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Tundra Fonder becomes major shareholder of HSG as others withdraw
Tundra Fonder has just bought one million additional shares in Hoa Sen Group (HSG) to become a major shareholder, while Le Phuoc Vu’s wife is selling all her stocks in the group.
Tam Thien Tam Co., Ltd., a big shareholder of Hoa Sen Group, has just announced sell its entire holding of 19.21 million HSG stocks, roughly 5.49 per cent of HSG’s charter capital. The transaction is expected to take place between May 23 and June 21.
One month ago, Tam Thien Tam Co., Ltd., where Hoang Thi Huong Xuan (HSG chairman Le Phuoc Vu’s wife) is chairwoman, also sold five million HSG stocks to reduce its ownership to 5.49 from 6.92 per cent.
Tam Thien Tam divested from Hoa Sen Group as the stock was on a downward trend. The stock had three consecutive sessions of decrease during the last week. At the end of the May 18 session, HSG was around VND14,000.
It has decreased by 22 per cent over a single month to the previous bottom price three years ago. Accordingly, Tam Thien Tam will earn around VND269 billion ($11.85 million) after successfully selling 19.21 million shares.
Several days ago, Tundra Fonder increased its ownership in HSG to over 12 million shares, equivalent to 3.49 per cent. Along with the HSG shares owned by Tundra Sustainable Frontier Opportunities Fund, Tundra Fonder now owns over 18.1 million HSG shares, equivalent to 5.18 per cent, and is a key shareholder at Hoa Sen Group.
Tundra Fonder is a Swedish asset manager specialising in frontier markets and new emerging markets through its Tundra Vietnam Fund, Tundra Pakistan Fund, Tundra Sustainable Frontier Fund, and Tundra Frontier Africa Fund.
In early 2018, Tundra’s growth hit 15.4 per cent, which was the highest growth among its markets in Vietnam, Nigeria, Pakistan, and Sri Lanka. Tundra Vietnam Fund started in May 2014, and total asset value has just reached around $165 million.
Currently, the biggest shareholders of HSG are Hoa Sen Investment Co., Ltd. (25.1 per cent), Hoa Sen Investment and Tourism Co., Ltd. (20.25 per cent), Le Phuoc Vu (10.7 per cent), Tam Thien Tam Co., Ltd. (5.49 per cent), and Tundra Fonder (5.18 per cent).
According to HSG’s business results in the first quarter of 2018, the group’s net profit was only VND115 billion ($5 million), equivalent to 20 per cent of the same period last year, due to increasing costs. HSG gained only VND87 billion ($3.7 million) in profit in the first quarter of 2018, which is the lowest amount within the last four years for this group.
Meanwhile, the liabilities of Hoa Sen Group stood at VND18.436 trillion ($0.8 billion), up VND2.167 trillion ($95.5 million) over the beginning of the year. Thereby, the group has to spend around $100,000 per day for interest payments.
Walt Disney deal to give facelift to Dai Dong Tien Plastics furnishing
As the Vietnamese plastics and packaging industry is luring in a new wave of foreign investors with its strong growth, a domestic plastics manufacturer has teamed up with Walt Disney to take over the market.
Most recently, Dai Dong Tien Corporation, a local plastics manufacturer, entered into a co-operation with The Walt Disney Company (Southeast Asia) Pte., Ltd. to develop the former’s plastic products.
Accordingly, Dai Dong Tien became the only strategic partner of Walt Disney in the Vietnamese plastic sector authorised to use the images of beloved Disney characters (Avengers, Spiderman, Disney princesses, Frozen, and standard characters) on home furnishing products and to sell such products in Vietnam.
Dai Dong Tien expected that the deal will create a new face for local plastic household products which are currently decorated mostly with monotonous images of animals and flowers.
Besides, co-operating with the global entertainment group will help Dai Dong Tien gain market share, bringing them closer the target of becoming the leading plastics manufacturer in Vietnam.
With its great unexploited potential, the plastics sector is a lodestone to foreign investment.
Ho Duc Lam, chairman of the Vietnam Plastics Association, said that the plastics sector will continue to grow on the back of strong growth in the domestic demand. Per capita plastics consumption is projected to increase to 45 kilogrammes in 2020, mainly due to growth in the packaging and construction segments.
Co-operating with The Walt Disney Company will help Dai Dong Tien gain market share, bringing them closer the target of becoming the leading plastics manufacturer in Vietnam. Additionally, numerous foreign investors have ambitions to acquire local plastics manufactures via M&A deals.
In December 2017, Japan’s Sojitz Pla-Net, the plastics division of Sojitz Corporation, entered into a strategic partnership with Rang Dong Plastic JSC to establish greater co-operation in the market, with Rang Dong Plastic selling a 20 per cent stake in its subsidiary Rang Dong Long An Plastic JSC to Sojitz Pla-Net. (Sojitz Pla-Net concluded an agreement for a strategic alliance with RDP in March 2016).
