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Vietnamese crazy about cars, manufacturers rush to sell
Foreign investors can see great auto sales opportunities in the Vietnamese market. Billions of dollars have been spent to develop car distribution networks instead of manufacturing.
Car trading in 2016 saw the number of projects in the sector increasing sharply. About 505 projects in the field were licensed, ranking second in terms of foreign direct investment (FDI), just after real estate, according to the Ministry of Planning and Investment (MPI).
The representative of a foreign-invested automobile manufacturer said previously, FDI capital flowed into production and assembling, but now, it pours into retail and post-sale services.
He said foreign investors all can see great potential in Vietnam, where the demand has been increasing rapidly. There is a big wave of foreign investors coming to Vietnam to work as distribution agents for manufacturers.
Sources said some auto manufacturers have finalized the list of distributors for the years from now to 2023, i.e that from 2017, they will only consider appointing distributors for the years from 2024.
From January 1, 2018, the tariff on the imports form ASEAN will be cut down to zero percent. Under free trade agreements, the tariffs on CBU (complete built unit) imports will also be decreasing step by step. By 2026, nearly all the tariffs will be lowered to zero percent before Vietnam fully opens its market by 2029.
About 30 leading brands are present in Vietnam. However, most of them still don’t have large distribution networks. The biggest brand has 40 sales agents throughout the country. The Central Highlands and the western part of the southern region – potential market areas – still have not been exploited.
Automobile manufacturers understand that expanding distribution networks is the best solution to improve revenue. Therefore, they applaud the FIEs joining the distribution market.
Mercedes Benz, Audi, BMW, Toyota, Honda, Mazda, Ford, Hyundai, Kia and Mitsubishi have opened a series of authorized distribution agents recently.
It is expected that by 2029, Vietnam market scale would be about 1 million brand-new cars a year with revenue of $12 billion.
Vietnam is among the fastest growing markets in the region. Over 300,000 cars were sold in 2016, an increase of 24 percent over 2015. Experts have predicted the growth rate would be 20 percent in 2017 thanks to the tax cut and lower car prices.
An analyst said there were clear opportunities to make money from selling cars as import tariff cuts would make cars cheaper and more affordable to Vietnamese.
Tran Thuy, VNN
Rescuing Vietnam’s rice sector by improving quality, branding
In the last 30 years, Vietnam has been trying to produce as much rice as possible but has not focused on improving quality.
Vinh Hoan Seafood Company has decided to quit rice production and export though it spent big money on building a factory and choosing high-quality rice sources for export.
Analysts said that Vinh Hoan made a reasonable decision. Many other rice export companies took a loss in the last year, had to be dissolved or kept operations at a moderate level. Many exporters reported a sharp decrease of 40-45 percent in export volume in 2016 compared with the year before.
Vietnam’s rice experienced an unsuccessful year in 2016 with the decline in both export quantity and turnover. China, Vietnam’s major export market, had the consumption decreasing by 35 percent. The demand was also lower from other loyal markets, including the Philippines (65 percent), Malaysia (48 percent) and the US (33 percent).
The total export volume in 2016 was 1.6 million tons lower than predicted by the Vietnam Food Association (VFA) in early 2016.
The latest report of MARD showed that Vietnam could only export 4.9 million tons in 2016, worth $2.2 billion, down by 26 percent in volume and 21 percent in value compared with 2015.
The director of a rice export company in the south said his company could not export one ton of rice in 2016. Though Laos and Cambodia exported less rice than Vietnam, their products could enter the choosy market of Japan. Meanwhile, Vietnam’s rice still cannot enter the market.
Nguyen Trung Kien from IPSARD (Institute for Policy and Strategy of Agriculture and Rural Development) commented that Vietnam’s rice sector has high production cost but the profit is lower than that of Thailand, India and Cambodia.
Meanwhile, the post-harvesting loss rate and poor infrastructure conditions all make the transport costs high, thus weakening competitiveness.
VND7 trillion to improve Vietnam’s rice
Seventy-six percent of Vietnam’s rice is exported to Asian markets at low prices, which explains why Vietnam can only obtain modest profits despite high export volume, according to Kien. Meanwhile, more orders have been placed with neighboring countries.
Pakistan, Vietnam’s loyal market, on January 4 suggested an inter-governmental rice purchase mechanism with Myanmar. Vietnam was warned that even Cambodia could also be a strong rival, though it has been exporting rice only in the last few years.
MARD has approved a VND7 trillion plan on restructuring the rice sector which says that 50 percent of rice exports by 2030 will bear a Vietnamese brand, 30 percent of which will be specialty and fragrant rice.
Of the total amount of VND7 trillion, VND5 trillion will be spent on upgrading rice fields, transport conditions, irrigation systems and the electricity systems in rice growing areas in the Mekong Delta, Red River Delta and coastal areas in the south central region.
Chi Mai, VNN
Philippine miners say closures to hit 1.2 million people, vow to fight back
VN predicts strong business confidence
HÀ NỘI - Business confidence is expected to improve in 2017, following the Government’s hastened reform efforts aiming to create momentum for firms and boost start-up entrepreneurship.
After a year of record firm foundations, which is considered a silver lining although the country failed to meet its growth target, the Government signaled ongoing determination to improve the business climate and national competitiveness this year.
“I believe that business confidence will strengthen and help boost economic growth,” said Trần Thị Hồng Minh, Director of the Business Registration Department under the Ministry of Planning and Investment.
Convenience in setting up firms - such as free online business registration from the beginning of this year - will promote private investments into the economy, Minh said.
According to the General Statistics Office, 8,990 new firms were founded in January with a total registered capital of VNĐ90.3 trillion (US$4.01 billion), representing increases by 8.1 per cent and 52.3 per cent, respectively, over the same month of last year. Registered capital averaged VNĐ10 billion, a whopping rise of 40.9 per cent.
Existing firms registered to increase capital by a total of VNĐ114.6 trillion in January, statistics showed. In addition, over 5,560 firms resumed operation, up by 14.2 per cent.
The reform effort is being geared up across many sectors. Minister of Finance Đinh Tiến Dũng said that finance-related policies will continue to promote private investment and business foundation, especially start-ups.
Dũng added that the ministry will focus on issuing policies which will encourage the application of technologies to create high-added value products.
The number of new firms hit a record of more than 110,000 in 2016, two years since the amended laws on Enterprise and Investment came into force.
The ministry’s statistics showed that it now took an average of only 2.9 days to handle procedures for setting up a firm. All business registration status were now updated on a national information system.
However, new firms are mainly of small and medium sizes with the average registered capital of around VNĐ8 billion.
“It is critical to improve the climate to create condition for businesses to grow,” Minh said.
Trần Đình Thiên, Director of the Việt Nam Institute of Economics said that the record number of 110,000 new firms in 2016 was just a number. “It is more important how to develop strong private companies in the next five years, which will become the backbone of the economy,” he said. - VNS
Manufacturing sector struggles to overcome skills gap
The labour challenges facing Vietnam in 2017 are considerable, requiring a massive effort to retrain and upskill workers by the millions, says the Ministry of Labour, Invalids and Social Affairs (Molisa).
According to Molisa’s Employment Department, the Make in Vietnam initiative is meant to help create a more solid foundation for the country’s economy by investing heavily in the high-end manufacturing sector, but it is running up against the limited skills of the workforce.
Realty market outlook gloomy
Problems in planning and large gaps between land prices and incomes will pose challenges for the property market over the next few years, experts said.
According to President of the Viet Nam Real Estate Association Nguyen Tran Nam, housing prices are still far beyond the incomes of a majority of residents.
The market had been focusing too much on the high-end segment with prices from VND40 million (US$1,750) per square metre, some even at VND100 million per square metre, Nam said.
Nam said that it was not easy to find homes priced VND20 million per square metre in Ha Noi and HCM City. However, demand for this segment accounted for 80 per cent of market demand.
According to Numbeo, a crowd-sourced global database, Viet Nam’s property prices were the fourth highest among 99 countries on property price to income ratio coming after Venezuela, Syria and Hong Kong.
Experts at a conference late last year warned about the widening gap between housing prices and incomes. Deputy Director of Dat Lanh Land Nguyen Van Duc said that if no improvements were made, the number of people who could not afford a home could increase rapidly. “This might be a crisis,” he said.
A report by the World Bank titled “Vietnam Affordable Housing – A Way Forward” published in December 2015 said that Viet Nam still had a substantial deficit of quality housing with almost 20 per cent or approximately 4.8 million households still in poor conditions.
The report said amid rapid urbanisation with an estimated 374,000 additional housing units needed in cities each year to cope with demand, adequate supply of affordable housing would be integral to achieving national development targets and maintaining a growth rate.
According to Nam, the Government should devise long-term policies to reorient housing development and lending towards the affordable and social housing segments.
Nam said that another headache was planning and attention should be paid to population density in urban areas to ease pressure in the infrastructure system.
“High-rise buildings are essential to urban areas. The important thing is planning,” Nam said.
If there were three lots of land, one 45-storey building in one slot and the two others for infrastructure parks would be a better option than developing 15-storey buildings in all three land slots, according to Nam.
Vietnam urged to focus on FDI quality, not quantity
Vietnam has been successfully calling for foreign direct investment (FDI) in the last 10 years, but in order to improve the quality of FDI projects, it needs new policies and technologies.
Dien Dan Doanh Nghiep cited an MPI report as saying that Vietnam has received many FDI projects in the last year, including from big Japanese firms such as Sanyo, Matsushita, Sony, Fujitsu, Toshiba, Panasonic and Nidec.
They have set up factories in Vietnam which use advanced technologies, and are also considering pouring more capital to expand.
Investors from US and Europe have also developed hi-tech projects. Intel, IBM, Cap Gemini and Accenture are seeking more opportunities in Vietnam.
More FDI capital has been flowing to hi-tech zones as well. Hoa Lac Hi-tech Zone in Hanoi has licensed 60 projects capitalized at VND31 trillion in total. Of the total, 29 projects have been implemented and 17 have been put into operation.
The hi-tech zone in HCM City, after seven years of operation, has attracted large projects including the $1 billion one developed by Intel, and other projects by Nidec, Datalogic, Scanning and Sonion.
According to the General Statistics Office (GSO), $20.9 billion worth of FDI was registered in 2016, a decrease of 8.2 percent compared with 2015. The capital mostly flowed to processing and manufacturing industries (63.8 percent of total registered capital); retail & wholesale, car & motor repairing (7.8 percent); real estate (6.9 percent) and others (21.5 percent).
However, the disbursement rate was very high, $15.8 billion, an increase of 9 percent compared with 2015, the highest rate so far.
Infonet quoted some experts as predicting that Vietnam would face big challenges in attracting FDI in 2017 as TPP has been rejected by the Trump administration. In fact, FDI capital to Vietnam began slowing down in the second half of 2016 as investors still waited for news about TPP.
RCEP (The Regional Comprehensive Economic Partnership) has been mentioned as a potential FTA to replace TPP. It is still under negotiation and some sources predict that the negotiation may end in 2017.
BVSC predicted that FDI would slow down and disbursement may decrease slightly in 2017.
Vu Dinh Anh, a renowned economist, said that it was difficult to repeat the record of attracting $68 billion Vietnam once made in 2008. However, he stressed that the most important factor in attracting FDI is implemented capital, not registered capital.
“TPP has gone. Forget about TPP and change the FDI attraction strategy. Don’t try to attract as much FDI capital as possible, just focus on quality and efficiency,” Anh said.
Kim Chi, VNN
Stock market expected to be strong in 2017
Thanks to the monetary policy maintained by the State Bank (SBV) in 2016, cash flow to the stock market was strong, which helped support the VN Index. Will the same trend occur in 2017?
Experts said the financial-monetary market operates in accordance with the ‘communicating vessels’ principle. The liquidity surplus will encourage cash flow to squeeze into different investment channels, including the stock market.
Reports have found close relations between the difference in money supply increase and credit, and the growth of the VN Index.
In July 2013-January 2014, November 2014-February 2015 and November 2015-September 2016, when the difference in money supply increase and credit widened, the VN Index also increased, and vice versa.
Amid the worry about weak capital flow from overseas as the US FED may continue raising prime interest rate, domestic capital will be considered the major ‘fuel’ for the stock market in 2017.
The government’s targets for money supply and credit growth in 2017 seem to be the same as 2016. However, it is more cautious setting the credit growth rate target of 18 percent for 2017, lower than the 18-20 percent growth rate target for 2016.
Rong Viet Securities (VDSC) believes that the loose monetary policy will still be maintained in 2017.
It pointed out that the risks for the monetary policy management in 2017 include the inflation rate risk and the US FED’s plan to raise the prime interest rate.
Regarding the inflation risk, the money supply increased very sharply in 2011-2016 with the ratio of M2 on GDP at the record high of 157.6 percent.
Credit has also been increasing rapidly with the ratio of credit on GDP at 123 percent. As such, Vietnam’s M2/GDP ratio is the second highest to China. However, regarding the credit scale, Vietnam ranks fourth, after China, Thailand and Malaysia.
If compared with previous years, the average M2 and credit growth rates in 2006-2011 were 1.5-2 times higher than that in 2011-2016.
VDSC warned that the money pumped into the banking system can be compared to a ‘time bomb’, i.e. the central bank needs to withdraw money from circulation, or asset bubbles will form.
Bloomberg has quoted analysts in Vietnam as affirming that the VN Index in 2017 will reach a 10-year high. The recovery of the national economy will attract investors to Vietnam.
The 11 experts interviewed by Bloomberg said the VN Index would be climbing to 745 points by the end of 2017 or increasing by 12 percent compared with the end of 2016, higher than the predicted 10 percent growth rate of MSCI AC Asean.
Thanh Lam, VNN
Rail accidents spur Government to action
Deputy Prime Minister Truong Hoa Binh has ordered urgent measures to increase safety at railway crossings.
His order came in the wake of a sharp spike in the number and scale of railway accidents during the Tet (Lunar New Year) holiday.
Deputy PM Binh, who also heads the National Traffic Safety Committee, sent a message to the Ministry of Transport, Ministry of Public Security, chairpersons of People’s Committees and heads of traffic safety departments in provinces and cities that the railway runs through.
The message followed two severe railway accidents on February 4.
At 3.20pm on February 4, train TN1 running in the North-South direction through Vu Ban district, Nam Dinh province crashed into a 16-seat car at a crossing, killing the car’s driver on the spot and injuring five, two of them seriously and the rest three were released from hospitals on February 5.
The same afternoon, three people were injured, one badly, when train LP5 running on the Hanoi-Hai Phong route hit a four-seat car which was crossing the railroad in Hung Yen province’s Van Lam district.
Eight traffic accidents involving the railways took place during the seven-day Tet holiday, claiming six lives and injuring 11. This marked an increase of 60% in the number of accidents, 100% in fatalities and 175% of injuries over the previous Tết holiday.
According to the National Traffic Safety Committee, the main cause of railway accidents is that drivers of vehicles disobey the law at crossings.
It said provincial and municipal authorities, as well as the Vietnam Railway Authority haven’t considered the problem serious enough to issue instructions, carry out inspections and push for solutions. They have also been lax in determining and dealing strictly with those responsible for railway crossing accidents, the committee said.
Deputy PM Binh has asked the Ministry of Transport (MoT) to instruct the Vietnam Railway Authority to closely work with relevant authorities of the Ministry of Public Security, as well as Nam Dinh and Hung Yen provinces to investigate the accidents on February 4 and affix responsibilities of organisations and individuals involved.
He said the MoT should work with provincial and municipal authorities to propose solutions for ensuring safety at level crossings on the whole route, including the construction of front roads, setting up barriers, and clarify the responsibilities of bodies guarding crossings throughout the route.
The ministry should continue updating detailed timetables of trains running through crossings, particularly those in and near residential areas so that local traffic safety departments can assign guards, strengthen inspections and compliance with law at level-crossings, Binh said.
He asked the Ministry of Public Security to co-ordinate with police in localities to reinforce patrols and strictly deal with violations, especially the illegal lifting of barriers.
The heads of provincial and municipal administrations as well as the heads of local traffic safety departments must develop concrete plans to eliminate illegally-established railway crossings, and appoint guards at crossings that do not have barriers, he said.
Missing foreign tourist found dead in Ha Long Bay
A tourist boat is seen in Ha Long Bay in this photo illustration.
The deceased, identified as 54-year-old Stephen John Scott, was discovered drowning in the bay off the northern Vietnamese province of Quang Ninh by two local fishing boats, four hours after going unaccounted for.
The fishermen then notified a team of on-duty rescuers to help take him ashore.
Scott was the leader of a group of foreign holidaymakers, who were on a sightseeing tour in Ha Long Bay on the Bien Ngoc 20 tourist boat, according to the .
The Aussie fell off the boat at around 8:45 am, with local authorities immediately launching a search and rescue mission.
Thecited initial reports from Quang Ninh authorities as saying that Scott had jumped off the boat of his own accord.
Quang Ninh officials are completing procedures to give the victim’s body back to his family.
TUOI TRE NEWS
People rush to buy gold on God of Wealth Day
As incomes rise, so does concern over pollution
The quick pace of the gross national product in Vietnam is resulting in rapidly deteriorating air quality and other environmental costs, say experts from the Ministry of Planning and Investment (MOPI).
New policies take effect in February 2017
New regulations on e-visas for foreigners, sanctioning of administrative violations in the field of environmental protection, duty-free goods and business in prize-winning electronic games for foreigners will come into effect since February 2017.
Pilot grant of e-visas for foreigners
The Government has issued Decree No. 07/2017/ND-CP defining procedures on pilot grant of e-visas for foreigners entering Viet Nam, which has come into effect since February 1, 2017.
According to the Decree, foreigners who apply for e-visas will realize these following steps:
1 - Access the websites http://www.xuanhapcanh.gov.vn or http://www.immigration.gov.vn for registration of personal information
2 - Receiving codes for e-files and paying visa fee
It will take 3 days to process an application for an e-visa valid.
