VBL Vietnam not to sell Laru beer brand to China

Vietnam Brewery Limited (VBL) would neither change its join venture member nor sell Laru beer brand to China, said VBL managing director Leo Evers yesterday.

Reporting to Secretary of the Da Nang City Party Committee Nguyen Xuan Anh, Leo Evers affirmed that the group was working to expand Laru market share.

He has rejected recent rumors of the deal, adding that it had greatly affected VBL's production and trading.

VBL Da Nang is a member of VBL Vietnam which is a joint venture between Singaporean Asia Pacific Breweries Ltd (APB) and Vietnamese Saigon Trading Group (Satra).

Last year the company contributed nearly VND1.7 trillion (US$76 million) to the city's budget, said Mr. Xuan Anh.

Secretary Nguyen Xuan Anh yesterday visited and launched New Year production and construction at some locations in the central city of Da Nang including Children Cultural House, Cat Tien Sa Seaport and VBL Da Nang.

Work starts on Nui Coc Lake tourism site

The northern province of Thai Nguyen and Xuan Truong Construction Company today started work on the Nui Coc Lake tourism site.

The VND15 trillion (US$6.6 million) project is located in Dai Tu District's Van Tho Commune.

The construction plan includes a pagoda, temples, service areas, a hotel, a golf court, a boat wharf, and ethnic village areas.

At the groundbreaking ceremony, General Tran Dai Quang, a member of the Political Bureau and Minister of Public Security, said the construction of the Nui Coc Lake tourism area, along with other tourism sites, would promote the country and attract more domestic and foreign tourists, contributing to the development of Viet Nam's tourism industry.

The province should work closely with the contractor on land clearance and other parts of the project, he said.

The relevant ministries and sectors should also create advantages for the contractor to ensure construction progresses at a high standard of quality, the general said.

The first phase of the project will be completed in four years and will welcome tourists by the end of 2019.

Bac Lieu calls for investment in key projects

The Mekong Delta province of Bac Lieu in 2016 will focus on calling for investment into projects involving hi-technology aquaculture breeding and high value export products.

In order to reach the goal, the province’s agricultural sector will encourage businesses and farmers to develop intensive shrimp planting models using modern technologies.

Bac Lieu set a goal to have 23,350 hectares of intensive and semi-intensive shrimp farming by 2020, including 14,250 hectares of giant tiger prawn and 9,100 hectares of white leg shrimp.

The province has also called for investment into Dong Hai district, a key maritime economic zone with 23 kilometres of coastline and the big ports of Cai Cung and Ganh Hao with a fleet of 600 fishing vessels, including 250 offshore ones.

Notable projects in Dong Hai this year include a sewage treatment plant worth 50 billion VND (2.2 million USD) and a shrimp breeding project worth 93 billion VND (over 4 million USD), according to Bui Minh Tuy, Chairman of the district’s People’s Committee.

The district is also striving to attract investors to a project to expand Ganh Hao seaport, Lap Dien ecological tourism project, and the Ganh Hao industrial zone.

Ford Vietnam posts record sales in Jan

Ford Vietnam sold close to 2,600 units in January, a year-on-year increase of 70 percent, the highest growth ever recorded, the automaker announced on February 17.

According to the firm’s General Director Pham Van Dung, the record sale was driven by continued strong demand on its three product lines – Ranger, EcoSport and Transit.

Sales of Ford Ranger continued to lead the pickup truck segment with more than 1,300 units sold last month, up 171 percent against the same period last year. This made Ranger one of the best-selling vehicles in Vietnam.

Ford Transit also remained the lead in the commercial vehicle segment with the sale of 583 units, up 58 percent year-on-year, while sales of the EcoSport SUV rose by 13 percent year-on-year to nearly 450 units.

Additionally, the new Ford Focus, which was officially launched in December last year, contributed 110 units to the total vehicles sold in January by Ford Vietnam.

Dung unveiled that Everest, Ford’s latest globally developed family SUV, will be ready for delivery in the first quarter of this year. However, he gave no further detail on expected price.

