VN garment sector to boost export growth

The domestic textile and garment industry is expected to sustain growth in exports in the coming months, according to the Viet Nam Textile and Apparel Association (VITAS).

Truong Van Cam, VITAS vice chairman and general secretary, said many textile and garment companies had signed contracts to produce export products in the third quarter of this year.

Many Vietnamese garment firms had also sustained high growth this year in traditional markets such as the United States, the Republic of Korea, the European Union, and member-states of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Cam said a series of recently-signed free trade agreements (FTAs) was expected to boost the sector.

Since 2001, Viet Nam had signed bilateral trade agreements with the US, Japan, China, and the Republic of Korea, as well as Australia, New Zealand, and India, and joined the World Trade Organisation. However, global demand for textiles and apparel only grew by 1 to 2 per cent each year, resulting in fierce competition, he said.

Most FTAs have product origin rules for fibre and fabrics even as Viet Nam imports up to 80 per cent of materials, according to Cam.

Bangladesh, on the other hand, has cut its corporate tax rate to 20 per cent from 35 per cent, import tax for linen and spandex fiber from 10 per cent to 5 per cent, and chemical products and dye from 25 per cent to 15 per cent.

Meanwhile, Pakistan has waived material, energy, equipment, and machine taxes for the production of export apparel, and India has reduced fibre import tax to 2.5 per cent from 5 per cent.

The EU has offered zero per cent tax to apparel from Cambodia and Myanmar, while the US has waived taxes for several Cambodian goods. However, Vietnamese apparel are still subject to tariff rates of 17.7 per cent and 9.6 per cent when exporting to the US and the EU, respectively.

VITAS has called on the State to devise planning and grant licences to major garment industrial areas to attract investments in weaving and dyeing. It also urged support for waste water treatment in industrial zones and measures to discourage foreign firms from investing in fiber and sewing. 

VPBank to pay 61.82% stock dividend     

Viet Nam Prosperity Joint Stock Commercial Bank (VPBank) will pay shareholders stock dividend at the rate of 61.82 per cent for 2017’s business result, the company announced.

The list of shareholders participating in the payout will be finalised on June 19.

A shareholder who owns 100 shares will receive nearly 62 new shares. VPBank will buy treasury shares from shareholders owning preferred shares, as approved at the general meeting of shareholders.

After that, the shares will be used as a source of share for existing shareholders. The bank is currently filing reports on the acquisition of treasury shares, which is expected to start in July.

Shareholders will receive share dividends at the rate of 30.217 per cent and bonus shares from supplementary capital and share capital surplus at the rate of 31.6 per cent.

VPBank is expected to issue some 925.67 million shares to pay dividend this time.

The bank’s charter capital is expected to increase from VND15.7 trillion (US$690 million) to VND24.9 trillion.

VPBank made the decision shortly after State Bank of Viet Nam approved its plan to raise capital from VND15.7 trillion to VND25.2 trillion.

US to crack down on illegal shrimp imports     

The US National Oceanic Atmospheric Administration (NOAA) has confirmed that foreign shrimp and abalone will be added to the Seafood Import Monitoring Program (SIMP) beginning on January 1, 2019.

The SIMP requires importers to report traceability information on imported seafood from point of capture to point of first sale in the US in order to thwart illegal, unreported and unregulated (IUU) fishing activity.

Accordingly, American shrimp importers have until December 31, 2018 to comply with the regulations under the SIMP programme.

Specifically, shrimp importers must be US citizens. They are required to obtain an International Fisheries Trade Permit, submit harvest and landing information on those products to the USA Customs and Border Protection International Trade Data System prior to entering the USA and maintain supply chain records from the point of harvest to the point of entry into the USA for a period of two years.

The SIMP also allows NOAA and related agencies to check mandatory supply chain information provided by importers.

This will strengthen US government efforts to combat IUU fishing and a range of fraudulent activities in the shrimp import chain attributed to dishonest importers who violate US consumer safety laws and trade.

