DKSH opens innovation center in HCMC

DKSH’s Business Unit Performance Materials, an ingredients and specialty chemicals distributor and provider of market expansion services, has expanded its infrastructure with the opening of an innovation center in HCMC.

The investment in the new facility allows DKSH to meet high market demand and to better serve its business partners. The innovation center is located at a convenient site to provide hands-on technical support to customers and technical training to DKSH specialists.

The center has three laboratories with each focusing on one of Business Unit Performance Materials’ key markets in Vietnam - food and beverage, personal care and specialty chemicals. It will develop new concepts, products, formulations and technologies for the personal care, paints and coatings industries and the food and beverage industries.

Besides, it fosters entrepreneurial talents to develop cutting-edge solutions and allows hands-on collaborations with business partners to create market-ready and trend-setting products.

DKSH’s Business Unit Performance Materials operates a total of 26 innovation centers, which are strategically located to support business partners worldwide. The new facility in Vietnam replaces the existing innovation center (also located in HCMC) that has contributed to the commercialization of innovative products by DKSH customers for many years.

Hung Dang Phung, general manager of Performance Materials at DKSH Vietnam, commented that DKSH has been present in Vietnam for a long time to support business partners to expand into new markets. “We have a proven track record in providing insights on how to better synergize ingredients and chemicals for greater results,” he said.

DKSH’s business partners have made inroads into new markets and have seen their products successfully commercialized. By investing in the new center, DKSH will continue to turn creative concepts into commercial reality, Phung said.

Vietnamese fresh lychees enter Thailand

Central Group Vietnam & Big C Vietnam shipped the first shipment of fresh lychees from Luc Ngan district, Bac Giang province to Thailand on June 20, said their representative.

This opens more opportunities for the Vietnamese fruit to access the potential market, especially after the import duties are removed as the ASEAN Community comes into effect.

Luc Ngan lychees have been sold at Big C supermarket across the country at promotional prices as from June 16, helping customers have a chance to enjoy the high-quality products with clear origins.

Around 150 tons of lychees from Luc Ngan and other localities are expected to be sold at Big C supermarkets during the period.

The US Animal and Plant Quarantine Agency under the US Department of  Agriculture has granted the area code with geographic indications for 300 households in Luc Ngan district to grow lychee on more than 217 ha.

Meanwhile, the production process is strictly managed by local authorities to ensure international food hygiene and safety standards so that the fruit can enter demanding markets like the US, Australia, the EU and Japan.

HCM City’s industrial production rises in first half

HCM City’s industrial production index experienced a year-on-year increase of 7.5 per cent in the first half of this year, the highest level recorded in the past five years.

This was revealed by the latest statistics from the municipal People’s Committee.

The positive performance was attributed to the industrial output growth seen in four key sectors — mechanical engineering, manufacturing, electronics and IT, chemical-rubber-plastic and food processing, the committee said.

Typically, the mechanical engineering and the manufacturing sector expanded 17.5 per cent year-on-year, thanks to the use of modern and competitive equipment. Meanwhile, the electronics and IT sector grew 12.4 per cent, and the food processing industry rose 5 per cent.

Phạm Thành Kiên, director of HCM City’s Department of Industry and Trade, said the city has facilitated its industrial development by focussing on providing financial assistance, connecting part suppliers and manufacturing firms, and attracting investment in industrial parks and complexes.

The city has built a database for the supporting industry to help businesses seek information on equipment, machinery and new production technologies, he said.

According to the data, the city’s total electricity consumption in the period between January and June was estimated at 11.6 billion kWh, up 3 per cent over the same period last year.

The city also generated an estimated US$4.6 billion from exports in the six months, surging 80 per cent year-on-year, while its imports saw a yearly rise of 69.2 per cent to $4.15 billion.

Gov’t raises depositors’ insurance compensation to VND75 million

The maximum insurance payable to a depositor for all deposits in an insured organisation will be raised to VNĐ75 million (US$3,289) from VNĐ50 million with effect from August 5.