The firms will join forces to develop the Rang Dong Long An factory complex in the southern province of Long An. The first phase of the project started operations in mid-May.
With $32 million in investment capital for the first stage, the plastics complex will house three factories on an area of 8.7 hectares. The factories will employ the latest technology from Germany, Italy, Japan, Taiwan, and South Korea.
Previously, in September 2015, Dongwon Systems, a packaging unit of Dongwon Group, released the information on its website that it completed the purchase of controlling stakes in Vietnamese packaging firms Tan Tien Plastic Packaging and Minh Viet Packaging for the total cost of $96 million.
According to the agreement, Dongwon Systems would transfer technology to the Vietnamese firms to export high-performance packaging materials. The firm expected that it will be able to leapfrog to become a global integrated packaging company with the acquisition of Tan Tien and Minh Viet.
In the same year, SCG completed the acquisition of an 80 per cent controlling interest in Vietnam’s Tin Thanh Packing JSC (Batico) for $44.4 million. At the time, the deal was the largest purchase in the Vietnamese plastics sector.
At the time, Batico was one of Vietnam’s top five packaging companies, churning out some 230 million square metres of products on average each year and it held a 40 per cent market share in the southern region.
Previously, in December 2013, Oji Holdings Corporation acquired 75 per cent of all the issued shares of United Packaging Joint Venture Co., Ltd. The value of the deal was not disclosed.
At present, the Vietnamese plastics industry has 3,000 enterprises operating across the country. The 2016 revenue of the plastics industry was estimated to reach nearly $14 billion, a 10.3 per cent increase compared to 2015.
Walt Disney deal to give facelift to Dai Dong Tien Plastics furnishing
As the Vietnamese plastics and packaging industry is luring in a new wave of foreign investors with its strong growth, a domestic plastics manufacturer has teamed up with Walt Disney to take over the market.
Most recently, Dai Dong Tien Corporation, a local plastics manufacturer, entered into a co-operation with The Walt Disney Company (Southeast Asia) Pte., Ltd. to develop the former’s plastic products.
Accordingly, Dai Dong Tien became the only strategic partner of Walt Disney in the Vietnamese plastic sector authorised to use the images of beloved Disney characters (Avengers, Spiderman, Disney princesses, Frozen, and standard characters) on home furnishing products and to sell such products in Vietnam.
Dai Dong Tien expected that the deal will create a new face for local plastic household products which are currently decorated mostly with monotonous images of animals and flowers.
Besides, co-operating with the global entertainment group will help Dai Dong Tien gain market share, bringing them closer the target of becoming the leading plastics manufacturer in Vietnam.
With its great unexploited potential, the plastics sector is a lodestone to foreign investment.
Ho Duc Lam, chairman of the Vietnam Plastics Association, said that the plastics sector will continue to grow on the back of strong growth in the domestic demand. Per capita plastics consumption is projected to increase to 45 kilogrammes in 2020, mainly due to growth in the packaging and construction segments.
Co-operating with The Walt Disney Company will help Dai Dong Tien gain market share, bringing them closer the target of becoming the leading plastics manufacturer in Vietnam.
Additionally, numerous foreign investors have ambitions to acquire local plastics manufactures via M&A deals.
In December 2017, Japan’s Sojitz Pla-Net, the plastics division of Sojitz Corporation, entered into a strategic partnership with Rang Dong Plastic JSC to establish greater co-operation in the market, with Rang Dong Plastic selling a 20 per cent stake in its subsidiary Rang Dong Long An Plastic JSC to Sojitz Pla-Net. (Sojitz Pla-Net concluded an agreement for a strategic alliance with RDP in March 2016).
The firms will join forces to develop the Rang Dong Long An factory complex in the southern province of Long An. The first phase of the project started operations in mid-May.
With $32 million in investment capital for the first stage, the plastics complex will house three factories on an area of 8.7 hectares. The factories will employ the latest technology from Germany, Italy, Japan, Taiwan, and South Korea.
Previously, in September 2015, Dongwon Systems, a packaging unit of Dongwon Group, released the information on its website that it completed the purchase of controlling stakes in Vietnamese packaging firms Tan Tien Plastic Packaging and Minh Viet Packaging for the total cost of $96 million.
According to the agreement, Dongwon Systems would transfer technology to the Vietnamese firms to export high-performance packaging materials. The firm expected that it will be able to leapfrog to become a global integrated packaging company with the acquisition of Tan Tien and Minh Viet.
In the same year, SCG completed the acquisition of an 80 per cent controlling interest in Vietnam’s Tin Thanh Packing JSC (Batico) for $44.4 million. At the time, the deal was the largest purchase in the Vietnamese plastics sector.
At the time, Batico was one of Vietnam’s top five packaging companies, churning out some 230 million square metres of products on average each year and it held a 40 per cent market share in the southern region.
