Japan injects additional capital in Dong Nai province

Japan has affirmed its position as one of the two largest investors in the southern province of Dong Nai by landing further investments in the locality from the outset of this year.

Most of the capital came to the support industry, a field that the province is calling for investment to enhance input material supply capacity for local enterprises and lessen dependence on imports.

Mai Van Nhon, deputy head of the Dong Nai industrial zone management board, said Dong Nai has been an attractive destination for Japanese investors in recent three years, adding that most of the investments are in support industry, electricity, electronics, mechanics and machines.

From the beginning of this year, the province has constantly welcomed Japanese businesses studying and seeking investment opportunities. 

Representatives from 22 enterprises in Japan’s Sakai city came to Dong Nai province this month to study investment opportunities. They made a fact-finding tour of local industrial parks like Amata and Long Duc.

Meanwhile, Kobelco Eco-Solutions Col., Ltd under the Kobe Steel Group proposed investing in the province’s clean water treatment. The company already jumped in investment in waste water treatment at Loteco and Long Duc industrial parks.

Experts said that Vietnam’s engagement in new generation free trade deals has brought numerous opportunities to enterprises operating in Vietnam, including those from Japan.

Dong Nai province has seen robust growth of exports to Japan since the Vietnam-Japan free trade agreement took effect. Last year, the locality shipped over 1.5 billion USD worth of products to Japan, up 11 percent year-on-year and Japan was the second largest export market of the province. 

In recent years, local businesses have paid much attention to orders from the Japanese market to enjoy tax preferences.

A representative from Mabuchi Motor Vietnam Co., Ltd said that thanks to preferential policies, the company’s products become more competitive in the Japanese market and this makes production hike 13 percent each year. The company will enlarge their material production to reduce imports and meet demand from its partners.

According to the provincial Department of Planning and Investment, the province granted investment certificate to 31 foreign direct investment projects worth 314 million USD in the first three months of this year.

The province is currently home to 32 industrial parks. To date 44 countries and territories have invested in the province with over 1,200 investment projects.

NCB to raise total assets to $4.2 billion

The National Citizen Joint Stock Commercial Bank (NCB) will raise total value of its assets to VNĐ95 trillion (US$4.2 billion) in 2017, up nearly 40 per cent from last year.

This was stated at its shareholders meeting on Thursday. 

The bank’s net revenue is expected to reach VNĐ350 billion, up 60 per cent against the previous year. Bad debt rate has been kept at below three per cent. 

This year, NCB will focus on improving its business model, enhancing risk management capacity and expanding customer and partner ecosystems. 

It will select foreign strategic shareholders among its partners, who are interested in adding VNĐ3 trillion more to NCB’s charter capital. 

In 2016, NCB introduced a development strategy for the 2016-20 period and performed impressively. 

The State Bank has approved NCB’s plan to open six more transaction points. 

NCB’s report showed that the bank’s total assets were valued at VNĐ70 trillion ($3.1 billion) in 2016, registering a growth of 43 per cent against 2015. 

Capital mobilisation and lending recorded high growth, hitting over VNĐ18.5 trillion and VNĐ8.9 trillion, respectively. 

The bank’s 2016 revenue reached VNĐ211 billion, 91 per cent higher than 2015. The quality of the balance sheet improved and the rate of bad debt stood at below three per cent. 

NCB, established in 1995, started off as a bank for the agricultural sector before transforming into a commercial bank in 2014.

IML Technology Viet Nam project inaugurated

 IML Technology Việt Nam Co Ltd on Wednesday officially inaugurated its packaging production plant in the Đình Vũ Industrial Zone (Deep C HP I) in northern Hải Phòng Port City.

IML Technology Việt Nam Co Ltd’s project, with total investment capital of US$3 million, is wholly foreign invested and built on 14,857 sq.m of land.

The project focuses on the production of packaging material made of plastic and fibre for lubricants, chemicals and other purposes, specialising in In-Mold Labelling technology. 

In a stable production year, the plant supplies 6,500 tonnes of products and can hire up to 300 workers.

IML Việt Nam is a subsidiary of IML Technology Indonesia, a leading company in In-Mold Labelling technology. Its clients include leading names in the lubricant, chemical and cosmetic industries.

Co.opmart offers discounts for Liberation Day, May Day     

To meet demand during Liberation Day on April 30 and Labour Day on May 1, Co.opmart and Co.opXtra have stocked more goods than normal and are set to offer many attractive discounts.

The highlight of this promotion is the Super Incentives programme applicable this weekend under which many products, like dishwashing liquid, liquid detergents and shower gel will see their prices cut by up to VND100,000.

On Friday (April 28) the prices of a Co.opmart 40x60cm folding table will be cut from VND79,000 to VND49,000; two 40x60cm SGC cotton pillows from VND183,800 to VND99,800; 4litre bottles of Co.opmart plant flavour detergent from VND124,000 to VND79,900; and Co.opmart EL 28cm deep non-stick frying pans that can be used with induction cookers from VND199,000 to VND129,000.