Under Decision 21/2017/QĐ-TTg, issued last week by Prime Minister Nguyễn Xuân Phúc, the insured deposit amount, which is paid by the Deposit Insurance of Việt Nam (DIV), will include both principal and interest.

As per current regulations, to get deposit compensation, credit institutions and banks mobilising deposits are required to purchase the insurance.

Insured banks have to declare the list of deposit insurance schemes they have purchased to all transaction offices.

To be eligible for insurance, deposits must be in Vietnamese đồng. Depositors will be paid back 60 days after the bankrupt institution ceases all transactions.

In case the bankrupt credit institution or bank gets mired in dissolution, which affects the security of the banking and finance system, the DIV will support these banks by lending, guaranteeing, or covering their debts.

Like in most other countries, Việt Nam’s deposit insurance policies have two main aims: to protect depositors and to secure the banking industry.

Public trust in the banking system is important, and can be significantly improved through deposit insurance policies.

The insurance limit is being raised after experts and depositors have repeatedly pointed out that the current limit of VNĐ50 million per customer is very low. The limit is much lower than the 50,000 euros in Europe, $200,000 in the Republic of Korea and $250,000 in the United States, they said.

According to the State Bank of Việt Nam, institutions and individuals deposit roughly VNĐ6 quadrillion in the country’s commercial banks.

Currently, annnual interest rates for đồng deposits average at 0.8-1 per cent for below one month terms, 4.5-5.4 per cent for one to six months, 5.4-6.5 per cent for six to 12 months, and 6.4-7.2 per cent for above 12 months.

CBRE: Domestic investors retain strong appetite for hospitality sector

Real estate investment activity in metropolitan and resort destinations continued to strengthen amid robust demand from domestic and foreign buyers, according to latest report from real estate consultants CBRE.

Vietnam saw around 3.2 million foreign arrivals in the first quarter of this year, an increase of 30.6 per cent year-on-year.

CBRE identified that the large number of new developments, which are largely of a resort nature with many villa developments proposed, is causing concern regarding potential oversupply.

Vietnam continues to see an influx of international hotel management corporations setting up operations in the country.

Major transactions occurred on Phu Quoc Island, with the Sulyna Hospitality Hotel Restaurant Travel Service Co. buying 70 per cent stake, equal to $15 million, in the Long Beach Resort Phu Quoc. Stretching along a pristine beach, Long Beach Resort has 118 rooms opened in its first phase and possesses unique architecture resembling a traditional Vietnamese village, while offering a new standard in exclusive and bespoke indulgence.

CBRE’s report also noted that domestic investors retain a strong appetite for hospitality sector investment. Some groups are looking to purchase development sites and en bloc properties outright, while others are more open to forming joint ventures with foreign investors.

There continued to be a large volume of overseas capital looking for a home in the first quarter. Asian groups have been especially active in seeking hotels in large cities and resort destinations. South Korean buyers have been focusing on three- and four-star hotels in Ho Chi Minh City, while the tourist destinations of Da Nang and Hoi An have also seen solid demand for hospitality assets.

Asian developers and companies have been very active in the market in recent quarters as they continue to be lured by the high yields on offer in Vietnam.

The other main driver of investment demand at present is Vietnamese conglomerates.

VEPR: 2017 growth at 6.21%

Vietnam’s economic growth this year will reach only 6.21 per cent, lower than the 6.68 per cent recorded in 2015 and the target of 6.3 per cent set by the government at its regular meeting in September 2016, the Vietnam Center for Economic and Policy Research (VEPR) wrote in a report released on June 16.

The Vietnam Annual Economic Report 2017 was launched at a conference on June 16.

VEPR Director Mr. Nguyen Duc Thanh told a press conference on June 16 to release the Vietnam Annual Economic Report 2017, with the theme “Accelerating Reforms Towards a Facilitating State”, that economic growth will not be as good as previously expected.

VEPR has forecast two scenarios. Under the scenario for 6.7 per cent growth, inflation would be 3.2 per cent and pose problems for sustainable growth.

The second scenario is for economic growth to reach around 6.37 per cent and inflation 2.35 per cent.

The report also provides analysts of short-term policies and medium- to long-term policies.