Previously, in December 2013, Oji Holdings Corporation acquired 75 per cent of all the issued shares of United Packaging Joint Venture Co., Ltd. The value of the deal was not disclosed.
At present, the Vietnamese plastics industry has 3,000 enterprises operating across the country. The 2016 revenue of the plastics industry was estimated to reach nearly $14 billion, a 10.3 per cent increase compared to 2015.
Motorbike sales hit a red light
Foreign investors in motorcycle manufacturers witnessed only a marginal increase in unit sales during the year’s first quarter and with Yamaha Motor Vietnam’s reports of unit sales decreasing, concerns are circulating that this market is reaching its saturation point.
The total number of motorcycles sold in this year’s first quarter – from the likes of Honda Vietnam, Piaggio Vietnam, Suzuki Vietnam, SYM Vietnam, and Yamaha Motor Vietnam – is 803,204 units, a mere 1.9 per cent increase on-year according to the Vietnam Association of Motorcycle manufacturers (VAMM).
Each month the five firms sold nearly 270,000 motorbikes on average, which means that approximately 9,000 motorbikes were sold each day nationwide.
There are no details on the individual company sales, but in recent years, Honda Vietnam has been dominating the sector with a market share of about 69 per cent in 2017 according to Honda Vietnam, with Yamaha Vietnam following behind.
A fortnight ago, Yamaha Motor announced consolidated business results for the first quarter, saying that “Unit sales in developed markets decreased due to factors such as a decline in total demand and irregular weather in Europe. Unit sales in emerging markets such as Indonesia, the Philippines, and Brazil increased, but decreased in the Vietnamese market.”
According to the Ministry of Industry and Trade (MoIT), as more people in Vietnam tend to choose other travel methods than motorbikes, the market has suffered low growth in recent years.
Vietnam is the fourth-largest motorcycle market in the world, after China, India, and Indonesia. According to the MoIT’s latest data, the number of motorbikes in Vietnam has already surpassed 45 million, 25 per cent above the government’s plan. It is an astounding figure that one in every two people owns a motorcycle.
VAMM has forecast that the market is entering a saturation period. Currently, automatic motorbikes account for 45 per cent of the market share.
Tuan Anh, a salesman at the Yamaha store on Kieu Mai Street in Hanoi, said his store receives 40 per cent fewer customers than four years ago.
“In the past we would earn several million dong in profit for each Yamaha we sold, but now we are only taking several hundred thousand dong. If we include the cost of rent and employee salaries, we are lost,” said Anh, adding that some Yamaha stores had closed due to sustained losses.
Vietnam’s motorbike market is in trouble and will continue to slow down in the near future as the supply has already surpassed demand, a representative of Honda Vietnam told VIR.
The competition for a share in the saturated Vietnamese motorcycle market is going to heat up in the next few years, with companies targeting the few remaining niche markets and raising the quality of their after-sale services, according to VAMM.
Hoa Lac Hi-Tech Park boosts investment climate improvement
The Management Board of Hoa Lac Hi-Tech Park (HHTP), based in Hanoi, will press on with improving its investment environment to attract more funding.
Deputy Minister of Science and Technology Pham Dai Duong, who also chairs the HHTP Management Board, said in the first four months of 2018, the management board granted investment registration certificates for four projects worth nearly 10.92 trillion VND (477.7 million USD) and covering 15.4 hectares of land.
In 2017, certificates were provided for three projects with total investment of more than 5 trillion VND, covering 11.7 hectares of land.
Compared to 2016, average investment per hectare of land here has risen by more than two times to 31.5 million USD at present.
Duong said projects with investment registration certificates are being swiftly implemented. Notably, the factory of the Hanwha Aero Engines company, invested by the Republic of Korea’s Hanwha Techwin Co. Ltd, has had its construction completed and is operating on a trial basis. This factory project has total registered capital of 200 million USD, which is expected to rise to 260 million USD in 2021.
Meanwhile, two of the five projects worth 1 billion USD in total in the HHTP invested by Japan’s NIDEC Corporation received investment certificates last April. They are working to finalise procedures for construction so as to put the plant into operation in the first quarter of 2019.
He noted the HHTP Management Board will propose mechanisms and policies for the park to improve investment quality. It will also continue reviewing projects to ensure they are implemented as scheduled and prevent land wastefulness.
The board has so far revoked 19 projects that lagged behind schedule or failed to run as planned. It has also reduced land areas used by two other projects, the official added.
Located in Thach That and Quoc Oai districts, the 1,586-hectare Hoa Lac Hi-Tech Park is being developed into a science city hosting investors in biotechnology, information – communications, new material technology and automation.
Like many urban Vietnamese women, Nguyen Thu Trang never lets her smartphone out of reach. The first thing she does every morning is checking Facebook on her phone to see what her friends are up to and what items are for sale.