Sanctioning of administrative violations against regulations on environmental protection
Decree No. 155/2016/ND-CP dated on November 18, 2016 on sanctioning of administrative violations in the field of environmental protection took effect from February 1, 2017.
Under the Decree, the maximum penalties for individuals and organizations are VND 1 billion and VND 2 billion, respectively.
Guidance on regulation on selling duty-free goods
The Government promulgated Decree No. 167/2016/ND-CP dated on December 27, 2016 providing guidance on the regulation on selling duty-free goods.
The Decree, scheduled to come into effect since February 15, 2017, stipulates eligible persons and conditions for purchase of duty-free goods.
Accordingly, passengers on entry shall be entitled to purchase duty-free goods at shops at limited areas of international airports right after completing entry procedures and shall not be allowed to purchase duty-free goods after leaving the limited areas.
Business in prize-winning electronic games for foreigners
The Government has issued Decree No. 175/2016/ND-CP to amend and supplement some articles of Decree 86/2013/ND-CP, dated July 29, 2013 on business in prize-winning electronic games for foreigners.
Under the new Decree, the electronic game machines with prizes used in business shall be 100% new.
Especially, the technical specifications of electronic game machines shall have to be clarified by manufacturers and verified by G7-based independent certification organizations.
Payout rates of slot machines installed in gaming facilities shall be at least 90%, according to the Decree.
BUSINESS IN BRIEF 7/2
Thousands of cheap apartments in Ho Chi Minh City to be launched in 2017
Following the development of cheap apartment projects in 2016, investors plan to bring thousands of cheap apartments to Ho Chi Minh City in 2017.
Numerous developers have already started building affordable apartment projects.
After starting sales of 300 apartments in block A under the Him Lam project (District no.9, Ho Chi Minh City), Him Lam Land announced that they will start selling nearly three blocks of apartments totaling almost a thousand in 2017.
“Developing cheap apartment projects has been a strategy of Him Lam Land since 2016,” according to Mr. Ngo Quang Phuc, Deputy General Director of Him Lam Land. “We will bring supportive policies to customers such as offering 72-month deferred payments and giving free furniture.”
Vingroup has developed land resources in Ho Chi Minh City with plans to build 200,000 cheap apartments. In district 9, Vingroup has completed the leveling out of more than 200 hectares of land to implement the project.
Hung Thinh Corporation launched four projects with apartment prices under VND 1.7 billion ($75,100) in 2016. In 2017, they announced that they would start apartment sales for the Richmond City project on Nguyen Xi Street, Binh Thanh district. The total number of apartments in this project is 880 and they cost under VND1.8 billion ($79,558) per apartment.
Vietcomreal announced that they would focus on projects for affordable housing. They plan to develop the Venus project (district 8), the Ventosa project (district 5), and Viva Riverside (district 6).
Dat Xanh Group and Nam Long Company too, will launch a thousand cheap apartments during the first six months of 2017.
In 2016, expensive apartments in Ho Chi Minh City comprised of 31 per cent of all apartments while medium and cheap apartments were 49 per cent and 20 per cent respectively, according to HoREA.
Real estate companies will focus on land and villas. The Cat Tuong Group will continue to sell the rest of their land under the Cat Tuong Phu Sinh project at VND 500 million ($22,100) per portion.
The Tran Anh Long An Real Estate Joint Stock Company will launch Bella Villa, a villa project that goes for just VND1.5 billion ($66,298) per unit. This project spans an area of more than 92,000 m2 with 422 townhouses and villas northwest of Ho Chi Minh City.
According to Mr. Nguyen Huy Vu of BANVIETLAND, 2017 will witness various medium price projects in Ho Chi Minh City. Investors will go to the suburbs to develop projects.
“In my opinion, in the first six months of 2017, the eastern areas - namely district 9, Thu Duc district, district 2 - and the western areas (including district 8, district 7, and Binh Chanh district) will be the focus of investment for medium projects,” he said.
ACV makes bank on yen fluctuations
Airports Corporation of Vietnam (AVC) recorded VND2.049 trillion ($90.4 million) of after-tax profit in the fourth quarter of 2016, mostly thanks to the depreciation of the Japanese Yen.
According to ACV’s consolidated financial report for the fourth quarter of 2016, the revenue was VND4.044 trillion ($178 million). The cost of goods sold in this quarter was VND3.171 trillion ($140 million), therefore, the gross profit only amounted to VND873 billion (over $38 million), equivalent to a gross profit margin of 22 per cent.
However, income from financial activities was VND2.319 trillion ($102.4 million), mostly thanks to an unrealised exchange rate difference gain of VND1.646 trillion ($72.82 million), a realised exchange rate difference gain of VND236 billion ($10.42 million), and the VND223 billion ($9.85 million) gained from interests on deposits.
By the end of 2016, ACV’s total liabilities stood at ¥72 billion (VND14.227 trillion/$630 million), make up 31 per cent of its total funds. Thus, the fluctuations of the Japanese Yen significantly affect the company’s profit. During the second quarter of 2016, ACV had a loss of VND63 billion ($2.8 million), but in the next quarter, it gained a profit of VND757 billion ($33 million) due to exchange rate differences.
ACV has a monopoly over the administration and exploitation of twenty two commercial airports in Vietnam. According to Rong Viet Securities, ACV has long-term opportunities to grow because (1) Vietnamese income is at a low level but is rapidly rising, (2) airport services (land leasing, advertising, and selling goods) are very profitable but are limited and rudimentary in Vietnam in comparison with other countries, and (3) Important projects will be implemented more efficiently and effectively with enhanced private sector involvement. Perhaps the crowning jewel of these projects will be Long Thanh Airport, awaiting development at the hands of ACV.
Garco 10 expects revenue growth despite unravelling TPP
Garment 10 Corporation-Joint Stock Company (Garco 10) set the goal of VND3.1 trillion ($137 million) in revenue this year, up 6.3 per cent on-year, despite the more opaque prospects of the Trans-Pacific Partnership Agreement (TPP).
According to Nguyen Thi Thanh Huyen, General Director of Garco 10, in spite of the slowing or straight out faltering demand for textile exports in 2017, Garco 10 expects a profit of VND62.5 billion ($2.7 million) and will pay a 15 per cent dividend.
Huyen added that in 2017, along with the expansion of investment activities, the Garco 10 and its unit members will try to reduce production costs so that they can increase the competitiveness. For instance, they will invest in modern technology, improve organization and improve the workers’ skills so as to improve the productivity, which might offset the increase in minimum wage.
In 2016 Garco 10 earned VND2.9 trillion ($129 million) in revenue, rising 6.42 per cent compared to 2015.
The contribution of Garco 10 to the government budget was VND58.75 billion ($2.6 million), 24.18 per cent greater than in 2015. In addition, the average income of the company’s workers reaches VND7 million ($310) per person per month, an increase of 4.33 per cent compared to 2015. Also, labour productivity reaches $21.43 a person per day, 4.87 per cent higher than in 2015.
Garco 10 operates 18 factories and has 12,000 employees, spanning 8 provinces and cities.
Sabeco reports all-time record profit
Saigon Beer-Alcohol-Beverage JSC (Sabeco)’s 2016 after-tax profit reached VND 4.655 trillion (over $205 million), increasing 33 per cent on-year, a company record since its establishment.
The figure was reported in Sabeco’s recently released consolidated financial report for the fourth quarter of 2016. Revenue was VND30.66 trillion ($1.35 billion), up 12.9 per cent on-year. Earnings per share (EPS) in 2016 was VND6,978 (about 30 US cent). At the end of the trading session on February 2, 2017, the stock reached VND219 thousand ($9.66), which was equivalent to the price-earnings ratio of 31.
Numbers released at the company’s conference to review its performance in 2016 showed that the output was 1.603 million litres, of which 1.584 million litres were sold. The company submitted VND16.5 trillion ($730 million) to the state budget in tax.
In the fourth quarter of 2016, Sabeco earned a revenue of VND8.834 trillion (over $390 million), up 80 per cent on year. Although gross profit declined due to growing prices, it still rose by 11 per cent compared to the fourth quarter of 2015.
Income from financial activities rose by 48 per cent in this quarter to VND172 billion (nearly $7.6 million), while financial expenses were reduced to VND31 billion (about $1.37 million). Some other expenses, such as general, administrative, and sales expenses remained nearly unchanged.
As a result, Sabeco recorded VND997 billion (nearly $44 million) in after-tax profit, a 16 per cent growth in the fourth quarter of 2016.
Toyota reign showing cracks
Though the Toyota Vios model still ranked first in terms of sales in 2016, other Toyota cars that topped the charts in 2015 were bumped down and some disappeared from the top 10 best selling cars in Vietnam in 2016.
The Toyota Innova and Fortuner, though still making it into the list of the best-selling cars in Vietnam in 2016, dropped from their second and third spots to make place for the Kia Morning and the Ford Ranger.
The Altis and the Camry, meanwhile, did not make the cut.
According to data realeased by the Vietnam Automobile Manufacturers’ Association, in 2016, Vietnamese customers bought a total 304,427 units, up 24 per cent against last year. Of the volume, passenger car sales was up 27 per cent, commercial vehicle sales 25 per cent, and special-purpose vehicle sales 33 per cent versus last year.
Sales of completely knocked down cars was up 32 per cent and completely built up cars 5 per cent.
VAMA forecast that 2017 sales volumes would be about 10 per cent higher than in 2016.
Below is the graph of the 10 best-selling cars of 2016 with their total sales figures.
State-owned banks lead in employee efficiency
Four big state-owned banks, namely Vietcombank, VietinBank, BIDV and Agribank, produce the highest profit per employee in the Vietnamese banking system.
Nghiem Xuan Thanh, chairman of Vietcombank, claimed a consolidated after-tax profit of VND8.5 trillion ($375 million). Of all state-owned commercial banks, the number of staff in Vietcombank is the lowest (barely over 14,000) and the most efficient in turning profit: each individual make VND600 million ($26,514) on average in a year, which means VND50 million ($2,210) every month. This is also the reason why Vietcombank staff gets the most satisfying wages and benefit packages in the current banking sector.
With the profit of VND8.25 trillion ($365 million), VietinBank goes virtually head-to-head with Vietcombank, however, breaking it down amongst the 21,000 employees, Vietinbank’s profit per employee averages VND474 million ($21,000) a year and nearly VND40 million ($1,700) a month, .
Ranking third is BIDV. Thanks to its 24,000 employees, the bank turned VND7.5 trillion ($331 million) in profit in 2016, which means a contribution of VND312 million ($14,000) per employee throughout the year, or VND26 million ($1,150) per month.
The last one is Agribank, whose profit is over VND4 trillion ($17 million) made by a staff of 40,000, meaning that each worker makes VND100 million ($4,400) in profit a year, or VND8.3 million ($366) a month.
In the joint-stock commercial banking sector, many banks have yet to announce their profit, but the few figures announced so far show uneven productivity.
Up to this point, the highest profit was made by Military Commercial Joint Stock Bank (MB). In 2016, the bank’s pre-tax profit was VND3.711 trillion ($164 million), which means each employee made VND510 million ($22,536), or nearly VND43 million ($1,900) per month. VIB employees made VND14.6 million ($645) and VPBank about VND15 million ($662) per month.
At some banks currently undergoing restructuring, each employee only made a profit of VND2-3 million ($88-$132) per month. Overall, there are more than a dozen banks whose profit per employee is below VND10 million ($441) a month.
Of course, this figure is not an accurate depiction of the productivity of each specific employee in each bank, because these numbers summarise a lot of factors, especially the allowances for bad debt expenses, risk provisions, operating costs, etc. Not to mention some of these profit figures are unreliable. Many banks report high profit figures, but indeed, interest accruals are included and bad debts in the off-balance sheet are not counted yet.
Looking at the bad debts and the banks’ profits, it is clear that the most transparent data in the current banking system is provided by Vietcombank. By the end of 2016, this bank has bought up itsbad debts from Vietnam Asset Management Company (VAMC), putting all bad debt items in one ledger, no longer having liabilities in or off the balance sheet like other banks. The bank’s provisions for credit losses are also very high, up to 121 per cent of the bad debt volume.
In almost all other banks, although bad debts are now lower than three per cent (slightly over one per cent at some), there still exist thousands of billions of dong in bad debts that have not been handled (being at VAMC). In the years to come, when bad debts will be required to be calculated correctly and fully, including the balance sheet and off-balance sheet liabilities, then trillions of VND of banks’ profits will be spent on risk provision for bad debts.
The good news is from 2017 the government will implement a range of practical solutions in order to facilitate dealing with bad debts. Together with the improving business environment, this will increase banks’ profits and make bank employees’ performance more effective and efficient.
Consumption of beer in January 2017 rose 20 per cent compared to the same period of 2016 in Vietnam
Consumption of beer in January 2017 rose 20 per cent compared to January 2016.
Vietnam sold nearly 322 million liters of beer during the Lunar New Year month, up more than 9 per cent compared to the same period in 2016 This is according to the Economic - Social Report in January 2017 generated by the General Statistics Office of Vietnam.
In particular, bottled beer and draft beer were the two most consumed product lines having reached sales of 6.7 million, and 154.4 million liters respectively. That’s an increase of 20.6 per cent and 23.3 per cent respectively compared to the same period in 2016.
Canned beer consumption decreased by 2 per cent, reaching nearly 159 million liters, while other beer products reached only 1.6 million liters, an increase of 6.9 per cent compared to same period last year.
Other consumer products such as cigarettes, milk, and processed seafood increased compared to January 2016. Cigarette consumption reached nearly 419 million, up 0.6 per cent compared to the same period.
Electrical appliances and transport also recorded an increase for the Lunar New Year.
In electronics, televisions were the most sought after in January 2017 with 670,600 units sold, up 35.2 per cent compared to January 2016. Cars and motorcycles increased significantly, reaching 19,400 and 342,000 units respectively.
According to reports of the Ministry of Industry and Trade, the volume of beer sold in 2016 was 3.788 billion liters meaning each person in Vietnam drank 42 liters of beer. That shows an increase of approximately 4 liters each compared to the previous year.
In 2016 cars and motorcycles saw record sales with 3.12 million cars and more than 300,000 motorcycles having been sold. That’s an increase of 24 per cent and 9.5 per cent respectively over the same period in 2015.
Numerous enterprises established in the first month of the new year
During the first month of the new year 8,900 enterprises were established with a total registered capital of over VND90 trillion ($3.96 billion). That’s an increase of 8.1 per cent in number and 52.3 per cent in registered capital, according to the latest Socio-economic report from the General Statistics Office.
These newly established enterprises are expected to create 104,100 jobs. That figure is 83.9 per cent more compared to the same period of 2016.
Notably, the number of businesses resuming operations after being temporarily suspended reached 5,564, up 14.2 per cent per cent compared to the same period of 2016.
Arts and entertainment is the most attractive sector with newly established enterprises up 2.4 per cent in number and 658 per cent in registered capital. The next is health and social assistance activities with an increase of 57.6 per cent in number and 455.5 per cent in registered capital.
Although the manufacturing index of the mining sector fell to 13.9 per cent, the number of newly established enterprises rose by 3.4 per cent and registered capital rose by 401.2 per cent.
Meanwhile, the number of enterprises ceasing operations was 1,583, up 18.3 per cent compared to the same period last year, and were mainly small-scale enterprises with capital less than VND10 billion ($440,000).
The number of enterprises temporarily ceasing operations was quite high with 13,289, up 6.7 per cent year-on-year.
Vietnam targets to have at least 1 million by 2020 and the private sector would account for 48-49 per cent of the country’s GDP, according to the Government Resolution No. 35 to support and develop enterprises.
Vietnam embarked on a thorough process of improving its business climate and national competitiveness in 2014, with the issuance of Government Resolution No. 19.
The government is also promoting an entrepreneurial spirit and making Vietnam conducive to establishing startups as part of efforts to develop the private sector, which has been defined as the driver of socio-economic growth.
A law on supporting small and medium-sized enterprises (SMEs) is being drafted. There are now more than 500,000 enterprises in Vietnam, of which approximately 97 per cent are SMEs.
Hoa Phat sees profit up 89 per cent in 2016
Vietnam’s steel giant Hoa Phat Group (coded: HPG) has announced its revenue for 2016 at $1.5 billion and profit after tax at about $292 million. Those figures show an increase of 34 per cent and 89 per cent compared to the previous year. This is the highest profit and revenue Hoa Phat has ever seen since its foundation.
This is the first time that the company has reached the leading position in the domestic market share of construction steel consumption. It had a total output of 1.8 million tons per year. Consuming nearly 500,000 tons of different kinds of steel pipe, Hoa Phat continues to lead in consumption volume, accounting for 26 per cent of the market share in the country.
In the real estate sector, apart from Pho Noi A Industrial Park in the Hung Yen province and Hoa Mac Industrial Park (IP) in Ha Nam province, Hoa Phat is going to construct two big projects in 2017 including Yen My IP covering 200 ha and Pho Noi New Urban Area covering 260 ha in Hung Yen province. Those projects will significantly contribute to meet the very high demand on housing for residents in industrial zones and the areas surrounding Hanoi.
For the agricultural sector, Hoa Phat said its array of animal feed production has already been put into operation and has been preparing to complete its second factory in Long Khanh IZ in Dong Nai province. It will have a capacity of 300,000 tons per year.
Hoa Phat this year continues to implement construction of its third plant, with a similar capacity, in Phu Tho province to serve the northwestern region.
In recent news, the government has agreed on the investment policy of Hoa Phat’s iron and steel complex in Dung Quat EC in Quang Ngai province.
For a long time now the Hoa Phat Group has been seeking permission from local authorities to take over the the Guang Lian Dung Quat steel mill project in Quang Ngai province, which has been delayed for ten years.
The Hoa Phat Group plans to build a $3 billion iron and steel complex at the Dung Quat Economic Zone (EC) with a capacity of 4 million tons a year which will be divided into two phases and have an operational duration of 70 years.
In early September, the Quang Ngai People’s Committee decided to revoke 337 hectares of land from the Guang Lian Dung Quat steel factory, due to its long delay in construction and for violating the Land Law.