A short-term mindset in dealing with the slowdown in growth may slow the forces behind reforms and delay the recovery of sustainable growth, such as efforts to increase capital, accelerate the disbursement of public projects, and the extraction of crude oil.

Policymakers, therefore, need to be cautious about adjusting monetary policy, and especially need to be cautious and independent in adjusting credit growth plans to maintain inflation targets.

The government also needs to seriously implement policies on staff cuts and cutting recurrent expenditure and provide financial support to the budget-funded activities of various associations.

Policymakers also need to adjust policies in line with the rapidly emerging middle class.

Indochina Capital invests in Toong

It will become Toong’s latest investor and one of its key shareholders. “Indochina Capital is always looking for excellent Vietnam-focused investment opportunities,” said Indochina Capital CEO Peter Ryder. “When Toong came to our attention, we were immediately interested because the company has the largest and widest footprint of any co-working space provider in Vietnam. We were also impressed with the Toong brand. In just 22 months, Toong, led by its brilliant founder and CEO, Duong Do, and his extraordinary team, has established itself as a leading player in Vietnam’s high octane co-working service and space market and formed relationships with Openasia, one of Vietnam’s leading investment firms, and CapitaLand, one of Asia’s largest real estate developers.” 

The funding from Indochina Capital will allow Toong to provide more modern, progressive, and conducive working environments for companies and individuals in Vietnam. 

In addition to its capital injection, Mr. Ryder and Mr. Doan Viet Dai Tu, co-founder and Chairman of the Openasia Group, will join forces with Mr. Do on the company’s Board of Directors. 

The union of Indochina Capital and Toong furthers Toong’s expansion and potential dominant market position while complementing Indochina Capital’s lifestyle brand. 

Toong will take full advantage of Indochina’s real estate experience in design, project management, development execution and market knowledge, while Indochina Capital adds another “arrow” to its development “quiver” with Toong as a partner and preferred tenant. Specifically, Indochina Capital’s upcoming series of lifestyle properties via the ICC-Kajima development platform will be enhanced by a Toong co-working facility. 

“The founders of Openasia Group and Mr. Ryder are among only a few entrepreneurs in Vietnam whose vision and meticulous attention to detail in what they bring to the market I deeply admire,” said Mr. Do. “Every product they create brings not only new value to customers but also positive change to society while redefining how people live and work.” 

The Indochina Capital investment will enable Toong to strongly expand its network of high-quality creative working environments in Vietnam. “More importantly, having both Peter and Dai Tu join Toong’s Board of Directors will be of invaluable help in further refining product offerings and realizing our mission of changing the way people work in Vietnam,” Mr. Do added. 

“Innovative change dominates the global real estate industry, not just in Vietnam,” said Mr. Ryder. “This is evidenced by a growing number of companies that utilize co-working models to encourage disruptive ideas and cutting-edge technology in collaboration with other firms. Indochina Capital enters into our partnership with Toong expecting that via the interaction and intersection of design with technology and education with location, Indochina Capital and Toong will produce a portfolio of unique iconic spaces to nurture Vietnam’s entrepreneurial intelligence and culture.”

Founded in 1999, Indochina Capital is an innovative leader in Vietnam’s rapidly growing real estate, financial services, and capital markets. Through its subsidiaries, it has established itself as one of the country’s leading real estate developers (Indochina Land) and one of the country’s most experienced capital markets investment managers (Indochina Capital Advisors). The company also provides local and cross-border advisory and finance services (Indochina Finance & Investment).

Launched in August 2015, Toong pioneered the concept of large-scale, professional co-working space in Vietnam, and since then has been the torchbearer of this new concept, which has shown impressive growth in the last two years. After only seven months in operations, Toong closed series A funding and expanded its network to cover all of Vietnam, with over 6,000 sq m and five locations in total around the country. 

Early this year, CapitaLand announced it had entered into a strategic partnership with Toong in developing a series of co-working spaces in Vietnam.

VNPT & Nissho Electronics Vietnam offer points cards

The Vietnam Posts and Telecommunications Group (VNPT) and Nissho Electronics Vietnam will work together to provide Vpoint multifunction points cards.