“Social networks help me keep in touch with friends and stay up to date with latest trends. It is also a very effective shopping channel,” said the 32-year old office worker in Hanoi.
Trang prefers Facebook to local e-commerce sites because she can directly inquire sellers for the specific information she needs. For fashion products such as clothing items or shoes, she can decline to buy the items when they are delivered if they don’t fit or their quality doesn’t match what she expects.
Trang is just one of millions of Vietnamese social media savvy users who regularly shop on channels like Facebook, Instagram and homegrown Zalo. They buy everything, from groceries and homemade products, to cosmetics, clothes and household items from informal online family-run businesses.
In a user-friendly interface where sellers and buyers are easily connected, many Vietnamese are choosing social network shopping instead of going to big brands in the e-commerce industry which don’t always offer them the items they need.
According to experts, since social networks in Vietnam, especially Facebook, have amassed a huge following with their newsfeed algorithms designed to grab user’s attention and boost engagement, these platforms have become the perfect market place.
Vietnam ranked 7th worldwide for number of Facebook users last year, at 64 million or more than half of the country’s population, according to a report by marketing and advertising agency We Are Social.
Vietnamese also spend more time on Facebook than users in most other Southeast Asian countries and are much more apt to use it as a platform to start a business, Joe Nguyen, ComScore Inc. senior vice president of Asia Pacific told Bloomberg.
Many people sell their items on Facebook just to make some extra income on top of their day jobs. However, there are those who take Facebook seriously and base their entire business on the social network.
It is estimated that there are about 50 young Vietnamese from the age of 19 to 20 who have become dollar millionaires for making money online, said Huynh Kim Tuoc, a representative of Facebook in Vietnam in the Vietnam Online Business Forum 2017.
“We haven’t seen this scale in other places,” Joe Nguyen said. “Vietnamese are very entrepreneurial. Everyone wants to try to sell something.”
Nguyen Thanh Mai, who works at a biotechnology center in Hanoi, is one of them. Customers can order fresh or processed food from her on Facebook and wire her the money or pay cash on delivery.
“Selling products on social networks is the easiest way,” Mai said. “I don’t have to pay monthly rent like a brick and mortar business, which is a huge advantage to new ventures like mine.”
The online shop has turned the 35-year-old office worker into a successful entrepreneur. After two years, her one-woman business now employs eight people.
“As long as the social network is people’s favorite, I can make a living out of it,” Mai said.
In Hanoi and Ho Chi Minh City alone, there are at least 27,000 Facebook accounts that use the social media network as a retail platform, according to estimates by local authorities, who have yet to figure out how to collect taxes from these shops.
Many, if not most of the Facebook retailers are run by mothers who often start as a way to supplement their income when they are on maternity leave.
Their customers, fellow mothers, trust the seller as someone who’s been there, done that. Someone, who is using her reputation and experience as a mother to not simply sell but also share parenting experience with her fellow friends, argues Dr. Nguyen Thu Giang who is studying motherhood in the time of Facebook and food scares.
As Vietnamese have a habit of physically “touching” a product, another reflection of trust issues, they often surf the Internet for prices without actually ordering from the online retailers. Facebook retailers, on the other hand, tend to offer a more flexible return policy, allowing customers to physically check out the product first, before paying.
Online sales in Vietnam have expanded rapidly in recent years, currently accounting for 3.39% of the country’s retail market. The total retail market grew 10.9% last year to US$173.27 billion, as reported by local media.
The World Bank forecasts that Vietnam’s US$200 billion economy is likely to grow to a trillion dollars by 2035. More than half of its population, compared with only 11% today, is expected to join the ranks of the global middle class with consumption of US$15 a day or more.
According to one estimate, about 30% of the population will be buying goods and services over the internet in 2020, with each shopper spending an average of US$350 per year.
However, Trang believes there is no reason not to have a favorite cosmetic, fashion or household product delivered at her doorstep with only a small amount of delivery fee after ordering on a social network.
“Social networks will continue to be my favorite shopping channel in the future.”
E-commerce giants struggle to find profit in Vietnamese market
Multiple online retailers in Vietnam have been struggling to gain profits for years due to high operational costs in a competitive market.
Tiki.vn, one of the most popular e-commerce firms in Vietnam, recently reported a VND322 billion (US$14 million) loss in two years.
The loss in 2017 of the online retailer, which sells a variety of products including clothes, household items and electronic devices, has tripled its charter capital and is seven times its loss in 2016.
Tiki.vn is not the only e-commerce company in Vietnam that has been suffering from losses in recent years.
Before being acquired by the Chinese giant retailer Alibaba in 2016, Lazada Group said that it has lost US$334 million in 2015 the Southeast Asia market, including Vietnam. This lost is double what it posted in 2014, according to TechCrunch.
Some local e-commerce companies like Lingo.vn, Deca.vn and Beyeu.com have also been forced to shut down due to prolonged losses.
