Vietnamnet global

25/10/2018 08:30 (GMT+07:00)

BUSINESS IN BRIEF 25/10

Vietfood Beverage-Propack expo to open in HN, Master plan for Nhon Hoi Economic Zone to 2040 to be adjusted, Vietcombank opens first overseas subsidiary in Laos, Bà Rịa-Vũng Tàu seeks investment from S Korea and Japan

Vietnam Motor Show 2018 kicks off in HCM City

The Vietnam Motor Show 2018 opened at the Saigon Exhibition and Convention Centre in Ho Chi Minh City on October 24, featuring nearly 120 automobile models in all segments.

Toru Kinoshita, Chairman of the Vietnam Automobile Manufacturers Association (VAMA), said this year’s event, organised by VAMA and the Vehicle Importers Vietnam Association, is the biggest edition so far. It covers almost 30,000 sq.m of ground and showcases nearly 120 models from affordable to high-end segments.

Car brands present at the show include Audi, Chevrolet, Ford, Jaguar, Honda, Land Rover, Lexus, Maserati, Mercedes-Benz, Mitsubishi Motors, Nissan, Subaru, Toyota, Volkswagen and Volvo.

Some outstanding imported models are Honda Brio, Nissan Terra, Lexus ES300h, Ford Ranger Raptor, Mercedes-Benz Maybach S560, Jaguar E-Pace, Honda Civic Type R. An F1 race car model of Red Bull Toro Rosso Honda and a new concept car Toyota i-Road are also displayed.

The motor show includes a Subaru stunt show that features Russ Swift – a British driver known for performing stunts and precision driving. Visitors will also have a chance to test drive new cars.

Aside from auto makers, more than 100 other units which are car spare part and supporting companies, banking services providers, insurance firms and media partners also take part in the event.

The Vietnam Motor Show 2018 will run through October 28.

International wood fair opens in Binh Duong

An international fair on woodworking machinery and wood materials kicked off in the southern province of Binh Duong on October 24.

The BIFA Wood 2018, jointly held by the Binh Duong Furniture Association (BIFA) and the Panels & Furniture Group of Wood Magazines, draws the participation of over 180 enterprises from host Vietnam and many countries and territories from across the world, which are showcasing their products at 780 booths.

Seminars on automation technology in the sector and wood materials from the US and Europe, and entertainment activities are also expected to be held during the four-day fair.

BIFA President Dien Quang Hiep said that in the context of the Fourth Industrial Revolution, the fair offers a good chance for the Vietnam wood processing sector to gain access to modern technology.

It also creates a venue for both domestic and foreign enterprises to meet, establish and expand long-term cooperation for the sustainable development of Vietnam’s timber sector.

Vice Chairman of the provincial People’s Committee Tran Thanh Liem stated Binh Duong is the centre of Vietnam’s wood industry, with its export turnover in 2017 accounting for more than 50 percent of the country’s total wood export value, surpassing 4 billion USD.

Vietnam is one of the world’s leading wood processing and exporting countries with an export turnover of 8 billion USD in 2017. The figure is expected to hit 9 billion USD this year.

The nation sets a target of 20 billion USD in wood exports by 2025.

Petrol prices down slightly, those of oil unchanged

Petrol prices decreased slightly, while those of oil remained unchanged after the latest adjustment of the Ministry of Industry and Trade and the Ministry of Finance on October 22.

Specifically, prices of bio-fuel E5 petrol dropped by 224 VND per litre, and RON95 by 144 VND a litre. Those of diesel 0.05S, kerosene and mazut were kept unchanged compared with the previous adjustment.

The prices of E5 are not higher than 20,682 VND per litre, RON95 not higher than 22,203 VND per litre, and diesel 0.05S not higher than 18,611 VND per litre.

The ceiling prices of kerosene and mazut are capped at 17,086 VND per litre and 15,694 VND a litre, respectively.

From July 7 to September 9, petrol prices were kept unchanged, while those of oil were adjusted slightly.

However, after that, the prices of petrol rose two times with a combined increase of nearly 1,300 VND per litre.

The petrol price stabilisation fund has been used constantly over the past time to mitigate the impacts of global rising commercial oil and petrol prices and contribute to curbing inflation.