The new Vpoint multifunction points cards have a variety of utilities, integrating leading companies in the fields of food, travel, supermarkets, electronics, transport, and telecommunications.

Customers need only use a single card to accumulate points at all stores within the system. Points accumulated can then be converted to cash at the next payment.

The use of points cards has been popular for many years. But with Vpoint, instead of having a points card for many businesses, customers’ purses and wallets will be more compact with a single card that can be used at many different stores. Vpoint can also be linked to a bank account, allowing customers to pay using the card and accumulate points.

Vpoint cards connect businesses together to take care of customers, making a difference through the privileges reserved for card users. VNPT customers will enjoy more benefits in packages and services when using Vpoint, while businesses can offer different incentives to Vpoint users.

A signing ceremony for a cooperation contract between VNPT and Nissho Electronics Vietnam was held on June 16. VNPT will act as the business unit in Vietnam while Nissho will provide and operator the associated technological solutions. The signing is the first step in the commitment of the two companies to successfully deploy the Vpoint card in Vietnam.

The cards are to be officially launched in Vietnam during the fourth quarter.

Suitable music boosts sales

Clothing stores that have “sound DNA” similar to the “sound DNA” of customers can increase their sales by up to 30 per cent, Mr. Nguyen Tien Huy, Managing Director of DigiPencil MVV, a digital innovation company, told the Music Marketing workshop in Hanoi on June 16. 

“Sound DNA” features elements such as a brand sound, melody, riffs, voice and instruments, he explained.

Spas and the food and beverage industry can also improve their business performance via music. “People feel comfortable with sounds around 432 Hz, so music played should be in that audio frequency,” Mr. Le Tan Thanh Thinh, CEO of Brandbeats, a consultant on music in media channels, said at the workshop.

Vietnamese really love music, he added, and it has a greater influence on people here compared to other ASEAN countries. He cited the Google Consumer Barometer for last January, which found that 53 per cent of Vietnamese use smartphones to listen to music while the ratio in Singapore, Malaysia, Thailand, the Philippines, and Indonesia was only 28, 22, 22, 15 and 6 per cent, respectively.

The percentage of consumers using computers to listen to music in Vietnam is also higher than elsewhere in ASEAN, at 28 per cent, compared to 22, 10, 9, 6, 2 per cent in Singapore, the Philippines, Malaysia, Thailand, and Indonesia, respectively.

Music can even save a brand in Vietnam, Mr. Thinh explained. Huda beer, for example, was always considered the local beer of Hue and central Vietnam but sales began to fall when rumors spread that it was owned by a Chinese company. After it introduced a song confirming its origin that aroused the pride of people in Hue and the central region, it again dominated the central beer market.

Despite the influence of music on consumer behavior, Mr. Nguyen Hai Phong, Creative Director at Brandbeats, said that Vietnamese enterprises have failed to pay sufficient attention to the music experience for consumers.

Mr. Thinh said that a person who is 65 years old has seen an average of about 2 million advertisements. In the modern era, Mr. Huy said, it’s increasingly difficult to attract the public’s attention. “Melodies are more easily recognized by people than images,” he said. “Now is the time for the brands to ‘sing’.”

PNJ to sell over 9.8mn shares to open 40 stores

The State Securities Commission (SSC) has announced receipt of a registration dossier for the private placement of over 9.8 million shares of the Phu Nhuan Jewelry Joint Stock Company (stock code PNJ), which will fund the opening of 40 new stores.

The issuing price will be no less than 10-15 per cent of the closing price on the date the SSC approves the documents. Based on the share price on June 14, the minimum amount received will be VND800 billion ($35.23 million).

Money raised will added to PNJ’s business capital and fund its retail store expansion.

The cost of opening 40 new stores and branches is some VND60 billion ($2.64 million). Additional working capital for the 40 stores is about VND600 billion ($26.42 million) and PNJ will spend VND25 billion ($1.1 million) on improving equipment at its jewelry factory.

If investors do not purchase all shares on offer, PNJ’s Board of Management will distribute them to others at a fixed price.