Shrimp imports may involve a range of illegal activities, including illegal IUU fishing; use of dangerous and illegal antibiotics in farms abroad; employing slave labor on international fishing vessels, shrimp farms and processing plants; evasion of US anti-dumping duties and noncompliance with Food and Drug Administration (FDA) food safety laws.

Viet Nam’s shrimp exports to the US in the coming time are expected to face many challenges.

Last year, the US market dropped to the fourth among the top leading buyers of Vietnamese shrimp, accounting for only 17 per cent of Viet Nam’s total shrimp exports.

According to the Viet Nam Association of Seafood Exporters and Producers (VASEP), in 2018, Viet Nam’s shrimp exports to the US are showing more positive signs. In the first two months of 2018, shrimp exports to the US reached US$75 million, up 6.6 per cent over the same period in 2017. The US had risen to the second rank behind the EU among top importers of Vietnamese shrimp. 

HDBank promotion offers deposit interest rate of 7.6%     

HDBank has relaunched its Bach nien phat tai (100 years of prosperity) programme offering extra interest to several categories of depositors.

The bank will offer extra interest of up to 0.7 percentage points to customers depositing for six months or 13 months and having a minimum balance of VND500,000 (US$22) in their current account.

Besides, the interest rate will also be commensurate with depositors’ ages and deposit amounts.

The maximum interest a depositor can hope to get under the programme is 7.6 per cent.

This is the third installment of the programme, which will run until the end of June.

After two earlier instalments of the promotion this year, HDB had more than 8,600 existing customers renewing their saving accounts and attracted around 20,900 first-time depositors. 

FLC Group to hold investment roadshow in US     

FLC Group, one of leading multi-sector companies in Viet Nam, will organise its first-ever roadshow in Washington, DC on June 25.

FLC Group said its aim was to share investment opportunities in potential fields in Viet Nam and attract American investors to dabble in projects in the country.

The roadshow will feature seminars by well-known speakers and experts in real estate, aviation, travel, golf and hi-tech farming, with the participation of about 400 guests.

The seminar, with the theme “Viet Nam: Investment potential and opportunities,” will be held in the context of the significant changes and reforms made by Viet Nam over the past few years, which has transformed it into one of the most attractive investment destinations in Asia, attracting more European and American enterprises to explore investment potentials in the emerging economy.

Heads of diplomatic agencies, financial institutions, fund management companies and investment funds, as well as enterprise leaders, individual investors, and global press agencies, will present at the half-day event.

Participants will be offered insights about Viet Nam’s most FDI-attractive fields, such as real estate, aviation, travel, golf, and hi-tech farming. Individual and institutional investors from the US will also have chance to get detailed information about Viet Nam’s legal frameworks, investment environment, and incentives, as well as investment potentials in outstanding projects, products and services being offered by FLC Group.

There will also be one-on-one consultations with participating US investors.

The US event follows the success of a series of roadshows and seminars held by the FLC Group in Singapore, Japan and South Korea in 2017. It will also be an important step for the Vietnamese multi-sector company to organise other marketing and roadshow programmes in the international market in 2018.

The FLC Group is a privately-owned multi-sector company focusing on resort real estate development. The company is currently developing more than 50 projects covering nearly 9,000ha located in around 40km of the most beautiful coastal areas in Viet Nam.

In October 2017, the fund management firm Unicap valued total assets owned and managed by FLC Group, composed of the value of all its projects, investments, and other assets, at US$9 billion. The company listed as FLC on the HCM Stock Exchange (HOSE), with total outstanding shares of $683.7 million.

The “Viet Nam: Investment potential & opportunities” seminar will be held at the Trump International Hotel - Washington, DC, 1100 Pennsylvania Ave NW, Washington, DC 20004, the US on June 25, 2018.

To register for the seminar, please contact Dung Bui at (+84) 974 080 515. 

Prices fall as fruit floods HCM City markets     

With many fruits entering harvest season, large volumes of them have been making their way to HCM City in recent weeks, dragging their prices down.

Lychee, durian and rambutan have entered their peak harvest season.

