Vietnam has 1.4 mil traditional trade stores nationwide: Nielsen
The Southeast Asian country has 1.4 million traditional trade stores nationwide, as per a recent study of Nielsen- a global performance management company that provides a comprehensive understanding of what consumers watch and buy.
30 percent of more than 1.4 million traditional trade stores in Vietnam account for approximately 80 percent of sales in the fast moving consumer goods (FMCG), said in the study.
Accordingly, it can be a big challenge for manufacturers because it is unthinkable for producers to satisfy just 50 percent of 1.4 million stores even huge manufacturers which can provide commodities for 30 percent of store.
Quy Nhon Beach Resort gets green light
The Binh Dinh Economic Zone Administration (BEZA) has recently granted an investment license to a joint venture between two Canadian and one Vietnamese companies for the four-star MAIA Quy Nhon Beach Resort project in south-central Binh Dinh province.
“All preparatory work and legal procedures for the project will be completed before the middle of next year,” Mr. Nguyen Bay, Director of the Investment Promotion Center under the provincial Department of Planning and Investment (DPI), told VET.
The joint venture consists of Canada’s Transwood Investments Limited and VCCF Limited and Tam Khang Binh Dinh Limited from Vietnam, with Transwood Investments holding a controlling stake of 80 per cent and VCCF and Tam Khang Binh Dinh 10 per cent.
Developed in Zone 1 of the Nhon Ly - Cat Tien tourism area at the Nhon Hoi Economic Zone, the project covers an area of about 34 ha, including 28.88 ha of land and 5.27 ha of sea area, and has total investment of around $52 million and a lifespan of 50 years.
The investors will focus on building a four-star luxury resort with 755 rooms and the project is a combination of various types of tourism and services, such as building and doing business in tourism areas, accommodation, resorts, hotels, restaurants, and other supporting services, travel services, meeting and conference organization, transport services for travelers, entertainment and sports services, and beaches.
Along with the five-star resort invested by the FLC Group in the provincial capital of Quy Nhon, MAIA Quy Nhon Beach Resort is expected to contribute to developing tourism into an important economic sector in Binh Dinh.
At the end of July the FLC Group held an opening ceremony for its five-star beach and golf resort complex covering an area of 1,300 ha and including a 36-hole golf course, a 1,500-room luxury resort, a marine eco-tourism area, a luxury hotel, a zoo and a 1,500-seat international convention center.
The province hopes these projects will boost the local tourism industry and create thousands of jobs, contributing to local socioeconomic development in the years to come.
Binh Dinh has an area of 6,039 sq km and a population of 1.51 million. Registered foreign-direct investment (FDI) stood at $1.7 billion in 59 projects as at the end 2015, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment (MPI).
The Nhon Hoi Economic Zone is located on Phuong Mai peninsula on an area of about 12,000 ha. It has a favorable investment environment and advantages in natural conditions and geographic location.
Other investments in the economic zone include the Nhon Hoi new urban area, with capital of $700 million, the Thi Nai Lagoon eco-tourism area with capital of $400 million, and the Nhon Hoi integrated port with capital of $300 million.
Hanel Plastics to join UPCoM
Twenty-two years after its equitization, the Hanel Plastics Joint Stock Company will officially debut on the Unlisted Public Company Market (UPCoM) on December 20 under the code HNP with a starting price of VND20,000 ($0.88) per share.
Established in 1994, Hanel Plastics has charter capital of VND50 billion ($2.2 million) with the State, via the Hanoi Electronics Corporation (Hanel), holding 56 per cent.
Hanel Plastics has secured a strong presence in manufacture and supplying foam and plastic products. Its production capacity consists of plastic injection, with an annual output of 4,500 tons, vacuum forming with an annual output of 500 tons, and expandable polystyrene (EPS) styrofoam production with an annual output of 3,000 tons.
While many domestic support businesses have struggled to enter into the supply chains of foreign-invested enterprises, Hanel Plastics has a customer list to admire, including major players like Vietnam Airlines (food boxes, plastic cutlery and cups), Samsung, Canon, Panasonic, LG, Iwatani, Brother, and Kangaroo, among many others.
Its development was acknowledged in 2013 with a VN-Fast 500 listing; the Top 500 fastest-growing Vietnamese enterprises. In 2015 revenue stood at VND348 billion ($15.3 million) and after-tax profit VND19 billion ($834,860), while it paid a 15 per cent dividend.
The company’s 2016 plan was for revenue of VND356 billion ($15.6 million) and after-tax profit of VND19.6 billion ($861,224), with an expected dividend of 15 per cent.
Its parent company, Hanel, underwent equitization last April but is still to hold a shareholders meeting to change into a joint stock company.