PNJ has set a target of opening 40 new stores this year and recording profit growth of 33 per cent.

It Board reported total revenue of VND8.56 trillion ($376.8 million) for 2016, up 11.3 per cent and fulfilling 97.5 per cent of its annual plan. Wholesale sale of jewelry reached 78.9 per cent of the plan but was down 15 per cent compared to 2015.

Pre-tax profit last year was VND608 billion ($26.7 million), up 223 per cent compared to 2015 and 32.2 per cent higher than planned. After-tax profit was VND470 billion ($20.7 million), up nearly five-fold and exceeding the plan by 30 per cent. Consolidated net profit came in at VND449 billion ($19.8 million), nearly double the figure in 2015.

On June 14, PNJ’s shares closed at VND95,300 ($4.19). The share price has increased 29 per cent since mid-April, from VND74,000 ($3.3) to VND95,300 ($4.2).

Time to refresh

Since Mekong Capital’s Mekong Enterprise Fund III (MEF III) poured $6.9 million last year into Wrap & Roll, the Vietnamese restaurant chain has grown by a handy 20 per cent. Alterations to its menu and operational structure lies behind the growth, according to the fund, which are part of Wrap & Roll changing its brand identity as it targets to become the fastest-growing Vietnamese restaurant chain in the country. 

Changes in brand identity are normally done in a bid to reposition the business model or build a new image among local consumers, according to the CEO of the Masso Group, Mr. Nguyen Trung Thang. In this case, however, Wrap & Roll decided to change its brand identity to build a new image among long-standing customers. “After ten years, we wanted to renew our image, including our logo, products, and the design of our restaurants, to bring a new experience and satisfaction level to customers,” said Ms. Le Hoang Anh, Marketing Manager at Wrap & Roll. 

The change is necessary for a ten-year brand like Wrap & Roll, according to brand expert Mr. Vo Van Quang. “This makes the brand remain the pioneer in the market, being fresh,” he said. “Leading brands in the world always undergo evolution, upgrading and revolution after five or ten years. It depends on each field.” 

The new logo retains the colors of the former, including green, yellow and white. The difference is in the round-shaped multi layers representing rice paper, with green transitioning from dark to light and the final layer is orange, as the core of the roll, which represents the warmth of an intimate Vietnamese dining space. 

The change also includes the architecture of restaurants, including details such as wood, trees, images of Vietnamese rolls and hand-made material details, to create closeness and comfort for customers, as if they are enjoying a meal in their back garden. 

The new logo is better in terms of color, according to Mr. Quang, but the former was better in terms of structure. “However, both the new and the former don’t clearly express the cultural identity of Vietnamese cuisine, except for the slogan ‘The differentiation of Vietnamese rolls’,” he said. “The slogan cannot describe the whole meaning of the criteria industry insiders set. The identity must be expressed through a basic identification design, in the language, color, and texture.

Many well-known restaurant chain brands have left Vietnam quickly in recent times due to a lack of identity, as the competition among foreign and domestic brands is fierce. Wrap & Roll, however, has its own identity, Mr. Quang said. The potential of Vietnamese cuisine is huge, but turning this potential into competitive capacity, at the branding level, remains weak. 

The founder of Wrap & Roll, Ms. Nguyen Thi Kim Oanh, told a local newspaper that the competition made it sit back and conduct a review to identify the right way forward. “We didn’t invest in an extended way but we looked at core values and reviewed our branding and team to define the change,” she said. 

Wrap & Roll was the first company that MEF III invested in. Mr. Chad Ovel, Partner of Mekong Capital, said in a statement at the time that Wrap & Roll has successfully created a modern way to help consumers enjoy authentic healthy Vietnamese food and built a base for rapid expansion. “In Wrap & Roll, we see an unusually strong commitment to continuously developing their management systems and the capabilities of their management team,” he said. 

The cost of changing its brand identity is significant, according to Ms. Hoang Anh, but is suitable, as its target is to bring customers excellent experiences. 