According to experts, e-commerce is an industry which requires a long time to recover capital and gain profit, therefore the losses of these giants in the Vietnamese market is understandable. Big brands in the field such as U.S.-based Amazon and Alibaba has to go for 10 years before having profit.
Operating cost, especially logistics costs, is one of the main reasons for the losses. As large e-commerce firms often require massive warehouses covering thousands of square meters and hundreds of staff to work in them, logistics costs account for 60-70% of online retailers’ revenues, said trade expert Vu Vinh Phu.
This enormous cost can be seen from the case of Tiki and Lazada Vietnam, each has a storage of over 4,000 square meters (about 1 acres) with 300 staff in Ho Chi Minh City. It is estimated that the operating cost of one of these storages is VND1 billion (about US$44,000) a month. With three warehouses in operation, the two companies spend about US$2 million a year, according to local media.
In addition, marketing also plays a part in the high costs of e-commerce companies in Vietnam. When entering the market, Lazada Vietnam invested heavily in television and online advertising to attract users and gain market share. This company used to spend up to US$2 million per month for advertising programs, local media said.
The popularity of shopping on social networks such as Facebook or Zalo is also creating challenges for big online retailers. “There is an unbalanced competition between e-commerce giants such as Lazada, Tiki and Shopee with social network sellers,” said Pham Thai Binh, head of retails at property consultancy Savills Ho Chi Minh City.
As businesses on social networks don’t have to pay high costs of investment, item price range is lower which in turn attracts the majority of Vietnamese people, Binh said. On the other hand, famous brands have to invest a great deal in terms of staff, operating system and other relating costs, he added.
As Vietnamese has a habit of physically “touching” a product, they often surf the Internet for prices without actually ordering from the online retailers. The lack of information and customer service tools also plays apart in the problem.
To compete in the market, retail giants in Vietnam are under pressure of price competition which leads to a loss of profit. Under pressure from investors, many businesses sometimes accept to sell 10 or 20% below market price, local media said.
Despite those difficulties, experts believe that there is still great potential for e-commerce in Vietnam in the future.
In a survey of about 1,000 participants conducted by CBRE Vietnam, a commercial real estate services and investment firm, 25% said that they will reduce the frequency of shopping at brick and mortal businesses. About half of participants said that they will shop online more in the future.
In the annual survey of Vietnam’s Business Studies and Assistance Center (BSA), the number of people shopping online has tripled from 0.9% in last year to 2.7 this year. As young people start to participate more in online shopping, e-commerce is a potential area for retailers to exploit, which will bring many benefits to customers, said a representative of BSA.
E-commerce is a fast growing industry as customers’ behavior change every day, said Tran Tuan Anh, CEO of the online retailer Shopee Vietnam. “This year will be the year of e-commerce as Vietnamese people are now very familiar with online shopping,” he said.
Price will continue to be an important factor for Vietnamese customers, but product quality and service are becoming more important, he said. As more and more consumers are aware of e-commerce, the brand, service, technology and value added services such as shipping and payment will need to be improved, Anh said.
Tran Ngoc Thai Son, CEO of Tiki, also believes that the transition from traditional to online shopping is inevitable. E-commerce, now accounts for 3% of the US$90-billion revenue of Vietnamese retail market, will grow to a 5 or 10% segment in the future, Son said. However, online shopping will not be able to replace brick and mortar businesses, he said.
“The growth rate of Vietnam’s e-commerce market is estimated at about 35%, which is 2.5 times higher than Japan,” said industry expert Duc Tam at the Vietnam Online Business Forum 2017.
According to one estimate, about 30% of the population will be buying goods and services over the internet in 2020, with each shopper spending an average of US$350 per year.
VN produce to show off at Thai expo
Thirty leading Vietnamese food and beverage companies will showcase their organic produce and other foods that meet global standards, as well as geographical indication-protected products at an expo to be held in Bangkok from May 29 to June 2.
This will be the first time the Vietnamese High Quality Products Business Association is sending businesses to ThaiFex – an International Trade Exhibition for Food and Beverages, Food Technology and Retail and Franchise in Asia, said Vu Kim Hanh, chairwoman of the association.
The participating companies will include Vinamit JSC; Ben Tre Import-Export JSC; Trung Nguyen Group; VinEco Agricultural Investment, Development and Productions LLC; Lai Phu JSC; Thuan Thien Thanh Food Investment and Development JSC; Co May Co Ltd; Bibica JSC; and Petrolimex Import-Export JSC.
The Vietnamese pavilion will have an “organic and natural village” to showcase organic products such as desiccated fruits, rice, processed coconut and milk, alongside products with geographical indication like Phu Quoc fish sauce, Binh Thuan dragon fruit, Binh Phuoc cashew nuts, Ben Tre’s Xiem coconuts and grapefruits, and natural products like Dong Thap lotus.