Durians costs VND50,000-VND60,000 per kilo, Hoa Loc mango type 1 costs VND80,000-VND90,000, and lychee costs VND60,000-VND80,000 if air transported and VND20,000 - VND35,000 if transported by road.

Tran Ngoc Lan, a fruit trader at Thi Nghe Market, said fruit prices have been falling relentlessly, and are now much cheaper than a few weeks ago.

Tran Duc Thinh, head of the fruit section at the Binh Dien Wholesale Market, told Sai Gon Giai Phong newspaper large volumes of fruits have come to the market in recent days and so prices have fallen.

Co.opmart and Big C supermarkets are selling dragon fruit at VND23,500 per kilogramme, lychee at VND48,000, and Nam Roi grapefruit at VND39,900.

Co.opmart is offering discounts on fruits as part of its “Southern fruits week”.

Around 1,000 tonnes of speciality fruits have been brought to the Southern Fruit Festival being held at Suoi Tien Theme Park in District 9, and sold at 10-15 per cent below market prices.

Ngyen Thi Minh Anh, owner of a shop selling Central Highlands fruits in Tan Binh District, said usually for Vietnamese farm produce a bumper crop means a price fall and vice versa.

This happens every year, she said.

Experts asked why localities, when farmers are unable to sell their products, call for “rescue” efforts and why this “chorus” is repeated over and over again.

The short answer to this is that farmers grow crops without any planning.

At a recent meeting HCM City held in collaboration with other localities to promote consumption of farm produce, many HCM City fruit traders said farmers do not discuss directly with them how to ensure sales of their products.

Each wholesale market in HCM City can consume up to 500 tonnes of fruit a day on peak days, meaning the city is a very good market, but the most important thing is ensuring steady supply and quality, they said.

According to fruit shops, young consumers and families with high incomes are increasingly concerned about their health, and choose to buy high-quality products regardless of their prices.

A salesperson at a shop selling imported fruits on Nguyen Thi Minh Khai Street, District 3, said imported safe cherries, melons, and avocados costing hundreds of thousands to millions of dong per kilogramme, or two or three times the price of similar local products, have lots of buyers.

With consumers increasingly focused on the safety of foods, farmers need to enhance the use of good farming practices, experts said.

Taisho Group increases holding in Hau Giang Pharmaceutical

Taisho Group expressed interest in buying an additional 650,000 shares to increase its holding in Hau Giang Pharmaceutical JSC (DHG) to 24.94 per cent.

The sale is expected to be conducted on June 6-7. The offered price was the closing price of the transaction session on June 1 (VND104,500–$4.58), thus Taisho will have to pay VND67 billion ($2.94 million) for the purchase, according to enternews.vn.

It is just a small share volume, however, it brings Taisho Group closer to its target of enhancing its pharmaceutical business in Asia, including Vietnam.

In July 2016, Taisho acquired more than 21.3 million shares or a 24.4 per cent stake in DHG. The value of the deal was not disclosed, but based on June 30, 2017 data, with each DHG share closing at VND103,000 ($4.52), the deal should be worth nearly VND2.2 trillion ($98 million).

At the time, the group believed the transaction and alliance with DHG, as the leading drug maker in Vietnam, would enable it to share knowledge, technology, and experience in the pharmaceutical business, resulting in an increase in sales and further growth for both companies in Asia.

The offered price was the closing price of the transaction session on June 1 (VND104,500–$4.58), thus Taisho will have to pay VND67 billion ($2.94 million) for the purchase.

In addition, synergy was expected between DHG, with its strong presence in Vietnam, and Taisho. The group committed to enhancing its pharmaceutical business in Asia and is striving to grow various business segments in the continuously expanding Asian market.

Taisho Pharmaceuticals, headquartered in Tokyo, is a leading Japanese pharmaceutical company specialising in the manufacturing of pharmaceutical products and non-prescription dietary supplements under well-known brands.

In Southeast Asia, Lipovitan-D (a vitamin-rich energy drink) is the company’s most famous brand. In 2015, the parent company recorded a revenue of $2.7 billion and after-tax profit of $210 million. In the local market Taisho founded an $11.8-million investment company that manufactures and distributes Lipovitan drinks.