Construction of Da Nang – Quang Ngai Expressway accelerated

The Vietnam Expressway Corporation (VEC) has pledged to speed up the implementation of the expressway linking central Da Nang city with Quang Ngai province.

The VEC will complete components funded by the Japan International Cooperation Agency (JICA) and the World Bank (WB), so that several sections of the expressway will be open to traffic at the end of 2016, said General Director Mai Tuan Anh.

The company is committed to promptly supplying financial resources for contractors to deal with any arising problems during the implementation of the project.

Meanwhile, the management board of the project will actively work with local authorities to deal with land clearance and compensation, and create all favourable conditions for the contractors to complete the project by 2018.

The construction of the Da Nang – Quang Ngai Expressway commenced in 2013 with a total investment of nearly 1.7 billion USD.

The 140-km expressway has significant meaning in promoting social-economic development and national defence-security in the central region, once it is put into operation.

It also enables international transportation between Laos, Cambodia, and Vietnam through the East-West corridor to a number of seaports in central Vietnam.

Private sector must innovate to compete

Private firms should be more dynamic in developing linkages and production chains to sharpen competitive edges as the country was underway to integrate deeply into the global economy.

Vietnam recognised the private sector as an important economic driver and planned to raise stronger support for private firms to grow in the economy which witnessed disappointing reforms of State-owned enterprises (SOEs), even as the foreign direct investment (FDI) sector proved to be the most dynamic.

According to the General Statistics Office, the FDI sector accounted for roughly 70 percent of the country's export value and 20 percent of the national gross domestic product.

Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry, said that while the FDI sector could reap rich dividends from support policies, private firms were weak with 98 percent of them being of small and micro scale.

Even in the home market, local firms were not strong enough to become partners of their FDI counterparts, he said. This could be clearly seen in the stories that Vietnamese firms were struggling to become suppliers of foreign giants such as Samsung.

Vice Director of the Central Institute for Economic Management (CIEM) Vo Tri Thanh pointed out that not only the support industry but even the garment industry, which was considered to be one of the country's competitive advantages, faced great challenges in securing domestic supply of yarns in order to enjoy preferential tariffs brought about by free trade agreements.

The vulnerability of the agricultural sector in the rapid integration process due to the lack of a brand name and poor conditions was also of great concern to experts.

Loc said that enhancing competitiveness of private firms, especially those of small and medium sizes, was becoming an urgent issue.

According to Truong Dinh Tuyen, former Minister of Commerce, the nation posted an impressive growth rate of 6.8 percent last year, with significant contributions from the FDI sector. "The growth which does not originate from internal force will hardly be firm and sustainable."

Tuyen said that competitiveness of private firms were also undermined by less preferential interest rates and greater difficulties in accessing credit, compared to SOEs.

The recognition of the role of the private sector of an important driver at the 12th National Congress of the Communist Party of Vietnam was expected to promote the institutional reform and power the development of this sector.

Tran Dinh Thien, Director of the Vietnam Economics Institute, said that this was a big difference from a State-subsided economy more than 30 years ago when the private sector was not recognised.

Thien said that the private sector should be the base to operate the market economy while the spearheads should be strong economic groups.

During the past three decades since a multi-sector economy was first mentioned in the 6th National Congress' Document, the private sector contributed significantly to the nation's economic growth.

There were around 500,000 private firms in Vietnam, generating 1.2 million jobs and contributing more than 40 percent to GDP per year, statistics showed.

According to the country's five-year blueprint, favourable conditions for the development of private firms would be raised to create an impetus to enhance the economy's competitiveness.

National Assembly Deputies said that it was vital to promote institutional reforms towards building a strong private business community.

Deputy Ngo Thanh Danh said that incentives would be increased to encourage the private sector to participate actively in the economy with sound mechanisms for each region and each industry.

Deputy Nguyen Thanh Ngoc said the recognition of the private sector's role in the economy should be translated into government's detailed policies and supports.

According to Loc, to push the development of the private sector, besides a State policy giving equal treatment to all economic sectors, private enterprises themselves should take the initiative in renovating production technology, modernising equipment and machinery, and enhancing their business administration capacity.

