of the Real Estate Personality of the Year special award will be announced before the ceremony.

Supervising the judging process is BDO, the world’s fifth largest auditing and accountancy firm.

Thien Duong, managing director of Transform Architecture, once again heads the 10-member central panel that comprises experts in the real estate sector and related fields.

There are additions to the panel this year: Heng Long Beh, development director, Tamouh LLC (UAE); Edward Haysom, general director, MODE/HAYSOM Architects Vietnam; David McDonald, general director, WT Partnership (Vietnam) LLC; and Dang Van Quang, associate director, PAM Services, JLL Vietnam.

Terry Blackburn, founder and managing director of the PropertyGuru Asia Property Awards, said: “I would like to thank the chairman of the judges, the central panel and everyone who have assisted the site visits, for the long hours that they’ve put in to ensure that the awards process is ethical, fair, transparent and credible. The panel represents the finest real estate professionals in Viet Nam and we’re very appreciative of their contributions.”

Early bird tickets for the gala dinner are available until May 5. For reservations or more information about the PropertyGuru Vietnam Property Awards, email [email protected] or visit the official website, AsiaPropertyAwards.com/vietnam.

Vietcombank, Indovina Bank pledge $64m for HCM City ring road     

Vietcombank and Indovina Bank have signed an agreement with Van Phu Bac Ai JSC to provide VND1.46 trillion (US$64.32 million) to finance construction of a section of HCM City’s Ring Road No 2.

The section, from Pham Van Dong Street to Go Dua intersection on National Highway 1 in Thu Duc District, will cost VND2.77 trillion ($122 million) and be built under a BT (build-transfer) contract.

Ring Road No 2 will serve as a fulcrum around which more urban infrastructure will be built.

The Thu Thiem branch of Vietcombank – or the Joint Stock Commercial Bank for Foreign Trade of Viet Nam, as it is formally known – will provide VND1.16 trillion ($51.1 million) and Indovina Bank, VND300 billion ($13.2 million).

The five-year loan will be used to acquire land.

The road, whose construction began last December, runs from Go Dua intersection through Binh Phuoc intersection, An Suong intersection, An Lac Road, Ha Noi Highway, HCM City-Long Thanh-Dau Giay Expressway, Phu My Bridge, and Nguyen Van Linh Road.

Vietcombank’s Thu Thiem branch opened just over a year ago, and this is its biggest infrastructure project so far. 

Vietnam to benefit from first PPP deal with WEF

Vietnam has become the first partner of the World Economic Forum (WEF) within the public-private partnership (PPP) model, which is expected to provide Vietnam with access to great resources and relationships for the country’s development.

In a recent interview with Vietnam News Agency in Geneva, WEF Managing Director Philipp Rosler said that the deal aims to build a trusting partnership with Vietnam in information exchange, while supporting the country on the threshold of the fourth industrial revolution.

Activities include providing training courses on the fourth industrial revolution as well as challenges and opportunities for Vietnam, he said, adding that as many as 2,000 people could access the courses each year.

Rosler showed optimism on future cooperation prospects between the forum and Vietnam amidst the sound bilateral partnership, especially in agriculture with about 20 WEF partner enterprises supporting Vietnam in shaping strategies for high technology farm produce development.

The new cooperation mechanism that the forum hopes to share with Vietnam is a comprehensive partnership covering a wide range from industry, agriculture, infrastructure, trade, IT, services to climate change, immigration and economic security. The mechanism is borderless, he said, adding that WEF global activities will provide Vietnam with access to WEF resources.

WEF wishes to approach the cooperation model with Vietnam in two aspects: shaping strategies through sending academic scholars to help Vietnam build management strategies and planning to adapt to the fourth industrial revolution and supporting Vietnam in working with world leading groups and enterprises that share or will set up partnerships with WEF, said Rosler.

At the WEF for ASEAN region in May this year in Cambodia, the forum will hold working sessions with Vietnamese officials to discuss the PPP deal. Prime Minister Nguyen Xuan Phuc is scheduled to attend the event.