Adding to the excitement of investments in the Vietnamese pharmaceutical sector, Celtrion Group from South Korea also found opportunities to join the game.

At a working session with the leaders of the Binh Duong People’s Committee on May 8, Chang Sin Jae, general director of Celtrion Group, stated that the group intends to develop a pharmaceutical manufacturing factory with triple the scale of its existing factories in South Korea, Europe, and North America, according to information published on Binh Duong News.

The factory in Binh Duong is estimated to have a total investment capital of $800 million and capacity of 360,000 litres of water-based medicine.

The firm expects to receive support from the province and relevant authorities to receive the licence in short order.

Foreign companies tap into Vietnam's elderly market

Foreign companies are increasingly rolling out new products targeting the growing elderly market in Vietnam.

Vietnam is one of the countries with the fastest aging population, the number of individuals aged 50 and above is projected to reachmore than 30 million by 2030.With more adults living longer than before, they are looking to lead active and healthy lifestyles as they get older.

Muscle loss has been shown to be a key factor that can interfere with adults' quality of life due to lack of strength. Good nutrition is critical in maintaining muscle health and strength with age.

Dairy maker Abbott has recently launched its new Ensure Gold formula with the nutritional ingredient HMB to support muscle health. HMB is naturally found in small amounts in some food and in the body, and levels may decline with age. HMB has been shown to support muscle health.

''As part of our continued long-term commitment to helping build healthy aging communities in the country, Abbott is excited to bring the new Ensure Gold with HMB as a gift of everyday strength to adults in Vietnam, so they can carry on doing the things they love to do each day into their golden years," said Douglas Kuo, general manager of Abbott Vietnam.

Meanwhile, diaper manufacturer Unicharm also promotes its pants-type disposable adult diaper known as Caryn in Vietnam, which currently holds about 80 per cent of the market. The product is aimed to serve the increasingly elderly population and accident patients.

Takenori Nakajim, brand manager of Diana Unicharm, said that Vietnam is the most important market for the company in Southeast Asia. Unicharm has achieved double-digit growth in all product segments in Vietnam.

Unicharm entered Vietnam in 2011 by acquiring local company Diana. In 2015, Unicharm expanded its factory in the northern province of Bac Ninh to step up operations in the country.

In fact, Vietnam’s elderly market has been on the radar of foreign investors, especially those from Japan. Taku Sato, director of the Healthcare Industries Division, Service Industry Department at the Japan External Trade Organization (JETRO), told VIR that Japanese investors are keen on ASEAN healthcare markets, including Vietnam. One of the hottest sectors drawing the attention of Japanese companies is geriatric care.

"Vietnam’s population is aging faster than Japan by 10 years, and there is a robust, growing demand for geriatric care. Therefore, investors are looking to test the market and seize opportunities to prepare for the aging population," he noted.

Emission fraud plagues famous German car makers

With a billion-dollar fine and the huge number of recalled vehicles, will the emission fraud scandal drag down Mercedes-Benz like it did Volkswagen back in 2015?

German Der Spiegel magazine reported on last Friday that Daimler, the owner of Mercedes-Benz, is facing a fine of EUR3.75 billion ($4.37 billion) for using illegal software to manipulate diesel emissions.

Accordingly, the magazine’s report comes after Andreas Scheuer, German Federal Minister of Transport and Digital Infrastructure, questioned Daimler at a closed-door meeting over how many Mercedes-Benz vans and cars need to be fixed after an inspection found illegal software in one of its models.

Scheuer expressed concerns that 750,000 Mercedes vehicles could be affected and the ministry could impose a fine of up to EUR5,000 ($5,834) per vehicle.

The German car maker last month was also ordered by the German motor vehicle authority (Kraftfahrt-Bundesamt–KBA) to recall its 1.6-litre diesel Vito vans for violating emissions regulations.

According to Consumer Report, C-Class vehicles "enjoyed" the highest rates of recalls in the Mercedes-Benz portfolio in 2013-2017. Specifically, the firm recalled 5.77 of every 100,000 vehicles sold.

Phapluatplus.vn stated that Mercedes-Benz Vietnam (MBV) announced eight rounds of recalls this year. The latest recall was in early May, when MBV announced recalling 7,000 vehicles between May 14 to December 31, 2022 to handle electric system flaws.

In 2015, Volkswagen was found to have purposely programmed its turbocharged direct injection (TDI) diesel engines to activate emission controls only during laboratory emissions testing, which lowered the vehicles’ NOx (a generic term for the nitrogen oxides that are most relevant for air pollution, namely nitric oxide (NO) and nitrogen dioxide (NO2)) output to meet US standards during regulatory testing, while during normal driving the cars emitted up to 40 times more NOx.

After the violation saw light, the German automaker had to pay a fine of $18 billion in the US, and spent $8 billion to recall vehicles equipped with violating software.

In the aftermath of the scandal, Volkswagen’s CEO Michael Hornwas forced to resign and the corporation saw significantly reduced revenue and conceded its leading position in the world to Japanese car manufacturer Toyota.

However, emissions violations were uncovered not only at Mercedes-Benz and Volkswagen, but BMW as well. In an announcement on July 22 last year, the European Commission (EC) confirmed to the German Der Spiegel magazine that the institution has been investigating frequent meetings among the car brands’ representatives to agree on technical specifications on grips, engines, and emission systems.

The magazine also stated that there has been an unspoken agreement between the sides since 1990.

At the time, the spokesmen of Volkswagen, Mercedes-Benz, and BMW declined to comment on this.

OneEnergy proposed as sole investor of Vung Ang 2 thermal power plant

Once Hong Kong investor OneEnergy Asia Limited receives the Vietnamese government approval, it will become the only investor in the $2.2- billion Vung Ang 2 thermal power plant.

The Ministry of Industry and Trade (MoIT) has collected opinions from the Ministry of Planning and Investment, the Ministry of Finance, and the Ministry of Justice about the proposal to change the investor of Vung Ang 2 thermal power plant.

After MoIT received feedback from these ministries, it will forward these to the prime minister for consideration.

This comes after the proposal of Vung Ang 2 Thermal Power JSC (VAPCO), a joint venture between local firm Refrigeration Electrical Engineering Corporation (REE) and OneEnergy Asia Limited, which is a 50/50 partnership of Hong Kong’s CLP Holdings and Japan’s Mitsubishi Group.

Notably, after REE completed the transfer of its entire holding in VAPCO to OneEnergy, VAPCO applied for authorisation for OneEnergy to become the only investor of the Vung Ang project.

Previously, in March 2009, VAPCO was established as a joint venture of LILAMA Corporation (Lilama, 25 per cent), REE (23 per cent), OneEnergy 30 per cent, and other shareholders.

In September 2011, Lilama transferred its stake in the joint venture to REE.

In August 2012, VAPCO only had two major shareholders left, namely REE (51.55 per cent) and OneEnergy (48.45 per cent). In April, 2018, REE sold its entire holdings in VAPCO to the Hong Kong investor.

The 1,200MW Vung Ang 2 project is part of the Vung Ang thermoelectricity power centre in Ha Tinh province, where PetroVietnam is building the 1,200MW Vung Ang 1 power plant.

The plant's owners expected to begin construction in March 2015 under the BOT format and take the first unit online in 2021 and the second unit in 2022. However, the construction of the project was immobile despite the inking of the BOT project agreement in January 2017 between the General Directorate of Energy (GDE) of MoIT and VAPCO.

In September 2017, the representative of Mitsubishi, an important shareholder of the project (Mitsubishi holds 50 per cent stake in OneEnergy), met with Deputy Prime Minister Trinh Dinh Dung to discuss the project. However, the meeting did not produce any lead on when construction might begin.

According to dantri.com.vn, Duong Tat Thang, Deputy Chairman of the Ha Tinh People’s Committee, stated that if the PM approves VAPCO’s proposal, the BOT contract can be signed between the local authorities and the new investor in the third quarter this year. Besides, the construction may be kicked off in the fourth quarter of this year.