Loc also urged the private sector to be more active in seeking out markets and diversifying their products and services, as the demands of markets and customers were increasingly become stricter.

Banks offering post-Tet holiday promotions to attract depositors

Local commercial banks are offering diversified promotion programmes to attract depositors at first working days after Tet (Lunar New Year).

Deputy Director of Sacombank Nguyen Minh Tam said that commercial banks often give lucky draw or lucky money programmes to attract depositors at the occasion.

Tam said that his bank's deposits at the first working days after Tet increased significantly.

ACB also estimated that transactions at the bank during the days also rose 1.5 times against normal days.

Besides having to go to banks to make transactions after a long holiday, many customers also come to banks to deposit money to get the banks' ‘li xi' or lucky money.

Though there were no official statistics on deposits on the first working days after Tet, the number of savings transactions at the banks have reportedly increased sharply at the occasion.

On the first working days after Tet, tellers at Vietcombank had to work very hard as customers flock to the bank to get ‘li xi'.

Vietcombank offered the li xi programme of VND50,000 (US$2.3) for all deposits and transfer transactions at the bank on the first two working days of February 15 and February 16.

A representative of Vietcombank said that total budget for the li xi programme was roughly VND3.5 billion ($160,000).

VietinBank, BIDV, TPBank and Sacombank also offered lucky draw programmes to gift lucky money worth VND20,000, VND50,000 and VND100,000 to depositors.

Though not too crowded as at Vietcombank, the number of customers coming to other banks has also been higher than the other days.

Besides giving lucky money, many other banks also diversify its promotion programme to attract depositors at this occasion.

OceanBank is offering one tenth of a gold tael for nine month deposits of VND1 billion ($45,600). Besides, depositors of VND10 million ($456) with terms of at least one month also have chance to get presents.

Depositors of Eximbank also get a high rate between 5.4 per cent and 6.9 per cent for their savings during this occasion.

Customers depositing at least VND50 million ($2,280) at Sacombank also get an interest rate bonus of 0.2 per cent.

NamA Bank said that it is also implementing a Tet programme with more than 68,000 awards ranged from VND20,000 to VND100 million ($4,560) to attract depositors.

BSC forecasts slowdown in domestic truck market

Stocks of truck enterprises were among the most attractive, thanks to higher sales, last year.

However, the research done by BIDV Securities JSC (BSC) on the 2016 outlook forecasts that shares of truck firms will not be attractive this year.

Tran Thanh Long, from BSC's head of analysis office, said the automobile industry was still growing, but the truck segment would experience a significant slowdown as the local demand was mostly met last year.

Long said the strong demand for trucks last year was caused by tightening of regulations about the curb weight of trucks, with oversized trucks being strictly banned, forcing their owners to buy larger vehicles.

Three enterprises — Hoang Huy Investment Services (HHS), TMT JSC automotive (TMT) and Truong Long Engineering and Automotive JSC (HTL) — gained the most from the strong demand for trucks.

The total turnover of the three enterprises amounted to VND8.57 trillion (US$382.7 million) last year, a 2.2-times increase compared to the previous year.

Regarding net profits, HHS earned VND481 billion ($21.4 million), 3.5 times more than the previous year; TMT earned VND186 billion ($8.3 million), three times more than the previous year; and HTL got VND135 billion ($6 million), two times more than in 2014.

Their shares in the local stock market were listed among the maximum sold on the market. Shares of HHS, which imports Dongfeng heavy trucks, reached their peak last June.

However, the demand for trucks, especially heavy trucks, would not be that strong in 2016, Long said, as most of the larger trucks had met the local demand. At the same time, Long said, the increasing duties and taxes for imported cars would make imported trucks no longer attractive.

The downtrend was revealed in the last quarter of last year after truck sales peaked in Q2, local statistics showed.

In Q4, HHS' sales fell 50 per cent from Q2, while HTL's fell 18 per cent from its peak.

The Q4 after-tax profit fell, as a result. As reported, HHS earned VND64 billion ($2.8 million) in profit, while Truong Long earned VND33 billion ($1.47 million) and TMT got VND8 billion ($357,000) in the quarter, marking not only significant falls from the peak in 2015, but also a sharp reduction year-on-year.