On Saturday (April 29) 500ml bottles of Chinsu salmon fish sauce will be sold at only VND2,000; packs of four 297ml Nutri strawberry milk bottles will also be priced at only VND2,000; and 2l bottles of Simply soya cooking oil will see their price reduced from VND91,700 to VND45,000.

On Sunday (April 30) a bottle of 3.5kg Lix dishwashing liquid will have its price cut from VND67,5000 to VND17,000; a 1.8kg pack of Omo detergent liquid will be discounted by VND42,000 to VND37,000; a bottle of 1.4kg Clear cool mint shampoo will be discounted by VND101,000 to VND170,000; a pack of 1.6 litre Ariel condensed detergent liquid will be discounted by VND49,000 to VND60,000.

To buy these products, shoppers need to meet certain bill conditions. Detailed information is available at the supermarkets.

In addition, from now to May 2, Co.opmart and Co.opXtra are offering discounts of up to 30 per cent on fresh food, including Omega 3 chicken eggs, Da Lat tomatoes, red apple, bitter melon, fish paste, pork and others.

Furthermore, customers having Co.opmart loyal and VIP cards will have a chance to accumulate an additional 20-30 bonus points in their cards on May 1 and 2. 

Efforts needed to keep local products on store shelves

Made-in-Vietnam products are still holding a strong position in modern stores but as the competition from imported products is rising, local enterprises need to improve quality and boost publicity to keep their goods on the local store shelves, said experts at an online seminar on April 26.

At the seminar titled "Vietnamese goods in the competition to enter modern distribution channels" held by the Vietnam Government Portal (VGP), representatives from the Ministry of Industry and Trade and BigC supermarket chain said beside support from the Government, local firms need to promote branding and improve goods quality to secure their share at supermarkets and commercial centers.

Dinh Thi My Loan, chairwoman of the Vietnam Retailers Association, said local retailers have made efforts to introduce Vietnam-made products into their store chains, but the association is still worried over the long-term development of local products given tougher competition triggered by more economic integration. Therefore, local enterprises should brace for changes, further approaching consumers with different methods.

Le Viet Nga, deputy director of the Domestic Market Division under the Ministry of Industry and Trade, noted that the supply-demand connectivity program initiated by the ministry has helped broaden the presence of Vietnam-made products in modern shopping centers.

Still, the race between domestic and foreign products has been increasingly fiercer and some local firms have failed to survive while some others have withdrawn their products from supermarkets due to uncompetitive prices and unstable supply.

Thai Ba Dung, deputy general director of BigC Thang Long supermarket in Hanoi, said Vietnamese products account for 80% of the stocks at BigC supermarket chains, but only enterprises that can meet quality requirements, offer reasonable prices and secure stable supply are chosen.

According to Nguyen Dang Hien, general director of Tan Quang Minh Manufacture and Trading Co., Ltd (Bidrico Beverage), domestic enterprises should support each other, map out appropriate distribution strategies, and do the marketing to expand their operations and ensure sustainable development.

Enterprises want more overtime hours

A proposal for increasing the annual number of overtime hours was one of the issues brought up by business representatives during their dialogue with the HCMC government on April 26.

The dialogue focusing on the topics of salary, employment, occupational safety and vocational education was co-held by the Investment and Trade Promotion Center of HCMC (ITPC) and the Department of Labor, Invalids and Social Affairs.

While many countries regulate that an employee may work overtime for nearly 1,000 hours per year, Vietnam stipulates an annual maximum of only 300 hours, which is not suitable for some specific production areas, said a business representative. Therefore, he deemed it necessary to consider increasing overtime hours.

The city has sent a petition to the Ministry of Labor, Invalids and Social Affairs on this issue and is awaiting a decision, said the HCMC labor department.

As the Daily reported in December 2016, many businesses complained that the limit on the maximum number of overtime hours makes it difficult for them to fulfill their orders, reducing their competitiveness in the context of international integration. Therefore, a draft amending the 2012 Labor Code has suggested a two-fold rise in overtime hours or a complete removal of the ceiling.

Article 106 of the current Labor Code specifies that the maximum number of overtime hours per employee is no more than 30 hours per month or 200 hours a year, or not exceeding 300 hours in special cases.

But in practice, many employers find it necessary to increase the maximum number of overtime hours to meet their production needs. Moreover, more overtime hours satisfy the demand of a small group of workers who wish to earn more.

The labor ministry has proposed two options of raising overtime hours. In the first option, the number of overtime hours will double the current one.

Specifically, the number of overtime plus normal working hours of an employee shall not exceed 12 hours a day and each round of extra work shall not last more than five consecutive days. The total number of overtime hours must not exceed 600 hours per year.

In the second option, the number of overtime plus normal working hours shall also not exceed 12 hours a day. However, there is no limit on the total number of overtime hours per year as in the first option.

In response to the question of an enterprise, a representative of the labor department said there are 30 cases seen as occupational diseases in which workers will be provided with protective gear and obtain compensation.

As per the Labor Code, employers must not let female workers work at night, work overtime and make a business trip if they are seven months pregnant, six months in case of working in highland, remote, border and island areas, or raising children under 12 months old.