Every year, the WEF gathers about 3,000 delegates to the Davos Forum, the largest economic forum in Europe.

WEF has a partnership network grouping thousands of enterprises, groups and research institutes in all fields.

If Vietnam successfully builds a partnership with the WEF, the country will enhance its position and role in the world by directly engaging in building global rules.

Many economists said that the PPP deal between Vietnam and the WEF is a great chance for Vietnam to send its officials to WEF to learn from WEF experts for national sustainable growth, while contributing to world efforts in strengthening economic development.

Annual international medical expo to run in May

The 24th Vietnam International Medical and Pharmaceutical Exhibition (Vietnam MEDI-PHARM 2017) will take place in Hanoi from May 10 to 13.

The annual event has been scheduled for May in Hanoi since 1994.

This year, it is expected to feature 500 booths operated by 410 firms from 30 countries and territories worldwide, with participants displaying a wide range of health products, equipment, technologies and services.

The fair will run in conjunction with the 10th Vietnam International Hospital Exhibition, International Rehabilitation & Healthcare Technology Exhibition & Conference, and the 6th Vietnam International Dental Exhibition.

A series of conferences and public awareness-raising campaigns, including those on the Law on Pharmacy, stem cell therapy in cancer treatment, and partnership promotion, are also scheduled as part of the exhibition.

Agricultural minister calls on businesses to support pig farms

Minister of Agriculture and Rural Development Nguyen Xuan Cuong has called on food processors to increase their purchase of pigs and keep them in frozen storage in order to help farmers reduce inventories and stop the resulting downward price spiral.

He spoke at an urgent meeting in Hanoi on April 24 with feed and food processing firms seeking measures to rescue the pig-farming industry.

Cuong said the Government had helped the industry for 20 years, during which businesses made profits and now they should take responsibility for the farmers’ plight. “I believe that all businesses can share the difficulties with the farmers,” said Cuong.

As a first move, Cuong said, firms needed to reduce the price of input materials, such as breeding pigs, feed and veterinary medicine.

The price of live pigs has dropped to a record 20,000-23,000 VND (0.87-1.32 USD) per kilogramme in recent days. The minister said if the price drop continued, most husbandry households, even big farms, would be unable to operate, affecting feed business households too.

According to the ministry, a supply exceeding demand is the main reason for the price drop. In the last 20 years, the industry’s productivity increased by 20 times from 1.8 million tonnes in 1996 to 5.4 million tonnes this year. Meanwhile, people’s daily meals have changed and diversified with various foods including beef, chicken, egg and seafood.

There is also a weakness in the industry’s production organisation and marketing. Some 45 percent of the industry are pig farms, while the remainder are small farming households.

“Countries in the region, such as Singapore, the Philippines and China, import high volumes of pork but Vietnam has not yet entered these markets,” said Le Ba Lich, Chairman of the Vietnam Feed Association.

At the meeting, representatives of feed companies pledged to support the farmers in overcoming their difficulties. They will take some actions, including debt rescheduling and increase in frozen storage, and expand the pork market.

Vu Anh Tuan, Deputy General Director of C.P Group, said his group would immediately reduce input prices of feed, veterinary medicine and breeding animals. They had already rented frozen storage to keep pork.

To share difficulties with farmers, he said the company had already cut the prices of feed and breeding animals. The company also planned to build a big slaughtering house this year.

Representatives of businesses proposed that the ministry temporarily stop importing pork and its products in order to stabilise the domestic market. As for the long term, planning is required for the industry, which should be seen as a conditional business area.

Minister Cuong said the ministry would apply advanced technologies for the industry in order to raise capacity and reduce price.

He also requested localities to check and limit the opening of new feed processing units and restructure production to build an effective and sustainable pig industry.

Masan Group approves 11-percent cash dividend for 2016

Shareholders of Masan Group have approved a 11 percent cash dividend for 2016 and the remaining 7 trillion VND post-tax profit will be retained entirely.