The BSC expert said the consumption in 2016 would be motivated by the expiry of registration of 19,000 trucks this year, an increase of 26 per cent from last year.

BSC also recorded changes being made in business strategies to resolve the problem, noting that HHS expanded its distribution of tractors, and TMT established a bus assembly plant in Hung Yen Province and co-operated with India's Tata in distributing cars in the market.

However, the securities company still does not expect strong growth in the shares of the companies this year.

Vietnam wants more foreign investors for stock market

A better legal framework and a stronger privatization drive of state-owned enterprises are key measures for Vietnam's securities market to keep attracting foreign investors this year, a senior official has said.

Speaking to news website VnEconomy on February 16, Vu Bang, chief of the State Securities Commission of Vietnam, said attracting investment into securities market is priority of the government.

But it will face difficulties this year as China's economic slowdown and oil shock may affect investor sentiment, he said.

Bang said his commission has been working with the Ministry of Planning and Investment to make it easier for foreign investors to buy stocks.

Decree No.60, which took effect on September 1 last year, allows foreign investors to buy up to 100% of many listed companies but has never been applied.

Both authorities and businesses have difficulties deciding whether or not some listed firms fall into restricted categories in which foreign ownership is still capped at 49%, he said.

Another problem is that businesses are reluctant to attracting more foreign investors, fearing of losing perks and benefits as local companies, he said. In Vietnam companies with a foreign stake of more than 51% are categorized as foreign businesses.

"The problems will be solved this year," Bang promised, suggesting the 51% cap can be lifted to 65% for instance.

In another key measure, Bang said, his agency has asked the government to offer bigger stakes to foreign investors when the equitization of state companies -- the term for privatization in Vietnam.

He said almost no foreign investors bought into state businesses last year, mainly because they found the number of shares on sale was too small to make any difference in business management.

State companies must adopt the process of book building to find strategic investors, according to the official.

Local authorities are also working to upgrade Vietnam's securities market to the "emerging" position to attract stronger foreign investment, Bang said.

Measures include increasing the transparency of listed companies and publishing information in English, he said.

Most of the proposed measures have been supported by the government, because the securities market is now considered as playing a role in helping Vietnam's economy grow and improve capital sources, Bang said.

"Vietnam's economic recovery and growth has been considered a bright spot in the global economy," Bang said. "If we can solve the current problems and open the market, foreign investment will keep flowing in."

Vietnam's stock market ended last year with "a very good achievement" as market capitalization rose 17% and the benchmark VN-Index 6.1%, Bang said.

VN-Index closed at 547.1 on February 17, down 0.18% from February 16.

SBV approves MBBank-Song Da Finance merger

The State Bank of Viet Nam (SBV) has issued a decision to approve the merger of Song Da Finance Company (SDFC) and Military Commercial Joint Stock Bank (MBBank).

SBV approved the the merger of Song Da Finance Company (SDFC) and Military Commercial Joint Stock Bank (MBBank).- Illustrative image/ Photo bizlive.vn

The merger will come into effect on March 18 this year.

MBBank will receive all assets, rights, obligations and legal interests of SDFC.

Within 15 working days of the decision taking effect, the bank must complete the procedures for business registration as prescribed by law, announce the merger as well as implement other duties as prescribed by law.

SDFC will transfer all assets, rights, obligations and legal benefits to MBBank.

SBV will also complement MBBank's operating licence's new content, such as financial advisory, asset management service, mergers and acquisitions advisory, as well as investment advisory.

MBBank had announced the merger with SDFC in an extraordinary shareholder meeting in October last year.

The new finance company - MB Finance Co Ltd (MB Finance) -is expected to have a charter capital of VND500 billion (US$22.3 million).

In the first two years, MB Finance will be equipped with facilities, personnel and a distribution network to enter the consumption finance market. The new company will expand its market share and operations, and diversify its products and customers from the third year of operations.

The ratio between SDFC shares and MBBank shares is currently 2.2/1.