As part of equitization plans it was to become a joint stock company with charter capital of VND1.93 trillion ($84.8 million). The State was to retain 29 per cent, strategic investors would have access to 61 per cent, and a public auction was to be held for 19.1 million shares, or 9.9 per cent.
Against expectations, Hanel has only managed to sell some 3.9 million shares at public auction out of the total of 19.1 million. With an average bid price of VND10,004 ($0.44) per share, sales stand at VND39.1 billion ($1.72 million).
There has also been no movement in the sale to strategic investors. Singaporean firm Sebrina Holdings and Vietnamese electrical designer the VietTien Engineering JSC were previously reported to have expressed interest.
Founded in 1984, Hanel works in the fields of electronics production, information technology, and telecommunications. It has nine subsidiaries and five associated companies, including Hanoi Telecom, which owns telecom provider Vietnamobile, and the Daewoo Hotel on Hanoi’s Nguyen Chi Thanh Street.
Minh Nguyen opens workshops to supply parts for Samsung
Minh Nguyen Supporting Industry Joint Stock Company on December 19 inaugurated and put into operation its plastic injection, mechanics, and plastic component assembly workshops at the Saigon Hi-Tech Park to supply products for Samsung.
Minh Nguyen Company is one of the first domestic firms to be picked to take part in the direct supply chain of components for the US$2-billion Samsung household electronics complex at SHTP.
As a member of Phuoc Thanh Plastic Co Ltd, Minh Nguyen is the investor of the Phuoc Thanh high-tech research, application and production complex project, spanning 52,000 square meters at SHTP. It requires total capital of over VND1.6 trillion, specializing in producing plastic and electronic components, mechanical parts and hi-tech molds.
The first phase of the complex has an area of 36,000 square meters with a total investment of VND800 billion. The company will operate plastic injection, mechanics, and plastic component assembly workshops, and research laboratories with advanced and automatic mechanical systems directly imported from Japan, South Korea, German and the U.S. The complex has a maximum production capacity of 20 million products per year.
Chau Ba Long, general manager of Minh Nguyen, said the company’s investment strategy focuses on technology and human resources. Therefore, it will actively participate in the global supply chain, contributing significantly to supporting industries in particular, and the city’s socio-economic development in general.
HCMC vice chairman Le Van Khoa said at the inauguration event that Minh Nguyen is one of eight firms to be chosen in the city’s investment stimulus program in line with Decision 50/2015/QD-UBND issued on October, 2015. The company has invested heavily in the supporting sector with new workshops and hi-tech devices thanks to the city’s support.
The company has supplied its products for multinational corporations like Samsung. Khoa said this was a positive sign, and also a driving force for municipal authorities to put forward solutions to develop supporting industries.
A representative of Samsung said the electronics giant has been looking for Vietnam’s potential manufacturers, and South Korean experts will be dispatched to such firms so as to guide, advise and support their staff.
As of September 2016, the number of domestic enterprises that joined Samsung’s supply chain had increased by three times compared to 2015, with 12 first-tier suppliers and 178 partners listed as second-tier suppliers.
Fuel market lucrative to investors
The fuel sector is capturing the attention of quite a few domestic investors thanks to good profitability whereas foreign investors are not yet allowed in.
Originally a liquefied petroleum gas (LPG) trader, Pacific Petro Commercial JSC has recently decided to set foot into the fuel market with the establishment of gas stations. So far, the company has set up three Saigon East pumping stations, with two of them in HCMC and one in Dong Nai.
Talking to the Daily, Le Quang Tuan, sales manager of Pacific Petro, said his company was now an agent of Vietnam National Petroleum Group (Petrolimex), but would become a wholesaler, who is responsible for importing, exporting, distributing and even retailing fuels.
“We intend to apply for a wholesale license when having opened five gas stations,” Tuan said. He asserted his firm’s determination to achieve the goal of setting up 10 stations in the near future.
He said the fuel market was luring new players, especially those specializing in LPG. The reason, he said, is cooking gas business is no longer as easy as before due to unexpected adjustments and imposition of business conditions that have brought losses to enterprises.
Meanwhile, the fuel market is attractive with high profit margins thanks to big discounts, around VND1,000 per liter, higher than specified in the base price structure, or even VND1,200 when world prices go down.
Wholesalers offer generous discounts due to strong competition and good gross profit buoyed by the import tax difference.
This is also why wholesalers and general agents are actively opening new retail outlets. A gas station of about 2,000 square meters in HCMC costs some VND20 billion.
The Ministry of Industry and Trade informs there are now 29 fuel wholesalers in the country. The number is rising rapidly, with at least five new names this year.