A cookery show by food artisan Bui Thi Suong and the Viet Nam Culinary Conservation, Research and Development Centre will be held on the first three days of the exhibition, to introduce Viet Nam’s unique dishes to visitors, Hanh said.
The Vietnamese delegation will organise business matching programmes between Vietnamese and ASEAN firms, and there will be an international seminar with Vietnamese and foreign speakers discussing the potential of the ASEAN market and sharing their experience in developing and commercialising products with geographical indication.
Hanh said businesses could promote their products and technologies, seek business partners and get updated on global consumer tastes and market trends in the food and beverages sector.
Jointly organised by Koelnmesse Pte Ltd, Thailand’s Department of International Trade Promotion and the Thai Chamber of Commerce, Thaifex is expected to draw the attendance of more than 2,500 exhibitors from over 40 countries and territories.
Bamboo Airways to fly 40 routes by 2023
The FLC Group’s Bamboo Airways plans to open 24 domestic routes and 16 international routes by 2023.
Given the plan, the 24 aircraft to be received from Airbus in the 2022-2025 period is only part of its overall strategy, according to General Director Mr. Dang Tat Thang.
Bamboo Airways has already conducted a number of practical activities, such as signing a memorandum of understanding to purchase 24 Airbus A321neo aircraft and a purchase agreement for ten Boeing 737 Max 9 and five 777X aircraft.
While waiting for the handover of aircraft from Airbus, Bamboo Airways will lease 20 Airbus and Boeing aircraft in the fourth quarter of 2018 in order to conduct flights.
The “hot” aircraft in the market, the A321neo is suitable for short-haul flights. After a period of operations and performance testing, Bamboo Airways will consider expanding its investments.
As soon as the contract for 24 Airbus 321neo aircraft is completed, the FLC Group plans to order 26 Airbus A321 LR (Long Range) aircraft, bringing its fleet to 50. The A321 LR has the longest fuselage among all aircraft and is capable of flying some 7,400 km without refueling, making it suitable for Bamboo Airways’ long-term operations.
Boeing has suggested the Dreamliner 787 and Dreamliner 787-10, which are designed with 20 to 45 per cent load capacity, a capacity of 323 passengers, 60 per cent noise reductions, and 20 per cent fuel savings. They would be a suitable option for long-haul international flights, especially to the Americas and Europe, which Bamboo Airways could develop after its launch in the domestic and Asian markets.
The FLC Group and Bamboo Airways continue to actively negotiate with many other companies specializing in selling and leasing aircraft in the world to expand its flight services.
Established in 2017, Bamboo Airways is a member of the FLC Group, has charter capital of VND700 billion ($31.1 million), and is a pioneer in the hybrid model (a combination between traditional and low-cost carriers). Passengers will be offered the same facilities as traditional airlines at a only slightly higher cost than on budget carriers.
In its first year of operations, Bamboo Airways is expected to operate eight to ten routes to priority domestic destinations such as Quang Ninh, Hai Phong, Thanh Hoa, Quy Nhon, and Nha Trang in Vietnam.
In subsequent years it will add international routes to Japan, South Korea, China, Thailand, Hong Kong and Taiwan. By 2023 it will open long-haul routes to the Americas, Europe and Africa.
Vietnam grants first casino licence in ten years to Laguna Lang Co
Laguna Lang Co, one of Asia’s largest integrated resorts with international hospitality operator Banyan Tree as its managing partner, has officially got a casino licence from the Vietnamese government, marking it the first casino license in recent 10 years in Vietnam.
Laguna Lang Co is part of a chain of integrated resorts created and managed by Banyan Tree under the Laguna brand and includes Laguna Bintan in Indonesia and the flagship Laguna Phuket in Thailand.
Laguna Lang Co’s Phase 1 development, with an investment of US$285 million, comprises both Banyan Tree and Angsana hotels, an 18-hole championship golf course designed by golf legend Sir Nick Faldo, luxury private villas and residences, convention facilities, recreational activities, and beachfront land for six more hotels, part of a 280-hectare project. It will be celebrating its 5th anniversary this month on May 25-27.
“With the commemoration of Laguna Lang Co’s 5th anniversary, the issuance of the casino licence is a good start for our second phase,” said Ho Kwon Ping, executive chairman of Banyan Tree Holdings. “Many hotel investors and development funds have been awaiting the casino licence and the selection of a casino operator before finalising their investment into our Phase 2.”
This is the first casino licence issued by the Vietnamese government in the past ten years. Laguna Lang Co welcomes world-class casino operators and investment partners to join in the next exciting phase and growth of its integrated resort development in Central Vietnam.
Known for its sustainable efforts towards the environment, the local community, and the economy of Hue, Laguna Lang Co is the first luxury resort development of Banyan Tree Holdings Limited in Vietnam and has received numerous international awards. Existing infrastructure, including transportation, electrical, water, and environmental management systems, will allow the rapid development of Phase 2 and future phases.
The expansion project running from 2018 to 2022 will see investment capital increase from US$875 million to US$2 billion and include international-scale casino operations on its existing land.
Integrating a casino within the beach-golf resort which is in close proximity to three UNESCO Heritage sites provides a unique cultural, sporting, and entertainment experience that will further boost tourism in the central province of Thua Thien-Hue and attract global travellers.
Trung Nguyen Legend Coffee expands to China market
Trung Nguyen Legend has signed a cooperation deal with Shanghai Qinzhou Trade Co., Ltd, the China’s Food Products Wholesalers, aiming to send G7 coffee products to eastern China where is home to the world’s busiest cities and commercial centres such as Shanghai, Hangzhou, Suzhou and Nanjing.
Shanghai Qinzhou Trade Co., Ltd has been considered a “golden distributor” for ten consecutive years in the market. With strong distribution network on both General Trade (GT) and online channels, including mega malls like Carrefour, Lotus, Auchan, Metro, Tesco, and NGS and websites such as JD, Amazon, RT-Mart, Century Mart, Missfresh.com, and womai.com, Qinzhou will sell Trung Nguyen Legend coffee products, especially G7 instant coffee to customers in eastern China and the rest of the country.
Trung Nguyen Legend has also accelerated trade promotion activities in China, introducing G7 instant coffee at Food & Beverage Innovation Forum 2018 (FBIF2018) in Shanghai and selling it on reputable websites such as Alibaba, Taobao.com, tmall.com, Yihaodian.com, and jd.com and at more than 1,000 supermarkets in China. It plans to further promotion activities and open more selling points in China’s major cities.
Turnover from China, including Hong Kong and Taiwan, was estimated at more than US$30 million in 2016-2017 and expected to reach US$100 million this year.
Trung Nguyen Legend has made great effort to develop Chinese and other foreign markets through promotion activities and building new plants in the country to step by step conquer the world market and consolidate its brand on the international market.
Fruit and vegetable exports see robust growth over 4 months
Vietnam’s exports of fruit and vegetables jumped 29.1% to US$1.32 billion during the first four months of the year, according to preliminary statistics from the General Department of Vietnam Customs.
This is the first time that exports of fruit and vegetables have exceeded the earnings from crude oil (US$668 million) and set the highest record for growth in years.
Vietnam’s fruit and vegetables have penetrated 60 countries and territories with many stable markets such as China, Japan, the US, and the Republic of Korea. It is noteworthy that Vietnamese products have been exported to Thailand and Indonesia, which are agricultural strongholds in themselves.
China remained the largest importer of Vietnamese products, buying US$988.77 million in four months, accounting for 75% of Vietnam’s total fruit and vegetable exports, up 30.3% against the same period last year.
The general picture shows that exports to most markets obtained growth over the period, with leading markets being Southeast Asia (up 19.4% to US$56.39 million), the US (up 12.3% to US$38.84 million), Japan (up 15.9% to US$36.55 million), and the EU (up 11.8% to US$32.22 million).
A stand out performer, despite the modest export value of US$0.82 million, Cambodia became the fastest growing market with export growth of 279%.
Some markets saw a decline in exports, including Indonesia (down 77.6% to US$0.25 million), Ukraine (down 33.6%), the UK (down 22%), and Russia (down 15%).
Fair targets promoting furniture consumption in local market
The Vietnam Furniture and Home Furnishing Fair will promote locally-made wooden furniture, home decor and handicraft products for the domestic market.
VIFA Home 2018, to be held in District 11’s Phu Thọ Stadium from November 16-19, will feature 600 booths displaying outdoor and indoor furniture, handicrafts and home decor, household appliances, garden decor, gifts and souvenirs.
Huynh Van Hanh, permanent deputy chairman of the Handicraft and Wood Industry Association (HAWA), said: “Unlike previous years when the fair just allowed enterprises that have factories in Viet Nam to take part, this year the fair is also open to woodworking firms from other countries.”
Many property firms will also join the fair, creating favourable conditions for woodworking firms to exchange information and explore business co-operation, he said.
Hanh said exhibitions and trade fairs offered opportunities for exhibitors to promote their brands and products, expand market share, and enhance co-operation with potential business partners.
VIFA Home last year attracted more than 12,000 visitors, including wholesale buyers in the city and from other cities and provinces, leading to many direct sales at the fair.
Wooden furniture production for domestic consumption reached US$1.65 billion last year, he said.
Viet Nam has become a centre for producing quality wood furniture from legal timber sources for both domestic and export markets.
The domestic market is the most promising market thanks to the rapid development of the property market in the last two years.
“Normally, wooden furniture demand from the new apartment segment accounts for 40 per cent of total demand, offering a great opportunity for woodworking firms,” he said.
According to the fair’s organisers, Hawa and Hawa Corporation, enterprises that register early for the fair will receive special incentives.
Building materials market maintains stability
The domestic building materials market has remained stable and is growing well in the first months of 2018, meeting consumer demand, the Ministry of Construction (MoC) said.
The MoC said total cement consumption nationwide reached about 29.83 million tonnes by mid-second quarter of 2018, a year-on-year increase of 13 per cent. The production of building glass products was estimated at 105 million sq.m, up nine per cent compared to the same period last year.
The country’s ceramic tile production stood at 257 million sq.m, up 9 per cent against the same period in 2017, while porcelain construction production reached 5.3 million products, an increase of 10 per cent. Nationwide production of unleaded bricks was estimated at 2.45 billion units, up 11 per cent.
The MoC is currently completing the master plan for the exploration, exploitation, and use of minerals as primary building materials by 2025, with an outlook through 2035. The master plan will be submitted to the Prime Minister by the end of the second quarter of 2018.
In the immediate future, the MoC will boost the handling and use of ash in high-power plants and chemical plants, and fertilisers as raw materials for construction materials and construction work, as stated in a Prime Minister’s decision issued last year.
Petrolimex to spend 94% profit on dividends
The Viet Nam National Petroleum Group (Petrolimex) will close the list of shareholders on June 15 to pay dividends for 2017 at the rate of 20 per cent.
This is equivalent to VND2,000 (8 US cents) per share.
The payment is due on June 29, 2018.
Petrolimex will spend some VND162 billion ($7 million) to pay dividends to shareholders.
The group decided to pay cash dividends at the rate of 20 per cent, equivalent to some 94 per cent of total after-tax profit to distribute among shareholders.
Last year, Petrolimex recorded more than VND5.046 trillion in net revenue and VND171.4 billion in after-tax profit.
In 2018, the group targets a net revenue of over VND5.53 trillion, a year-on-year increase of 10 per cent. The after-tax profit is expected at VND189.45 billion, up by 11 per cent compared to 2017.
The group will also try to spend at least 80 per cent of the entire year’s after-tax profit to pay dividends to shareholders.
Green products promoted in HCM City
Many activities and environment projects are being carried out under the "Green Products Consumption Campaign” in HCM City, which has since 2010 sought to improve people’s awareness of environment protection.
Organised by Sai Gon Giai Phong (Liberated Sai Gon) newspaper, the departments of Industry and Trade and Natural Resources and Environment, and Saigon Co.op until June 30, the event encourages businesses to be more socially responsible, caring for the environment and consumers’ health, and the public to consume eco-friendly products.
Volunteers will go to residential areas around the city to educate and help the community identify and consume products made by businesses that fully comply with environmental regulations.
Supermarkets will display “green products” and offer discounts on them to promote consumption of those items.
This year, the campaign includes the Green Capacity Project for Community, under which volunteers will visit residential communities to instruct residents in classifying garbage.
They will also liaise with waste recycling units to create eco-friendly products.
The Green Brand is a key programme that will help the community identify green and eco-friendly products through a smart phone application.
There will also be a programme to promote consumption of green products at Co.opmart supermarkets in June. Co.opmart will gift 4,000 “green consumption coupons” to consumers for shopping at its stores.
It will also collaborate with green businesses to run promotions to increase consumption of products made by environment-friendly businesses and encourage consumers to use environment-friendly bags and take part in activities to encourage consumption of green products at Co.opmart stores.
A representative of Saigon Co.op, which owns Co.opmart, said sales of green products had increased by 50-60 per cent during the campaign.
Phung Thi Ai Van, head of the campaign organisation board, said the campaign launched in 2010 has proven effective by raising public awareness of environment protection.
People in Viet Nam increasingly consume environment-friendly products and those meeting hygiene and food safety standards, turning their backs on products made by enterprises causing pollution, she said.
These are positive signals indicating the green consumption trend has taken root, she said.
Saigon Autotech Accessories expo opens
The 14th Saigon Autotech & Accessories, which opened on May 24, hopes to provide networking opportunities for manufacturers and suppliers of automobiles and other vehicles and components.
The four-day international expo is being attended by around 200 companies, 60 per cent of them from countries and territories such as China, Korea, Taiwan, and Indonesia.
On display are products like cars and electric bikes and their components like lights, braking systems and others.
There will also be several forums to provide more networking and learning opportunities for participants besides business matching events.
Pham Tuan Anh, deputy director of the Ministry of Industry and Trade’s industrial department, said while the automobile and component industries have been receiving a lot of support from the Government, there is room for improvement.
Most local companies in auto supporting industries remain focused on simple parts such as glass, mirrors, seats and wires, he said.
“Businesses and authorities need to develop supporting industries and invest more in the automobile sector. If the auto industry is well developed, it will push other industries, especially supporting industries, to grow along with it.”
He stressed the importance of organising more networking and investment promotion events and providing learning opportunities.
The expo, at the Saigon Exhibition and Convention Centre in District 7, is organised by the Asia Trade Fair and Business Promotion Joint Stock Company.
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