Thaco opens Chu Lai factory

The Truong Hai Automobile JSC (Thaco) opened a factory producing trailers and specialized vehicles on February 15 at the Chu Lai Open Economic Zone in central Quang Nam province.

The project is Vietnam’s first producing trailers and specialized vehicles and has total investment of VND150 billion ($6.7 million) with a designed capacity of 5,000 vehicles each year. Construction began on November 1 last year on an area of 2.4 ha, with the workshop occupying 1.38 ha.

With modern equipment and advanced technology on its production line, the plant specializes in welding ben tanks, painting, assembling, and quality testing.

Speaking at the opening ceremony, Secretary of the Quang Nam Provincial Party Committee Mr. Nguyen Ngoc Quang expressed his desire that the company would contribute to the development of the province as well as the localization rate in Vietnam’s automobile industry.

The plant is to produce 3,000 vehicles this year, including 1,200 trailers, 1,500 ben tanks and 300 tanks for specialized vehicles. With scientific design and modern infrastructure and equipment, the plant will be a major supplier of high quality trailers and specialized vehicles and will meet demand in the domestic market.

Real estate sales a big earner for Vingroup

Vingroup’s consolidated financial report for the fourth quarter of 2015 reveals consolidated total revenue of over VND14.3 trillion ($643.5 million), up 134 per cent compared to the fourth quarter of 2014, with contributions coming from Vinhomes, Vincom Retail, Vinpearl, Vinpearl Land, Vinschool, Vinmec, Vinmart, and VinPro.

Notably, revenue from real estate sales reached over VND10.18 trillion ($458.1 million), for a record growth rate of 131 per cent year-on-year.

Revenue from business center and office space rentals stood at VND695 billion ($31.27 million), a 31 per cent increase, revenue from hotels, tourism and entertainment was VND546 billion ($24.5 million), up 21 per cent, and revenue from hospital operations was VND247 billion ($11.1 million), up 60 per cent.

In addition, by increasing the number and quality of its Vinmart and Vinmart+ supermarket chains, total revenue from retail during the quarter exceeded VND1.6 trillion ($72 million), a 443 per cent increase year-on-year.

In the retail sector Vingroup recorded pre-tax profits of VND962 billion ($43.3 million), up 60 per cent, and after-tax profits of VND421 billion ($18.9 million), up 27 per cent.

Vingroup launched a series of new projects in the final quarter of last year, such as Vincom Mega Mall Thao Dien in Ho Chi Minh City, Vincom Center Nguyen Chi Thanh in Hanoi, and Vincom Center Plazas in northern Hai Phong city, northern Phu Tho province, and the Mekong Delta’s An Giang province.

The five-star Vinpearl Ha Long Bay Resort, the Vinpearl Phu Quoc Resort & Golf Course, the Phu Quoc Vinpearl Safari Park, and the Vinmec Central Park International Hospital in Ho Chi Minh City were also launched in the closing months of the year.

In 2015 as a whole Vingroup earned consolidated revenue of over VND33.8 trillion ($1.52 billion), up 23 per cent compared to 2014.

Foreign investors picking up securities trading codes

Vietnam Securities Depository (VSD) has announced it issued 149 securities trading codes to foreign investors in January.

Codes were issued to 32 institutional investors and 117 individual investors.

VSD also agreed to alter information regarding 21 foreign investors (15 individual and six institutional) and cancelled the securities trading code of one institutional investor.

As at January 31 VSD has issued a total of 18,756 securities trading codes to foreign investors, including 2,911 institutional investors and 15,845 individual investors.

In 2015 it issued 1,037 codes to foreign investors, an increase of 23.6 per cent against 2014.

Foreign investors have a significant impact on market sentiment and were net buyers in 2015. According to figures from VSD, last year they bought 266.51 million shares worth nearly VND3 trillion ($132 million), down 11 per cent in volume and 22.36 per cent in value compared to 2014.

New Manager for Hanoi's Apricot Hotel

Ms. Phuong Nam Nguyen has been appointed Manager of the luxurious Apricot Hotel in the heart of Hanoi.

The 48-year-old Hanoian brings a trifecta of distinguishing qualities to her new role at the five-star hotel: a wealth of experience in hospitality management and guest relations, coveted international qualifications, and an insider’s knowledge of the capital’s hospitality industry.

“I believe my professional journey from humble beginnings as a guest relations officer to reaching the pinnacle as a hotel manager in my home town, coupled with my connections to my culture and history can only enhance our culturally-enriching guest experience,” Ms. Nguyen said. “With original Vietnamese artworks adorning the entire hotel, we take our guests on an extraordinary journey through Vietnamese history and culture.”

Before the appointment Ms. Nguyen was the General Manager of the Prestige Hotel Hanoi for almost five years. Among other achievements she bolstered services, products, and sales and marketing, with a particular focus on fostering a positive work environment for all her employees.

From 1999 to 2010 she worked at Hanoi’s Sunway Hotel, starting out as an assistant to the Front Office Manager before moving up the ladder to become Front Office Manager, Room Division Manager, and then Executive Assistant Manager.

With sweeping views of iconic Hoan Kiem Lake and with the hustle and bustle of the quaint Old Quarter on its doorstep, the Apricot Hotel also houses two restaurants, a lobby lounge and cafe, a rooftop bar, a heated rooftop swimming pool, a ballroom, meeting facilities, and a spa and fitness center.

Steeped in French colonial history, the ten-story building has experienced a new lease of life since undergoing a major revamp where classical met modern design. It was formerly the Phu Gia Hotel, where the city’s movers and shakers have gathered since the 1920s.

FLC Vinh Thinh Resort set to welcome guests

On March 6 the FLC Group will officially open the FLC Vinh Thinh Resort in Vinh Tuong district, northern Vinh Phuc province.

Spanning 7 ha, the resort resembles a green heaven with environmentally-friendly landscapes, fresh air, and peace and tranquility. It promises to be a weekend getaway destination for people from all around the north and especially Hanoi.

Conference facilities with a variety of rooms, diverse design, sound systems, stage lighting, and other amenities also makes the resort the ideal place to hold major events.

Its restaurant, boasting a royal style and Asian-European cuisine and local flavors, can seat 50 to 300 guests.

Other facilities includes a hotel, bungalows, a golf course, tennis courts, private entertainment on all floors of the hotel children’s play area, an outdoor bar, and a garden.

FLC also announced it will begin construction of the second phase of the FLC Vinh Thinh Resort, including the golf course, villas, high-end entertainment areas, a five-star hotel and premium amusement parks on an area of over 250 ha. The second phase has total investment of VND4.6 trillion ($205.6 million) and confirms FLC’s growing position in the field of golf courses and resorts. In March FLC will also begin construction of two golf courses in central Quang Binh and northern Quang Ninh province.

The project is expected to turn Vinh Phuc into a leading tourist attraction in the north, developing its service and industrial structure.

Caravelle appoints new Director of Rooms

Caravelle Saigon, one of Vietnam’s most historic properties, has named Mr. Michael Robinson as new Director of Rooms, in time for the second stage of its enhancement project to come later this year.

Mr. Robinson brings nearly a decade of experience to his new role at the 335-room hotel in downtown Ho Chi Minh City.

“We’re incredibly lucky to have such a talented new addition to the team, especially at this crucial moment in the hotel’s history,” said Mr. John Gardner, Caravelle’s General Manager. “With Michael at the helm of our rooms division and with the improvements soon to come we’re truly excited about the future of Caravelle’s guests’ experience.”

Mr. Robinson honed his skills in the rooms division at five-star hotels in destinations as diverse as California, Dubai, and Qatar and comes to Caravelle fresh off his most recent post as Front Office Manager for the Park Hyatt Dubai in the UAE.

He got his start in hospitality in 2007 as an F&B supervisor and by 2008 was working as a Management Trainee in the rooms division at the Hyatt Regency La Jolla, California. The following year he relocated to the Middle East to accept the role of Assistant Front Office Manager at the Grand Hyatt Doha, where he was also part of the pre-opening taskforce spearheading the launch of Hyatt properties in Russia and South Africa before moving to Dubai in 2011.

Caravelle Saigon has been at the center of Ho Chi Minh City society since it was opened in 1959. It has 335 superbly-appointed rooms, suites, exclusive Signature Floors, a Signature Lounge, non-smoking floors, and specially-equipped rooms for the disabled. Amenities include an IDD telephone, satellite TV, a DVD player, a fax machine, a mini-bar, tea and coffee facilities, an espresso machine, and an in-room safe. The hotel has received a range of awards, such as TripAdvisor 2013-2014 Traveller’s Choice Award and the TripAdvisor 2012-2013-2014 Certificate of Excellence Award, to name just a few.

Banks enjoy sharp rise in deposits

Local banks are seeing increasing number of deposits after the lunar new year as many people believe opening a new account provides good luck.

Tien Phong Bank experienced a 50 percent increase in transactions on February 15, compared to normal days. A Kien Long Bank representative said it was common for customers to withdraw money prior to Tet and make deposits in the new lunar year, this year was no exception.

Sacombank branch in HCM City had hundreds of people waiting to make their deposits on February 15.

Employees at Vietinbank said they were operating flat out.

NCB Bank attempted to attract more depositors through offering the chance to win lucky money to clients who deposited over VND20m (USD952).

In order to lure in more customers, Dong A Bank started new promotion campaign that will add 0.1 percent in interest for depositors of over 45 years old or for female customers that make over six-month term deposits. Hundreds of customers went to Dong A Bank in HCM City. Tran Viet Trung, a local, said he decided to deposit the money he earned just before Tet there benefit from the interest rate offer.

Enterprises’ expectations in 2016

Many enterprises have a positive outlook for 2016 with projected rises in output and export orders, but they are also concerned about pressure from international integration.

In January, more than 4,800 enterprises went back to business, up 69.6% from a year earlier, marking the first month of the year with the largest number of enterprises resuming operations in recent years. According to the General Statistics Office’s survey on business trends of manufacturing enterprises, nearly 41% of respondents say the outlook will be brighter while only 17.7% expect the situation to be grimmer. Moreover, up to 91.1% of enterprises are confident that the number of orders in 2016 will improve compared with 2015 and 90.8% expect export orders to rise and remain stable.

This optimism can be attributed to the domestic economy’s solid recovery. According to a forecast by the Central Institute of Economic Management (CIEM), Vietnam’s economy could grow by 6.82% in 2016 thanks to favourable conditions both at home and abroad. Global economic conditions are creating favourable impacts on Vietnam such as falling crude oil prices, which have led to lower input costs. In particular, Vietnam has signed many new-generation trade agreements, which could push Vietnam’s exports up by more than 10% in 2016. In addition, many breakthroughs in terms of mindset, state apparatus and policy implementation capacity as a result of the recently concluded 12th Party Congress will open new business opportunities and strengthen market confidence.

According to Tran Tien, deputy director of Ha Ca, a Ho Chi Minh City-based company specialising in handicraft exports, the economic outlook in 2016 is fairly bright and Vietnam’s economy will be more stable. He expects that the signing of the Trans-Pacific Partnership (TPP) will help Vietnamese goods penetrate deeper into major markets.

Sharing the same view, Hoang Van Tu, director of Phu Ha Industry and Trade Company said for the garment sector, growth would continue in a stable manner in 2016 but would face more difficulties in the following years as enterprises have to satisfy the TPP’s strict requirements which could hurt small and medium-sized enterprises and help foreign or larger enterprises.

According to Director of the General Statistics Office Nguyen Bich Lam, orienting the economy towards export is the right path to take, especially as Vietnam is becoming deeply integrated into the world’s economy with many trade agreements already signed and taking effect. But with more than nine out of ten Vietnamese enterprises being small businesses with weak competitiveness and outdated technologies, Vietnam can hardly compete with other countries.

Phu Ha Director Hoang Van Tu said competition in the garment industry would be even stiffer because besides having to secure most of the materials by themselves, Vietnamese enterprises would have to cope with pressure from rising wages, and environmental protection costs, among others, which would reduce the amount of capital needed for production.

In Ho Chi Minh City, competition in the garment industry is increasingly intense due to a shortage of workers, high costs and stricter requirements on working conditions and benefits for workers. Currently, many enterprises have relocated part of their manufacturing to neighbouring provinces to take advantage of cheaper labour and better incentives from local authorities.

For years, Vietnam’s garment industry has been relying on materials imported from China or produced by foreign joint ventures, so as Vietnam joins the TPP, it seems highly advantageous in general but the garment industry in particular is not well-prepared for this trade pact. This is a disadvantage to small and medium-sized enterprises.

If the government does not aggressively invest in the supporting industries for garment manufacturing, there is a high likelihood that Vietnam could only do contract work or grab a very small share of the pie.

The deputy director of Ha Ca, Tran Tien, said falling oil prices have put a strain on the government budget, which will increase pressure on enterprises as a result of likely rises in tax and costs.

Together with additional costs from wage and insurance contribution rises, struggling enterprises can barely survive.

Enterprises expect that in 2016, tax agencies will refund value-added tax on time so that they can speed up the capital cycle and earn more profits.

Companies also expect tax and customs agencies to continue simplifying administrative procedures to facilitate their business activities and help them reduce export-import costs while imposing strict fines on those filing taxes in a dishonest way to make illegal profits. In addition, the government should support enterprises in regional and international integration through concrete measures such as low-interest loans and tax cuts, among others.

Vietnam ranks seventh among 44 countries with the highest entrepreneurial spirit in the latest survey conducted by top German university Technische Universitat Munchen (TUM) and market survey company Gesellschaft fuer Konsumforschung (GfK), after Denmark, South Africa, Thailand, the UK, China and India.

Although around 900,000 Vietnamese enterprises were established, more than 400,000 of them were dissolved and stopped operations in the past few years.

According to the General Statistics Office, Vietnam had approximately 8,320 newly established enterprises in January 2016, a year-on-year increase of 21.2% in quantity and 87% in total registered capital.

In January, a total of 4,872 enterprises resumed operations, up 69.6% year on year. The same month also saw a 34.7% rise in dissolved enterprises at 1,338. The number of struggling enterprises forced to close temporarily rose by 27.5% to 12,456.

That the number of enterprises which stopped operations and went bankrupt was equal to the total number of firms which were newly registered and resumed operations in the same reviewed period shows that despite many obstacles, the entrepreneurial spirit is still being nurtured.

Half a million enterprises are running operations nationwide, which means that there is one enterprise for every 200 people, dozens of times lower than in developed countries in the world.

Each year, Vietnam sees tens of thousands of newly founded firms and thousands of business initiatives looking for entrepreneurial support.

Entrepreneurial motivation is not only generated from the quest for a living, but also from their aspiration to improve themselves, contributing to the country and creating more jobs for society.

The year 2016 was chosen as the National Year of Entrepreneurship. The vigorous entrepreneurial spirit and entrepreneurial success in a professional environment are necessary conditions to nurture innovations, creativity and the building of a strong business and enterprise community, which is expected to take a vanguard role, seize opportunities and generate motivation for socio-economic development in today’s market economy and integration process.

Aside from their capacity, experiences and understanding about the market, business management models and their entrepreneurial spirit, factors contributing to entrepreneurial success also include a professional and healthy working environment.

To set up such environment, the State needs build a system of laws, policies, strategies and planning while improving its management apparatus, ensuring necessary public services and developing socio-economic infrastructure. It is also necessary to improve human resources training, create a transparent business environment for fair competition, and establish start-up programmes, venture capital funds, business incubators, science parks, counselling offices and business support services.

Associations, localities and sectors should also expand exchanges and training, launch start-up competitions nationwide, seek investors for feasible projects, and establish start-up funds.

Entrepreneurship and entrepreneurial support are activities of creativeness which can include both success and failure. Facts have shown the need to raise awareness and bold and comprehensive actions from the government, business associations, schools, localities and residents to facilitate Vietnam’s "national entrepreneurship ecosystem”, which can encourage, support and realise initiatives and the national entrepreneurial spirit.

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