VietnamWorks says strong growth in labor supply, demand

The latest report of the job online recruitment website VietnamWorks showed both labor demand and supply in the country soared in the first quarter of this year, but supply grew stronger than demand.

Quarter one saw recruitment demand expanding 23% over the year-earlier period while labor supply jumped 38% year-on-year, according to the Report on Recruitment Demand and Labor Supply in Vietnam Market in Quarter One that VietnamWorks announced on April 26.

VietnamWorks said the report was compiled based on the data collected from jobs posted and job applications on vietnamworks.com.

The report revealed the top five industries and job categories in terms of recruitment demand growth. They were electric/electronics with an increase of 67%, executive officer/manager with 104%, construction with 46%, public relations (PR)/advertising with 35% and customer service with 51%.

Meanwhile, the highest numbers of job applications belong to education, electric/electronics, executive officer/manager, architecture/interior design and customer service.

Regarding recruitment demand, the information technology (IT) industry took the lead in the January-March period, followed by administrative/secretary, accountant, customer service, PR/advertising, manufacturing, architecture/interior design, construction, marketing and sales.

HCMC and Hanoi were the two hottest locations for recruitment demand in Vietnam in the first quarter of 2017. Other localities in the top five were Binh Duong, Danang and Bac Ninh.

The report said although Bac Ninh was fifth in the top five, the northern province was in the top three in terms of competition on employment with a competition rate of 1/42. This meant every candidate in Bac Ninh had to compete with other 41 candidates to land a new job.

The competition in Bac Ninh was higher than in Hanoi and the southern province of Binh Duong that share the same rate of 1/38, and Danang with 1/37, but lower than HCMC with 1/46.

VietnamWorks reasoned the high competition rate in Bac Ninh was that the first three months are the peak time for recruitment in the manufacturing industry.

“That is the time for massive recruitment of manufacturing companies and many of them located in Bac Ninh. In spite of the high competition rate, it is still difficult for them to recruit many high skillful positions, such as production managers, technical engineers, quality control engineers…,” VietnamWorks said.

The administrative/secretary sector held the highest competition rate of 1/66, followed by accountant with 1/61, import/export with 1/56, manufacturing with 1/51 and health service/biotechnology with 1/47.

VietnamWorks said its website attracts more than three million visits a month. Since its launch in 2002, it has helped deliver jobs to over 2.4 million registered professionals and has provided recruitment solutions to more than 8,500 companies.

Consumer lending market has much room for growth

The consumer finance market still has much room for growth in Vietnam in the coming time, according to a study of the Institute of Business Administration under the University of Economics and Business.

Consumer loans account for 5% to 10% of total outstanding loans in Vietnam, compared to around 40-50% in developed nations, said Hoang Van Hai, dean of the institute, at a seminar on the domestic consumer lending market in Hanoi on Tuesday.

“Our consumer lending market potential remains huge given the modest number of credit organizations and their products, as well as the low proportion of consumer credit,” said Hai, adding the informal credit market still exists and attracts a good number of participants.

The report indicates local banks dominate 87% of the formal consumer lending market, followed by financial firms with 12%, and fintech firms with a mere 1%.

The study’s author Nguyen Thuy Dung said the estimate has excluded informal lending channels, as well as lending by social agencies and organizations.

Dung added domestic consumer loans are flexible, owing to simple filing procedures and quick disbursements. Notably, the growth of loan models like those of Viet Phu Payment Services Support Corp. and F88 Investment Joint Stock Co. has been robust in recent times. However, loans for the education and healthcare sectors have yet to exist.

“There have been major changes in consumer habits and strong demand for credit among middle-income earners,” she said.

Ho Chi Dung, head of the institute’s marketing department, explained young people are more confident nowadays, so they may be willing to take out loans for spending needs. Besides, some have been independent since younger ages, so they have more shopping needs.

However, a recent survey shows that a large proportion of interviewees are inclined to borrow from relatives. In addition, nearly 99% of respondents perceive commercial banks as a reliable source of consumer loans, with 66% of them willing to borrow from them. Meanwhile, 93% have heard of financial institutions, but only 33% are prepared to borrow from such concerns.

Daehan Motors commissions first auto factory in HCMC

Daehan Motors, a wholly South Korean-owned enterprise, announced on April 26 to enter Vietnam’s auto market by introducing three models of light truck named Teraco which are assembled in HCMC.

Daehan Motors has invested to build its first factory in the Automotive-Mechanical Industrial Park in Hoa Phu Ward in Cu Chi District. With a total investment of US$20 million and a total area of more than 132,440 square meters, the facility can turn out 20,000 units a year.

According to Nguyen Hai Trung, chairman of Daehan Motors, the stringent production process of the factory will help ensure product quality.

At present, the localization rates of three Teraco truck models, including Tera 190 (load capacity of 1.9 tons), Tera 230 (2.3 tons) and Tera 240 (2.4 tons) are 20% to 25%.

Trung said Daehan Motors has planned to raise its localization rate to 40% in the coming time to reduce prices and increase competitiveness to enter ASEAN markets.

Although Daehan Motors is a Korean firm, it has no products sold in South Korea. Meanwhile, Teraco is an auto brand that Daehan Motors builds for Vietnam’s market and its first three models are equipped with Hyundai and Isuzu engines.

Trung said Daehan Motors has targeted to develop a variety of products, including commercial vehicles and mini autos. However, as the light truck market in Vietnam is growing well, the company will focus on this segment first.

According to data of the Vietnam Automobile Manufacturers Association (VAMA), in 2016, the total number of trucks sold in Vietnam reached over 84,000 units, an increase of 22% over 2015, and more than 50% of trucks sold were under-five-ton ones. The light truck segment was forecast to maintain 20% annual growth in the coming years.

However, Daehan Motors looks to sell about 5,000 units in the remaining eight months of 2017. Individuals, households, small and medium sized enterprises providing transport services, professional logistics companies and start-ups with limited capital are identified as the company’s main customers.

Daehan Motors said the reasonable prices and good quality will be the competitive advantage of the Teraco brand against competitors in the same segment. The company is developing its distribution system throughout the country, focusing on the provinces that have great potential transportation needs.

SBV provides hi-tech farming credit package with many incentives

The State Bank of Vietnam (SBV) on Tuesday decided to provide a credit package for hi-tech applied and clean agriculture with lot of incentives.

According to a loaning program, in accordance with a Government resolution to develop hi-tech farming, borrowers comprise legal entities and individuals in need of funds to implement hi-tech projects.

Norms on hi-tech projects are stipulated at Decision 738 by the Ministry of Agriculture and Rural Development in March.

Commercial banks will provides short, medium and long term loans in Vietnamese dong with the interest rate 0.5-1.5 percent lower than annual normal rate for the same terms of the banks.

Mortgage item will be negotiated by customers and the banks and customers can use properties built from the loans they get under the program for collaterals.

In case customers meeting with difficulties in paying debts because of objective and majeure reasons, commercial banks will consider restructuring payment deadline to suit customers’ payment ability.

When restructuring the payment time, creditors will provide those having feasible production and trading projects with new loans.

Basing on their current regulations and financial capability, lenders will consider other assistance measures to help customers remedy difficulties and restore production and trading. For instance interest and overdue interest payment will be exempt or reduced and banks will reclaim original debts first and interest debt later.

Registered capital of real estate firms highly increases

HCMC recorded 12,088 domestic firms established with the total registered capital of VND132,600 billion (US$5.83 billion), in which real estate firms’ funds was highest accounting for 38 percent of total in the first four months this year. 

That was reported at a socioeconomic review meeting chaired by chairman of the city People’s Committee Nguyen Thanh Phong yesterday.

The number of newly established companies and registered capital was a year on year increase of 12 percent and 60 percent.

Of the total registered capital, real estate firms held most with 38 percent, followed by those from wholesale, retail, auto and motorbike repair fields with nearly 20 percent.

Processing and manufacturing firms made up 5.2 percent while information and communications accounted for 5 percent.

At present, the number of registered businesses in the Department of Planning and Investment’s system reaches 306,400. HCMC has set a target to have 60,000 new businesses this year and 500,000 active enterprises by 2020.

Viettel Global expands investment in world

An annual general meeting of Vietnamese telecom giant Viettel approved the one-year business plan with revenue of $1.4 billion, an increase of 29 percent.

As per the military-run company’s last year business results, Viettel’s total revenue from investment in abroad surged by 21.5 percent, double compared to 2015’ growth speed. 

Viettel Global’s fresh markets in African countries have seen non-stop development; for instance, Viettel Tanzania hiked by 1.343 percent; Viettel Cameroon skyrocketed by 43 percent and Viettel Burundi with 42 percent.

In 2017, the company planned to have 12.9 million fresh customers bringing the number of customers in abroad to nearly 50 million subscribers. 

Viettel plans to enter bigger markets with 100-200 million people.

HCM City sees breakthrough developments

The southern metropolis of Ho Chi Minh City has gained significant socio-economic accomplishments since the liberation of the South and national reunification on April 30, 1975.

Over the past 42 years, HCM City has made remarkable contributions to national building, defence, industrialisation, modernisation, and international integration.

The city was one of few localities in Vietnam to record double-digit growth for many consecutive years from 1991-2010 thanks to the creative implementation of the Party’s guidelines on developing the socialist-oriented market economy.

It recorded annual average growth of 9.6 percent between 2011 and 2015, 1.66 times higher than the national average.

In 2016, the city achieved economic growth of 8.05 percent. The economic structure was shifted to services and industry-construction, which made up 54.8 percent and 28.76 percent of the municipal gross domestic product (GDP) respectively. The agricultural sector only comprised 0.8 percent of GDP. 

HCM City has long been one of the most attractive foreign direct investment (FDI) destinations. 

In 2016, the city lured 3.7 billion USD, raising total FDI to approximately 41 billion USD, with 6,485 foreign investment projects.

The FDI sector contributed 23.8 percent to the city’s GDP.

Per capita GDP increased to 5,428 USD in 2016 from 712 USD in 1995-1996.

HCM City is considered a bridge connecting the southern region with the south central and Central Highland regions and plays a crucial role for the development of the southern key economic region.

These achievements were attributed to the city’s focus on planning urban areas, industrial and processing parks, and developing transport infrastructure.

The southern economic hub has also made strides in culture, society, education-training, and human resources.

It is one of the leading localities in national universal secondary education.

The healthcare system has been developed with the increasing use of modern technologies in medical examination and treatment.

So far, 54 out of the 56 communes in the city have been recognised as new-style rural areas.  

GE Energy Ecosystem to help Vietnam meet 2030 power targets

The GE Energy Ecosystem portfolio was unveiled on April 27 at the Powering Vietnam conference held in Hanoi, resonating interconnected systems of digital and industrial technologies with the country’s energy agenda to deliver affordable, reliable, and more sustainable production, distribution, and consumption of energy.

“We chose Vietnam to be the first country to launch the Energy Ecosystem portfolio because it is one of the most energy-hungry nations in the world and open to new ideas and solutions to provide stable, reliable, and sustainable power,” Chairman and CEO of GE ASEAN, Mr. Wouter Van Wersch, told the conference.

“Some of the most innovative programs available today are showcased in the ‘ecosystem’, and many have been developed with customers across the entire energy landscape,” he went on. “This is a strength that GE has developed globally and we look forward to helping more customers in Vietnam, and other markets, achieve their energy goals in the future.”

Highlights of the Powering Vietnam conference included panel discussions and presentations from GE business leaders on opportunities in gas, steam, and renewable energy, and how power services partnerships, new grid technologies, and digital industrial solutions can advance Vietnam’s energy modernization plans.

Insights and opinions were also provided by local sector experts and energy representatives from the Vietnam Institute of Energy, the Department of Science, Education, Natural Resources and Environment, the World Bank, and the United Nations Development Program, among others. They shared power development ideas and best practices with more than 200 of Vietnam’s leading industry stakeholders from the government and the private sector. Many discussions focused on new solutions to help Vietnam produce more sustainable power to meet rising demand, which is predicted to grow at an average of 10.5 per cent annually during 2016-2020 and 8 per cent annually during 2021-2030.

As Vietnam’s power industry is undergoing unprecedented transformation, navigating it requires a full understanding across the entire energy ecosystem. Electricity consumption is projected to reach 234.6 terawatt-hours (TWh) in 2020 and 506.0 TWh by 2030 - a fourfold increase by 2030 compared with consumption in 2014.

The country’s near-term energy plans were outlined by Mr. Phuong Hoang Kim, Deputy Director of the General Directorate of Energy under the Ministry of Industry and Trade, during his welcoming remarks. “The goals set out in our revised National Power Master Plan VII are designed to boost energy security, diversify our energy mix, attract new investment, and ensure environmental benchmarks are met,” he explained.

“Fossil fuel and thermal power remain the major energy sources in the context of Vietnam’s economic development growing at around 7 per cent per annum to 2030. The high cost of renewable energy is still the greatest barrier for Vietnam.”

Discussions on the digital industrial transformation covered the increasing use of advanced software, analytics, and low-cost sensing converging with the industrial internet to reveal the hidden power of big data that seamlessly connects the ecosystem. Best practice was also shared on how digital power plant can help increase asset performance, enhance operations, and improve energy trading decisions to create additional revenue and cost reduction opportunities.

Mr. Pham Hong Son, CEO of GE Vietnam, said that conference attendees particularly enjoyed the chance to listen and learn more about energy solutions and project financing. “There were enthusiastic discussions on a wide range of important topics, from analysis of the world’s most efficient renewable power solutions today to industry modernization programs driven by advanced digital industrial solutions,” he said.

Decentralization was another important topic, where speakers discussed the shift from power generation towards generation closer to the point of consumption. There was also strong interest in the latest lower or non-emitting CO2 energy producing technologies to help developing markets like Vietnam upgrade aging infrastructure to save costs and meet emissions standards.

“As Vietnam is poised to ramp-up the development of energy infrastructure in the next five to ten years, there was great interest in financing options offered by GE, including early stage capital formation and access to third party capital and from export credit agencies, development financing institutions, and other institutions,” Mr. Son added.

Private enterprises up against it

It is difficult for private enterprises to compete with State-owned enterprises (SOEs), Mr. Truong Dinh Tuyen, former Minister of Trade, said at the first Private Business Forum held in Hanoi on April 26.

Although there is no difference between SOEs and private enterprises under Vietnamese law, private enterprises must cope with a host of difficulties when competing.

He suggested that development strategies promote market share and improve competitive capacity.

He still believes, however, that there are advantages held by private enterprises. The government has acknowledged the important position they play in Vietnam’s economic development and has been improving administrative processes and the business environment. It has also pushed forward with SOE equitization.

In discussing the private sector in Vietnam after 30 years of “doi moi” (renovation), Mr. Tran Dinh Thien, Director of the Vietnam Institute of Economics stated that private business is foundation of economy.

Vietnam’s private sector has proved its position in the economy, especially over the last decade. It contributes about 40 per cent of GDP, about 30 per cent of total industrial output, and about 64 per cent of total goods production.

Mr. Tuyen said that private enterprises should have reasonable strategies for development in new free trade agreements (FTA). They must also reduce their weaknesses and promote their strengths to improve the competitive capacity. The growth strategy is, indeed, competitive improvements.

They should also restructure with reasonable strategies and green growth. Restructuring should be deployed when there are changes in the market. Enterprises should express their responsibility to Vietnamese society.

The Private Business Forum, entitled “The Private Economy in Socio-Economic Development”, was organized by the Vietnam Private Business Association (VPBA).

Deputy PM urges EVN & MoIT to conduct Gencos' equitization during Q3

Deputy Prime Minister Vuong Dinh Hue, who is also Head of the Central Steering Committee for the Innovation and Development of Enterprises, urged the Ministry of Industry and Trade and Electricity of Vietnam (EVN) to conduct the equitization of the latter’s power generation corporations during the third quarter of this year.

In a working session on April 26, the Deputy PM asked EVN to actively review and list the group’s loss-making projects in accordance with market principles, balance cash flows in production and trade, apply modern technology in management, reduce labor costs, reduce energy consumption, and ensure transparency in calculating electricity prices, reducing the price by at least 10 per cent.

In regard to input costs, Deputy PM Hue requested that EVN prepare different scenarios for retail electricity prices during 2016-2020 and the management mechanism for electricity prices during the period and for 2017.

He urged EVN to determine the electricity price for 2017 with prudence, ensuring appropriate returns and creating the grounds to attract investment and ensure energy security, in particular attracting investment in renewable energy sources like wind and solar.              

EVN owns all capital in three major power generation corporations and plants that play an extremely important role in the country’s socioeconomic development and national security.

It also owns 100 per cent of the National Power Transmission Corporation and five other corporations that manage power distribution, trading, and market operations.

In an interview last month, Mr. Dinh Quang Tri, Deputy CEO of EVN, said the Power Generation Corporation 3 (Genco 3) will undergo its equitization process this year and Genco 1 and 2 in 2018. As per the Prime Minister’s approval, it will equitize the three Gencos in two phases.

In the 2016-2018 period, the Gencos will remain under EVN’s management, with the group holding at least 51 per cent. In 2019-2020, the group will consider reducing its controlling stake, and two years after equitization the Gencos will cease to be EVN subsidiaries.

The Gencos are currently having difficulties investing in power projects, Mr. Tri said. The group has submitted a restructuring plan to the PM, under which they can sell part of their equity in power generation companies to improve financial capacity and ensure a debt-to-equity ratio of less than three, as per the law. This would help EVN and the Gencos ensure reciprocal capital for attracting investment into new power projects.

EVN has also suggested that the PM allow the Gencos to put up shares worth more than half of their charter capital in their IPOs. If those shares are not sold, EVN would continue to hold a controlling stake in the corporations and divest at a later date.

In August 2014, the Ministry of Industry and Trade approved initial plans to equitize Genco 3, with a valuation to be conducted by January 1, 2015. The plan aimed at conducting an initial public offering (IPO) in March 2016 and then hold its first shareholders’ meeting a month later.

Infrastructure attracts investment to north Việt Nam

The newly established five modal (rail/road/air/river/sea) infrastructure network has brought a great deal of investment to the Red River Delta, especially Hải Phòng, delegates told a seminar held in HCM City on Wednesday.

Hans Kerstens, international business development manager at Deep C Industrial Zones, said in the last five years the north has become the most popular investment destination for foreign companies.

Almost US$60 billion has been invested there since 2011, outperforming the south by nearly $9 billion, he said.

Availability of prime industrial land adjacent to the new infrastructure developments in combination with reliable power, water, wastewater treatment and, unconditionally, the best tax package available in Việt Nam are some of the reasons why many more investors have decided to come here, he said.

Vũ Duy Mật, deputy director of Cát Bi International Airport in Hải Phòng, said the airport, upgraded last year, has been a success story in terms of both passengers and cargo.

In the first quarter of this year passengers and cargo throughput increased by 47 per cent and 48 per cent year-on-year.

The presence of a second airport (besides Nội Bài Airport in Hà Nội) capable of handling cargo via international routes is an imperative to comfort investors in the mobile phone and electronics business, he said.

Phạm Hải Mạnh of the Ministry of Transport’s Maritime Project Management Unit said a major game changer in the north has been the construction of the new Hải Phòng International Gateway Port (also known as Lạch Huyện Port).

Until recently Hải Phòng only had a port with a limited draft of seven metres. The new Lạch Huyen Port, which will become operational next year, will allow vessels with a draft of 14 metres or 100,000DWT to berth in Hải Phòng, eliminating the need to tranship from places like Singapore or Hong Kong and reducing the time to markets.

Hải Phòng in particular has received a lot of interest among foreign investors, Đỗ Trung Thoại, chairman of the Hải Phòng Economic Zone Authority, said.

It is home to 490 FDI projects worth almost $14 billion by some major players like LG, Bridgestone, Knauf, Regina Miracle, Nipro Pharma, and Flat Glass.

The integrated infrastructure, especially the transport system, has been one of the biggest factors in this.

Its investment environment too has greatly improved, especially in terms of administrative procedures, enabling businesses to get licences and customs and tax declarations faster, he said.

He expected the investment wave in the city to strengthen further when large national transport infrastructure works are completed soon.

He hailed the active support offered by local authorities to investors. 

The province has approved a list of projects requiring FDI investment in 2016-20, with a focus on environment-friendly ones, he said.

Kerstens said investors in the Deep C Industrial Zones can enjoy the convenience of transportation by sea, road, rail, and air.

They have so far attracted over $3 billion worth of investments from various countries in 70-odd projects.

The zone supports customers by providing an integrated support package in an unconditional and transparent way to allow them to do business hassle-free, Kerstens said.

Nearly 100 business people attended the seminar on “Mega Infrastructures Make Difference in the North” organised by Beluxcham together with various IP authorities, Deep C Industrial Zones, and KPMG.

HSC announces goals for 2017

The HCM Securities Corporation (HSC) aims to achieve total revenue of VND1.01 trillion (US$44.3 million) this year, up 23 per cent year-on-year, with the goal for after-tax profit set at VND391 billion, up 19 per cent.

HSC made the announcement at its annual shareholders meeting for the fiscal year 2016 held in HCM City on Monday.

HSC reported that average daily trading in the first quarter of this year was VND2.76 trillion, up 23 per cent from 2016 and 4 per cent higher than the plan for the year.

The company earned VND219 billion revenue in the quarter, while after-tax profit hit VND95 billion.

In the past year, HSC’s brokerage market share was 11.2 per cent, surpassing the 10.4 per cent market share in 2015. HSC ranks second in market share for brokerage and fund certificates in the market.

For all of 2016, HSC’s individual customer sector achieved average market share of 9.6 per cent in domestic customer transactions, higher than the 8.9 per cent in 2015 but lower than the target of 10.8 per cent for last year.

Online news website ndh.vn quoted Johan Nyvene, CEO of HSC as saying that the reason for not hitting the target was partly because the management board wanted to limit the risk of granting loans to some stocks.

A number of stocks traded in the market negligently through HSC or ineligible for HSC to issue margins was another reason, he said.

Foreign investor trading activities at HSC accounts for 28.5 per cent of total foreign trading on the domestic stock market.

Net sales of the company reached VND824 billion last year, while net profit reached VND305 billion, up 39 per cent and 43 per cent respectively from 2015, reported HSC’s board of directors.

With this result, HSC surpassed 12 per cent of revenue target and 1 per cent of profit plan approved by last year’s annual shareholder meeting.

According to initial plans, HSC set a dividend of 12 per cent for last year and paid a cash dividend for the first phase at a rate of 5 per cent, which was paid in January this year.

The board of directors also submitted a plan to shareholders to increase the dividend in 2016 from 12 per cent to 17 per cent.

HSC also asked shareholders to increase the foreign ownership cap from 49 per cent to 100 per cent.

EVN told to propose realistic tariffs

Deputy Prime Minister Vương Đình Huệ has asked the national power company, Electricity of Việt Nam (EVN), to propose tariffs based on true production costs this year.

The move aims to ensure EVN’s profits and create favourable conditions to attract investment in renewable enegies, and at the same time to curb inflation, Huệ told EVN representatives in Hà Nội on Wednesday.

EVN should also clarify the results of its restructuring process of the past few years and its upcoming plans, including privatisation, divestment, building a competitive power generation market, human resources and technologies, he added.

EVN calculations show that its total production costs this year are expected to increase to more than VNĐ7.2 trillion (US$316.7 million) due to the fluctuation of coal, gas and oil prices.

EVN general director, Đặng Hoàng An, said earlier this year that some input costs, especially coal, have increased continuously since 2015 but have not been calculated into electricity prices. Coal prices which rose 7 per cent from December 2016accounted for over VNĐ4.7 trillion of the total price increase.

However, EVN says it has set in motion a range of plans to knock off costs of about VNĐ3 trillion from the projected increase. Last year, total revenue reached VNĐ278 trillion, posting a 14 per cent year-on-year increase. All units reported profits in 2016.

The deputy PM asked the group to focus on balancing capital every year in the 2017-20 period to save at least 10 per cent a year.

The ministry, EVN and relevant agencies plan to complete the privatisation process of Power Generation Corporations in the third quarter of the year. The group is requested to review loss-making projects to ensure investment flows for its production and business. Modern technologies should be applied to reduce labour costs, electricity losses and increasing transparency in the power price calculation.

Dương Quang Thành, EVN’s chairman, said it would apply automation at all units, especially power transmission and distribution.

The Central Power Corporation has cut about 1,000 people from its payroll by installing two million electronic metres.

Japanese company to build waste treatment plant in Thanh Hoa

The General Director of Japanese CAN Holdings Ltd Company, Mr. Tadashi Yoshii has discussed with Thanh Hoa provincial leaders its plan to construct a waste treatment plant in the province.

The plant will be built on an area of 1,386sq.m at Nghi Son Economic Zone with a daily capacity of 30 tons on the trial period (as from May 2018). After it is put into official run, its capacity will be 100 tons per day.

The environment improvement project through recycling organic waste, including domestic waste in the province, is funded by Japan International Cooperation Agency (JICA), which authorized CAN Holdings to conduct a feasibility study and make collaboration plans. The domestic waste, after being processed, will become high quality organic fertilizer for a safe agricultural production.

Nguyen Duc Quyen, vice chairman of Thanh Hoa provincial People’s Committee, revealed the actual situation of waste collection and treatment in the region and accepted CAN Holdings’ proposal on building a pilot plant. After the plant is completed, it will be handed over to a local business for management.

GE helps meet Vietnam 2030 power targets

Leaders of US Company GE and global and local energy sector experts shared new ideas, case studies and best practices with more than 200 attendees and industry experts at a April 27 conference to address the challenges and opportunities for Vietnam’s Energy Ecosystem.

As the Vietnamese power industry is undergoing unprecedented transformation, navigating it requires full understanding across the entire energy ecosystem. 

The GE Energy Ecosystem portfolio was unveiled at the Powering Vietnam conference, resonating interconnected system of digital and industrial technologies with country’s energy agenda to deliver affordable, reliable, and more sustainable production, distribution, and consumption of energy.

Wouter Van Wersch, President and CEO, GE ASEAN kicked off the GE’s Energy Ecosystem program in Vietnam during the event and said, “We chose to launch the Energy Ecosystem portfolio in Vietnam because it is one of the most energy-hungry nations in the world and open to new ideas, and solutions, to produce more affordable, reliable and sustainable power. 

“Some of the most innovative programs available today are showcased in the ‘ecosystem’ – many have been developed with customers across the entire energy landscape. This is a strength that GE has developed globally and we look forward to helping more customers in Vietnam, and other markets, to achieve their energy goals in the future.”

Highlights of Powering Vietnam conference included panel discussions, and presentations from GE business leaders on opportunities for gas, steam, and renewable energy, and how power services partnerships, new grid technologies, and digital industrial solutions can advance Vietnam’s energy modernization plans.

Insights and opinions were also provided by local sector experts, and energy representatives from the Vietnam Institute of Energy, Department of Science, Education, Natural Resources and Environment, the World Bank, the United Nations Development Program, and more.

Together, they shared power development ideas and best practices with more than 200 of Vietnam’s leading industry stakeholders from the government and private sector. 

Many discussions focused on new solutions to help Vietnam produce more sustainable power to meet rising demand that is predicted to grow at an average of 10.5 percent annually during 2016–2020, and 8.0 percent annually during 2021–2030.[1] Electricity consumption is projected to reach 234.6 TWh in 2020 and 506.0 TWh by 2030 - a fourfold increase by 2030 compared with consumption in 2014. 

The nation’s near-term energy plans were outlined by Mr. Phuong Hoang Kim, Deputy Director, General Directorate of Energy, Ministry of Industry and Trade in his welcome remarks “The goals set out in our revised Power Master Plan VII are designed to boost energy security, diversify our energy mix, attract new investment, and ensure environmental benchmarks are met.”

“We understand that meeting these objectives requires support, input, and expertise from many stakeholders, and today’s Powering Vietnam event - which brings together experts from the public and private sector - is a great way to address the opportunities and challenges ahead.”

The digital industrial transformation trend discussed covers increasing use of advanced software, analytics and low cost sensing converge with the Industrial Internet to reveal the hidden power of big data that seamlessly connects the ecosystem. Best practice was also shared on how digital power plant can help increase asset performance, enhance operations, and improve energy trading decisions to create additional revenue and cost reduction opportunities.

Pham Hong Son, CEO, GE Vietnam said conference attendees especially enjoyed the chance to listen, and learn more about energy solutions and project financing. 

“There was enthusiastic discussion on a wide range of important topics from analysis of the world’s most efficient renewable power solutions today, to industry modernization programs driven by advanced digital industrial solutions. 

Decentralization was another important topic where speakers discussed the shift from power generation towards generation closer to the point of consumption. 

There was also strong interest in the latest lower or non-emitting CO2 energy producing technologies to help developing markets like Vietnam upgrade aging infrastructure to save costs and meet emissions standards.

“And as Vietnam is poised to ramp-up the development of energy infrastructure in the next five-10 years, there was high interest in financing options offered by GE including early stage capital formation and access to third party capital and from export credit agencies, development financing institutions, and other institutions,“ added Mr Son.

HCM City to host top Thai brands fair     

Around 300 firms will present Thailand’s internationally recognised brands to Vietnamese consumers at Top Thai Brands 2017, a trade fair to be organised in HCM City from May 11 to 14.

The fair, held jointly by the Thai commerce ministry’s department of international trade promotion and the Thai Consulate-General in HCM City, aims to boost the connection between enterprises in both countries, facilitating their search for agents, distributors and franchisees.

Through the fair, both nations hope to enhance trade and investment cooperation, while providing a platform for businesses to widen their networks and further develop strategic partnerships.

Top Thai Brands 2017 offers opportunities for industries such as food and beverages, home appliances, automobile and motor spare parts, cosmetics and healthcare, as well as service sectors such as education, tourism and business franchising. 

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