FDI disbursement up 6.3 per cent y-o-y
Total disbursement of foreign direct investment as of January 20 this year stood at $850 million, up 6.3 per cent year-on-year, according to the latest report from the Ministry of Planning and Investment (MPI).
New and additional FDI capital totaled $1.42 billion, up 6.6 per cent compared to the same period in 2016.
As of January 20, 175 new projects had been granted investment licenses with a total registered capital of $1.243 billion, up 37.8 per cent in terms of projects and 23 per cent in terms of capital compared to the figures in the same period last year. In addition, 76 existing projects added $179.2 million in capital.
The manufacturing and processing sectors attracted FDI the most, with a total capital of $834.9 million, accounting for 67.1 per cent of the total registered capital in January.
Real estate was second, with a total capital of $297.4 million or 23.9 per cent of the total. The remaining sectors accounted for $111.5 million, or 9 per cent.
Twenty-six cities and provinces received investment, led by Binh Duong province with a new total capital of $666.2 million, or 53.6 per cent. Bac Giang province was second, with $159.5 million, or 12.8 per cent, followed by Ba Ria-Vung Tau province, Ho Chi Minh City, Hai Duong, Tay Ninh, Hanoi, with $108.7 million, $75.2 million, $61.8 million, $32 million and $30 million, respectively.
Foreign investment came from 31 countries and territories, led by Singapore, with an investment of $416.7 million, or 33.5 per cent of the total. South Korea followed, with $347.8 million, or 28 per cent; China with $310.1 million, or 24.9 per cent; Japan with $56.8 million, or 4.6 per cent; Malaysia with $44.1 million, or 3.5 per cent and Samoa with $20 million, or 1.6 per cent of the total.
ACV records profits over VND2 trillion
The Airports Corporation of Vietnam (ACV) has announced its consolidated financial report for the last quarter of 2016 with net revenue of over VND4 trillion ($176 million).
Cost of sales in the fourth quarter accounted for over VND3.1 trillion ($136.4 million) making gross profits decrease to VND873 billion ($38.4 million) equivalent to a gross profit margin of 22 per cent.
In the fourth quarter, ACV’s financial revenue stood at VND2.3 trillion ($101.2 million), mainly thanks to the revert of the exchange rate differences of VND1.64 trillion ($72.1 million), exchange rate differences interest of VND236 billion ($10.3 billion) and interest on deposits of VND223 billion ($9.8 million).
By the end of 2016, the corporation’s loan balance amounted to 72 billion Japanese yen ($636.6 million) and accounted for 31 per cent of the total company capital. The fluctuations of the Japanese yen, therefore, have made a significant impact on the ACV’s profitability.
ACV recorded over VND2 trillion ($88 million) after-tax profit in the fourth quarter of which the profit after tax of the parent company reached VND1.9 trillion ($83.6 million).
In November 2016, ACV was given permission to trade on the Unlisted Public Company (UPCoM) market under the code ACV, with a total of 2.18 billion shares and a registered stock value of more than VND21.7 trillion ($976.5 million).
ACV is a joint stock company operating under the form of the parent-subsidiary company, with the State holding a majority stake. In October 2015 the government approved its equalization plan, with State ownership to fall to 75 per cent. In March 2016 it held its first shareholders meeting.
ACV will become the largest enterprise by charter capital on UPCoM. It manages 22 airports throughout Vietnam, of which seven are international and 15 are domestic with 21 being directly managed by the corporation. It also has a range of joint ventures with other companies.
From 2012-2014 it served 132.6 million passengers at a growth rate of 16 per cent per year, and handled over 2.28 billion tons of cargo with growth of 15.29 per cent per year.
After officially becoming a joint stock company in March, 2016, ACV now has a charter capital of over VND21 trillion ($940 million), equal to 2.177 billion shares at a price of VND10,000 ($0.44) each. The government still holds 95.4 per cent.
Its targets for 2016 include welcoming 73 million passengers, a 12.4 per cent increase against 2015, 53 million of which are domestic, and to cater to 516,000 commercial flights. Revenue is targeted at almost VND12.1 trillion ($541.9 million) and pre-tax profit at over VND2 trillion ($89.5 million).
It recently recorded its first-ever losses for the second quarter of 2016. It was VND124 billion ($5.58 million).
A number of State enterprises are also listed, such as the Hanoi Alcohol Beer & Beverages Corp. (Habeco), the Hanoi Construction Corporation (Hancorp), and Vinacomin Viet Bac.
Truong Thanh Furniture faces delisting for heavy losses
After a dismal business performance in 2016’s fourth quarter, the final decision to delist Truong Thanh Furniture’s (TTF) shares now lies in its audited financial statement.
The company’s consolidated financial statement for 2016’s fourth quarter showed a total loss of VND145 billion ($6.4 million) bringing its full year’s loss to VND1.63 trillion ($72 million) of which its cumulative losses amounted to VND1.768 trillion ($7.8 million). Moreover, the wood company has had a negative owner’s equity of more than VND195 billion ($8.6 million) as of December 31, 2016.
From September-December gross loss stood at nearly VND27 billion ($1.2 million), financial costs surged as high as VND65 billion ($2.9 million), and administrative costs were VND34 billion ($1.5 million). TTF’s shares are currently being put under a special control list by the Ho Chi Minh Stock Exchange (HoSE) and its shares are fluctuating around the VND5,000 ($0.22) price range. In just four months TTF’s shares fell dramatically from VND43,700 ($1.92) on July 19 to VND4,000 ($0.18) on November 18.
As VET had earlier reported, there are only two options for TTF to avoid delisting - have a profit of VND160 billion ($7 million) in the fourth quarter last year to balance cumulative losses vs. charter capital, or request that Tan Lien Phat go ahead with its loan.
Tan Lien Phat became a major TTF shareholder in May last year after acquiring 72 million shares for VND25,000 ($1.1) per share TTF then saw some instability in its senior personnel. On August 12, founder Mr. Vo Truong Thanh was dismissed from his duties as Chairman of the Board of Management after not taking sufficient responsibility as Chairman during TTF’s tough times. He was replaced by Vingroup’s Deputy Managing Director Ms. Vu Tuyet Hang.
TTF’s shares fell dramatically after the Tan Lien Phat Company, a subsidiary of Vingroup, suddenly announced in mid-July the suspension of its loan of VND1.2 trillion ($53.8 million) to TTF in exchange for 69 million of TTF’s shares after finding serious discrepancies in data relating to inventories as well as questionable debts.
Since Tan Lien Phat has announced plans to offload its holdings in TTF from 49.9 per cent to 29.9 per cent, the second option is off the table. Current policy regulates that an enterprise will be delisted if its cumulative losses surpass its charter capital based on audited financial statements. With the recent announcement of its business performance in the fourth quarter, the final decision for its delisting will lie in its audited financial statement.
But despite its difficulties, the company continued to increase its borrowing last year. Liabilities increased by another VND568 billion ($25.1 million) during the year of which short-term loans accounted for VND2.6 trillion ($115 million) and long-term loans VND30 billion ($1.3 million). For short-term loans, Viet A Bank has the largest outstanding loan of VND653 billion ($29 million), Dong A Bank with VND124 billion ($5.5 million), SHB with VND56.5 billion ($2.5 million) ,and Kien Long Bank with nearly VND60 billion ($2.65 million).
According to TTF, all those loans were taken to increase the mobilizing capital to meet the business needs, including payment for wood materials and other costs. As of December 31, 2016, interest rates of those loans varied from 10.25 per cent to 11 per cent for VND loans and 5 per cent to 6.9 per cent for foreign currency loans. For long-term loans, TTF owes VND36 billion ($1.6 million) to Kien Long Bank and VND3 million ($132,600) to Agribank.
ACB hit VND73.7 million in 2016's pre-tax profit
ACB’s pre-tax profit in 2016’s fourth quarter reached VND422 billion ($18.6 million), up 89 per cent year-on-year. The full year figure was VND1.667 trillion ($73.7 million), up 26.8 per cent year-on-year. This is according to the bank’s consolidated financial statement for 2016’s fourth quarter.
During the fourth quarter, ACB recorded a net interest income of VND1.946 trillion ($86 million), up 17.6 per cent year-on-year, giving the full year net interest income an increase of 17 per cent year-on-year, at VND6.9 trillion ($305 million).
Other activities of the bank continued to rise from September-December. Services brought a net income of VND283 billion ($12.5 million), up 35 per cent year-on-year, foreign currencies trading had a net income of VND79 billion ($3.5 million), up 23 per cent year-on-year, and securities trading had a net income of VND74 billion ($3.3 million), up 14 times year-on-year.
Notably, operating costs surged by 62.5 per cent to VND1.2 trillion ($53 million) during the quarter. But thanks to its business performance, net operating income was up 3.7 per cent times year-on-year and stood at VND1.07 trillion ($47.3 million). The bank has set aside VND654 billion ($28.9 million) for risk provision cost which is 10 times higher year-on-year. For the quarter, ACB recorded VND422 billion ($18.6 million) in pre-tax profit, up 89 per cent year-on-year.
For the full year, it posted VND1.667 trillion (73.7 million) in pre-tax profit, up 26.8 per cent with after-tax profit VND1.325 trillion ($58.5 million), up 29 per cent year-on-year. As of December 31, 2016, the bank’s total assets stood at VND233 trillion ($10.3 billion), up 16 per cent compared to the start of the year.
Customer lending reached VND163 trillion ($7.2 billion), up 20.7 per cent year-on-year and customer deposits reached VND207 trillion ($9.15 billion), up 18.3 per cent year-on-year. Total bad debts as of the end of the year stood at VND1.42 trillion ($62.7 million), down 20 per cent year-on-year. Its bad debt rate had fallen from 1.31 per cent to 0.87 per cent as of December 31,2016.
The bank’s management report issued last month indicated that ACB’s management board has shown interest in acquiring Posts and Telecommunications Finance Ltd (PTFinance). Founded in 1998, PTFinance has a charter capital of VND500 billion ($22.1 million) and is 100 per cent owned by the State-run telecom provider VNPT.
PTFinance posted a rather modest profit of VND2.8 billion ($123,760) during 2016’s first half. Its total assets stood at VND384 billion ($17 million) by the end of 2016’s second quarter, in which short-term investments took up a huge portion with VND260.4 billion ($11.5 million).
Mergers and acquisitions (M&A) between banks and financial companies has been a trend for the last few years. SHB finished the M&A deal with Vinaconex-Viettel Finance (VFF) after two years of negotiating. With the acquisition of a financial company, banks can participate in the unsecured lending sector, which incurs high risks but even higher returns than other ordinary loans.
In an interview with Forbes last month, ACB’s Chairman Mr. Tran Hung Huy revealed that the bank has been conducting research to acquire a financial company in order to develop unsecured lending products. However, Mr. Huy affirmed that ACB has no plan to grab a piece of this fruitful activity yet due to a fear of deriving bad debts.
ACB's shares price closed as high as VND24,200 ($1.07) after the trading session on February 3. The bank's share value has gone up by 36 per cent since the trading session on January 2 when it closed at VND17,790 ($0.79) per share.
Sacombank saw a business downturn in 2016
Sacombank recorded a total loss of VND18.5 billion ($817,145) during the fourth quarter of 2016. This confirms the pre-tax profit for the whole year 2016 of only VND531 billion ($23.4 million), down 64 per cent year-on-year, the bank’s consolidated financial statement for 2016’s fourth quarter showed.
As of December 31, 2016, the bank’s total assets stood at VND333.3 trillion ($14.7 billion), up 14 per cent from the start of the year. Customers lending was recorded at VND198.8 trillion ($8.8 billion), up 6.9 per cent year-on-year while customer deposits reached VND291 trillion ($12.85 billion), up 11 per cent year-on-year.
During 2016’s fourth quarter, net interest income reached VND1.4 trillion ($61.8 million), up 54 per cent year-on-year but the full year figure went down by 22 per cent year-on-year and stood at VND5.12 trillion ($226.1 million). Most of the bank’s activities during the September-December period were less than satisfactory except services which brought a net income of VND418 billion ($18.5 million), up 19 per cent year-on-year.
Foreign currencies trading saw a heavy loss of VND275.2 billion ($12.1 million) even though loss of this activity in 2015’s fourth quarter was only VND29 billion ($1.3 million). Against a profit of VND16 billion ($706,720) in 2015’s fourth quarter, securities trading recorded a loss of VND2.6 billion ($114,842) in 2016’s fourth quarter. Net loss from investment securities was recorded at VND37.4 billion ($1.6 million) for the quarter.
During the fourth quarter, operating costs surged by 29 per cent to VND1.58 trillion ($69.8 million). But the total loss of the quarter, despite being recorded at VND18.5 billion ($817,145), was only “secured” because Sacombank had cut down its credit risk provision from VND1.13 trillion ($50 million) in 2015’s fourth quarter to VND23.5 billion ($1.04 million) in 2016’s fourth quarter. Its net operating revenue during the period stood as low as VND5 billion ($220,850), down 91 per cent year-on-year.
The bank revealed its full year’s pre-tax profit of VND531 billion ($23.4 million), down 64 per cent year-on-year, and an after-tax profit of VND372 billion ($16.4 million). Its charter capital remained at VND18.85 trillion ($832.6 million) as of December 31, 2016.
Last month, Sacombank was named one of the top five banks to undergo restructuring in 2017, together with the three zero dong banks that the central bank acquired for the price of zero dong in 2015: the VNCB, PG Bank, Ocean Bank and Dong A Bank. It became the fifth-largest lender in the local banking sector in 2015 after the voluntary merger with Southern Bank.
But while the State Bank of Vietnam (SBV) has praised the joint entity, saying it had synergy that brought greater benefits to shareholders and customers, Moody’s confirmed the merger resulted in high solvency and liquidity risks for Sacombank. In its October 2016 report, it changed the bank’s outlook to negative because its problem assets had been increasing substantially since the pre-merger period and its credit provisions were slim by the end of June.
That’s not the only thing working against Sacombank, as related risks include its corporate behavior, opacity and complexity. The corporate behavior risks originate from the situation where the majority of Sacombank’s shares are managed by the SBV, which creates uncertainty around the financial health and future development of the bank.
Opacity risks stem from the fact that the bank has not yet published its audited financial report for 2015, which raises the possibility they may be restated. “The negative outlook for Sacombank reflects the uncertainty around the strategic direction of the bank, its unclear ownership structure, and the true scope of asset quality challenges,” wrote Moody’s.
In its latest response, Sacombank Chairman Mr. Kieu Huu Dung declared that Sacombank is not a weak bank, pointing out that it still leads the commercial group. He also revealed that many potential investors are keen to lend a hand to address the consequences of the Southern Bank merger, and, in the meantime, the bank’s restructuring plan is to be submitted to the central bank. “We are determined to start the process as soon as the plan is approved,” he added.
ASIA DMC has new group managing director
ASIA DMC, one of the leading regional tour operators, is setting its sights on accelerated growth this year with the hiring of dynamic travel professional Mr. Linh Le in the role of Group Managing Director as it charts an expansion course across the region.
The move follows the rebranding of the Hanoi-headquartered company at the World Travel Market in London last year after 20 years of operating under HG Travel. This was done in order to set the stage for growth in Southeast Asia and enable the company to offer exceptional tailor-made travel experiences to upscale travellers from around the world.
Mr. Le joined ASIA DMC following a six-year tenure with boutique luxury tour operator Trails of Indochina and is now tasked with consolidating ASIA DMC’s position in Vietnam, Thailand, Myanmar, Cambodia and Laos where it has offices. He is also expected to expand into Sri Lanka, China, India, and the Philippines this year.
“We are delighted to welcome such a motivated and modern leader to our team,” said HG Holdings CEO Tran Thanh Nam. “Mr. Linh’s knowledge of luxury travel experiences around the region is second to none and his ethics and relationships stand out making him the ideal ambassador for ASIA DMC as we grow.”
Mr.Nam will stand down from his existing position as CEO of ASIA DMC to focus on developing the hospitality arm of HG Holdings which is the owning company of ASIA DMC.
During his 14-year career in tour operations, Mr. Le has been internationally recognized, and awarded for his holistic knowledge of the worldwide travel industry. He also received the 2016 Highest Growth Award from Virtuoso Asia Pacific whilst acting as Global Director of Trails of Indochina.
"It’s a privilege to be aligned with a company of such great quality, vision – particularly in terms of social responsibility which is the cornerstone of all plans and strategies – and indeed growth potential,” said Mr. Le.
Following its rebranding in November, ASIA DMC quickly moved to fulfill its mission to provide unique, tailor-made journeys and engaging activities for travellers seeking a more fulfilling travel experience.
With the company’s commitment to social and environmental responsibility, an innovative approach to destination management, and motivated leadership, ASIA DMC is now looking confidently to the future.
Coffee and rice exports decline sharply in January 2017
Vietnam’s coffee and rice exports in the first month of 2017 decreased sharply regarding both volume and value compared to the same period of last year.
Specifically, Vietnam shipped an estimated 127,000 tonnes of coffee abroard in January and brought in approximately US$287 million in revenue, down 26.5% in volume and 3.6% in value year on year.
The average coffee export price in 2016 was US$1,872 per tonne, representing a 6% fall against 2015.
Germany and the United States remained the two largest consuming markets of Vietnamese coffee last year with respective market shares of 14.8% and 13.5%.
Vietnam’s 2016 coffee export turnover surged in most of the country’s major markets, including Algeria (up 64.5% year on year), the Philippines (up 63.6%), China (up 45%), the US (up 43.6%), Germany (up 37.6%), Belgium (up 33.1%), Italia (up 23.6%), Japan (up 17.7%) and Russia (up 14%). Spain was the only market to see a decline (down 8.3%).
Meanwhile, rice exports over the past month were estimated at 325,000 tonnes worth US$136 million, down 32% in volume and 35.1% in value compared to the same period of 2016.
The average rice export price in 2016 was US$449 per tonne, up 6.2% against 2015.