At its shareholders meeting in HCM City on April 24, Masan has set a target of increasing sales and net profits by 15-20 percent to over 50 trillion VND (2.19 billion USD) and 3.2-3.4 trillion VND this year.

The group reported sales of 43.29 trillion VND last year, a year-on-year increase of 41 percent. Its net profit increased to 2.79 trillion VND from 1.48 trillion VND.

In the meat value chain, MSN has integrated and transformed Proconco and ANCO’s animal feed businesses into a single “FMCG-like” platform, resulting in 24.4 trillion VND in sales last year.

With groundbreaking done for its 10,000-sow Nghe An pig farm and a strategic partnership with Vissan, Masan has put in place key building blocks for developing an integrated meat value chain.

This year, the net revenue of Masan Nutri-Science, a subsidiary of Masan Group, is expected to grow by 20-30 percent.

Masan has also developed a full-fledged branded food and beverage franchise that has been delivering a steady stream of free cash flows for the past three years.

Since developing market leading positions in key food categories such as seasonings and convenience foods, Masan has gone on to build a beverage business.

Bottled beverage is now Masan’s fastest growing category, with 69 percent growth in non-alcoholic bottled beverages and 47 percent growth in beer in 2016.

Masan Resources has emerged as a globally significant tungsten producer, delivering profitability and more than 50 percent revenue growth last year despite a depressed commodity price environment.

This year Masan Resources is expected to grow net revenues by 22-27 percent and earnings by 37-164 percent depending on commodity prices.

In 2017, Masan Consumer is hoped to contribute 60 percent of net sales and earnings, with Masan Nutri-Science and Masan Resources accounting for 30 percent and 10 percent.

Vina Kraft’s second paper plant becomes operational

Vina Kraft Co. Ltd on April 24 inaugurated its second paper and packing factory in the My Phuoc Industrial Park 3, Ben Cat town, the southern province of Binh Duong.

Vina Kraft, a joint venture between Siam Kraft Industry Co., Ltd – a subsidiary of Thailand’s Siam Cement Group (SCG) and Rengo Company Limited of Japan, was established in January 2007 and began commercial activities in February 2009, 

Covering on an area of 380,000 sq.m, the factory was built at a total cost of 330 million USD.

Vina Kraft is considered the largest and most modern paper and packing factory in Vietnam, with a combined capacity of 500,000 tonnes per year. 

According to Sangchai Wiriyaumpaiwong, Vina Kraft General Director, with seasoned experience in paper and packing industry of both SCG and Rengo, Vina Kraft is able to produce various kinds of high-quality wrapping, meeting domestic demand and replacing imported paper. 

Vina Kraft’s second factory uses green and environmentally friendly technologies, which help reduce the use of water and energy. 

Addressing the launching ceremony, Chairman of the provincial People’s Committee Tran Thanh Liem hailed Vina Kraft for building the plant, saying that this affirms the company’s determination to do long-term business in the locality. 

Liem said the local authorities always pay attention to supporting and making it easy for enterprises to effectively operate in the province. 

Binh Duong will focus on improving investment climate, accelerate administrative reform and increase investment in infrastructure development to call for more investors.

The province ranks second in the country in foreign direct investment (FDI) attraction, after HCM City. It is home to more than 2,900 foreign-invested projects with a total capital of over 27 billion USD.

Annual international medical expo to run in May

The 24th Vietnam International Medical and Pharmaceutical Exhibition (Vietnam MEDI-PHARM 2017) will take place in Hanoi from May 10 to 13.

The annual event has been scheduled for May in Hanoi since 1994.

This year, it is expected to feature 500 booths operated by 410 firms from 30 countries and territories worldwide, with participants displaying a wide range of health products, equipment, technologies and services.

The fair will run in conjunction with the 10th Vietnam International Hospital Exhibition, International Rehabilitation & Healthcare Technology Exhibition & Conference, and the 6th Vietnam International Dental Exhibition.