Wrap & Roll now has seven restaurants in Ho Chi Minh City and four in Hanoi, with four franchised eateries in Singapore. The chain plans to expand its brand in both local and overseas markets. It has also spent half a million dollars on constructing a facility in order to supply inputs to local and franchised restaurants. 

In the next three years, it plans to open 15 restaurants each year. “With a new business strategy, we believe Wrap & Roll will become the fastest-growing Vietnamese restaurant chain in the country,” Ms. Hoang Anh said. 

“The plan is feasible if it is supported by stable and safe financial plans,” Mr. Quang said. “The brand may have high and low-segment versions as it is being developed in many countries at the same time. This is a multi-brand development direction that many international brands are taking.” 

Bao Viet opens first financial supermarket

In order to meet the diverse needs of customers and to maximize utilities for providing services, Bao Viet Group has launched a financial supermarket system - One Stop Shop - a model that has also been deployed in developed countries with advanced financial and insurance industries, such as Japan, the UK, and Canada.

One Stop Shop operates as a convenient financial supermarket with a full range of products that can meet insurance, investment, financial and banking needs in the same location. Customers can have a new experience in a retail space with products and services and receive the best customer service from Bao Viet.

It provides multi-functional financial solutions to meet the diverse needs of customers. Bao Viet believes that customers will recognize its unceasing innovation, from the diversification of products and services to its continual efforts to improve service quality and provide integrated and full-package financial solutions.

“The opening of the Bao Viet financial supermarket and the ‘Sunny and Blue Seas with Bao Viet’ customer gratitude program are steps in the process of creating momentum for the ‘Ready to Take Off’ program in 2017 and the ‘Affirmation of the Vietnamese Brand’ in 2018, to prepare for reaching out to the world,” said Mr. Nguyen Quang Phi, General Director of the Bao Viet Group.

According to leading market researchers TNS Global, Bao Viet has a professional, close and trustworthy image.

The Bao Viet financial supermarket was launched at 72 Tran Hung Dao Street, Hanoi, an area where many financial institutions are located and conveniently located in the city center. According to the roadmap from 2018, the One Stop Shop will be expanded to its transaction points around the country.

The Bao Viet Group is the leading finance and insurance group in Vietnam. With a history of development since 1965, it is proud to be the first insurance company established in Vietnam. It is currently headquartered in Hanoi and has over 180 branches nationwide. Its shares (BVH) have been listed on the Ho Chi Minh Stock Exchange since June 2009.

The Bao Viet brand was valued at $89 million by Brand Finance last year, ranking A +, and it was honored in the “Top 50 Most Valuable Brands of Vietnam in 2016”.

Vietnam's exports to Brazil continues to rise

Vietnam's export revenue to Brazil was estimated at over US$1.06 billion in the first sixth months of 2017, an increase of 46% compared with the same period in 2016, according to the Ministry of Industry and Trade.

Thanks to the recovery of foreign trade activities, after the economic recession, the two-way trade revenue between Vietnam and Brazil reached roughly US$1.73 billion in the first half of 2017, up 16% compared to the corresponding period in 2016.

Of the total, Vietnam posted export revenues to Brazil at US$1.06 billion, up 46% over the same period in 2016, with import revenues standing at US$665 million, down 13% against the same period in 2016.

According to the Vietnam Trade Counsellor in Brazil, the export of key Vietnamese products to Brazil increased sharply in the first five months of 2017, including phones and electronics equipment up 57%, seafood up 43%, rubber and rubber products up 73%, synthetic fibers up by over 300%, alongside the rise in the export revenue of textiles, steel products, plastics, and food.

The Vietnam Trade Counsellor in Brazil recommended that Vietnamese exporters work closely with their Brazilian partners to deal with increasing trade defence measures and technical barriers faced, while exporting commodities to Brazil.

The Vietnam Import Export Report 2016 showed that Vietnam's key markets in Latin America all posted high trade revenues, including four markets reporting over US$1 billion in trade revenue with Vietnam in 2016, namely Brazil, Argentina, Mexico and Chile.

In particular, Brazil is one of the most important markets of Vietnam in Latin America as it has a large scale and great potential for foreign trade activities.

Phuong Nam pulp mill to be auctioned in mid-July

The loss-making company Phuong Nam Pulp Mill, a subsidiary of the Vietnam Paper Corporation (Vinapaco), is scheduled to be auctioned off on July 14 with an initial price of VND1.885 trillion (US$82.94 million).

According to the Vietnam Auction Company, Phuong Nam’s entire fixed assets, goods inventory and usage rights of a 453,755 sqm plot of land in Thuan Nghia commune of Thach Hoa district, will be put up for sale.

The pulp mill is one of the twelve State-owned projects which have incurred huge losses over recent years.

Over VND3.4 trillion (US$149.6 million) has been poured in the Long An province-based mill but the mill has been unable to operate effectively as malfunctions were continuously encountered since its initial trial run.

Tracodi, a company under the Ministry of Transport, initially provided investment for the project in 2003, but it was later transferred to Vinapaco in 2009.

According to an independent consultant hired by Vinapaco, in the optimal conditions, the mill would incur a loss of VND4 million (US$176) per tonne of product.

In addition, the mill’s subpar wastewater treatment system requires an additional VND60 (US$2.64 million) billion to fix.

The valuation of Vinapaco for equitisation has also been delayed pending the liquidation of Phuong Nam.

Action plan on restructuring state budget and public debt management

The Government has just promulgated the Government's Action Program to implement Resolution No.07-NQ/TW of the Politburo, on the guidelines and measures needed to restructure the State budget and public debt management in order to ensure a secure and sustainable national finance.

Resolution 07-NQ/TW, issued on November 18, 2016, targets the strengthening of the mobilisation, management, distribution and effective use of financial resources, while boosting socio-economic growth.

Accordingly, the action plan aims to successfully complete the general objectives and specific objectives of the Resolution up to 2020, ensuring a balanced budget and maintaining national financial security.

Specific goals set in the resolution include the contribution of 20-21% of GDP to the State budget on average, in the period 2016-2020, while striving for a rise in total budget collection by 1.65 times the amount in 2011-2015.

Domestic collection is expected to account for 84-85% of State budget income, with 14-16% coming from crude oil and other import-export activities.

Meanwhile, central budget collection is set to reach 60-65%, according to the resolution, which also sets that after 2020, the State budget collection will remain at a stable and reasonable ratio compared to GDP.

The resolution aims to keep the State budget expenditure, in 2016-2020, at 24-25% of the GDP on average, with about 25-26% of the total sum to be allocated to development investment, with up to 64% allocated for regular spending.

At the same time, the yearly public debt, for the 2016-2020 period, will be reined in at a maximum of 65% of the GDP, while Government debts and national foreign debts will not exceed 55% and 50% of GDP respectively.

By 2030, public debts, Government debts, and national foreign debts are targeted to remain below 60%, 50%, and 45% of GDP, respectively.

In addition, six major solutions has been set out, including the creation of a favourable environment and motivation for socio-economic development, generating sustainable income sources for the State budget, along with restructuring budget collection and spending, strengthening public debt management and ensuring safety and stability of the national finance.

KKday opens its office in Vietnam

KKday, a leading E-commerce travel platform in Asia offering localized travel across the globe on June 17 officially launched in Ho Chi Minh City, Vietnam.

Launched in 2015 and headquartered in Taiwan, the Asia’s holiday expert and travel experience e-commerce platform  has more than 6000 worldwide travel activities from our processional providers and unique local experts in more than 53 countries.

Kkday  has offices in numerous regional hubs such as Hong Kong, Korea, Japan, Thailand, the Philippines, Indonesia and Singapore. 

KKday allows travelers to choose from a wide range of tours conveniently and at low costs. The company provides unique experiences for all different kinds of travelers, such as full day tour, tickets, hotel reservation, tour guide, charter service and airport, and more.

Kido acquires 50% stake in Dabaco

Kido Corporation (KDC) has acquired a stake of 50% in Dabaco Foodstuffs Processing Co Ltd. in yet another step to enhance its presence in the food and seasoning sector.

A Kido leader said at an annual general meeting of the corporation last week that Dabaco Foodstuffs Processing Co Ltd, a subsidiary of Dabaco Group, operates in the field of processing fresh, frozen and canned food such as meat and sausage products. However, Kido has not announced the investment and time for acquisition completion.

Dabaco has a poultry slaughtering plant and a foodstuff processing plant on an area of 100,000 square meters in Bac Ninh Province. The poultry slaughtering plant includes a chicken slaughterhouse with technology from Denmark with the capacity of 2,000 chickens an hour, and a pig slaughterhouse.

With the new deal, Kido has continued investing in the food processing sector through mergers and acquisitions (M&A), having acquired stakes in the Vietnam Vegetable Oils Industry Corporation (Vocarimex) and the Tuong An Vegetable Oil JSC.

This year, Kido plans to expand its market share in the food and seasoning sector by promoting cooperation with its partners and acquiring and merging with large food producers by capitalizing on its strong internal forces, nationwide distribution system and profound understanding of domestic retail market and consumers.

The strategy of M&A helps Kido enter the food and seasoning market quickly, gradually become the leading foodstuffs company in Vietnam and expand its market to Southeast Asia.

Specifically, Kido said it would cooperate with large processing companies in Thailand and Indonesia to shorten the time to launch high-quality products. For instance, KDC will coordinate with its Thai partner to launch high-quality chili sauce in August as one step to tap the sauce market.

To strengthen its position in the domestic market, KDC also proposed shareholders allow for an increase of the equity stake of foreign investors from 49% to 100% to create opportunities for its foreign investors to buy KDC shares, contributing to KDC development, improve its capital mobilizing ability and production activities, and support the M&A activities of the corporation.

At the meeting, KDC leaders also presented to shareholders the 2017 business plan with target revenue of VND7.7 trillion (US$338.76 million), 3.4 times higher than in 2016, and pre-tax profit of VND490 billion. The canned food sector is expected to contribute VND5.8 trillion to total revenue and generate profit of VND240 billion while the frozen food sector is expected to create revenue of VND1.9 trillion and profit of VND250 billion.

Last year, KDC enjoyed revenue of over VND2.2 trillion and pre-tax profit of some VND1.5 trillion, or 24% higher than its yearly target. In late 2016, its subsidiary Tuong An Vegetable Oil JSC contributed 43.7% to total revenue. The ice-cream and yoghurt sector – rising 30% year-on-year – led the contribution with a 45.3% proportion.

Ask-and-give mechanism needs to be removed between banks and enterprises

There should be no “ask-and-give” mechanism between commercial banks and enterprises in credit relations, heard a bank and enterprise matching conference in HCMC last Friday.

Nguyen Phuoc Thanh, deputy governor of the State Bank of Vietnam, said the program was initially launched in HCMC, and since then, has been introduced to other parts of the country. It has offered capital for enterprises to finance their production and business activities in a timely manner, thereby promoting the country’s economic growth.

Data of HCMC shows loans under the program have amounted to around VND124.3 trillion over the past five years.

However, a representative of the HCMC Business Association said a majority of small and medium enterprises has yet to enjoy as strong benefits from the program as major companies, as they lack collateral, thus having a hard time accessing credit.

Therefore, the deputy governor proposed banks should streamline their procedures, reduce costs, and enhance their appraisal abilities. The aim is to make enterprises, especially small and medium-sized ones, have easier access to loans.

Besides, they should eliminate the lamentable ‘ask-and-give’ mechanism. “This is a fair business relationship… Banks need customers, and enterprises also need banks,” he said.

In addition, he stressed, it is necessary for small and medium enterprises to make their financial resources transparent to create peace of mind for banks when appraising their borrowing requests from businesses. This has been a major problem over the past time.

Notably, he also asked the HCMC government to make suitable master plans for the manufacturing sector, especially towards supporting, high-tech, and clean industries. In doing so, enterprises will have access to banking services in a more transparent and risk-averse manner.

“It is vital for municipal authorities to strictly handle those abusing capital support policy,” he stressed.

VNA/VNS/VOV/SGT/SGGP/TT/TN/Dantri/VNEVET