China remained the largest importer of Vietnamese rice last year with a market share of 36%, with Vietnam earning approximately US$782.3 million from shipping 1.74 million tonnes to the market – down 17.5% in volume and 8.6% in value.
Ghana followed in second place with a market share of 11.5%. Vietnam exported 503,700 tonnes of rice to the market (up 38.9%) and brought in US$248.9 million (up 34.5%).
U.S., EU major importers of Vietnamese-made phones
Vietnam fetched US$34.3 billion from exports of phones and phone components in 2016 with the U.S. and the European Union (EU) emerging as key importers.
A General Department of Customs report says phones and phone components became the biggest export earner last year with their export revenues rising by 13.8% versus 2015. Apparel came second by revenue with nearly US$24 billion, followed by computers, electronics and components with around US$19 billion.
Last year saw the country obtaining export revenue of over US$34 billion for a single item for the first time despite Samsung’s suspension of Galaxy Note 7 smartphone production over battery fire incidents. Samsung’s two production plants in the northern provinces of Bac Ninh and Thai Nguyen make around 35% of the firm’s mobile phones for world markets.
Phones and phone parts remained the biggest export earner with their revenues accounting for 27.1% of the country’s total exports in 2016.
According to the General Department of Customs, Vietnam’s phones and phone components were shipped to many foreign countries last year. Notably, sales to the EU neared US$11.24 billion, up 11.1% from a year earlier, and those to the U.S. exceeded US$4.3 billion, up 55.5%, the United Arab Emirates US$3.83 billion and ASEAN nations some US$2.27 billion.
Given increasing investments by phone producers and phone component suppliers, analysts have forecast phones and phone components would continue to be the biggest contributor to Vietnam’s export turnover this year as their outbound sales are projected to climb to US$39 billion.
Data of the General Department of Customs shows Vietnam’s 2016 import-export turnover grew 7.1% against 2015 to US$350.74 billion. Of which, exports reached US$176.63 billion, up 9%, and imports totaled US$174.11 billion, a 5.2% increase, leaving a trade surplus of over US$2.52 billion.
The top 10 export earners brought nearly US$126.85 billion, making up 71.8% of the total.
The Ministry of Industry and Trade has predicted import-export turnover would keep rising this year, backed by a number of free trade agreements to which Vietnam is a signatory. In addition, foreign direct investment (FDI) is expected to flow from other regional nations, including China, to Vietnam.
The ministry noted that despite opportunities brought by the ASEAN Economic Community (AEC) and other trade deals, challenges will exist, especially in terms of market development and competitiveness on home and overseas markets.
Minister: Multiple challenges still weigh on local economy
Minister of Planning and Investment Nguyen Chi Dung has said Vietnam will continue coping with a host of challenges this year given lingering domestic weaknesses and considerable uncertainty for the global economy.
Many weaknesses remain in the economy of the nation related to low growth quality, labor productivity and competitiveness, Dung said. Institutional and legal reform and new pro-growth policies have not produced as many positive results as expected, especially for enterprises.
Dung said in an interview with the Government’s news website on the occasion of the Lunar New Year that a large number of enterprises have been established but they will have to face a rough ride.
Difficult access to finances and land, and cumbersome administrative procedures are still major barriers to business operations, Dung pointed out.
These make it hard for domestic firms to survive, grow and compete on par with global rivals.
However, Dung noted that challenge would come along with opportunities and that enterprises should be active in cashing in on such opportunities. Notably, Vietnam’s business environment has steadily improved, according to foreign and domestic business leaders at the Vietnam Business Forum last December.
In spite of the improvement, Vietnam is now ranked fifth in the 10-member ASEAN. Vietnam still finds it hard to move higher in the regional grouping and is likely to be left behind as other countries in the lower positions are striving for higher places while those in the upper rankings will not let Vietnam catch up.
Ministries and agencies have made greater efforts to better institutions, governance and policies and lessen state intervention in economic activity. But Dung emphasized the importance of eliminating interest groups to enhance law and discipline enforcement.
He said the ministry participated in building a number of medium-term development plans. As an agency responsible for State management of public investment, the ministry helped the Government and the Prime Minister draw up a public investment plan for 2016-2020.
The public investment plan is aimed at restructuring and improving public investment in support of the country’s five-year socio-economic development plan at a time of rising financial constraints for public investment projects and programs.
The public investment plan was built to ensure mobilization of sufficient capital for major infrastructure projects designed to fuel growth, including the north-south expressway project, and at the same time for social welfare, environmental protection and climate change adaptation schemes.
The ministry will closely cooperate with other ministries and agencies in effectively allocating available funds to contribute to the successful implementation of the five-year socio-economic development plan and the economic restructuring plan for 2016-2020. Dung added that the National Assembly approved the economic restructuring plan.
To reach the targets envisaged in the plans, there are many tasks to complete, Dung noted.
Tourism growth strong in Jan
The nation’s tourism sector has got off to a good start this year, with more than one million international visitor arrivals reported in January, up a staggering 23.6% year-on-year, according to the Vietnam National Administration of Tourism (VNAT).
More than 247,000 Chinese visited the country last month, surging 67.9% over the same period last year and representing one-fourth of all international tourists to the country in the first month.
Other major source markets for the tourism sector are South Korea and Japan. Around 172,000 Koreans came to Vietnam, a 155% year-on-year increase, and Japanese visitors numbered 66,000, up 4%.
Russian tourist arrivals showed strong growth last month, with nearly 59,000 Russians coming, up 36.5% compared to the same period last year.
According to VNAT, the country will continue seeing robust tourism growth this year, with forecasts putting international arrivals at 11.5 million and domestic visitors at 66 million. Tourism revenue is projected to amount to VND460 trillion (US$20.3 billion).
Last year the country had more than 10 million international visitors, a 26% increase against the previous year, and 62 million domestic tourists, up 9%. Tourism revenue was put at VND400 trillion, surging 19% from a year earlier.
There are 21,000 lodging facilities with over 420,000 guest rooms nationwide.
Thua Thien-Hue aims to attract 6 trillion VND of investment in 2017
The central province of Thua Thien-Hue has set a target of luring 20 projects to its economic zones and industrial parks with a total investment of about 6 trillion VND (272 million USD).
To this end, the province’s Economic Zone and Industrial Park Management Board will launch investment promotion programmes with focus on fostering partnership with investors in infrastructure as well as financially strong firms, said Nguyen Que, deputy head of the Board.
Que revealed that currently, the board is working with major domestic firms including FLC Group, VinGroup, Bitexco and Viglacera, and strengthening coordination with foreign partners including JICA, KOICA and JETRO in investment promotion.
For projects being implemented in Chan May-Lang Co Economic Zone, including the second phase of the Lang Co Laguna, Minh Vien Lang Co resort and Wharf 3 in Chan May Port, the provincial authorities have been assisting in construction process and capital disbursement.
According to Chairman of the Thua Thien-Hue People’s Committee Nguyen Van Cao, the province has applied a number of measures to call for more investment, including improving investment and business environment and fixing the consequences of the sea environment incident that happened last year.
In the coming time, Thua Thien-Hue will also enhance the quality of business associations and trade organizations to better the connectivity among enterprises. The province will invest over 2 trillion VND in socio-economic infrastructure and industry development programmes in 2017.
At the same time, Thua Thien-Hue will also restructure its vocational training system and step up administrative reform, striving to conduct over 50 percent of administrative procedures online and apply the one-stop shop model at the provincial and district administration centres, thus raising the satisfaction rate among local residents and businesses to over 80 percent, said Cao.
Last year, local economic zones and industrial parks attracted 14 projects with total investment of nearly 4.9 trillion VND, bringing the total number of projects located in their facilities to 140 worth over 63.7 trillion VND. Of the projects, 36 are run by foreign investors with registered capital almost reaching 31 trillion VND (approximately 1.4 billion USD).
Vietnam’s stocks to rise on lunar year optimism
Shares may continue rising this week as investor confidence increases at the beginning of the lunar year, analysts say.
Banking stocks are expected to take the lead with investors expecting improvements in the sector, they add.
The benchmark VN Index on the HCM Stock Exchange on February 3 fell 0.4 percent to end last week at 700.35 points, after rallying 3 percent in the previous five sessions to reach a nine-year high of 703.18 points on the previous day.
At the Hanoi Stock Exchange, the HNX Index rallied for a fourth day, increasing 0.5 percent to end at 85.03 points. The northern market index has moved up 2.4 percent in the last four sessions.
Investor sentiment is often high at the beginning of the lunar year, and this will be an important factor that could lift the market, as seen in the five consecutive days ending on February 3.
“Positive investor sentiment at the beginning of the lunar year will help increase investment in the stock market, especially when the resistance range of 690-700 points has been surpassed for the first time since September 2016,” said Phan Dung Khanh, head of the investment consultancy at Maybank Kim Eng Securities Co Ltd.
Before the Tet (Lunar New Year) holiday, the VN Index had crossed the 690 point level, and the nine-year high was reached after the market returned from a one-week break.
This caused both regret and excitement among investors because they had pulled out of the stock market during the pre-Tet holiday period, missing the opportunity to participate in the market’s improvement, Khanh said.
The stock market will also be lifted by investor expectations of Government policies to support the economy and businesses, along with the release of companies’ earnings reports, and by large-cap groups that are preparing to be traded on the stock market, he added.
The VN Index corrected itself on February 3 after a five-day rally.
According to Vu Minh Duc, head of individual customer analysis at the Viet Capital Securities Company, the correction on February 3 was a must-decline session so that the VN Index can continue increasing in the near future.
More specifically, the benchmark index might decline during some of the first trading days this week to test the support range of 695-700 points, then increase to the middle-term resistance level of 740-750 points within months, he said.
Banks will lead the market in the coming week, and this year, as investors are counting on the restructuring plan for the entire banking system, as well as on the possibility of a policy that allows banks to lift the bar for foreign investment this year, as Prime Minister Nguyen Xuan Phuc told Bloomberg TV in January, Duc said.
Bank stocks, such as Vietcombank (VCB), BIDV (BID) and Vietinbank (CTG), weigh heavily on the market, as do other blue chip firms including dairy producer Vinamilk (VNM) and brewer Sabeco (SAB). While the price-to-earnings ratios of the large-cap bank stocks are lower than that of the latter, it also means the potential for bank stocks to grow is quite high, Duc said.
Investors may also take earnings reports of listed companies into account this week, according to Nguyen Ngoc Lan, head of the broker division at Agribank Securities Company.
Companies that saw yearly increases in their earnings for 2016 include dairy producer Vinamilk, steelmaker Hoa Phat Group (HPG), real estate group FLC (FLC) and Faros Construction Corp (ROS).
PM tours shrimp processing corporation in Ca Mau
Prime Minister Nguyen Xuan Phuc inspected the operation at the Minh Phu Seafood Corporation in the southernmost province of Ca Mau on February 5, one day ahead of a national conference on developing shrimp sector.
Minh Phu is Vietnam’s leading shrimp exporter, shipping products to more than 50 foreign markets. Shrimp export alone earns the corporation 535 million USD in 2016, according to its management. The corporation is employing 12,000 workers.
The PM hailed the company’s research into various models for shrimp farming, noting that any model should ensure the protection of the environment.
He expressed his hope that Minh Phu will earn two billion USD from exports by 2021, contributing to realising the national target of 10 billion USD in shrimp export value.
The company reported to the Government leader that it is developing a chain of shrimp farmers to ensure supply of clean raw materials meeting the quality requirements of strict markets and the easy verification of product origin.
It proposed a mangrove-based shrimp farming model, which could be an effective way for Ca Mau to reduce poverty and develop the local economy, considering the fact that the province currently has 100,000 hectares of mangrove forest.
Interest rate under pressure to stay steady
The State Bank of Vietnam has targeted keeping interest rate stable in 2017, however, the market’s developments in the first half of January 2017 show that lending rates are suffering from many pressures.
Analysts say the goal to stabilise interest rates this year may face many challenges, such as the recovery trend of commodity prices in the world market, including petroleum; the price adjustment of essential commodities of electricity, health service and education; and the risks of climate change and natural disaster.
Besides this, economist Bui Quang Tin said the exchange rate would also put pressure on interest rates in 2017.
Tin said the US dollar was forecast to continue strengthening due to the expectation that Fed would continue increasing interest rates this year and in 2018 and 2019. This trend would make it difficult for local commercial banks to reduce interest rates because at that time, the exchange rate between the US dollar and other currencies, including the VND, would hike.
"If Vietnam lowers interest rates, it will make the US dollar/VN dong exchange rate increase, resulting in imported goods becoming expensive and making it difficult for businesses," he said.
In addition, the central bank’s regulation on reducing the ratio of using short-term capital for medium and long-term loans from 60 percent to 50 percent from January 1, 2017, would also affect deposit rates, especially terms that are more than 12 months.
Prime Minister Nguyen Xuan Phuc also admitted interest rate was a serious problem for the central bank in 2017, especially in the context that inflation must be curbed and the macro economy must be stabilised. The country this year is targeting a GDP growth of 6.7 percent and inflation at some four percent.
In a bid to stabilise interest rate and control inflation, Tin suggested the central bank adjust inter-bank rates reasonably through the open market operation (OMO). Commercial banks can borrow capital from the OMO market to stabilise liquidity and deposit interest rates.
Besides preparation to cope with the US’s Fed policy on increasing interest rates, measures to support commercial banks enhancing medium- and long-term capital sources must be also taken, Tin said.
Economist Ngo Tri Long recommended the government continuously regulate prices of petroleum, electricity and public services according to the market mechanism with the State’s management.
Any changes in the prices of such commodities and services must be considered carefully and taken at a suitable time to avoid strong negative impact on the price level, Long said.
Social News 7/2
Nghe An takes action to curb avian flu
Diễn Châu District in central Nghệ An Province has stepped up preventive measures against A/H5N1 avian flu after hundreds of ducks were found infected with the disease last week.
On Friday, 60 ducks were found dead due to illness and 40 others were infected with disease at a farm belonging to Đặng Văn Suất in Diễn Thắng Commune.
A flock of nearly 450 ducks being raised by Suất were culled.
Other 500 flu-infected ducks belonging to Nguyễn Mạnh Hùng in Diễn Lộc Commune were also culled last Tuesday.
Local authorities have isolated the two pestholes to prevent the outbreak from spreading to nearby areas.
The provincial Department of Animal Health has provided 60 litres of sprayed chemicals and 20,000 vaccine doses for poultry bird injections in Diễn Lộc Commune.
One dead, 37 injured in Soc Son accident
A female passenger died and 37 others were injured when their coach crashed into a rock on Sunday morning after visiting the Saint Gióng Temple in Hà Nội’s Sóc Sơn District.
The 35-seater coach with number 17B-00938 from northern Thái Bình Province reportedly had 42 people on board, who were returning from a visit to the temple located in the mountainous area of Hà Nội’s suburban district. According to reports, the driver of the coach lost control while coming down and crashed into the roadside rocks.
Đỗ Xuân Huân, chief secretariat of the office of Sóc Sơn District People’s Committee, said until Sunday afternoon, three passengers with serious injuries had been taken to a major hospital in the city while the others were being treated at Sóc Sơn District General Hospital.
Local authorities offered financial support to the victims from VNĐ500,000 (US$22) to VNĐ2 million ($88) each. The family of the deceased victim received compensation of VNĐ5 million ($220)
Police are investigating the accident.
Chinese business fined for environmental violations
Chairman of People’s Committee of northern Hải Dương Province Nguyễn Dương Thái has imposed an administrative fine of VNĐ672 million (US$29,372) on a Chinese textile company for violating regulations on treating waste water.
Pacific Crystal Textile Company, located in Lai Vu industrial park in Kim Thành District, was fined for discharging toxic waste which exceeded technical levels, including pH and color levels, total suspended solids (TSS), chemical oxygen demand (COD), and biochemical oxygen demand (BOD).
The local People’s Committee asked the company to respond to the consequences of the release, collect waste water and treat it following technical standards before it is released into the environment.
Pacific Crystal began operations at its $425-million plant in Hải Dương Province in December 2015. It specialises in manufacturing fabrics and raw materials for textiles.
Hanoi to help over 10,000 families escape poverty in 2017
The capital city of Hanoi will strive to help 10,230 families rise out of poverty in 2017, equivalent to a 0.6 percent reduction in household poverty rate.
To this goal, the municipal Department of Labour, Invalids and Social Affairs have drafted plans to mobilize social resources for poverty reduction work based on the multi-dimensional approach with priority given to ethnic minority areas.
Specific policies to support the disadvantaged will be carried out to reach all those qualified for welfare allowance, including children.
In 2016, the poverty rate among Hanoi households was brought down to 2.37 percent, equivalent to 23,592 families rising out of poverty. The city spent 240 billion VND (nearly 11 million USD) to subsidize health insurance for 386,782 persons living under or just above the poverty line. More than 20,000 poor households were given access to preferential loans to start their production or small business activities to increase their income.
As of the end of the year, the city was providing monthly allowance to 177,294 beneficiaries.
Caring for children is a key task for the city, as 14,000 out of the city’s 1.8 million children are living in disadvantaged circumstances. An estimated 99.2 percent of the underprivileged children have received support in various forms.
Besides, Hanoi is stepping up efforts to build a child-friendly environment in its communes through setting up injury prevention models and providing training in child care and protection for local officials. Around 5,500 activists were also trained in preventing injuries and accidents for children.
Project develops sustainable livelihood sources for Dong Thap farmers
The flood-prone Dong Thap Muoi (Plain of Reeds) in the Mekong Delta province of Dong Thap will benefit from a project on enhancing flood drainage capacity and developing sustainable sources of livelihood for local residents.
The People’s Committee of the Mekong Delta province has approved the budget of over 664 billion VND (23.4 million USD) for this project, which includes more than 570 billion VND (25.2 million USD) in ODA loans. The rest will be covered by the province’s budget and private sources.
The scheme will be implemented from 2017 to 2020, targeting 22,313ha of land in the districts of Hong Ngu, Tam Nong and Thanh Binh and Hong Ngu township. It is set to benefit 11,400 local households.