A series of conferences and public awareness-raising campaigns, including those on the Law on Pharmacy, stem cell therapy in cancer treatment, and partnership promotion, are also scheduled as part of the exhibition.

Vietnam top trade award goes to foreign sector company

For the first time in the history of the Top Trade Services Awards presented annually by the Ministry of Industry and Trade, top honours went to a foreign sector company, CP Vietnam Livestock Corporation.

The Thailand based and owned CP Vietnam was presented the award for top business operating in Vietnam and its management team was recognized as the top business leaders.

CP Vietnam is in the business of producing feed for livestock, poultry, fish, and mash. The company also engages in processing fish, poultry and meat from its main facilities located in Bien Hoa and other locations throughout Vietnam. 

BIDV plans to raise charter capital this year

The Bank for Investment and Development of Vietnam (BIDV) planned to raise its charter capital by 4,445 billion VND (193.2 million USD) to 38,632 billion VND (1.67 billion USD) this year as said during its annual shareholders’ meeting in Hanoi on April 22. 

The plan will be conducted via the issuance of 2016 dividend-paying stocks worth nearly 2,393 billion VND (104 million USD), shares for investors worth 1,026 billion VND (44.6 million USD) and others for employees, known as Employee Stock Ownership Plan (ESOP) valued at 1,026 billion VND. 

As of the first quarter this year, BIDV posted a total asset of 1,025 trillion VND (44.56 billion USD), up 1.8 percent from early this year, and before-tax profit of 2,075 billion VND, marking a 9.2 percent increase annually. 

As of December 31, 2016, the bank recorded a total asset worth 1,006,404 billion VND (43.75 billion VND), up 18.3 percent year-on-year, accounting for 14 percent of the sector’s total asset value. The deposits and before-tax profit rose 21.1 percent and 3.2 percent, respectively to 940,020 billion VND and 7,709 billion VND. 

The meeting elected a 10-strong board of directors for the 2017-2020 tenure led by Phan Duc Tu as General Director and Tran Anh Tuan as executive member. 

Phu Quoc island looks to become smart city

The People’s Committee of the Mekong Delta province of Kien Giang has approved a project to build a smart Phu Quoc city in the 2016-2020 period.

The 67-billion-VND (2.9 million USD) project was invested by the Vietnam Posts and Telecommunications Group (VNPT) with a view to improving the quality of public services and urban management efficiency.

The necessary condition to kick-start the building of a smart city is refining information technology and telecommunication infrastructure, and providing convenient services in tourism, transport, environment, healthcare, education and finance.

To that end, sub-projects include building a fiber optic cable network to connect the entire island, expanding the 4G network, and allowing the public access to wireless internet services as well as launching a social-tourism information portal, developing e-government and online residential management, monitoring environmental protection, installing a camera system, and managing healthcare, education, tourism, and forest fires.

Vice Chairman of the provincial People’s Committee Mai Van Huynh said the move will help the province realize its target of developing Phu Quoc into a special administrative and economic unit and a high-quality eco-tourism hub in the country and beyond.

To implement the project effectively, the province is taking a number of measures to create a favourbale legal environment, promote the application of science and technology, and develop human resources in addition to raising public awareness and boosting domestic and foreign cooperation.

The project will contribute to modernising the administrative system, improving management capacity to better serve businesses and people, and making Phu Quoc one of the strongest e-government localities in the Mekong Delta.

The establishment of smart information systems will provide businesses and people with high-quality online services and reduce time and procedures in administrative transactions with the administration.

Phu Quoc is Vietnam’s largest island covering an area of nearly 600 square kilometers and a population of over 100,000.

Clothing, textiles need new EU marketing strategy

The EU and Vietnam have reached an agreement on a free trade deal that will remove nearly all tariffs on commerce between the two economies and contribute to further market access, albeit with long transition periods for certain products.

Although most economic experts believe that the deal concluded and set to come into force in 2018 is a good agreement, they also note that there are many issues that find the pact out of tune with today’s business reality. 