Most recently, this October, the Trade Ministry officially granted Petro Binh Minh Co. Ltd. in Quang Ninh a wholesale license. This company has started work on their Mong Duong Petroleum Depot.
Although there are 29 operational wholesalers, half of the fuel market is still in the hands of Petrolimex. This wholesale business has around 2,500 affiliated retail outlets, not counting the franchised establishments.
The sector has always attracted the interest of many foreign investors. However, the fuel retail market has not yet to be opened because under Vietnam’s commitments, foreign companies are prohibited from franchise, distribution, import and export of fuels.
So far, only Idemitsu Q8 Petroleum LLC as a partner in the Nghi Son oil refinery project has obtained a license to set up a 100% foreign-invested filling station. This outlet will be located near Noi Bai airport with import sources.
Many batches of tra fish found to have banned substances
Up to 134 batches of tra fish for export in the January-November period have been found to contain prohibited antibiotics and microorganisms, the National Agro-Forestry-Fisheries Quality Assurance Department (Nafiqad) said in its latest report.
The report does not give the exact volume of the 134 batches but said more than 604,000 tons of tra fish products had been checked and certified for export by agro-forestry-fisheries quality management centers in the eleven-month period.
The substandard batches are said to contain three banned antibiotics: SEM, enrofloxacin, and ciprofloxacin, and three types of microorganisms: Salmonella, Listeria monocytogenes and Vibrio cholerae.
To get permission for exporting their tra fish, enterprises must have their products inspected by agro-forestry-fisheries quality management centers in their localities.
However, at least 11 batches of Vietnamese tra fish have been warned by importing markets for failing to meet their food safety standards in the year to date, including three batches exported to the U.S., seven to the European Union, and one to the Eurasian Economic Union.
For the U.S., Nafiqad has requested exporters that have been warned to examine their products, identify the problems and have solutions to deal with them. Therefore, this market has now put those products back to the normal checking mode.
Meanwhile, the EU has issued a statement expressing its worries, saying Vietnam’s solutions for controlling the use of antibiotics in seafood products are not effective.
So far this year, the EU has removed one Vietnamese tra fish exporter from the list of enterprises allowed to access its market.
Real estate bubble unlikely next year: HoREA
A real estate bubble is unlikely to burst next year, the HCMC Real Estate Association (HoREA) forecast.
The association predicted the property market in 2017 will maintain growth momentum but a slowing trend this year will probably continue. In addition, there will likely be a big adjustment to address the supply-demand mismatch that is currently skewed towards the luxury segment, including resorts.
The market may also witness a major shift to the segment with affordable prices, meeting the real needs of the majority of average- and low-income earners in urban areas. In particular, the trend of cooperation between businesses will be inevitable, and project mergers and acquisitions (M&A) will grow stronger than before.
On another note, the market will need more than just regulations and tax-related tools such as a tax on owners of multiple houses and property tax, credit which is restricted by Circular 06 of the central bank, planning for land use, urban development or housing and investors’ responsibilities to consumers (bank guarantees, confirmations of projects eligible for financing, and announcements of mortgaged projects).
A recent change is the size of the municipal realty market has expanded beyond the administrative boundaries of the HCMC metropolitan area, especially in the fringe districts. HoREA believe only green, environmentally friendly and safe projects can satisfy the requirements of investors and consumers.
On the property market this year, HoREA says there is still room for growth but the pace has slowed and potential risks have emerged, such as the supply-demand discrepancy, the sharp rise in the number of secondary investors, and the concentration of credit on major developers of high-end projects.
The detailed report of the association says an extra 30,000 residential products have been launched in the city this year. The HCMC Department of Construction has confirmed 57 housing projects as eligible to raise capital from buyers in the future with 29,017 units, including 27,792 apartments and 1,225 low-rise homes.
Specifically, 5,630 apartments are in the premium segment (20.3%), 16,750 in the intermediate segment (60.3%) and 5,412 in the affordable segment (21.6%).
Affordable housing accounts for 79.7% and is currently the key segment of the real estate market. However, the market is still short of low-cost and commercial housing products, particularly those for rent.
Some businesses have kept failing to fulfill their obligations to homebuyers. Many projects are not qualified, especially in terms of fire prevention and fighting, yet their products have been handed over to the buyers.
In many cases, buyers have been waiting years for their home ownership certificates. In some others, investors mortgage the apartments they have sold to consumers.
“This is a distressing issue, directly affecting the interests of consumers and requiring the State to act to handle law-breaking investors,” says HoREA.
Tourism firms in Ba Ria-Vung Tau bemoan sharp land rent spikes
Many tourism enterprises in Ba Ria-Vung Tau Province are grappling with a slew of difficulties due to soaring land rents.
The Ba Ria-Vung Tau branch of the Vietnam Chamber of Commerce and Industry (VCCI) and the provincial Tourism Association held a conference last week to listen to local tourism enterprises. Many bemoaned land rent rises compared to their current contracts.
Nguyen Van Sy, deputy manager of Thang Muoi Tourist Hotel Joint Stock Company, said his firm inked a land lease for a 33-year term with a total area of 28,000 square meters. There have been two rental hikes so far, particularly a 1.9-time increase in the 2013-2014 period, equivalent to VND1.163 billion a year. This was followed by a rise of 7.37 times with VND8.6 billion a year. Therefore, his company has delayed a four-star resort project with total capital of VND120 billion, due to unstable and high land prices.
He said such rates have been unreasonable, coming as a shock to businesses and investors. His firm, with chartered capital of only VND8.1 billion, now has to pay land rent of VND8.575 billion per year, but prices of tourism products and services cannot soar accordingly.
Le Tan Dung, manager of Nghinh Phong Travel Joint Stock Company, said his firm has received two notices from the provincial tax department this year, with the total land rental of some VND8 billion, a shock increase of 18.13 times over 2013-2015 and accounting for half of the company’s full-year revenues.
Dau The Anh, director general of Vung Tau Cable Car Tourism Joint Stock Company, said the rental in 2011-2016 has surged 14 times over the 2006-2011 period.
He said the tax department has not adhered to contract terms between firms and the provincial government. While pending complaints, he proposed tax authorities not issue new documents to ask for tax payment, and not apply late payment penalties.
At the conference, many firms said most tourists just spend one day in the province, leading to low revenues. Rental spikes have adversely affected their business plans at a time when the local tourist industry is reaching saturation due to many competitors from neighboring provinces and cities.
Nguyen Thi Mai, a member of the Vietnam Association of Small and Medium Enterprises, said such high rental prices have posed a slew of difficulties for local firms, resulting in small or no profit. If the situation continues, many firms will go bust.
Bui Ngoc Diep, deputy chairman of the Vung Tau Tourism Association, said many major projects from domestic and international investors have been delayed.
Dau Anh Tuan, head of the Legal Department at VCCI, told the Daily that these changes would not only disrupt business operations but also create a negative image for the business environment in the province, leading to fewer investment opportunities.
Ca Mau seeks to woo investors
The government of Ca Mau Province at an investment promotion conference in HCMC last Friday pledged to offer strong incentives for investors, from preferential tax and low land rent to easy administrative procedures and support in site clearance and worker training.
Nguyen Tien Hai, chairman of Ca Mau Province, said the local government would continue creating a transparent and favorable business and investment environment for domestic and international investors doing business in the southernmost province. To do so, provincial authorities will further invest in infrastructure, step up training for workers, and streamline administrative procedures among others, Hai told the conference “Ca Mau – Potentials and Investment Opportunities” organized in HCMC last week.
“Investors in the province will be offered the most favorable conditions for implementing their projects successfully,” Hai stressed.
With this investment promotion conference, Ca Mau wants to appeal to investors at home and abroad to explore business opportunities in the province.
Hai said investment processes and procedures would be transparent so as to facilitate business and investment activities.
The province will offer specific support policies such as site clearance for projects, and infrastructure facilities like roads and power systems in industrial parks.
The provincial government will also offer the lowest possible land rent that can be collected by installment or via deferred payment to ease capital pressure on enterprises.
In addition, investors will be assisted in investment and trade promotion, technology transfer, access to credit, and human resource training. Local authorities would promptly act on feedback and complaints from investors to resolve them, or report them to competent authorities in a timely manner.
Notably, Hai said, provincial leaders would hold regular meetings and direct dialogues with businesses to address their difficulties.
At the conference, the province invited potential investors to consider projects in agriculture, industry, trade and services, tourism, infrastructure in economic zones and industrial parks, and traffic infrastructure.
A major project awaiting investors is the Hon Khoai seaport project that has been approved in principle by the Government. The port should be developed to a capacity able to handle 250,000-DWT vessels. Hon Khoai Port will help create a major international sea route to neighboring countries such as Singapore, Malaysia, Indonesia, Thailand and Japan.
At the conference, leaders of Ca Mau Province inked five memorandums of understanding with investors for building two shopping malls, a wind farm and other projects, and awarded some investment and business registration certificates.
This year, the province has awarded investment certificates for 30 projects capitalized at over VND6 trillion. Currently, the province has 205 investment projects in manufacturing and trading with total registered capital of around VND83 trillion.
HCGF cooperates with Saigon Bank to support SMEs
The HCMC Credit Guarantee Fund (HCGF) last Friday signed an agreement with Saigon Bank for Industry and Trade (SaigonBank) to help small and medium enterprises (SMEs) gain access to bank loans to fund their operations.
HCGF and SaigonBank will cooperate to provide consultancy on feasible business and production plans, financial management and technology besides provision of capital for SMEs.
Vu Quang Lam, chairman of HCFG, said the fund’s credit guarantees for enterprises have shown signs of declining lately. Enterprises often approach HCGF to ask for credit guarantees when their projects are ineligible for bank loans.
However, under the prevailing rules, enterprises would have difficulty applying for credit guarantees as they are required to have assets as collateral.
Thanks to the new agreement with SaigonBank, HCGF will support enterprises in preparing feasible business plans and completing procedures so that they can gain easier access to bank loans as the time needed for the bank’s appraisal process is shortened. However, HCGF still has to ensure transparency and the bank will still decide which enterprises can borrow.
The Government plans to revise the regulations on credit guarantees in a way that allows SMEs to take out unsecured loans from banks. Therefore, HCGF will closely coordinate with SaigonBank in all steps, from appraising to handling arising risks in preparing themselves for the amendments in the coming time, Lam added.
Currently, there are more than 12,000 SMEs active in HCMC, accounting for 96% of the total number of enterprises in the city. SMEs play an increasingly important role in the country’s economy, especially in creating jobs.
Due to poor corproate governance, outdated technology and lack of premises, SMEs face stricter conditions for credit guarantees.
HCFG, established in March 2007, is the financial organization under the HCMC government. The fund is mandated to support SMEs to gain access to bank loans. As of the end of last year, HCGF had total chartered capital of VND232.36 billion. Of which, VND227.9 billion came from the city’s budget, or 98.1% of the fund’s chartered capital.
After ten years of operation, HCGF has signed 121 credit guarantee contracts worth VND871.2 billion, creating favorable conditions for SMEs to borrow a total of VND1.45 trillion.
Hoang Dinh Thang, director of HCGF, said the fund’s performance was dismal in the 2014-2015 period as most SMEs failed to meet the collateral requirement.
Currently, the role of the credit guarantee fund is to provide consulting for enterprises to complete legal procedures so that their projects are eligible for bank loans.
This year HCGF has worked with 200 SMEs, and provided financial consultancy for 29 projects with total investment of nearly VND4.2 trillion and total loans of VND2.2 trillion. Of this number, eight projects have got the nod from banks or investors with total investment of VND813 billion and total loans of over VND360 billion.
Official: Faster equitisation needed
Speeding the equitisation of State-owned enterprises (SOEs) and development of the stock market is important to secure a Government policy to restructure businesses over the next five years, a finance official said.
Hoang Van Thu, Deputy Director of the Ministry of Finance’s Corporate Finance Department, told a conference held by the Hanoi Stock Exchange last week that the acceleration in equitisation was needed for the sake of enterprises and investors.
A report by the department said the nation has had 5,950 SOEs reorganised, with 4,460 of them equitised and the remaining firms restructured through mergers and acquisitions, dissolution, bankruptcy or conversion into limited companies with two members or more.
Forty-eight firms were equitised in the first 10 months of this year, after 591 companies were privatised during 2011-15. As many as 718 SOEs remain to be equitised.
The report said that in the five years until 2015, some 350 equitised companies showed better business performances, compared to the results they posted in pre-equitisation phases.
The combined charter capital of these firms increased 72 percent, and their total assets rose by 39 percent. Their combined pre-tax profits were up 49 percent, and joint contributions to the State budget were 27 percent higher.
The average workers’ income at these companies also increased 33 percent.
Also, the local press cited several cases where equitisation notably improved operational efficiency of businesses.
The Vietnam Dairy Products Joint Stock Company, or Vinamilk, has seen charter capital increase by 13 times from the 1.59 trillion VND (71.95 million USD) level recorded before it was equitised in December 2003.
Revenues of the company grew by more than 10 times, from 451.6 billion VND in 2003 to 40.2 trillion VND in 2015, and its after-tax profits increased from 56 billion VND in 2003 to 7.8 trillion VND last year, posting an average growth of 29 percent per year.
The Vietnam National Seed Joint Stock Company, also known as Vinaseed, posted revenues of 1.36 trillion VND last year, a rise of 20 times from the pre-equitisation figure recorded more than 10 years ago.
Its after-tax profits reached 157 billion VND in 2015, growing by 40 times; and asset values were up 22 times at 1.56 trillion VND, while equity was 40 times higher at more than VNĐ1 trillion.
The Vietnam National Petroleum Group, better known as Petrolimex, obtained more than 3 trillion VND in profits last year, compared to a loss of 1.67 trillion VND the company suffered before it was equitised in 2011. The firm also paid dividends at a rate of 12.14 percent in the first year of equitisation.
On the other hand, some equitised enterprises have reportedly shown declining performances.
The Vietnam Rubber Group saw profits fall from 11.84 trillion VND in 2011 to 2.2 trillion VND in 2015, while its debt amounted to 21.22 trillion VND, compared to an equity of 35.21 trillion VND last year.
In 2015, the average debt to equity ratio of SOEs was 1.23. However, 25 companies, including the Military Petroleum Corporation, the Vietnam Machinery Installation Corporation and construction firm Corporation No 36, had a ratio greater than 3.00.
Le Manh Ha, Vice Chairman of the Government Office and deputy head of the National Steering Committee for Corporate Renovation and Development, told news website Infonet that equitisation has, overall, benefited various subjects.
The State had more resources for socio-economic development, enterprises were better financed, and managed to improve production and business activities, and workers’ interests were more assured. Investors also saw more investment opportunities emerging in a manner closer to market rules.
Pham Hai An, another official from the Corporate Finance Department, said authorities must continue to complete policies and institutions needed to speed up equitisation.
Hundreds of companies, though equitised, have not yet listed shares on the stock market, as required. This makes SOE share auctions unattractive to investors and impedes transactions, he said.
On June 30, the Ministry of Finance issued Circular No 115/2-16/TT-BTC providing guidelines for initial public offerings and the use of money raised from SOE equitisations.
Last November, the Government issued Decree No 145/2016/NĐ-CP revising a former decree on treatment for administrative violations in the stock market, including violations of listings and transaction registering regulations.
A better legal framework is expected to boost the transparency of stock transactions and enable more stable and healthy operations of the market, said Pham Thi Thanh Huong, Deputy Chief Inspector of the State Securities Commission.
Can Tho licenses 47-million-USD waste-to-energy plant
Authorities in the Mekong Delta city of Can Tho on December 20 handed over an investment certificate to the China Everbright International Company to build a 47-million-USD waste-to-energy plant.
The Thoi Lai solid waste treatment plant will be built on an area of 53 hectares in Truong Xuan commune, Thoi Lai district. Construction of the factory is scheduled to kick off in February 2017.
After its completion in February 2018, the facility is capable of treating 400 tonnes of garbage a day and generating electricity for the national grid.
Director General of China Everbright International Chen Xiao Ping said, as one of the leading companies in the field of waste treatment, it currently has 68 waste-to-energy projects with a combined capacity of 55,000 tonnes of garbage per day.
This is the first project in Vietnam funded by Everbright, he said, pledging that it will become a key environmentally-friendly project in the Mekong Delta.
For his part, Chairman of the municipal People’s Committee Vo Thanh Thong said Everbright was selected among seven investors after the city sent a delegation to make a field-trip to the company’s projects in China.
He urged the investor to abide by Vietnam’s environmental standards and pledged to facilitate the implementation of the project.
US firms plan to expand investments in Vietnam
Many US enterprises are paying heed to, while others are planning expand their investments in Vietnam in such fields as infrastructure, energy, aviation, hi-technology and farm produce export-import, said US Consul General in Ho Chi Minh City Mary Tarnowka.
At a workshop in HCM City on December 20, Tarnowka said US firms highly evaluate Vietnam’ efforts in reforming institutions and administrative procedures, thereby creating an equal playground for foreign businesses, including those from the US.
Walter Blocker, a representative of the US Commerce Association in Vietnam, said US enterprises are actively supporting Vietnamese partners in joining deeper into the global supply chains, thus improving their productivity.
As Vietnam and the US have become leading trade partners, Vietnam should focus on updating new technologies and improving the quality of products to meet the consumption demands of both countries, he noted.
Statistics showed that two-way trade between Vietnam and the US increased nearly three folds within the last eight years, hitting 45 billion US at present.
Meanwhile, Vice Chairman of the Ho Chi Minh City People’s Committee Le Thanh Liem said the city hopes to welcome more US investors, making the US one of the leading foreign investors in the southern metropolis.
According to the official, trade value between HCM City and the US exceeded 8 billion USD in 2016, up 60 percent against the figure of 2012. The US now ranks 11th among 78 countries and territories investing in HCM City.
Vietnam, RoK seek to promote FTA implementation
A workshop was organised in Hanoi on December 20 to review and promote the implementation of the free trade agreement (FTA) between Vietnam and the Republic of Korea (RoK).
The event was jointly organised by the Ministry of Industry and Trade (MoIT), the Korea-Vietnam FTA Support Centre and the Korean Trade Investment Promotion Agency in Hanoi (KOTRA Hanoi).
Tran Minh Trang, a representative from the MoIT’s Export – Import Department, pointed out normal mistakes that enterprises often make while verifying the origin of products, resulting in delays in the granting of certificates of origin (CO) and administrative fines of 10-50 million VND (440 – 2,200 USD).
According to a representative from the Korean Customs Service (KCS), Vietnamese exporters need to follow strictly relevant regulations, including those on the origin and classification of products.
Choi Dae Kyoo, from the Korea-Vietnam FTA Support Centre, suggested Vietnamese exporters focus on training staff in charge of product origin management and develop a CO management system to better implement the FTA.
The RoK side pledges to provide more assistance and consultation for Vietnamese enterprises in order to realise the target of 70 billion in two-way trade by 2020.
Vietnam and the RoK signed the free trade agreement in May last year, under which Vietnam pledges to remove 8,521 tariff lines for the RoK, while RoK promises to abolish 11,679 tariff lines for Vietnam.
The bilateral trade value increased from 500 million USD in 1992 to 36.5 billion USD in 2015. The RoK is the fourth largest export market and the second largest import market of Vietnam.
Deadline for public companies and equitised enterprises to trade on UPCoM
The State Securities Commission (SSC) issued Circular 180/2015/TT-BTC on unlisted public companies, which took effect on January 1, 2016.
According to new rules it laid out, public companies which are not eligible for listing on the two stock exchanges and equitised enterprises must register for trading on UPCoM within 30 days from their registration as a public company.
Within 30 days of the last day of an initial public offering, unlisted public companies and equitised enterprises must register for trading on UPCoM.
The new rules were aimed at preventing eligible companies from avoiding listing and deliberately delisting, actions that could harm investors’ interests.
The authorities expect listing to improve the transparency and operational efficiency of companies.
Meanwhile, according to data released by the SSC on November 30, 2015, more than 1,000 public companies had listed neither on the stock exchange nor on UPCoM.
The new circular stipulates a deadline of December 31, 2016, for listing by companies that have not yet listed.
Because of this, many public companies, including joint stock banks, have been hastily completing the required procedures to list their shares to before the deadline.
By June this year shares of 686 companies had been traded on the two national stock exchanges, while the number on UPCoM stands at over 280.
Thaco proposes tax support to localise cars
Local carmaker Truong Hai Automobile JSC (Thaco) has asked ministries to give it preferential policies on taxes for the import of auto components.
In a document sent to the ministries of finance, sciences and technology and Vietnam Customs recently, Thaco said it was planning to conduct the pilot production of mini buses, or ten-seater passenger cars, whose technology would be transferred by the Republic of Korea (RoK)’s Huyndai Group.
It would move toward the localisation of mini buses in Viet Nam and their export to ASEAN, Thaco said.
The company proposed that the two ministries allow it to import auto components in two phases, which will have different tax levels.
In the first phase, the company will experimentally import 500 sets of complete knockdown units, which will be completely assembled in Viet Nam. The welded car body, imported from Turkey, and the chassis from RoK are expected to be taxed at 27 per cent of the car value.
Meanwhile, other components and parts will be taxed following the current regulations.
In the second phase, following completion of the first pilot phase, Thaco will only import components and then produce cars following market demand.
Thaco is the only partner in Asia that Huyndai has transferred its technology to and permitted to be used for localisation of up to 40 per cent of mini buses. It is also the only company in Viet Nam manufacturing and assembling three models -- passenger car, truck and bus -- with local supply rate from 16 per cent to 50 per cent.
In November, Thaco sold 10,001 units, a year-on-year increase of 16 per cent, of which, passenger cars reached 1,163 units and commercial cars were 3,838 units.
Thaco is leading the domestic market with 38.1 per cent of market share. It is targeting sales of 112,000 units this year.
Ha Noi seeks software park funds
The People’s Committee of Ha Noi is seeking financial support from the central budget to build a software park project under the 2016-20 national target programme on information and technology.
The city wants a supporting budget to build the infrastructure of the research and development (R&D) zone, which will be carried out in 2017 and 2018.
The park aims to develop a knowledge-based economy and the information and technology industry, especially the software sector of the capital city.
The park is also expected to create favorable opportunities for investment activities in and outside the country; create a modern international-standard working environment to attract high-quality employees; enhance the competitive capacity of software companies and contribute to the country’s economic growth.
Vingroup declares VinMart+ not for sale
The property and retail conglomerate Vingroup JSC (Vingroup) has denied it has plans to sell its supermarket chain VinMart+ to the Japanese convenience store giant 7-Eleven, local media reported.
Le Khac Hiep, Vice Chairman of Vingroup, said that Vingroup will not sell its supermarket chain VinMart+ at any price.
“Firstly, Vingroup will never sell its Vietnamese brands to foreign investors,” said Hiep. “Secondly, Vingroup will not sell its retail chain, which is developing well on the way to become the group’s second spearhead business unit.”
In Viet Nam, Vingroup holds the largest share of the retail market, and it has the fastest development speed – with about 1,000 supermarkets and convenience stores nationwide.
“Vingroup is exceeding other competitors regarding market coverage, growth rate, business scale and prospects.”
“Vingroup is also determined to build a reputable, efficient retail business that can connect local production to customers in order to develop a safe, standardised consumption industry for Vietnamese people.”
In addition, the retail business unit expects to be strong and competitive enough to protect and promote local businesses in the consuming production chain, he added.
The statement was made a few days after the Australia-based retail news publisher Inside Retail reported last Thursday that 7-Eleven “plans to enter Viet Nam by taking over Vingroup’s VinMart+ chain”.
In a statement from the US last year, 7-Eleven said it will build stores and convert “existing locations”. Now, industry insiders are saying the group will swallow VinMart+, but there has been silence from both brands, Inside Retail reported.
7-Eleven has yet made any offers to Vingroup, Hiep said, adding it could be a one-way interest from 7-Eleven or speculation from Inside Retail.
In 2017, Vingroup plans to cover at least 30 provinces and cities in total by opening an addition of 70-80 VinMart supermarkets and about 1,500 VinMart+ stores, as well as develop the shopping mall network in other provinces and districts.
VinMart+ is Viet Nam’s largest convenience store chain with more than 700 outlets. It has plans to expand to 10,000 stores in next 10 years.
Seaprodex to trade on UPCoM on December 23
Viet Nam Sea Products Import-Export Joint Stock Corporation (Seaprodex) will trade all its 125 million shares on the Unlisted Public Company Market (UPCoM) on December 23.
Seaprodex’s shares will be traded with code SEA, with price starting at VND11,400 per share, the Ha Noi Stock Exchange said in a statement that was released on Monday.
The company is among the leading companies in the fishery sector and has been in operation for 40 years. Its two core businesses are the processing of export sea products and commercial trading, which accounted for 54.75 per cent and 31.21 per cent, respectively, of Seaprodex’s total revenue in 2015.
Following the equitisation in December 2014, the sea products trader had chartered capital of VND1.25 trillion (US$55.5 million). Its two major shareholders were the Ministry of Agriculture and Rural Development (MARD) and representatives of Ha Noi Export-Import Company (Geleximco Group).
MARD held 79.2 million shares, or 63.38 per cent of Seaprodex’s capital, and Geleximco Group’s representatives owned 35 per cent of the company’s stake.
In 2016, there were some changes in the ownership organisation of Seaprodex, with the entry of Nova Bac Nam 79 Joint Stock Company, which purchased more than 25 million shares on June 14 to acquire a fifth of Seaprodex’s stake.
Meanwhile, some of the owners that are part of the Geleximco Group sold 10 per cent of their stake in Seaprodex to reduce their ownership in the firm to 15 per cent.
By December 31, 2015, Seaprodex had invested in 24 other companies for a total of VND950 billion, including three subsidiaries, nine joint ventures and 12 financial investment firms.
Seaprodex’s investments are the 59.34 per cent stake in Ha Noi Sea Products Import-Export JSC, a 50.78 per cent holding in Nam Can Sea Products Import-Export JSC and a 17.47 per cent ownership in Vietnamese-French Cattle Feed JSC (Proconco).
HN People’s Committee to sell furniture maker stake
Ha Noi People’s Committee has registered to offload its entire stake of over eight million shares in furniture maker Xuan Hoa Viet Nam Joint Stock Company on December 20-30.
The amount of shares is equivalent to a 40 per cent stake in the furniture company’s charter capital.
Xuan Hoa’s shares are currently trading up over 11 per cent at VND10,000 a share on the Unlisted Public Company Market (UPCoM). More than eight million shares changed hands this morning, equaling the amount the city’s People Committee registered to sell.
At this price, the Ha Noi People’s Committee will likely collect nearly VND80.6 billion from the sale.
Founded in 1980, the Phuc Yen-based company is one of the largest furniture makers in Viet Nam. The firm engages in designing and manufacturing office, home, school and hospital furniture.
The company made its initial public offering in June 2015 and started trading on the UPCoM on November 3, 2016.
Last week, the company reported VND368.5 billion in revenue from the sale of furniture this year. Its net profit reached VND10 billion, a 10-fold increase over last year’s figure.
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