Vice Chairman of the provincial People’s Committee Nguyen Thanh Hung said under the plan, three livelihood models based on combination of rice cultivation and fish or shrimp raising will be introduced to local farmers.
While dykes and culverts will be upgraded or built, communication activities will be stepped up to encourage farmers to change their agricultural practices. It will also establish cooperatives and give farmers training in farming and product preservation techniques.
The project in Dong Thap Muoi is a component of the Mekong Delta Integrated Climate Resilience and Sustainable Livelihoods project funded by the World Bank, which aims to enhance tools for climate-smart planning and improve climate resilience of land and water management practices in selected provinces in Vietnam’s Mekong Delta.
Tra Vinh launches rural clean water programme
The Mekong Delta province of Tra Vinh has kicked off a rural clean water programme in 2017, with the aim of providing tap-water for about 5,000 rural households.
Bui Van Mung, Director of the provincial Clean Water and Rural Environment Sanitation Centre said that 15 projects will be carried out to realize the target.
Five will be on the building of new water supply stations. Meanwhile, the other 10 will focus on improving and upgrading current water supply stations, installing water pipelines for about 5,000 families, thus raising the rate of rural households getting access to clean water to 87 percent.
Tra Vinh province invested over 17.6 billion VND (778,976 USD) in its rural clean water programme to repair and upgrade 40 water stations in 2016.
Accordingly, the water distribution network has been expanded, providing clean water for 14,778 families. A total of 94,239 households have access to clean water, accounting for 86 percent of the total.
Dak Nong accelerates new style rural area building
The Central Highlands province of Dak Nong launched a national target programme on building new-style rural areas for 2017 in Dak Rlap district on February 6.
Chairman of the Dak Rlap district People’s Committee Le Van Thi said the district was selected as the key location for implementing the programme, aiming to have all its communes meet all the criteria.
The district will focus on improving local people’s income and their living conditions while developing infrastructure facilities and services.
In 2017, Dak Rlap aims to have two new communes recognised as new style rural areas, Thi said.
According to Le Van Sinh, Vice Head of the provincial Office for the national target programme on building new-style rural areas, in 2016, the province poured nearly two trillion VND (88 million USD) into the programme, of which more than 1.4 trillion VNA (61.6 million USD) was covered by other local projects.
Despite being a mountainous disadvantaged province, all communes in the province have completed planning for new style rural area building, Sinh said.
The locality has assisted local farmers to change their crops, and breed high-value animals while promoting vocational training for rural labourers to increase their income.
On average, the province’s communes have completed 11 out of the 19 new style rural area building criteria, Sinh said, adding that the provincial Steering Committee for the programme has urged all localities to mobilise resources for the work.
In 2017, the province aims to have additional five communes meet all the criteria of the programme, raising the total to 10 communes, he said.
Fatherland Front leader promotes tree-planting cause
President of the Vietnam Fatherland Front Central Committee (VFFCC) Nguyen Thien Nhan on February 6 attended a tree-planting festival in the northern province of Vinh Phuc where he emphasised the need to make tree planting a regular practice of Vietnamese people.
Nhan stated that on November 28, 1959, President Ho Chi Minh launched the tree-planting festival with the hope that the country would become more beautiful with a more pleasant climate and have a plentiful supply of wood in the next 10 years.
With that spirit, on January 1, 1960, at the Thong Nhat (Unification) Park, President Ho Chi Minh and thousands of people in Hanoi organised the first tree-planting festival.
Since then, the festival has become a movement and a good practice of Vietnamese people during the Tet (Lunar New Year) days, contributing to environmental protection and social-economic development.
Applauding the initiative of the Vietnam Farmers’ Association and the Vinh Phuc provincial People’s Committee to launch the tree-planting festival aiming to plant 800,000 trees, Nhan recommended the Vietnam Fatherland Front at all levels need to coordinate with local governments and the agricultural sector to assess the efficiency of tree planting in the past years to put forward more effective measures for upcoming years.
The goal is to make tree planting part of Vietnamese life, bringing practical benefits to socio-economic development in each locality by 2020, the 60th anniversary of the day Uncle Ho launching the tree-planting festival, he stressed.
Ly Son Island needs proper planning for tourism development
Both residents and visitors to Ly Son Island in the central province of Quang Ngai are concerned about a construction boom that can destroy the unique natural landscape on the island.
The island is becoming an attractive destination for domestic and foreign visitors, resulting in high demand for accommodations and other services.
According to the People’s Committee of Ly Son Island District in the central province of Quang Ngai, about 45,000 tourists came here in 2015, spending 546 billion VND (nearly 24.5 million USD).
It is expected that the number of tourists will reach 80,000 by 2020, bringing 1,200 billion VND (53.8 million USD) to the island.
Hundreds of restaurants and hotels were built or are under construction with differing architectural styles.
Tran Hoang, a local resident in An Vinh Commune, said that ten years ago the island was very wild, with spectacular natural scenery.
But beginning over two years ago, the landscape has been gradually destroyed by unplanned buildings.
"The fragmented tourism development is worsening the natural landscape. Many cultivated areas are being turned into construction land for tourism," Hoang added.
Further, bars, restaurants and hotels have been illegally built in the centre of the island at famous tourist spots, such as in Hang Cau, Hang Co, and Cong To Vo.
After holidays, the island is scarred by rubbish.
The provincial Department of Culture, Sports and Tourism has reported the situation to the provincial authority.
The report noted that the lack of direction on massive building has negatively affected the island, particularly the environment and beautiful beaches.
Huynh Thi Phuong Hoa, deputy director of the department, told the Nguoi Lao Dong newspaper that poor supervision by local authorities caused the problems, though the province has approved an overall plan for tourism on the island.
To solve this problem, provincial inspection teams are to examine land management and construction, which were reported to have affected the landscape of the entire island.
Further, cases of using planned tourism land for other purposes would be strictly dealt with, according to the provincial party committee.
The committee has also directed local authorities to review and temporarily stop carrying out tourism projects that are not funded by the State budget, to wait for more specific plans, said Le Minh Huan, head of the office of the provincial People’s Committee.
Relevant agencies were also required to review and propose plans to adjust construction projects, aiming to ensure the well-being of the ecosystem and natural landscape.
“The prolonged situation will risk breaking the well-endowed natural landscape of the island in the future,” Tran Van Minh, Deputy Secretary of provincial Party Committee said.
Ly Son district lies 18 nautical miles off the Vietnamese coast and covers an area of 10 square kilometres. It includes three communes: An Hai, An Vinh and An Binh.
The island district has a population of approximately 2,100. The majority of residents earn a living from fishing and farming garlic and spring onion.
Ly Son is striving to become a maritime economic centre by 2025, with a focus on tourism and aquaculture.
Archaeologists found relics of Sa Huynh culture on the island, which date back to 3,000 years ago. Starting in the 16th century, a number of ethnic groups migrated to Ly Son from the mainland and have inhabited the island ever since.
The island boasts numerous forms of intangible cultural heritage, such as traditional boat races and the Hoang Sa Soldier Feast and Commemoration Festival, which was recognised as part of the national cultural heritage in April, 2013. In the past, during the Nguyen Dynasty, the festival was organised to choose the healthiest men for a team of Hoang Sa soldiers.
The festival, which has been held for more than 300 years, is organised between the fourth and eighth day of the Lunar New Year.
Khanh Hoa starts sea festival logo contest
The People’s Committee of the south central province of Khanh Hoa has launched a contest to design the logo for the Nha Trang-Khanh Hoa Sea Festival.
The logo is required to reflect the beauty of local people and landscapes as well as values of Khanh Hoa’s sea and islands.
The winner will receive 50 million VND (2,200 USD), while there will be four consolation prizes worth 10 million VND (440 USD) each.
Vietnamese citizens living at home or abroad, foreigners working and studying in Vietnam as well as domestic and foreign organisations are eligible to apply. Contestants will send their designs to the organising board by March 31. The awarding ceremony will be held in late April.
The biennial Nha Trang – Khanh Hoa Sea Festival was first held in 2003 and has become a typical social, cultural and artistic event of Khanh Hoa province. The eighth of its kind is slated for June 10-13, featuring nearly 50 activities to honour the province’s sea and island advantages and culture.
Yen Tu Spring Festival opens in Quang Ninh province
The Yen Tu Spring Festival officially kicked off on February 6, the 10th day of the first lunar month, at the Yen Tu historical site in Uong Bi city, the northern province of Quang Ninh.
The festival will feature a range of activities, including traditional rituals and folk games.
According to the festival management board, the Yen Tu historical site welcomed 136,000 visitors during the first six days of the lunar month, up 3 percent over the same period last year.
The number of visitors to the site is expected to hit 2 million during this year’s festival.
Yen Tu Mountain is located about 50 kilometres from Ha Long City. The area has a beautiful natural landscape and awe-inspiring scenery, surrounded by ancient pagodas and hermitages.
The pilgrimage route, which winds from the foot of the mountain to its pinnacle, is almost 30 kilometres. Dong Pagoda, which sits atop the mountain’s highest peak, is more than a kilometre above sea level.
In the 13th century, King-Monk Tran Nhan Tong (1258-1308), the third king of the Tran dynasty, abdicated the throne when he was 35 and spent the rest of his life on Yen Tu Mountain, practising and propagating Buddhism. He founded the first Vietnamese School of Buddhism called “Thien Tong” or Truc Lam Yen Tu Zen on the 1,068m-high Yen Tu Mountain. The 20,000ha site is considered the capital of Vietnamese Buddhism.
Besides numerous temples, it also preserves many old religious and cultural documents such as precious prayer-books and monks’ writings.
With its significant historical, cultural and natural values, Yen Tu was recognised as a Special National Relic Site in September 2012. It was also selected as one of the 10 most popular spiritual destinations in Vietnam by the Vietnam Records Organisation.-
Quang Ninh: Tourists rise 45 percent during Tet holidays
The Tourism Department of the northern coastal province of Quang Ninh has reported that the locality greeted 800,000 visitors during the week-long Lunar New Year (Tet) holidays.
The number of guests, including 86,000 foreigners, featured a surge of 45 percent from the same period last year, and a turnover of nearly 9 trillion VND.
The world heritage site Ha Long Bay welcomed nearly 70,000 visitors while Ha Long Ocean Park lured close to 25,000 guests.
Quang Ninh welcomed 8.3 million tourists in 2016, a year-on-year increase of 7 percent.
With mainland and sea surface coverage of 12,000 sq.km and a 1.2 million population, Quang Ninh has long been known as one of the top tourism centres in Vietnam with numerous attractive destinations and diverse tourism products thanks to the province’s efforts to boost tourism’ growth.
It has four major tourist hubs. The Uong Bi-Dong Trieu-Quang Yen area is home to many spiritual and cultural sites, while Ha Long Bay along with the adjacent area is famous as a centre for sight-seeing, culture, shopping and entertainment.
The Van Don-Co To area offers spiritual, sea and island and entertainment tourism, and the Mong Cai area is strong for sea tourism and shopping.
Ha Long city is a big tourism centre of the province. It now has 595 tourist accommodations, including 100 one to five star hotels; 30 shopping centres and restaurants; 500 cruise ships, including 169 standardised overnight tour boats. Tourism services in the city have increased in both quantity and quality.
Thanks to its favourable location, Ha Long has attracted big groups and businesses in tourism with the most noteworthy projects being the Ha Long Ocean Park of Sun Group, the Vincom commercial centre and the five-star resort in Reu islands, both of Vingroup, and the Times Garden complex of My Way Group, among others.
Ha Long has issued a resolution on turning itself into a high-quality tourism centre for 2016-2020.
According to the Department of Tourism, Quang Ninh currently has 157 accommodation establishments from one- to five-star ratings, along with 47 travel firms and nine beaches for tourists.
Recently, the department has teamed up with the Vietnam National Administration of Tourism to organise a famtrip for travel firms and media agencies across the country to a number of potential destinations around the Ha Long Bay World Natural Heritage site.
In order to fully tap tourism potential and increase the stay duration of tourists, the province is advised to apply comprehensive measures, including reviewing the planning and management of tourism, expand market and diversify tourism products.
At the same time, Quang Ninh is told to invest more in other types of tourism instead of focusing on only the Ha Long Bay, as well as in human resources for the sector. Experts suggested encouraging the involvement of the community in boosting tourism development.
Quan Lan becomes more attractive to holidaymakers
Quan Lan island in the northeastern province of Quang Ninh has become a magnet to visitors thanks to its pristine beauty.
Quan Lan is located in the Bai Tu Long National Park. There are many pristine beaches on the island, such as Son Hao, Quan Lan and Minh Chau, to name just a few.
In Quan Lan beach, the water is clear and blue. Most accommodation facilities here are small houses at the foot of the mountain. There are still few tourists, so the atmosphere is quiet.
The number of tourists to the island has sharply increased recently. In 2015, visitors to the destination numbered 45,000, almost doubling that in 2014. In the first ten months this year, it received 47,000 visitors.
The rise can be partly attributable to more diverse tourism products. In previous years, bathing was about the only thing tourists could do in Quan Lan. But now they have a lot of things to keep busy.
According to Luu Thanh Vien, Vice Secretary of the Quan Lan commune Party’s Committee, local residents used to live off fishing and catching Sa sung (a kind of marine worms). Sa sung is a speciality of the region. It's used in cooking soup, which helps provide a wonderful taste and adds nutrition to dishes. Digging for sa sung under the sand with the locals is a popular activity for tourists. Now these livelihoods have become a tourism product.
Vien underlined the development of experience-based tourism in the commune, saying that the Van Hai Xanh JSC offered a package named “Experience a day as farmer in Quan Lan island” in Son Hao village, in which holiday-makers will join in caring for vegetable and fruit trees, harvesting and enjoy the fruit of their own work.
Meanwhile, Viglacera – Van Hai JSC offers community-based tours, such as fishing, fire camping, and sport games.
The locality plans to open a Quan Lan – Tan Lap tour, in which tourists will be taken by boats from Quan Lan beach to Tan Lap hamlet located in Van Don town. They can join local fishermen’s daily activities or visit orange gardens in Ban Sen, or other landscapes.
Quan Lan Island, around 55km away from Ha Long City, is endowed with deep blue waters, white sandy beaches spanning several kilometres, and wild, green pines along the beach.
The sand on Quan Lan is different from the sand on other beaches. It's white, tiny, pure and smooth. The transparent water allows you to gaze at the bottom of the sea where you can watch fish swimming around colourful corals.
Since the 11th century, Quan Lan had been a stopover along the commercial route. In the 12th century, Quan Lan was the first trading port of Vietnam built under the Ly dynasty.
In 1149, King Ly Anh Tong set up Van Don town and Van Don trading port, which included Quan Lan Island, in order to bolster commercial relations between Vietnam and other Southeast Asian countries. Relics of the former trading port have been discovered with traces of ancient architecture and grazed terracotta, proving that the place used to be a crowded urban area.
During the fifth and sixth lunar months, the area annually celebrates religious ceremonies to remember the area's former king, and residents also hold boat rowing festivals.
In 1288, the island was also the site of the well-known defeat of invading Mongol troops, who were destroyed by General Tran Khanh Du's army. Tourists can visit a temple in Quan Lan dedicated to the General, where they can learn about the history of the region and the achievements of the commander. The temple's roof is hidden under pine canopies. Approximately 100 steps lead to the temple's entrance that is halfway up a mountain.
Uber, Grab beat Vietnam's motorcyle taxi drivers on their own turf
As more locals embrace ride-hailing apps, xe om drivers, mostly old and poor, find themselves on the losing side.
The growing popularity of app-based transport services like Uber and Grab has eaten into the incomes of many motorcycle taxi drivers in Vietnam.
Some have even predicted that these newcomers could eventually put old-fashioned drivers, now usually referred to as "traditional" xe om drivers, out of business.
Thanh, a middle-aged driver in Hanoi, said in the past the weeks before the Lunar New Year had always been busy for him, but this year everything changed.
“A large number of migrant workers and university students would be rushing back home ahead of Tet," Thanh said, waiting for his next passenger. "I couldn't drive them all. But business has slowed this year.”
Drivers like Thanh have blamed the advent of transport apps like UberMotor and GrabBike. Tam himself is not sure how he can adapt to the changing times.
“Most people seem to have ditched old-fashioned drivers like me,” Tam told VnExpress.
Uber and Grab are leaving traditional motorcycle taxi drivers at the curb. These apps let the user secure a driver and know the fare before hitting the road.
Many xe om drivers reportedly cannot meet technical requirements to join Grab or Uber networks. Some don't have a smartphone to pick up passengers while others don't think they can catch up with the new tech.
“Young people now use high-tech devices," said Thanh, who thinks he's too old to learn how to use a smartphone. "So they can easily hail a ride with Grab or Uber drivers, who come to their home and pick them up."
The driver said this year he had to work longer hours on the street to make some extra cash.
Thanh said he used to earn at least VND200,000-300,000 (US$9-US$13) on a normal day and up to VND600,000 before Tet. But now he earns around VND100,000 only.
His fellow drivers have even turned to another job and he said he may just stay at home to help his wife at her shop.
“Last year was hard. I don’t even know how the new year will turn out,” the driver said.
Horse racing comes to Dai Nam with new track opening
Officials hope that with the opening of a new race track on January 29, horses and the Dai Nam Tourism Complex will soon become practically synonymous.
The new track spans some 60 hectares and, in addition to horses, it can accommodate dog, motorbike, go-kart, jet-ski and flyboard racing as well as a bevy of other entertainment events.
The grandstand can accommodate roughly 18,000 people, said Huynh Uy Dung, CEO of the Complex in a speech at the grand opening. We've been waiting a long time for this and we're excited that the opening is finally here.
He added that there is no betting at the track. All earnings from events are earmarked for charitable and social purposes.
Chinese tourists remain key driver of Vietnam's tourism boom
The number of international arrivals surged 23.6% in January, following a strong year.