Most notably the terms call for long transition phase outs of tariffs for sensitive products of up to seven years for certain Vietnamese goods.

Furthermore, the strict rules-of-origin scheme for textiles will most likely not allow any of the parties to immediately benefit unless the more sophisticated businesses in the segments give effect to a fresh marketing strategy.

This is because most raw and intermediary materials used in production in Vietnam are imported from countries such as China that do not have trade agreements with the EU and therefore disqualify exports for more favourable treatment.

To receive the positive treatment of the trade pact such raw and intermediary products would for all practical purposes need to be imported from only the EU economy, that of the Republic of Korea or produced in Vietnam.

Absent an innovative marketing strategy the experts with near unanimity agree, and say it will take many years until Vietnam exporters develop an adequate in-country supply chain to capitalize on the benefits of the deal.

It should also be clearly understood that in most cases, Vietnam clothing and textile domestic sector companies do not export to the EU but instead sell their product cash on delivery in Vietnam to customers from the EU.

This is a point that is not well understood by much of the fake news in Vietnam who fail to understand that more than 70% of the domestic sector businesses are not considered exporters and do not pay border taxes.

The entire discussion of the free trade deal with the EU does not apply to these businesses and therefore to the overwhelming majority of those in the clothing and textiles segments.

Unless these clothiers change their marketing strategy and method of doing business the entire discussion of the free trade pact is academic and has no practical relevance whatsoever to their situation.

They are not exporters and they do not pay border taxes.

The experts underscore the point that they do not see these businesses changing their strategy any time in the foreseeable future, emphasizing again that the actual free trade agreement will undoubtedly have little to no immediate impact on their sales to EU customers.

However, they say that an outward processing strategy between the larger more sophisticated Vietnamese clothiers and EU businesses should be closely explored because it does offer some immediate benefits.

Outward processing pursuant to the agreement encourages EU companies to process in Vietnam by providing relief from import duties on the compensating value of goods shipped back to the EU after processing.

Under this regime, goods temporarily exported from the EU (or the ROK) qualify. Although, if products of EU origin are insufficient, derogation can be granted from these rules, but for no more than 14% of the total value of the goods for which prior authorization is requested.

Allowing for outward processing might sound complicated at first, but the rules are not nearly as complex as the rules of origin themselves, say the experts and they should not be ignored or underestimated by Vietnamese businesses.

This is because, assuming general compliance with the outward processing rules, the border taxes are almost always less than they otherwise would have been using other strategies in situations such as that of Vietnam where there is a deficient supply chain.

The German government took advantage of outward processing and built its entire modern production facilities upon it.  It is also a scheme that has been widely used in India, Malaysia, Singapore, the Philippines and the Republic of Korea with tremendous success. 

Expos offer new technology for industries     

The 9th Viet Nam Manufacturing Expo 2017 (VME) opened yesterday at the Ha Noi International Centre for Exhibition, showcasing the latest technologies for metrology and assembly automation from 200 brands from 20 countries.

“The VME provides s platform for manufacturers, engineers, and industrialists to meet up for networking and to learn more about new technologies, know-how, ideas and inspiration. This is important especially when we are entering the age of industry 4.0,” Thai Ambassador to Viet Nam Manopchai Vongphakdi said.

“Industry 4.0 may or may not be recognised as revolutionary – rather it may be seen as evolutionary. Industry 4.0 will be a game changer for the Vietnamese workforce. The human workforce will need multiple skills to take on complex manufacturing roles,” Isara Burintramart, Managing Director of Reed Tradex - the VME’s oganiser - said at the opening ceremony.

As skilled labour is considered as key for the new era of Industry 4.0, a wide range of conferences and training programmes will be held during the two-day event, aiming to enhance knowledge and expand networks for enterprises, he said.

The VME is co-located with two other exhibitions – the Industrial Components and Subcontracting Viet Nam which matches parts makers and potential buyers and Viet Nam Sheet Metal which provides technologies, knowledge and ideas in sheet metalworking. 

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR