Japanese firm to open Mini-mart in Vietnam

G7Mart, an affiliate of coffee producer Trung Nguyen Corporation, on December 11 made an agreement with the major Japanese retailer Ministop to develop a chain of convenience stores in Vietnam in May 2011.

According to this agreement, they will invest $10 million in the first stage of their plan, with 75 per cent of the state owned by G7Mart.

They said during the first year of operation, they would develop over 100 convenience stores called ‘G7Mart-Ministop’, throughout the country. This figure will increase to 500 units, in the next five years.

They said, the stores would mostly sell Vietnamese products.

Ministop, an affiliate of Japan’s first largest retailer AEON, runs 11,219 stores around the world. G7Mart convenient stores were introduced in Vietnam in 2006.

The local partner stated, “It has developed 460 stores, each with an average area of four square metres, across the country."

Auto research centre to benefit local sector

Nissan Techno Vietnam will invest $15 million in building an automobile research and development centre in Hanoi this year.

Under the plan, Nissan Techno Vietnam will start construction of the centre’s first phase this month and is scheduled to put it into operation in July 2011.

Nissan Techno Vietnam was established in 2001 and is a 100 per cent equity subsidiary of Japan’s Nissan Techno, which is a subsidiary of Nissan Motors.

Nissan Techno dispatches engineers to Nissan bases in the United States and Europe, but Vietnam represents the first case of its establishing its own base overseas.

Nissan Techno Vietnam’s outsourcing of software and technology development to Asia has increased significantly during the past years with the aim of utilising intellectual human resources. According to  Fujitsu Research Institute, there were more than a few companies considering the utilisation of Vietnam’s human resources.

“Japanese companies are expected to accelerate the shift of manufacturing capabilities to Vietnam while also increasing the outsourcing of development,” according to the institute.

Nissan Techno Vietnam has  1,500 employees, up from 100 people at the beginning. It is expected to have 80 per cent of employees at the centre specialising in research.

This firm is operating separately from Nissan Motors Vietnam, which was established in December, 2008 focusing mostly on automobile assembling and distribution of Nissan cars in Vietnam.

According to a Nissan Motors Vietnam executive, the company has received no technology transfer  from Nissan Techno Vietnam since the latter’s products are advanced technologies, which have not been applied in products assembled by Nissan Motors Vietnam.

“Nissan Techno Vietnam is currently providing its R&D products to Nissan Motors bases in other countries, particularly in the Asia-Pacific region,” the executive said.

Nissan Vietnam launched the first locally-assembled automobile vehicle, the Grand Livina multi-purpose utility, in April 2010. Last week, the firm announced to introduce another model to the Vietnamese market by late December, 2010.

The firm was built as a joint venture between Nissan Motors Corporation and Kjaer Group A/S of Denmark in 2008.

In November 2010, Kjaer sold its 74 per cent stake in the joint venture to Malaysian Tan Chong Motor Holding Berhad to concentrate on the African market.

Dung Quat Oil Refinery to be inaugurated on December 24

The Vietnam Oil and Gas Group will hold the inauguration ceremony of Dung Quat Oil Refinery at 8am on December 24.

This was confirmed on December 14 by Dang Hong Son, Head of the Office of Binh Son Oil Refinery Ltd Company during a working session with Nguyen Hoang Son, Vice Chairman of Quang Ngai provincial People’s Committee.

Dung Quat Oil Refinery Plant has total investment capital of over US$3 billion and its designed capacity is 6.5 million tonnes of crude oil, meeting one third of the country’s oil and gas consumption demand.

Now the Vietnam Oil and Gas Group works with JGC from Japan as its contractor to do research on expanding the plant and increasing its capacity from 6.5 million to 10 million tonnes per year. The enlargement is scheduled to be completed in 2015.

After two years of operation, the plant has received 94 plots with about 7.6 million tonnes of crude oil from Bach Ho mine in Vung Tau, and imported 6 trips of crude oil, including 400,000 tonnes.

By December 2010, it has successfully processed 6.75 million of products, and sold over 6.66 million tonnes of oil and gas. By the end of this year, the plant’s turnover is estimated to reach VND53,800 billion, contributing VND10,430 billion to the State budget. It plans to reach a turnover of VND73,000 billion by 2011.

Consumers more confident in economic prospects

Vietnamese consumers are showing more confidence in the country’s economic and employment improvement for next year as indicated in a recent survey released by the market research firm TNS Vietnam.

TNS Vietnam told the Daily that 68% of the 500 participants in the TNS AP Temperature check 2010 hold positive opinions about Vietnam’s economic prospects in 2011 and 69% expect more jobs available in the market next year.

The consumers’ confidence for next year is thus much higher than this year’s level as only 48% of respondents remain upbeat about the 2010 economy and employment. However, this percentage rate is still higher than in China, India and Indonesia.

“Vietnamese consumers are gaining back their confidence,” said Ralf Matthaes, managing director of TNS Vietnam. “What will happen when people become more confident? They will spend more.”

Consumers in Vietnam are most upbeat about both economic and employment prospects, TNS Vietnam comments in the report, attributing higher consumer confidence to higher projected economic growth for Vietnam next year than the expected growth rate of 6.7% for this year.

Matthaes quoted international sources and organizations including HSBC as saying that Vietnam had stood out as one of the fastest emerging economies worldwide and that this was a very good sign for the country.

The HCMC government’s target for gross domestic product growth of 12% in 2011 for the national economic locomotive also helps drum up consumers’ optimism, coupled with the GDP per capita in this city projected to surpass US$3,100.

The per capita GDP in HCMC by the end of 2015 is expected to stand at US$4,800 compared to over US$2,800 estimated for this year.

As continuing economic growth and higher income will lead to more spending, the company forecasts the consumer confidence index next year should exceed this year’s level of 78, which is higher than 64 last year but lower than 89 in 2008.

Consumer spending in Vietnam is strongly backed by the significant rise in the number of high- and medium-income purchasers.

Commenting on the future consumerism, TNS Vietnam says cautious optimism is still dominant. Vietnamese spending priorities have become more conservative since the global economic downturn, replacing big-ticket products with smaller luxury items.

Driven by affordable prices and aspiration, Vietnamese buyers of luxury goods require producers to enhance their brand equity to new heights and appeal.

Japan firms invest in local gas shipping company

Two Japanese firms have each acquired one million shares of Vietnam’s International Gas Product Shipping Joint Stock Company, or Gas Shipping, thus holding a combined stake of 6.7% in the local public company.

It was revealed at a function held in HCMC on Monday that Knowledge Company Inc. and Indochina No.1 Limited Liability Partnership had bought the two million shares from PetroVietnam Transportation Corporation (PVTrans), the parent firm of Gas Shipping which holds a controlling stake in the gas transporter.

Nguyen Ngoc Anh, general director of Gas Shipping, handed certificates recognizing the two Japanese investors as its major shareholders on Monday.

Gas Shipping, with chartered capital of VND300 billion, started operation in early 2008, with the core business being transportation of liquefied petroleum gas (LPG) as assigned by its parent firm PVTrans.

The company operates its own fleet of four vessels plus five chartered vessels. The company expects to obtain VND513 billion in revenue and VND66.4 billion in pre-tax profit, up 142% and 57% respectively from last year.

Gas Shipping is expected to list on the Hochiminh Stock Exchange in the first quarter next year.

Citibank launches credit card in Vietnam

Citibank Vietnam has launched its first card service on the local market through a travel credit card partnership with MasterCard.

The Citibank PremierMiles card is mainly for people who usually travel abroad for business or leisure. Cardholders can earn one Premier Mile for every VND20,000 of spend and cash withdrawal, 1,000 bonus Premier Miles for card renewal, and 5,000 bonus marks for spending over VND500 million in one year.

The card can be redeemed for free flight awards on about 50 airlines including Vietnam Airlines, Singapore Airlines, Cathay Pacific Airlines, and Delta Airlines. The Premier Miles earned by Citibank customers never expire.

The card owners can benefit from many local and international incentives such as 80% off the second business class ticket on Malaysian Airlines from Saigon to Kuala Lumpur; stay one night, get one night free offers from Sofitel Plaza Hanoi, Sofitel Plaza Saigon, Novotel Halong Bay, Novotel Nha Trang, Mercure Hanoi, Mercure Hue; discounts at Vinpearl Nha Trang, Eva Son Nha Trang and Six Senses Ninh Van Bay; and discounts and privileges at over 6,000 merchants across Asia.

Antonio Corro, MasterCard country head and chief representative for Indochina, said at a news briefing last Friday, “MasterCard’s latest travel survey revealed that one in four consumers across Asia Pacific is looking to travel.”

Vietnam is the eighth market in Asia where Citibank has launched this kind of card.

Explaining the decision to issue such a card in Vietnam, Bret Krause, managing director and Citibank country officer for Vietnam, said Vietnam had achieved fast growth in the past few years and the number of affluent Vietnamese people was increasing.

Bret Krause also said that the U.S.-based bank was still chasing the plan of seeking local incorporated license in Vietnam which is under the long-term investment plan of Citibank in the country.

Experts, enterprises decry high lending rate

Several experts and enterprises contacted by the Daily have voiced their grave concern over lending interest rate, saying a preventively-high rate of about 20% a year will sharply raise their input costs and affect the economy.

Although the monetary tightening policy should be applied to quell inflation, but enterprises should not be thrown into severe difficulty by the high rates, economists said. But lowering the lending rates looks increasingly unlikely as banks are chasing up the borrowing rates to as high as over 15% a year, though the Vietnam Banks Association has asked commercial banks not to mobilize funds at more than 15%.

Tran Dinh Thien, head of the Vietnam Institute of Economics, told the Daily that the 20% lending rate was too high for corporate borrowers. “Monetary tightening designed to anchor inflation expectations will only work in long term if it is well combined with other policies such as reducing the budget deficit.”

If the high lending rates are maintained for a long time, it will cause uncertainties for the economy, he added.

Le Tham Duong, head of the business faculty of HCMC Banking University, said monetary policy should be flexible. While it is aimed to put inflation under control, it must not force enterprises to go bankrupt.

Duong suggested the central bank pump more capital on the open market to indirectly impact the interest rates between banks and customers, instead of letting them float on the market.

Duong Thu Huong, general secretary of the Vietnam Banks Association, said the high lending rates would strongly impact enterprises, a driving force of economic development and main customers of banks.

Enterprises also voiced their harsh criticisms against the high lending rates.

Dang Quoc Hung, vice chairman of the Handicraft and Wood Industry Association of HCMC, said the acceptable lending rate for enterprises should be around 10% only. “Many people have asked me why I still maintain production despite the high interest rates as it may result in losses.”

The dilemma, according to Hung, is that “if I do not continue, I will lose much more and laborers will lose jobs while I have to continue paying the interest for projects funded by previous bank loans. So we have to remain in production.”

A household business owner said she borrowed capital five months ago at 1.25% per month, but it has risen to 1.36% now and the bank’s staff just informed her of a newly revised lending rate of 1.8%, effective from next month, or 21.6% per year.

The increase is not effective right now, she explained, because the credit contract states the bank can only revise the interest rate every three months.

Although the Vietnam Banks Association has asked commercial banks to keep the borrowing rates at a maximum of 15% per year including promotion, most banks have breached this suggested level.

Asia Commercial Bank (ACB) on Monday raised the borrowing rate up to 15% per year from 13% last week, besides new promotion programs with fringe benefits for depositors. The highest deposit rate offered by ACB was 15.5% per year for 12-month term, which will likely trigger a rate hike among other smaller banks.

Doosan wins US$1.3 billion deal to build power plant

South Korea’s Doosan Heavy Industries & Construction Co. signed a US$1.3 billion deal in Seoul last Friday to build a thermo-power plant at Mong Duong in the northern province of Quang Ninh.

Under the deal with AES-VCM Mong Duong Power Co., Doosan Heavy will act as the engineering-procurement-construction (EPC) contractor for the 1,200-MW plant whose construction is scheduled to begin shortly for completion in June of 2015. AES-VCM is an affiliate of U.S.-based power producer AES Corp, a Fortune 500 company.

The Mong Duong 2 coal-fired power project in Quang Ninh, 160km northeast of Hanoi City, has developed coal supplies and deep sea access facilities, according to a statement sent to the Daily by Doosan Heavy Industries Vietnam (Doosan Vina), a subsidiary of the South Korean contractor.

Doosan Vina, which has a plant in Dung Quat Economic Zone in central Vietnam, will play a leading role in this “Turnkey” contract. The company said its 2,000-strong workforce will be at the heart of the project, providing much of the skill and expertise to build, operate and transfer (BOT) this high-tech power plant.

“This project has been in the works for some time and it is gratifying to me to see the deal completed,” Cho Bong Jin, general director of Doosan Vina, said in the statement.

He added that “Doosan has been working in Vietnam for 15 years, investing, developing and training the next generation of leaders in heavy industry and this contract represents the faith in our Vietnamese staff and their ability to build the infrastructure necessary for Vietnam’s next stage of development.”

A Doosan company spokesman said the project will extend its presence in Vietnam, whose demand for power plant construction is estimated to reach US$17.7 billion by 2015.

The demand for power generation in Vietnam continues to increase to meet the fast-rising demand of the Vietnamese economy.

Doosan Vina is operating a US$300-million heavy-industry complex as a venture between Doosan Heavy Industries and Construction Co. Ltd., and Doosan Mecatec owned by Doosan Corporation.

The five business units of Doosan Vina in Dung Quat Economic Zone in Quang Ngai Province are manufacturing boiler, material handling equipment, heat recovery steam generator, desalination and chemical processing equipment.

The complex also has its own purpose-built deepwater port that provides easy access to major sea lanes for quick delivery.

According to Doosan Vina, employment at the complex is expected to reach 3,500 employees in the near future and these workers will be providing top quality “made-in-Vietnam” products to people all over the world. The venture has exported hundreds of millions of U.S. dollars worth of equipment since early last year.

The parent company, Doosan Heavy Industries of Korea, is a global enterprise operating in 33 countries around the world.

HCMC to need 265,000 workers next year

Employers in HCMC will need about 265,000 people next year, according to the HCMC Center for Forecasting Manpower Needs and Labour Market Information.

Around 45% of the figure is unskilled labor, 20% bachelor's degree holders and 35% people at intermediate level.

Tran Anh Tuan, deputy director of the center, said the industries that need to employ more staff include electronics, mechanical engineering, textiles, footwear, marketing, finance, banking, furniture, fine art, architecture and construction.

The labor-intensive sectors will face a serious lack of labor after the Lunar New Year holiday, or Tet, in February next year. The labor market is seen more volatile than the same period last year due to high inflation while pay rises in industrial parks are not in sight.

Tuan said labor demand of industrial parks in the city next year was forecast at over 30,000 employees, down 50% from this year. This is because the city is restructuring its economy with focus shifted to the high-tech and services sectors.

According to General Statistics Office, there were 271,100 jobs created in the city in January-November, up 1.6% from the same period. In particular, new jobs numbered 120,600, up 3.3%.

Vietnam lists top 10 trademarks

Nielsen Vietnam has released a list of the top ten Vietnamese trademarks based on the number of their customers.

Honda was top of the list, dominating the motorbike markets and selling to nearly 20 million consumers.

The Finish mobile phone producer Nokia came second despite, fierce competition from other international popular names like Apple, Blackberry, HTC, Samsung.

Third place went to Big C and the remaining were Mobifone, Vietcombank, Saigon Co.opMart, Viettel, Sony, Vinamilk and Coca-Cola.

Shrimp exports to reach US$2 billion

The total export volume of shrimps over the past 10 months has passed 195,000 tonnes earning US$1.68 billion.

The Vietnam Association of Seafood Exporters and Producers (VASEP) estimates that this year’s total shrimp export value will reach over US$2 billion, as there is a growing demand in VASEP’s three main markets of the US, Japan and the EU.

According to VASEP, this year shrimp exports will continue to increase despite the global economic recession in 2009. However, the industry still has to face challenges in ensuring the food hygiene.

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