The two ministries review fuel prices every 15 days to adjust the prices in accordance with fluctuations on the world market.

Vietnamese handicraft firms attend Mega Show Hong Kong 2018

Nearly 70 Vietnamese handicraft and gift enterprises are exhibiting their products in over 80 booths at the Mega Show Hong Kong 2018 from October 20-23.

The Vietnamese firms are introducing their handicrafts and household utensils made of natural materials such as rattan, bamboo, timber, rush, jute, water hyacinth, clay, and shells to international consumers. These are environmentally-friendly products that are suitable for the current global consumption trends.

Nguyen Duy Kien, Deputy Consul-General in charge of Economic-Commercial Affairs at the Consulate General of Vietnam in Hong Kong and Macau, said that the Mega Show is Asia’s largest-scale prestigious trade fair for gifts, home appliances, and toys.

It is also the most direct channel for Vietnamese businesses to introduce their products to international buyers, thus helping to boost Vietnam’s exports, he added.

Kien said many Vietnamese enterprises have signed big export contracts at the event, noting that after attending the Mega Show Hong Kong 2017, a large number of Vietnamese businesses signed contracts with foreign partners for supplying goods for the whole year.

In the context of the current US-China trade war, international buyers are tending towards importing goods from Southeast Asian nations, including Vietnam. Therefore, at this year’s event, the booths of Vietnamese enterprises have continued to attract the attention of many visitors.

Vietnamese businesses hoped they will be able to reach new records in exporting handicraft items after the event.

The organisers said the Mega Show Hong Kong 2018 drew the participation of 4,100 businesses from over 30 countries and territories, with 5,300 booths.

This year’s event is expected to lure some 55,000 visitors, higher than the figure of 52,000 in 2017.

Vietnam International Industrial Fair kicks off in Hanoi

Over 250 local and foreign enterprises from various countries and territories, including Italy, Russia, the Republic of Korea, Japan, India and China, are exhibiting their products at the 27th Vietnam International Industrial Fair (VIIF 2018), which opened in Hanoi on October 23.

Organised by the Vietnam Exhibition Fair Centre (VEFAC), the four-day event offers opportunities for Vietnamese firms to meet with their international partners and exchange technologies, as well as enhance cooperation and expand business.

The fair is featuring over 300 booths on an area of 6,000 sq.m, bringing practical and useful technology experience to visitors.

Visitors will be able to access modern and useful tools and equipment in precise mechanics, automation, and supporting industry, among others.

A series of business matching programmes will be arranged at the event, which aim to bolster trading connections between Vietnamese and international entrepreneurs.

Products using advanced technology and optimal solutions are introduced at the VIIF 2018 to facilitate businesses’ access to modern technologies towards the sustainable industrial development, according to Ly Hoa Lien from the VEFAC.

Le Khanh Hai, Deputy Minister of Culture, Sports and Tourism, said the event is a bridge, helping exhibitors promote their products, contributing to fostering the development of Vietnam’s industry.

Vietcombank opens first overseas subsidiary in Laos

{keywords}

The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) opened its first overseas subsidiary in Vientiane, Laos, on October 19.

Located on Lane Xang Avenue, a finance-banking hub in downtown Vientiane, the Vietcombank Laos chapter has a charter capital of 80 million USD, the highest among Vietnamese credit institutions in the country.

Aiming at connecting Vietnamese and Lao financial markets, the recently opened bank offers finance and investment service packages to Vietnamese investors in Laos and Lao businesses.

Vietcombank is completing procedures to open a representative office in the US and a branch in Australia. Currently, it has more than 500 branches, representative offices, and member companies in Vietnam and overseas; with over 2,100 agencies established across 131 countries and territories.

The bank posted a pre-tax profit of over 7.72 trillion VND (336.2 million USD) in the first half of this year, up 52.7 percent year-on-year. It looks to expand the figure to 13 trillion VND (566.15 million USD) by year’s end, up 14.6 percent against 2017.

Recently, Vietcombank has become the first bank in Vietnam to meet the SWIFT Global Payments Innovation Initiative (GPI) standards, which makes the bank ready to provide comprehensive solutions to satisfy clients’ demand in payments and money transfers.

Vietfood Beverage-Propack expo to open in HN

As many as 250 enterprises from 12 countries and territories will participate in the 2018 Vietfood and Beverage-ProPack international exhibition, taking at the Hà Nội International Exhibition Centre at 91 Trần Hưng Đạo from November 7 to 10.

About 67 per cent of the products displayed at the exhibition will be processed foods, agricultural products, food additives, beverages and packaged confectionery products. The rest are food processing machinery, packaging machines, packages and bakery production line.

At Vietfood & Beverage - ProPack 2018, besides the core products of Việt Nam such as milk, coffee, pepper and swallow’s nests, there will also be the pharmaceutical ingredients, traditional spices and frozen seafood for exports. Famous names such as Ba Vì Milk, Cánh Đồng Vàng (Gold Field), DH Food, TOGICO, Tân Nhất Hương, Khánh Hoà Swallow’s Nests and Phan Thiết Fish Sauce will introduce many of their new products to consumers and visitors, proving the attractiveness of the continuously growing domestic food market.

Especially at this year’s event, an e-commerce platform for agro-forestry-fishery & foodstuffs (www.gcaeco.vn) will be launched.

GCAECO’s platform will apply blockchain technology which creates a chain of trading activities from product traceability, ordering, online payment, transportation in Việt Nam and internationally.

South Korea’s pavilion CHUNGBUK TECHNOPARK will present packaged food and drink and traditional specialties such as red ginseng, seaweed, ginseng and rice cake.

The four-day event, organised by the Việt Nam National Trade Fair and Advertising Company (Vinexad), is expected to attract some 15,000 visitors.

Vietnam's steelmaker Hoa Sen to purchase hot-rolled coil from Formosa Ha Tinh

Vietnamese steel producers are looking toward domestic hot-rolled coil (HRC) in order to avoid more anti-dumping duties that could be imposed by the US.

Vietnam's steelmaker Hoa Sen Group has reached an agreement to purchase HRC from major Vietnamese integrated steel producer Formosa Ha Tinh (FHS) amid fierce competition, local media reported.

HRC is a major raw material for the production of steel sheet and steel pile. In the first nine months of 2018, HRC import prices increased by 16% year-on-year, causing a decrease of 55% in Hoa Sen Group's profit to VND512 billion (US$21.99 million).

Under this context, the deal is expected to improve the group's financial situation in 2019. According to Nhip Cau Dau Tu, Tran Duong, analyst at KIS Vietnam Securities Corporation, stated that an agreement to purchase HRC between FHS and Hoa Sen Group would temporarily relieve pressure on importing the product and keep a stable domestic market.

In addition to having a better price compared to the import price (US$610 per ton compared to US$618 per ton), purchasing HRT from local source would help Hoa Sen minimize impacts from the volatility of exchange rate in the world market.

Meanwhile, the deal gives FHS a steady stream of income as Hoa Sen currently is the largest producer of steel sheet and second of steel pile, holding market share of 34% and 18%, respectively. Moreover, Hoa Sen also owns the country's largest distribution network with 410 stores and branches as of present, which is expected to increase to 450 by the end of the year.

This year, FHS expects to provide 3 - 6 million tons of HRC to the market, which is considered a viable alternatives for local steelmakers. In fact, the escalation of a trade friction between the US and China could have a positive impact on FHS. As reported by the Metal Bulletin, Vietnamese re-rollers are looking toward domestic hot-rolled coil in order to avoid more anti-dumping duties that could be imposed by the US.

The US Commerce Department on Wednesday August 1 launched duty-circumvention probes into Vietnamese cold-rolled and coated flat steel imports produced using South Korean or Taiwanese substrate. This restricts the sources of HRC from which Vietnamese re-rollers can purchase. The US already has imposed high duties on Vietnamese flat steel produced using China-origin substrate.

Vietnam's steel industry in 2018 is forecast to grow by 20 - 22%. Additionally, with the economic growth target of 6.5 - 6.7% and a growing number of infrastructure development projects, the demand for steel is expected to increase, according to the Vietnam Steel Association (VSA).

However, the risk of oversupplying steel sheet in the market remains. Over the last two years, Hoa Sen Group has increased its steel sheet production capacity by 1.5 million tons, Nam Kim Steel by 800,000 tons and Hoa Phat 400,000 tons, not to mention other projects from other steel producers such as Dong A Steel or Pomina.

According to VSA, annual demand for consumption of domestically produced steel sheet is 2.5 - 2.8 million tons, however, the capacity of the industry has reached 3.2 - 3.5 million tons, putting pressure on companies to reduce operation cost and maintain competitive advantages.

USD/VND exchange rate to remain stable in remaining months of 2018: Experts

Vietnam`s foreign exchange reserves are sufficient to stabilize the exchange rate until the end of the year.

Vietnam's large foreign exchange reserves and foreign direct investment (FDI), coupled with the flexible management of the State Bank of Vietnam (SBV) are considered main factors to keep the USD/VND exchange rate stable in the remaining months of 2018, VnExpress cited experts as saying.

In early October, the SBV's reference exchange rate has been fluctuating, reaching VND22,721, the highest since the beginning of the year and up 1.41% against the end of 2017.

Meanwhile, the USD/VND exchange rate quoted by commercial banks also increased considerably, hovering around VND23,315 - 23,395, or even VND23,400. Local banks can set their USD prices +/-3% on the either side of the benchmark rate fixed by the central bank.

In the free market, the USD buying and selling prices were VND23,440 and VND23,490, up VND20 for each compared to previous trading sessions.

However, over the last two days, the benchmark rate has been stable, for which the selling price was VND22,719 on October 11 and went back to VND22,721 a day later. With the maximum fluctuation rate of 3%, the price ceiling and floor applied by commercial banks would be VND23,402 and VND22,039, respectively.

Under this circumstance, banks decreased the USD selling price by VND10 - 20, reaching VND23,300 - 23,380.

Andy Ho, CIO of VinaCapital, said the devaluation of the Chinese yuan (CNY) would partly put pressure on the VND, however, Vietnam's foreign exchange reserves are sufficient to help stabilize the exchange rate until the end of the year. "The depreciation of the VND and to what extend should be seen as the government's solution to support exports," Ho was quoted by VnExpress as saying.

HSBC Vietnam Country Head of Global Markets Ngo Dang Khoa said the USD/VND exchange rate has been quite stable compared to the region. Since the beginning of the year, the VND has depreciated by 2.6%, while the depreciation has been wider for other currencies in the region, especially Indonesia' rupiah with nearly 10%.

According to Khoa, the US - China trade friction has caused a sharp depreciation from CNY compared to the USD at around 8%.

China is Vietnam's major trading partner and latter is having a trade deficit with the former, so that the CNY's devaluation would have a certain impact on the VND. However, the VND would remain stable, thanks to flexible management of the SBV, among other factors, Khoa added.

At present, banks' liquidity of foreign currencies are at positive level, he continued, adding that lenders could still meet customers demand for purchasing US$1 million or even US$100 million.

Additionally, Vietnam's trade surplus of over US$6 billion in the first nine months of 2018 and FDI disbursement of US$13.5 billion play a major role supporting the stabilization of the USD/VND exchange rate in the coming time, Khoa stressed.

An expert from a foreign bank said that payment of foreign debts is not likely to undergo great pressure in the remaining months of the year, while the country is pushing for the privatization of state-owned enterprises. This could attract high amount of USD flowing into Vietnam from now on until the end of 2018, he stated.

Standard Chartered expected the USD/VND exchange rate to hover around VND23,400 by the end of 2018. The VND could then slightly depreciate in early 2019 before appreciating against the USD by the end of 2019, due to positive internal and external factors, the bank added.

Specifically, the USD/VND exchange rate would reach VND23,400 at the end of 2018, down to VND23,300 by the end of 2019 and VND22,700 by the end of 2020.

Saigon shopping malls moving out of downtown: property consultancy

Shopping malls are mushrooming outside Ho Chi Minh City’s central business district, a new report by Jones Lang LaSalle Vietnam says.

The real estate service firm (JLL) said the most prominent example is Landmark 81 in Binh Thanh District, which opened in the third quarter with 46,000 square meters of retail space. The tallest building in Vietnam has retail outlets of many major international and domestic brands.

This year there will be more new entrants in the non-CBD area such as Estella Place (District 2), Cong Hoa Garden (Tan Binh District) and TTC Plaza (Binh Thanh District).

Retail space in the non-CBD area currently accounts for 80% of the total supply in the city and the ratio will remain to be on the rise in the coming time, JLL said.

The current rental rate in the city retail market is US$46.2 per square meter per month, down 0.2% quarter-on-quarter and 0.7% year-on-year.

But in the non-CBD area, it is only at US$37.

According to JLL, though supply of retail space is booming in the suburbs, international brands and major financial players continue to prefer the downtown area.

Therefore, with the increasing supply of retail space outside the CBD area, the competitive pressure of the locations in the non-CBD area will be more fierce in future.

It warned that with the rise of e-commerce, retailers would need to focus on creating new shopping experiences to survive.

The Vietnamese e-commerce market grew by 25% last year and is expected to maintain this rate for the next three years, according to the Vietnam E-Commerce Association.

Singaporean, Vietnamese businesses foster connectivity

A conference on Singapore-Vietnam business connectivity was held in Ho Chi Minh City on October 15, drawing representatives of 12 Singaporean businesses including two groups - Sembcorp and NTUC, which are on a Vietnam trip from October 15-19 to seek trade and investment opportunities.

Addressing the conference, Nguyen Thi Van Nga, deputy director of the Agency for Southern region of the Ministry of Industry and Trade, spoke highly of the close connectivity between Singaporean and Vietnamese businesses, adding that the event offers a chance for them to compare notes and transfer technology in order to improve the quality of services and accelerate investment and trade cooperation.

Ho Si Bao, director of Bapula Chocola Company, said he hopes that after the conference his company can seek partners to distribute chocolate products in the Singaporean market.

Daininal Sani Lim, a representative of the Singapore-Malaysia Chamber of Commerce and Industry, said that besides fact-finding tours at industrial groups and parks, the HCM city trade connectivity conference helped participants look for partners and investment opportunities

Bilateral trade and investment ties have developed extensively. Singapore has been one of the biggest trade partners and foreign investors in Vietnam since 1996. Total trade turnover increased by 8.9% to US$8.3 billion in 2017. Vietnam mainly exports computers and components, means of transport and spare parts, material plastics, crude oil and petroleum to Singapore.

HCM City upscale apartment sales much higher than Hanoi

Premium and luxury apartments in Ho Chi Minh City are seeing high absorption rates while those in Hanoi get few takers.

Realtor Vietnam, an association of Vietnamese real estate developers, said in a newly-released report that the absorption rate of premium apartments in Hanoi was 13% in the third quarter, while it was six times higher in Ho Chi Minh City at 78%.

The gap is even wider in the luxury segment, with the absorption rate in Hanoi at 2% and that of Ho Chi Minh City a full 100%.

Premium apartments are defined as those which cost VND45-VND70 million (US$1,925-US$2,995) per square meter, while luxury apartments cost from VND70-VND200 million (US$2,995-US$8,558).

“This shows that investors have high confidence in the potential for development of Ho Chi Minh City and expect an increasing number of rich Vietnamese and expats to reside there in the future,” the report said.

In another recent report, real estate consultancy Savills Vietnam had said that the high-end apartment market has become vibrant again after a “quiet” period.

It attributed this to Vietnam’s development, higher savings and foreigners being allowed to own 30% of an apartment buiding since 2015, Savills said.

The number of luxury apartments in Vietnam is seeing robust growth. In the third quarter this year it reached 1,322 units, 11 times higher than the second quarter, according to Realtor Vietnam.

Vietnam's steelmaker Hoa Sen to purchase hot-rolled coil from Formosa Ha Tinh

Vietnamese steel producers are looking toward domestic hot-rolled coil (HRC) in order to avoid more anti-dumping duties that could be imposed by the US.

Vietnam's steelmaker Hoa Sen Group has reached an agreement to purchase HRC from major Vietnamese integrated steel producer Formosa Ha Tinh (FHS) amid fierce competition, local media reported.

Challenges remain