Arrivals from China in January increased 67.9% from a year ago, accounting for a quarter of Vietnam’s total international tourist number, according to the General Statistics Office.
The country welcomed more than 1 million foreign visitors in the first month of 2017, a 23.6% increase, official data showed. Nearly 70% of the arrivals were from Asian countries.
China continued to maintain its place as the biggest feeder market with a record high 247,621 visitors. The number of Chinese tourists hit 2.5 million last year, out of the total 10 million visitors, according to the Vietnam National Administration of Tourism.
Vietnam’s proximity to China has made it a popular destination to many Chinese who want a vacation overseas without a long haul journey.
Most Chinese tourists come in through northern border provinces, particularly Quang Ninh, home of the famous Ha Long Bay, arguably the country’s top sightseeing attraction. Quang Ninh has recently allowed Chinese travelers in groups to stay up to three days without a tourist visa.
Vietnam has also offered visa exemptions to visitors from South Korea, Japan and Southeast Asian neighbors. Since mid-2015 it has also attracted more tourists from Germany, France, Italy, Spain and the U.K. with a similar policy, which is expected to be extended this summer.
Hoping to give the tourism industry a major push, the Vietnamese government has launched the much-touted online visa system for travelers on short holidays or casual business visits.
Tourism authorities are eyeing a 15% increase in international tourists this year.
Tourism is expected to contribute 10% to Vietnam’s gross domestic product, becoming a key driving force of the economy by 2020, when the country is expected to receive up to 20 million foreign visitors and earn $35 billion in tourism revenue.
Clubs empower female migrant workers in Ha Noi
They have to work 10-12 hours per day, live in highly cramped lodgings, have no spare time for themselves and receive no training to improve their skills.
The sorry plight of female migrant workers was highlighted at a seminar held recently by the Hà Nội Women’s Union.
A study done by the Research Centre for Family Support and Community Development (CFSCD) found female migrant workers in Phúc Xá Ward in Ba Đình District, and in Thịnh Liệt and Định Công wards in Hoàng Mai District had to live in narrow, boarding houses that lacked sufficient light and toilets.
They face a lot of difficulties in registering as temporary residents and have little or no access to social insurance and health insurance, a CFSCD report said.
It said more than 80 per cent of the women spoken to said they were engaged in manual labour and saw no prospects of finding other, more stable employment.
CFSCD Director Lê Thị Thủy said the lives of female migrant workers were extremely hard. They had to send money to their families, parents, or repay debts from when they were still at school, so their income did not meet even minimum requirements.
“Many of them do not have health insurance, so whenever they are ill, they are not taken care of and must spend too much on treatment fees. They fall into poverty easily,” Thủy said.
Since the beginning of last year, the Hà Nội Women’s Union and CFSCD have jointly implemented a project to improve the living conditions of female migrant workers in Hà Nội and enhance their empowerment.
The project established three female migrant worker clubs in the three wards mentioned above. The clubs held monthly meetings to help each other overcome obstacles in their lives.
Club members met with local authorities to with requests for specific assistance, like having part-time work to augment incomes, loans at preferential interest rates to do business, support to buy health insurance and permission for their children to study in public schools located in areas where they are registered as temporary residents.
Vũ Thị Kim Thơi, head of the club in Thịnh Liệt Ward, said they had 50 members who receive training and assistance in trading, healthcare and law towards improving awareness and creating fresh momentum in their lives.
So far, the three clubs have attracted nearly 100 female migrant workers. For the upcoming Tết (Lunar New Year) festival, they presented 20 poor female migrant workers with gifts worth VNĐ8 million (US$350).
Quảng Ninh okays sand exploitation for aquaculture
Quảng Ninh Province will allow Vân Đồn Island District to resume its exploitation of sand mixed with pieces of coral and oysters, to serve the needs of local aquaculture farmers.
Early last year, the northern province’s people’s committee had tightened control over mineral resources, including sand, and had banned the exploitation of sand mixed with pieces of coral and oysters for aquaculture.
Soon after, the sand became scarce, and since then farmers have been struggling to procure sand for aquaculture, especially for breeding bivalve species such as clam and oysters. More than 500 households in the district said they had been affected by the sand shortage.
Nguyễn Thị Bảy, a farmer from Ngọc Vừng Island Commune, said the price of 140 cubic metre vessel of sand jumped up from VNĐ14 million (US$622) to VNĐ16 million ($711). There was also not enough sand to meet the demand.
The Vân Đồn Island District authority had reported the situation to the provincial authority, and now received permission to resume exploitation.
Farmers from Vân Đồn Island District will be allowed to do sand exploitation in a five-hectare area in Vạn Yên Commune’s Tây Bắc Hòn Chín and can extract a maximum of 142,000 cubic metres of sand. Quang Minh Co. Ltd. will be assigned to collect sand this year.
The provincial people’s committee has said that the district would not permit sand exploitation for trading.
The provincial natural resources and environment department will be in charge of inspecting the sand exploitation activities and taking appropriate steps for environmental protection and security.
Vietnam to change landline codes in Danang, Hue this weekend
Vietnam will change the landline telephone area codes in Danang and 12 central and northern mountainous provinces from February 5, the first step in a long-term plan to simplify the country’s telecommunications network.
The codes will start with a “2” and be either two or three digits long. Callers will be required to dial the new area code (plus the 7-digit number) to place a domestic call.
Also on the list are Quang Nam and Thua Thien-Hue, home to popular resort towns Hoi An and Hue.
Later phases finishing in August will change the codes in another 46 localities including Hanoi and Ho Chi Minh City. The codes in Vinh Phuc (211), Phu Tho (21), Hoa Binh (18) and Ha Giang (19) in northern Vietnam will remain the same.
Minister of Information and Communications Truong Minh Tuan said that people’s existing phone numbers will remain the same and there won’t be any changes to calls between fixed line numbers within the same province.
However, the changes will affect calls between different provinces and incoming calls from mobile phones and foreign countries to a fixed line number in Vietnam, Tuan said. In these cases, callers will be required to use the new area codes.
Vietnam constructed its first repository of phone numbers in 2006 after eliminating a monopoly in the telecommunications sector, but the area codes and network codes of the previous networks have been left unchanged to avoid confusion.
The ministry hopes that the area code change will solve inconsistencies in Vietnam’s area code system without having a big impact on Vietnam’s telecom traffic and users.
Reports on Vietnam’s telecoms sector show that inter-provincial calls and mobile and international calls to fixed landlines in Vietnam only account for 1.6% of the country’s total telecom traffic.
The ministry said the changes will be the first step in a long-term plan to reduce the number of area codes from 63 to only 10. Under the plan, adjacent provinces and cities will be grouped into regions with one area code. This should make the telecom network easier to manage, while people living in provinces with same area code will enjoy lower call rates.
Vietnamese businesses warned about ‘outsourcing trap’
More than 70 percent of Vietnam’s total export turnover belongs to foreign-invested enterprises (FIEs), while Vietnamese enterprises still cannot join the global value chain.
According to the General Statistics Office (GSO), Vietnam exported $175.9 billion worth of products in 2016, an increase of 8.6 percent over the year before. FIEs alone exported $126 billion, or 70 percent of total export turnover.
Vietnam’s exports have been witnessing stable two-digit growth rate over many years. In 2001, the country exported $15 billion worth of products, while the figure soared to $96.9 billion 10 years later. In 2016, export turnover climbed to $175.9 billion.
However, 70 percent of the export turnover belonged to FIEs, while Vietnamese enterprises could only pocket ‘small change’.
Le Dang Doanh, a renowned economist, said economists began warning about the modest contribution by Vietnamese enterprises to the country’s exports many years ago, when FIEs’ export turnover accounted for 50 percent of total export turnover.
However, the situation has not improved, while the figure has increased to 70 percent.
Ngo Duc Hoa, president of Thang Loi Textile & Garment, said all the products for domestic consumption are designed, produced and distributed by the company. However, for export products, it only does outsourcing for foreign partners.
Hoa said the biggest problem for Vietnam’s garment producers is that they have to import input materials. Since Vietnam’s fashion design industry is still weak, Vietnam’s products cannot attract customers.
And since Vietnamese companies only do outsourcing, they cannot earn big money. An export shirt is priced at $10, but Vietnamese companies have to pay $8.5 for the input material to make the shirt. Of the $1.5 left, exporters have to pay transportation fees, labor costs and other expenses, which means a modest profit of 10 percent for garment makers.
“It is reasonable to say garment companies can only pocket small change,” he said.
The same thing is occurring in hi-tech industries. Vu Thanh Tu Anh from FETP said a survey conducted by FETP’s team found that Vietnamese only make up 3 percent of Intel’s export value, including catering service, gift boxes and security service, the products and services which Intel cannot import. High technology does not always mean high added value.
Anh warned that the national economy would fall into the ‘outsourcing trap’ of low added value if the situation does not improve.
At a recent roundtable conference on Vietnam’s economic development between the PM and international experts, Tran Van Tho from Waseda University also warned that as Vietnam tries to integrate more deeply into the world, avoiding the outsourcing trap when joining value chains will be a great challenge.
Mai Thanh, VNN
Visitor recounts terrible animal abuse during trip to Saigon zoo
A visitor splashes water onto an elephant at the zoo in Ho Chi Minh City.
In recent years, many people have raised the alarm on the fact that wild animals at the Saigon zoo are suffering immensely – from narrow cages to light and noise pollution. But these nuisances are nowhere near the torture they endure on a daily basis from visitors.
At the elephant exhibit, I witnessed visitors relaxingly throwing cut sugarcane stalks onto the mammals and shouted excitedly whenever the objects hit their heads.
Meanwhile, the white tigers, though known as the ‘lords of the forests,’ were constantly ‘challenged’ by many visitors, who tried to scare the animals away by either knocking their hands on the tempered glass surrounding the cage, stomping their feet, or shouting at their faces.
But the worst suffering was on the crocodiles. The crocodile exhibit section is designed as an open space where visitors can walk across the area on a bridge and watch the reptiles from above, instead of through the cage bars. The consequences: the crocodile area was full of drink bottles, beer cans, confectionery packets and many other types of trash.
I even saw several half-eaten longan fruits on a crocodile’s head, and it was not difficult to tell from the scene that a bunch of the fruits had been thrown at this poor animal.
Across the zoo, there are more than a dozen restrooms and numerous bins, at the most convenience for visitors, but few would ever use them. I am wondering whether it was because they wanted to ‘save’ a few steps to approach the bins or because it was their deep-rooted habit of littering.
A lot of visitors threw away their leftover food and all kinds of trash wherever they walked by, and they allowed their kids to pee onto precious ancient trees that need special protection across the zoo.
I am wondering, again, that how many of those parents would know that by doing so, they were shaping the habit and behavior of their children?
Then came the camel exhibit area, separated from the main roadway by a narrow fenced passage full of thorny leaves of wild pineapples. The design is meant to stop visitors from approaching the cage, but this measure just did not work.
Many visitors did not bother to step onto those thorny leaves – and they indeed destroyed the whole area – to stand next to the cage and let their kids feed the camels with cakes, sausages and fish balls. Some other adults would pick leaves from the nearby trees and fed the animals.
All these acts of teasing and feeding the animals took place just beneath warning signs that visitors should not do so. Are they illiterate?
And yet next to the ‘Don’t Step on Grass’ signs, written in Vietnamese, on the lawns throughout the park were a sea of people resting, sleeping and even throwing drinking parties on plastic sheets.
I know it is hard to blame the zoo management for this, given that the number of visitors during Tet was way higher than usual and beyond the security’s supervision capacity. But I believe even when there were more security guards on duty, they might still be unable to stop the misbehavior from such a huge number of people!
The Saigon Zoo and Botanical Garden, one of the oldest zoological parks in the world, is not simply a place for recreation but also one where we, particularly children, get to know about the world of nature as well as flora and fauna species.
That the zoo space is occupied by noisy entertainment areas plus fast-food, souvenir and ice-cream stalls is already terrible for the park. We do not need trash and misbehavior to make things worse.
Tuoitrenews, HOANG NGUYEN
Casinos report losses while waiting to be opened to Vietnamese
Most casinos have reported losses, caused mainly by the fall in the number of travelers from China and Taiwan.
Running the only casino opened to foreigners in Ha Long City, Hoang Gia International JSC has reported unsatisfactory business results. Though revenue in 2016 increased by 15 percent compared with the year before, its profit was minus VND18 billion.
The casino brought VND88 billion in revenue to Hoang Gia International, the second largest revenue after hotels. Thevcompany took a loss of VND36 billion because of the high capital cost of VND123 billion.
Casinos’ continued losses or modest profit is not a surprise. A report of the Hai Phong City Party Committee showed that by the end of 2012, Do Son Casino, one of the first casinos in Vietnam, reported accumulative loss of VND169 billion.
Meanwhile, the 2016 annual report of Donaco International, an Australian group that runs Aristo International in Lao Cai province, showed that casinos still bring profit, but the profit in Vietnam is just 1/10 of that in Cambodia.
Vietnam now has seven licensed casinos open only to foreigners, and most of them report unsatisfactory business results, mostly due to the ban on Vietnamese to enter casinos.
Since Vietnamese are now allowed to gamble, casinos’ operation depends on travelers, mostly from China, South Korea and Japan.
Hoang Gia International has been taking losses since 2013, though Do Son is the only casino for foreigners in Ha Long City, a well known tourist city. The biggest post-tax loss, VND153 billion, came in 2014.
In 2015, the company reported a loss of VND56.5 billion because of high capital costs, while revenue was modest, at VND33 billion.
The company’s board of management explained that the number of travelers from China and Taiwan has decreased sharply. Therefore, it was seeking to sign contracts with tourism agents to attract more Chinese travelers, and also trying to attract more travelers with high income from South Korea and Japan.
The changes in the policies applied to Chinese travelers and the competition with other casinos have had a big impact on Do Son Casino.
As for Aristo International, in 2016, its casino attracted 148,000 players, but the revenue from the business was $23 million only, or 1/6 of the revenue it gained in Cambodia, while the pretax profit was $4 million, equal to 6 percent of the $62 million profit in Cambodia.
Analysts have warned that casinos would see their business facing more challenges as there are seven casinos, while more casinos would be set up in the future. Quang Ninh, Hai Phong, Da Nang and Kien Giang, the key tourist provinces and cities, already have, or will have, casinos.
Thanh Lich, VNN
BUSINESS IN BRIEF 8/2
Hoa Phat to build iron and steel production complex
The Dung Quat Economic Zone Authority (DEZA) and Quang Ngai Industrial Park Management Board on Monday granted an investment certificate for the Hoa Phat Dung Quat iron and steel production complex to the Hoa Phat Group.
Construction will resume on the Guang Lian Dung Quat steel project, which had its investment certificate revoked in early September. It will take up 372.7 hectares with a total investment capital of VND60 trillion (US$2.65 billion).
Of the area, nearly 340 ha will be used for building factory and 27 ha for building a specialized port.
The project was designed to have an annual capacity of four million tonnes of steel products, including steel for construction and rolled steel. It is expected to be completed in four years.
The project, divided into two phases, will be equipped with modern and environmentally-friendly technologies.
The annual capacity of the first phase will include one million tonnes of steel for construction and one million tonnes of high-quality rolled steel. The second phase is designed to produce two million tonnes of hot-rolled steel flat bar for machinery manufacturing.
Hoa Phat Group expects to earn US$2 billion in revenue per year and contribute VND4 trillion to the State budget after the project comes into operation.
An estimated 8,000 jobs will be created for local residents.
Speaking at the certificate granting ceremony, Chairman of Quang Ngai People’s Committee Tran Ngoc Cang said the province would create favourable conditions for investors to complete its investment.
Cang required the DEZA, management boards of IPs and authorities of Binh Son District to support the investor and solve arising problems if it occurred to help the investor carry out the project following its set progress.
The project will be conducted over 50 years. It is part of the plan to develop a steel production and distribution network from now to 2020 and in a vision to 2025 approved by the Ministry of Industry and Trade.
It was approved by the Prime Minister on January 25.
Export businesses sanguine, make frenetic start to 2017
After the Tet (the Lunar New Year) break, employees of Intimex Group Joint Stock Company are scrambling to fulfil export orders.
The company achieved export revenues of US$60 million last month and is expected to exceed the $100 million mark in the first two months of the year, much higher than in the same period last year.
Do Ha Nam, the company’s chairman and general director, said: “Orders to export rice to China are much higher compared to the same period last year. Meanwhile coffee export has entered the main season with many large contracts.
“Exports of rice and coffee may face difficulties this year, but the signals at the beginning of the year are rather positive.”
Pham Thai Binh, director of the Can Tho city-based Trung An Hi-Tech Farming JSC, a major rice exporter, said his company officially resumes work on February 6, but its staff began to work on the 31st to carry out export orders.
His company is rushing to fulfil two orders for high-grade rice from China and Malaysia, with 6,000 tonnes to be shipped to China, he said.
China and Malaysia are traditional customers, he said.
Though this year rice exports are set to face more difficulties due to a global glut, Trung An has set itself a target of 30 per cent export growth this year, with focus on high-grade rice products, he said.
The company has established a closed rice value chain from growing to exports and obtained certification from the International Federation of Organic Agriculture Movements, he added.
Tran Van Linh, chairman of Thuan Phuoc Seafood and Trading Corporation, said his company’s order book is full until the end of the first quarter.
It resumed work on February 2 to fulfil those orders, he said.
In the case of the garment and textile sector, many insiders forecast exports to be modest this year, but Garmex Sai Gon Joint Stock Company targets higher export growth than last year.
Le Quang Hung, its chairman, said the company achieved export revenues of nearly $6 million last month.
The US is the company’s key export market, accounting for 50 per cent of exports, he said, adding that Garmex Sai Gon is actively seeking new partners to expand its markets.
The US withdrawal from the Trans-Pacific Partnership trade deal is expected to affect Viet Nam’s export growth eventhough Viet Nam’s exports to the US climbed 15 per cent to $38.5 billion last year.
According to the Ministry of Industry and Trade, Viet Nam took advantage of many free trade agreements to boost exports last year.
The Viet Nam-Korea FTA, for instance, helped Viet Nam’s exports to South Korea rise by 29 per cent last year, it said.
It added it would step up trade promotion activities to help companies expand their export markets and increase exports to countries that have FTAs with Viet Nam.
National retail trade sales see increase in January
The total revenue from retail trade and services saw a year-on-year rise of 10 per cent, to US$15 billion in January, according to the General Statistics Office (GSO).
Excluding inflation, the amount marked a yearly increase of 6.7 per cent, GSO said.
Vu Manh Ha, a GSO statistician, attributed the strong growth in January’s retail trade to stable prices despite local people’s high consumption power in preparation for the Tet holiday and supermarkets’ sufficient sources of consumer goods for the country’s biggest festival.
Retail sales of goods, which accounted for more than three fourths of total sales, reached $11.5 billion in January, surging 6.5 per cent against the previous month and 11 per cent against the same period last year.
Several sectors recording a positive revenue increase included food and foodstuffs (up 13 per cent); textile and garments (up 11.5 per cent); transport services (up 11.2 per cent) and home appliances (up 7.8 per cent).
Meanwhile, retail sales in accommodation, restaurant and catering services, which made up 11.3 per cent of the total, topped more than $1.64 billion, representing a modest yearly rise of 3 per cent.
Some localities that posted encouraging accommodation, restaurant and catering retail sale growth included Ba Ria- Vung Tau with 12 per cent, Thanh Hoa (8.6 per cent); Kien Giang (7.4 per cent); Ha Noi (5.7 per cent) and Da Nang (5.2 per cent). Several others, however, witnessed a sales reduction, such as Quang Binh, down by 12.4 per cent and HCM City and Nam Dinh, down by 5.3 per cent.
In the first month of this year, revenue from tourism services also saw significant growth of 30.7 per cent to $155 million with some provinces and cities recording strong growth, such as HCM City and Ba Ria – Vung Tau (33 per cent) and Quang Ninh (23 per cent).
The reviewed strong increase was attributable to seasonal factors and a growing tendency of Vietnamese travelling abroad during the Tet holiday, GSO noted.
The sales of other services during the month reached over $1.67 billion, a hike of 9.3 per cent compared to a year ago.
Cost estimates for construction projects to be slashed
The estimated initial cost of State-funded construction projects in 26 provinces and cities could be cut as much as VND10.2 trillion (US$451.6 million) compared to early projections. The findings were made by the Ministry of Construction in a recently conducted cost review.
Reviews of 9,129 construction projects found that VND9.6 trillion ($424 million) could be trimmed from the total initial estimated cost of VND163 trillion ($7.2 billion). A review of an additional 1,369 construction projects scaled back another VND624.8 billion ($27.6 million).
Deputy Minister of Construction, Do Duc Duy, said the governing of construction investment has been undergoing positive reforms in line with the Law on Construction and related guiding documents, leading to a substantial boost in construction quality, loss and waste prevention, and improved efficiency of capital usage.
Generally speaking, Duy added, competent authorities have paid due attention to the evaluation of project planning, design and estimated cost. The more stringent evaluation processes are, the better the works’ quality and the fewer the risks, he said.
In 2017, the Ministry of Construction will step up the inspection of State management agencies in terms of their designated responsilities, as well as the adherence of entities involved in construction activities to laws and policies.
Over 20 million foreign investors granted trading codes
The Vietnam Securities Depository (VSD) granted trading codes to more than 20 million foreign investors by the end of January.
Of the total, 3,164 were institutional investors and 17,208 were individual investors.
In January alone, 113 foreign investors were granted trading codes, of which 12 were institutions and 101 were individuals.
In the period, VSD also approved information changes for 30 foreign investors (10 institutions and 20 individuals).
Province to attract significant capital to EZs, IPs
Central Thừa Thiên- Huế Province aims to attract 20 projects to its economic zones (EZs) and industrial parks (IPs) with total registered capital of some VNĐ6 trillion (US$264.3 million).
To this end, the province’s Economic Zone and Industrial Park Management Board will launch investment promotion programmes that focus on fostering partnership with investors having adequate financial resources in infrastructure, Nguyễn Quế, deputy head of the board, said.
According to Quế, currently, the board is working with major domestic firms, including FLC Group, VinGroup, Bitexco and Viglacera, and strengthening coordination with foreign partners, including JICA, KOICA and JETRO, in investment promotion.
For projects being implemented in the Chân Mây-Lăng Cô EZ, provincial authorities have been assisting in the construction process and in capital disbursement, including the second phase of the Lăng Cô Laguna, Minh Viễn Lăng Cô Resort, Wharf 3 at Chân Mây Port; infrastructure of Viglacera’s industrial park; Bitexco’s Lập An eco-tourism project; and infrastructure of Sài Gòn-Chân Mây industrial and non-tariff zone.
According to Nguyễn Văn Cao, chairman of Thừa Thiên- Huế People’s Committee, the province has implemented a number of measures to boost investment, such as improving investment and business environment and addressing issues in the aftermath of the sea environment incident that occurred last year.
In the future, Thừa Thiên Huế will also enhance the quality of business associations and trade organisations for better connectivity among enterprises. The province will invest over VNĐ2 trillion in socio-economic infrastructure and industry development programmes in 2017.
At the same time, this central province will also restructure its vocational training system and step up administrative reform, striving to conduct over 50 per cent of its administrative procedures online, and apply the one-door model at the provincial and district administration centres, thus raising the satisfaction rate for implementing administrative procedures among residents and businesses to over 80 per cent, Cao said.
Last year, local EZs and IPs attracted 14 projects with total investment of nearly VNĐ4.9 trillion, bringing the total number of projects located in their facilities to 140, worth over VNĐ63.7 trillion. Of the projects, 36 are run by foreign investors, with registered capital almost reaching VNĐ31.2 trillion.
SOEs told to improve information dissemination
A report by the Ministry of Planning and Investment has found that a number of State-owned enterprises (SOEs) failed to comply with regulations on disseminating information.
Just more than 38 per cent of 620 SOEs which were required to publish information under the Government’s Decree No 81/2015/NĐ-CP made public their information, but their dissemination was not adequate as requested, the report said.
Sectors with the most firms that failed to disseminate information included irrigation, forestry and lottery.
Member companies of giant SOEs also failed to publish information, such as five under the Việt Nam Oil and Gas Group, two under the Việt Nam National Chemical Group, six under the Việt Nam Coal-Mineral Industries Group and four under the Việt Nam Rubber Group.
The decree required firms to regularly make public nine reports, but on average, firms just announced four.
Deputy Prime Minister Vương Đình Huệ in October last year gave a push to the information dissemination of SOEs. Accordingly, the Ministry of Planning and Investment has been told to list companies which did not make public their reports as required and raise measures for handling.
US dollar devalued against dong
After rising against the Vietnamese currency ahead of Tet, the US dollar devalued against the dong on the first working day of the Lunar New Year.
On Monday, domestic commercial banks devalued the dollar against the dong by VND20-40 per dollar in comparison with the last weekend.
Vietcombank and Vietinbank quoted the dollar/dong exchange rate at VND22,565/22,635 for buying and selling, down VND20 and VND25, respectively.
Eximbank made a stronger cut by VND40 to list at VND22,520/22,620, while the cut at BIDV was VND30 to VND22,560/22,630.
The dollar strengthened against the dong ahead of Tet, during which time the demand for the dollar was high to meet payment and import requirements.
Resolution to improve business climate issued
The government issued Resolution No.19 on February 6 on tasks to improve the business climate and national competitiveness this year with a vision to 2020.
Vietnam is aiming to reach the level of ASEAN 4 countries (Singapore, Malaysia, Thailand and the Philippines) later this year in terms of business environment; become one of the top 70 and 80 countries in terms of start-ups and protection of minority investors, respectively; and among the top 30 countries listed by the World Bank in transparency and access to credit.
By 2020, the country also targets being among the top 40 countries ranked by the World Economic Forum in access to loans, achieving the average level of ASEAN 4 countries in competitiveness and that of ASEAN 5 (Malaysia, Vietnam, Indonesia, Thailand and the Philippines) in terms of the Global Innovation Index released by the World Intellectual Property Organisation.
On e-government, comprehensive reform will be conducted in telecommunications infrastructure, human capital and online service indexes, so that the country will be rated among the top 80 countries in the UN e-government ranking.
By the end of this year, most public services involving citizens and businesses will be launched at Level 3 and Level 4 which allows online payments and applications.
The government asked ministers and leaders of ministry-level agencies, government units, centrally-run municipal and provincial People’s Committees to devise action plans before February 28 to execute the resolution.
The Ministry of Planning and Investment was directed to work with the Ministries of Finance; Labour, Invalids and Social Affairs; and Vietnam Social Insurance to improve indexes on start-ups and investor protection, partly by cutting administrative procedures
It must also liaison with the Ministry of Justice and Government Office to build a decree on amendments and supplements to existing legal documents in order to clear business obstacles.
The Finance Ministry will adopt technological advances to manage imports-exports, and improve the efficiency of inspection at border gates and electronic customs clearance.
The Government asked the Vietnam Chamber of Commerce and Industry (VCCI), the Vietnam Lawyers’ Association, the Vietnam Bar Federation and business associations to conduct surveys on the implementation of administrative procedures and make relevant recommendations to the Government.
The VCCI will also work to improve the quality of the provincial competitiveness index (PCI) rating and collect feedback from the business community to report to the National Council on Sustainable Development and Competitiveness and the Government Office.
Municipal and provincial authorities were requested to launch one-stop shop models to simplify and shorten time for administrative procedures involving taxes and fees.
Construction ministry to finish equitising 16 big SOEs by 2020
The Ministry of Construction (MoC) plans to finish equitising 16 State-owned enterprises (SOEs) under its management by 2020.
The information was released by MoC Minister Pham Hong Ha at a working session in Hanoi on February 6 with relevant agencies on the re-organisation of SOEs and companies with State capital managed by the MoC.
The firms include Development Investment Construction JSC (DIC), Song Hong Corporation, Bach Dang Construction Corporation, VIGLACERA Corporation, Vietnam Water and Environment Investment Corporation (VIWASEEN), Hanoi Construction Corporation, LICOGI Corporation, LILAMA Corporation, Construction Corporation No.1 (CC1), FiCO Corporation, Vietnam Construction Consultant Corporation (VNCC), Construction Machinery Corporation (COMA), Housing and Urban Development Corporation (HUD), Song Da Corporation, Vietnam Urban and Industrial Zone Development Investment Corporation (IDICO), and Vietnam Cement Industry Corporation (VICEM).
Twelve of the companies have begun the equitisation process while four others (Song Da, IDICO, HUD and VICEM) were recently added to the list of SOEs subject to re-organisation between 2016 and 2020.
Minister Ha said these enterprises own a huge amount of assets while employing hundreds of thousands of workers.
The ministry proposed the rate of State capital at LICOGI be unchanged and the State-owned stake in the company be transferred to the State Capital Investment Corporation (SCIC) in the first quarter of 2017.
For LILAMA, VICEM, Song Da, VIGLACERA and HUD which are either holding a large amount of assets or are building key national projects, the rate of State capital will be reduced to 51 percent to ensure the State’s controlling stake there through 2020. The State stake in those five will be further reduced in the following years.
In the remaining ten corporations and joint stocks companies, the State-owned stake will be reduced to 36 percent which will be transferred to the SCIC or designated agencies to manage in 2018 and 2019.
Ha said the ministry will continue to instruct the divestment of State capital from affiliates and associated companies of its corporations in the next four years.
At the session, Deputy Prime Minister Vuong Dinh Hue, head of the Steering Committee for Enterprise Reform and Development, asked the MoC to complete a roadmap for divesting and transferring the right to represent State ownership at SOEs to fully protect the State’s interests.
He also instructed the MoC to bring the State stake in LILAMA, VICEM, Song Da, VIGLACERA and HUD to below 51 percent by 2019 by the latest, while the sale of all State capital in the other 10 corporations and joint stock companies should be completed in 2018.
Hue also requested the ministry accelerate the listing of equitised businesses in the stock market.
Phu Quoc develops hi-tech agriculture
Phu Quoc island district in the southern province of Kien Giang plans to develop hi-tech agriculture from now to 2020, with a vision towards 2030, to create clean, safe and high-value-added products.
The district aims to grow 2,500 hectares of vegetables by 2020, including 150-200 hectares using high technology in Cua Duong, Ham Ninh and Duong To communes.
It will also zone off areas to grow sweet potato, flowers and fruits and environmentally-friendly animal husbandry models, including raising 25,000 chickens in Cua Duong, Cua Can, Bai Thom and Ganh Dau communes by 2020.
Vice Chairman of the district’s People’s Committee Huynh Quang Hung said the district is also developing urban agriculture models.
He added that local authorities are encouraging economic sectors to invest in hi-tech agriculture.
The district will create favourable conditions for businesses, organisations and individuals to cooperate with partners in other cities and provinces such as Ho Chi Minh City, Lam Dong and Binh Duong, he said.
Located on the Vietnam-Cambodia-Thailand marine economic corridor, Phu Quoc district covers more than 593sq.km with a population of more than 100,000. Itcomprises 27 islands with Phu Quoc the largest.
Exports to India on upward trend
Vietnam exports to India in 2016 grew 8.7% to more than US$2.68 billion against the previous year, according to Vietnam Customs.
Vietnam-India total trade increased from US$1.01 billion in 2006 to around US$5.5 billion in 2016 while Vietnam exports to India jumped 19.34 times with an average growth of 253%.
2016 was the first year Vietnam enjoyed a trade surplus of US$70 million with India.
Structural changes have been seen in import and export trade. In the past, bilateral trade involved animal feed, corn and pharmaceuticals sectors only, with Vietnam was often the importer. However, the import-export business has been diversified, covering agricultural products, seafood, electronics, telephones, components, machines, equipment, pharmaceuticals, chemicals, garment, fibres and cars.
Most Vietnamese products exported to India obtained a growth last year. Telephones and components ranked first with an export value of US$379.15 million, followed by machines, equipment and tools (US$354.11 million) and base metal (US$238.94 million).
However, some export products saw a decline including rubber (down 0.4%), pepper (down 5.7%), confectionary and cereal products (down 51.6%), wood and timber products (down 47.2%) and plastics (down 34.4%).
WB: Prices of key Vietnam farm products forecast to surge
Prices of some of Vietnam's major agricultural goods are forecast to rise this year, according to the World Bank's (WB) Commodity Markets Outlook report.
The report, which provides detailed market analysis for major groups of commodities, releases price forecasts for 46 commodities until 2030.
Vietnam is the world's largest Robusta coffee grower, said the WB. The price of Robusta beans last year stood at US$2.08 a kilo but is expected to rise to US$2.32 this year but slightly drop to US$2.25 in 2019. By 2030, the price would decline to around US$1.66 a kilo.
For rice, the WB chose Thailand’s 5% broken rice as the benchmark for price forecasting. This type of rice this year is estimated at US$406 per ton, down from last year's US$422. The price would slip to below US$400 in the coming years and US$365 by 2030.
Thailand is the world’s leading rice exporter, so its rice prices are often referred to by importing countries to negotiate rice prices with exporting nations such as India, Pakistan and Vietnam. The Vietnam Food Association (VFA) has long given Thai rice price updates to member enterprises.
Regarding seafood, the WB forecast shrimp would rise to its highest price of US$12.65 per kilo this year before a steady fall in the coming years. Prices of agricultural materials including DAP and urea fertilizer are projected to edge down sharply in the years to come.
The price of rubber would surge in the coming years. RSS3 rubber could rise sharply to US$2.21 per kilo this year from US$1.71 last year. This level would remain above US$2 in the following years, and only at US$1.99 per ton in 2030.
The WB based its forecasts on 2010 prices.
Car sales forecast to slow this year
Vehicle sales are forecasted to drastically fall in 2017 as customers await lower prices in 2018 when tariffs on car imports from ASEAN countries will be fully removed.
Car prices in Vietnam are much higher than those in regional countries due to higher taxes. Currently, a vehicle which is produced in Thailand or Indonesia is priced at just VND250 million (USD11,360), however, it is sold at up to around VND600 million after being imported into Vietnam due to the country’s high taxes.
Following the ASEAN Trade in Goods Agreement, Vietnam will fully remove tariffs on imported cars from ASEAN countries from 2018. It is forecast that prices of vehicles worth less than VND1 billion will decrease sharply in 2018. The price of a current VND600-million car will decrease to VND400-450 million in 2018.
This will probably mean lower car sales this year.
Minoru Kato, General Director of Honda Vietnam, said that 2017 would be a tough time for car manufacturers. The Vietnam Automobile Manufacturers' Association believe the Vietnamese car market would see growth of 10% compared to 2016.
However, many people said that the prices of ASEAN-imported autos will not fall as expected in 2018 as the government would increase special consumption and value-added taxes to cover the car import tariff removal. This is also aimed to protect the domestic car industry.
Regarding this concern, lots of other people still believed that ASEAN-imported car prices in Vietnam would be much slashed in 2018 despite the government’s tax increases. At least USD3,000 worth taxes are raised for each vehicle imported from ASEAN countries so prices in 2018 could be as high as they are now.
Viet Tien Garment recorded high profits
Viet Tien Garment Joint Stock Corporation has recorded high profits since its equitization, up 59 per cent compared to its target set for 2016.
Viet Tien JSC has announced its financial report for the fourth quarter and for all of 2016. The company’s net revenue for the fourth quarter was over VND1.8 trillion ($79.2 million), up 11 per cent compared to the same period of last year.
Its pre-tax profit stood at VND143.7 billion ($6.3 million) and its profit after tax was VND119.3 billion ($5.2 million) for the fourth quarter, up 53 per cent year-on-year.
For all of 2016, the company’s net revenue reached over VND7.5 trillion ($330 million), up 17 per cent year-on-year and 12 per cent compared to its target.
The corporation’s pre-tax profit reached VND485 billion ($21.3 million), up 18 per cent year-on-year and 59 per cent compared to its target. Its profit after tax reached VND402.4 billion ($17.7 million), of which the parent company’s profit accounted for VND380 billion ($16.7 million).
By the end of 2016, the total assets of the corporation had increased from VND420 billion ($18.4 million) to VND3.8 trillion ($167.2 million).
Viet Tien Garment listed 28 million shares on UPCoM on March 10, 2016. The corporation has four subsidiaries: Thuan Tien Garment Ltd (where it holds 82.5 per cent of charter capital), Tien Thuan Garment Ltd (85.9 per cent), Nam Thien Ltd (83.6 per cent), and Viet Tien Meko Ltd (51 per cent).
Vietnam’s textile and garment exports have failed to reach the targeted $29 billion in export turnover that was set for 2016.
Export turnover is estimated at $28.5 billion, up 5.4 per cent year-on-year, according to Mr. Le Tien Truong, CEO of the Vietnam National Textile and Garment Group and Chairman of the Vietnam Textile and Apparel Association. However, it’s just short of the $29 billion target for the year, which was previously $30-$31 billion. “Growth is at its lowest since 2010,” Mr. Truong told VET, “but growth in absolute value was higher than in previous years.”
The decline stems from difficulties in global markets. Total global demand in 2016 did not increase and key markets for Vietnam’s major imports fell. In the US they fell by 4.5 per cent and in the EU by 3 per cent. Only Japan had an increase with more than 1 per cent.
Vietnam’s textile and garment sector was to be a major beneficiary of the TPP, but the future of the trade deal is now uncertain. This has raised concerns among some enterprises but many others believe that they will benefit with or without the TPP.
Exports to the US and Japan are still on the increase, at $11 billion and $3.5 billion, respectively. “Even without the TPP, Vietnam’s textile exports are still on track,” Mr. Truong said. “Vietnam also has other free trade agreements with the EU, South Korea and Japan, which are expected to bring benefits to textile and garment enterprises.”
JUMBO Seafood outlets to open in Vietnam
JUMBO Group Limited (JUMBO), one of Singapore’s leading multi-dining food and beverage (“F&B”) establishments, announced that it had entered its first franchise agreement to bring JUMBO Seafood to Vietnam.
The franchise agreement was inked by JUMBO’s wholly owned subsidiary, JUMBO Group of Restaurants Pte Ltd., and Nova Bac Nam 79 Joint Stock Company for rights to operate JUMBO Seafood restaurants in Ho Chi Minh City and Danang.
Plans are in the pipeline to open 3 JUMBO Seafood outlets in Ho Chi Minh City and Danang over the next 2 years, the first of which is expected to open in Ho Chi Minh City in mid-2017.
Mr. Ang Kiam Meng, CEO and Executive Chairman, said: “We are excited to bring our iconic JUMBO Seafood brand to Vietnam. With JUMBO Seafood’s strong brand name, we aim to tap the potential demand for quality Singaporean seafood in the Vietnamese market together with our franchise partner.
This first franchise agreement for the JUMBO Seafood brand also marks a key milestone for the group and is in line with the group’s strategy to pursue franchising opportunities to diversify and grow our business offerings and geographic markets,” added Mr. Ang.
The agreement is for an initial term of 10 years, which may be renewed for a further 10 years subject to certain conditions.
The group currently owns and operates 5 JUMBO Seafood outlets in Singapore, and 3 JUMBO Seafood outlets in Shanghai, China. Meanwhile, the Group is also growing its Singapore-based business presence, with the opening of a new NG AH SIO Bak Kut Teh outlet at the Food Village (Takashimaya Food Court) in Ngee Ann City. This brings the total number of NG AH SIO Bak Kut Teh outlets in Singapore to 6.
VN exporters need to prove no harm to U.S. shrimp industry
The domestic shrimp sector must prove they are causing no injury for American shrimp farmers if it wants the U.S. government to revoke the anti-dumping duty on frozen warmwater shrimp imports from Vietnam.
This recommendation was made by General Secretary Truong Dinh Hoe of the Vietnam Association of Seafood Exporters and Producers (VASEP) in a talk with the Daily. The U.S. Department of Commerce (DOC) in a conclusion on the second sunset review on the anti-dumping tariff for frozen warmwater shrimp decided to continue imposing the duty on imports from Vietnam.
The final results of this sunset review are expected to come out this May, Hoe said.
Pending a final say by the International Trade Commission (ITC), the anti-dumping duty will continue to be levied as in the previous administrative reviews. “This procedure is carried out every five years to see if Vietnam’s shrimp exports to the U.S. cause injury for the American shrimp industry and if they don't, the U.S. government will lift their anti-dumping duty,” said Hoe.
In case imports from Vietnam threaten the U.S. shrimp farming industry, the anti-dumping tariff would continue to be in place as in the past 10 years.
The annual administrative review is to determine an official dumping margin for each particular business.
VASEP last Friday said the DOC in September 2016 published a final conclusion on the tenth administrative review (POR10) on shrimp imports from Vietnam in the period from February 1, 2014 to January 31, 2015.
As a result, Minh Phu Seafood Corp. is exempt from the duty as in a number of the previous reviews, although the March 2016 preliminary results showed this firm would be subject to a duty of 2.86%.
The voluntary rate for 31 other shrimp exporters of Vietnam is 4.78%, up 0.91 of a percentage point over the previous preliminary results. Stapimex faces 4.78%, unchanged from the preliminary results.
Meanwhile, the preliminary tariffs during POR11 published in November 2016 for shipments from February 1, 2015 to January 31, 2016 are essentially the same as in POR10. A duty of as high as 25.75% is imposed on those importers not participating in the review.
Preferential interest rates offered to lure homebuyers
A couple of realty developers have launched programs in which their customers can take out home loans with annual interest rates of 5-6% even though the Government-endorsed VND30-trillion credit package ended last year.
Hai Phat Investment JSC, the investor of The Vesta project, has started a program for 2017 to enable its clients to buy budget homes with an annual interest rate of 5% and the term of a loan can last up to 15 years.
Purchasers of The Vesta homes, which cost VND13.5 million (some US$597) per square meter or above, can take out loans equivalent to 50% of the value of a house with a fixed annual rate of 5% in 15 years.
Since the end of last year Hoang Quan Consulting-Trading-Service Real Estate Corporation has helped customers buy homes at projects where it is the investor or a shareholder.
The company will cover the difference if the interest rate at commercial banks is higher than 6%. Hoang Quan said this program would be in place until a new financing mechanism under the Government’s Decree 100/2015/ND-CP on development and management of budget homes is out.
Hoang Quan has estimated that around 5,000 homebuyers would benefit from the program with disbursements of a combined over VND2 trillion. It said it would have to pay the interest rate difference totaling VND60-80 billion a year.
The VND30-trillion home loan program ended in June last year.
The Prime Minister then signed Decision 1013 on June 6, 2016 ordering the Vietnam Bank for Social Policies to apply an annual rate of 4.8% to social housing loans until the end of the same year. However, no homebuyers could take out such preferential loans last year.
According to the Government’s Decision 48 dated January 13, 2017, credit institutions shall apply an annual interest rate of 5% to loans for low-cost homebuyers this year with the lending term of at least 15 years.
Low-income people in cities and those benefiting from State support need such cheap loans.
Ministry looks to larger housing area per capita
The Ministry of Construction has set a target of increasing the average housing area nationwide to 23.4 square meters per person this year from 22.8 square meters in 2016.
To realize the target, the ministry said it will speed up housing developments with a focus on social home projects as part of the national strategy to better meet demand of residents.
The ministry will improve its controls over zoning and use of available land in urban areas for social housing development as well as the quality of such homes and relevant infrastructure.
In 2016, some 500,000 square meters of social housing was developed in urban areas, bringing the total area for this purpose to 3.3 million square meters. However, the ministry said social housing supply has yet to meet demand, supporting programs for social housing projects have been executed slower than scheduled, and funding has remained inadequate for those projects.
Supporting policies for housing projects have not produced as good results as expected due to tight budget and many investors have not been interested in this segment because of low profit and of a lack of workable measures and cleared land.
The Prime Minister signed Directive 03/CT-TTg ordering ministries, agencies and localities to support social housing projects so as to help achieve the targets in the national housing development strategy until 2020 with a vision towards 2030.
The PM told local authorities to create favorable conditions for investors of social housing projects in terms of land and administrative procedures, especially those for workers in economic zones and industrial parks. Provinces and cities were urged to review and adjust the zoning plans for industrial parks in a view to setting aside more land for social housing development.
Vietnam urged to spur trade facilitation
Vietnam needs to speed up trade facilitation by improving logistical services and shortening the time of goods transport, according to Herb Cochran, executive director of the American Chamber of Commerce (AmCham) in HCMC.
At present, it is time consuming to transport goods as it takes at least 15-16 days to carry goods from the U.S. to Vietnam and Vietnamese customs clearance procedures require an additional 21 days.
Vietnam and the U.S. are expecting a time reduction to 48 hours in 2018 and a commercial fee cut by 20% for exporters and importers. The two sides have struck a trade facilitation agreement but it is not easy to put the deal on fast track.
Vietnam should make full use of trade facilitation to prop up exports, instead of looking to the Trans-Pacific Partnership trade agreement. Late last month, U.S. President Donald Trump signed an executive order formally withdrawing the U.S. from the multinational trade deal, which was signed by the U.S., Vietnam and 10 other Pacific Rim nations in New Zealand in February last year.
Vu Thanh Tu Anh at Fulbright Vietnam University said at a recent event that Vietnam should embrace reforms whether there is the TPP trade deal or not as reform pressure is mounting due to widening budget deficit, swelling public debt, population aging, low labor productivity and climate change. The country should manage to weather the impact of uncertainties for the world economy.
The Vietnamese Government has take measures to support businesses, improve growth quality and productivity, boost renovation and innovation, and achieve sustainable growth. The Government has pledged not to attain growth targets at any cost.
Anh called for domestic enterprises to keep a close eye on the current situation and adopt appropriate measures to pull themselves out of troubled times.
Vietcombank honoured by Global Finance magazine
The Bank for Foreign Trade of Vietnam (Vietcombank) is named among the 55 country winners of Best Treasury and Cash Management Banks and Providers by the Global Finance magazine, announced a representative of the bank on February 7.
Global Finance has recently released the rankings for its 17th annual Best Treasury and Cash Management Banks and Providers by category, region and by country.
A variety of subjective and objective criteria were considered, including: profitability, market share and reach, customer service, competitive pricing, product innovation and the extent to which treasury and cash management providers have successfully differentiated themselves from their competitors around core service provision.
A multi-tiered assessment process was used, which included a readers’ poll, input from industry analysts, corporate executives, technology experts and independent research, to select the best providers of treasury and cash management services.
Vietcombank’s goal is to become Number 1 bank in Vietnam in 2020 and among the world’s 300 largest banking financial groups managed by best international practices.
The bank is included in the list of the world’s 500 leading brands of the Brand Finance, an independent branded business valuation and strategy consultancy. It is also the first and only bank in Vietnam voted among Top 500 world leading banks by The Asian Banker.
Dak Lak moves to foster coffee processing industry
The Central Highlands province of Dak Lak plans to raise the rate of processed coffee products such as powder coffee and instant coffee to 15 percent of the local coffee bean output by 2020.
It expects to increase the rate to 20-30 percent by 2030 to improve the added value of products from coffee – the biggest foreign currency earner in Dak Lak, according to Chairman of the provincial People’s Committee Pham Ngoc Nghi.
To that end, the province has moved to create a favourable investment climate for both domestic and foreign businesses, particularly those specialising in roasting and grinding, to attract investment in processing factories.
The provincial authorities plan to assist coffee processors in applying advanced post-harvest and processing techniques, as well as modern corporate governance process. The province also offers support to organisations, enterprises and cooperatives to build brands, trademarks or geographical indications for processed coffee products, Nghi said.
Dak Lak has nearly 204,000 hectares of coffee and produces at least 450,000 tonnes of coffee beans each year – the biggest area and output of coffee in Vietnam. However, there are only 145 processing facilities in the province with combined design capacity of over 32,100 tonnes, accounting for 5.55 percent of the local coffee bean output.
In 2016, Dak Lak produced only 28,000 tonnes of processed coffee products, including 23,000 tonnes of powder coffee and 5,000 tonnes of instant coffee. It exported 4,520 tonnes of instant coffee, making up 2.3 percent of total coffee bean export volume, bringing home more than 26.8 million USD which accounted for 7.5 percent of the province’s coffee export revenue. The remaining processed coffee was sold in the domestic market.
Nghi acknowledged that most locally-based processing companies are private firms whose market access and product advertising capacity remains modest. Meanwhile, local policies are not attractive enough to persuade Vietnamese and foreign enterprises to invest in coffee processing plants.
Newly-established firms register high capital in January
Up to 8,990 firms were established nationwide with a total registered capital of 90.3 trillion VND (3.92 billion USD) in January, up 8.1 percent in number and 52.3 percent in capital value, according to the General Statistics Office.
The total amount of registered and additional capital hit 204.9 trillion VND (8.9 billion USD) during the month, it said.
The new firms operating in arts and entertainment saw a 2.4 percent rise in number and a 65.8 percent surge in registered capital.
Up to 5,564 firms resumed their operations in the month, up 14.2 percent year-on-year.
Meanwhile, 1,583 enterprises completed dissolution procedures, marking an 18.3 percent increase from 2016’s January. As many as 13,289 others halted their operations, up 6.7 percent against the same period last year.
A representative from the Ministry of Planning and Investment’s Business Registration Management Agency said most of them registered a term halt and will return to their business later.
The number of firms which temporarily stopped working or awaited dissolution fell year-on-year, including those operating in agro-forestry-fisheries (down 54.3 percent), lodging and catering services (down 38.4 percent), mining (37.5 percent), transport and warehouse (30.8 percent), and construction (28.3 percent).
Vietnam enjoys increasing trade surplus with Canada
Vietnam enjoyed a trade surplus of nearly 3.089 billion USD with Canada as of the end of November, 2016, an increase of 24.6 percent against the same time in 2015, according to Statistics Canada.
In the period, the two-way trade value reached 3.826 billion USD, a year-on-year increase of 10.6 percent. It comprised Vietnam’s exports worth 3.457 billion USD, up 16.4 percent and its import value of 368 million USD, a drop of 25 percent.
According to Hoang Anh Dung, Vietnam's commercial counsellor in Canada, Vietnam leads the ASEAN nations in export value to Canada.
It was followed by Thailand with 2.17 billion USD, a drop of 3.2 percent; Malaysia with 1.789 billion USD, down 7 percent; Indonesia with 1.134 billion USD, down 7.6 percent; the Philippines with 934 million USD, down 9.8 percent; and Singapore with 666 million USD, down 3.5 percent.
Canada spent 1.174 billion USD on Vietnam’s electronic products and accessories, up 56.5 percent; 355 million USD on footwear, up 15.5 percent; 108 million USD on sportswear, up 25 percent; and 54 million USD on children toys, up 24 percent, among others.
Among Vietnam’s export goods, mobile phone recorded the highest increase by 67.9 percent, to 827 million USD.
HDBank becomes successful case in VN’s bank restructuring
HDBank continuously posted record high profit in 2016, making it the most successful case in the country’s bank restructuring.
The bank’s pre-tax profit in 2016 surged by up to nearly 63 per cent against the previous year to VNĐ1.282 trillion (US$51.9 million).
For the past three consecutive years, HDBank made high profits following a merger with DaiABank and the acquisition of Société Générale Viet Finance (SGVF) a few years ago.
The bank’s total assets by the end of 2016 doubled against 2014 to more than VNĐ152 trillion. Its non-performing loan ratio was also controlled at 1.65 per cent.
The bank’s representatives attributed the success to its merger with a good bank and effective business strategies, including the acquisition of a finance company.
Following the merger with DaiABank, HDBank has become a medium-sized bank, with total assets of some VNĐ70 trillion and a network of 220 counters.
Right after the merger, HDBank also successfully set up effective business strategies with the acquisition of a foreign wholly-owned finance company and then co-operated with a Japanese partner to boost a finance company called HD Saison that currently has more than 6,000 counters nationwide.
The HD Saison finance company enabled HDBank to earn profits of VNĐ175 billion in 2014, VNĐ280 billion in 2015 and more than VNĐ440 billion in 2016.
Owing to the good business performance, the State Bank of Việt Nam allowed HDBank to pay dividends of 5 per cent in 2014 and 10 per cent in 2015.
In 2017, HDBank has targeted increasing total assets to VNĐ193.3 trillion and profit to VNĐ1.64 trillion. It also expects to lower bad debt ratio to 1.5 per cent.
Ha Noi attracts $366m investment in January
Ha Noi has presented investment licences for 43 new projects with total registered capital of US$31.7 million, the municipal Department of Planning and Investment said.
The city has also adjusted the investment plan of 15 current on-going projects, raising their investment capital to over $334 million, and bringing total investment capital into Hà Nội during January to nearly $366 million.
Also in January, the city granted business registration certificates for 1,414 newly-established enterprises with registered capital of VND13.1 trillion ($580 million), bringing the total number of businesses operating in the city to over 209,500 firms.
Ha Noi has set Gross Regional Domestic Product (GRDP) growth targets of 8.5 to 9.0 per cent for 2017.
To achieve these targets, the city will focus on some key tasks including economic development. Ha Noi will implement measures to improve competitiveness and its provincial competitiveness index (PCI), improving the business and investment environment, and encouraging entrepreneurship and enterprise development.
Ha Noi will also focus on innovation and improvements in market forecast management quality, strengthening trade promotion and boosting exports while enhancing investment promotion, and mobilising domestic and overseas resources for development.
Chairman of Ha Noi People’s Committee, Nguyen Duc Chung, has assigned relevant agencies to urgently study and propose specific measures to attract investment to the city, before submitting them to the Prime Minister for consideration and preparing for the Investment Promotion Conference in Ha Noi to be held in April.