Cooking gas price increases by $1.18

The price of gas in HCM City and the southern provinces spiked by VNĐ27,000 (US$1.18) for a 12kg canister of cooking gas with effect from August 1.

Accordingly, the retail price for consumers will increase to VNĐ300,000-305,000 per 12kg canister. 

Gas traders explained that the latest hike was on account of the $85 per tonne increase in the world gas price this month over the previous month’s level, taking it to $440 per tonne. 

Therefore, the price of domestic gas had to be adjusted in accordance with the market.

Suppliers and distributors announced the increase in price on July 31. 

Agents, gas shops and consumers in HCM City and the southern provinces have been informed about the new gas prices.

Vietnamese manufacturing PMI moderates in July

The Vietnam Manufacturing Purchasing Managers’ Index (PMI) moderated in July, with slower increases in both output and new orders, the latest survey from Nikkei’s IHS Markit showed on Tuesday.

“The composite indicator of manufacturing performance dipped to 51.7 in July, down from 52.5 in June. The reading represented a modest improvement in the health of the sector and one that was weaker than registered at the end of the second quarter,” Nikkei’s IHS Markit reported.

Both output and new orders increased at slower rates during July. The rise in production was the weakest in the current nine-month sequence of expansion.

New orders have risen continuously since December 2015 and increased solidly in July. This was also the case with new business from abroad.

“With new orders increasing to a greater extent than output, backlog of work accumulated and stocks of finished goods depleted. The rise in outstanding business was solid and the strongest since April 2011. Meanwhile, the marginal decline in post-production stocks was the first in three months as firms used stocks to help fulfill orders,” the survey showed.

Rises in new orders and higher production requirements led manufacturers to increase staffing levels for the sixteenth successive month. The rate of job creation was little-changed from that seen in June.

Andrew Harker at IHS Markit, which compiles the survey, said: “Output growth in the Vietnamese manufacturing sector was the weakest in nine months during July, continuing the recent trend of more moderate expansion relative to earlier in 2017. New order growth also slowed. It’s not all doom and gloom, however. The rate of expansion in new orders remained solid. Meanwhile, the fact that backlog of work rose at the fastest pace in over six years and inventories of finished products fell suggests that firms will be looking to increase their output in coming months.”

According to the survey, the rate of input cost inflation moderated and was the weakest since June 2016 as some panellists reported falling market prices. The latest rise in input prices was much slower than the first quarter of the year. With cost pressures easing, manufacturers lowered their output prices again in July, for the third successive month. The rate of decline quickened slightly, but remained modest.

 “The recent price trends were also repeated in July. Cost inflation has eased sharply since March’s recent peak, and was the slowest in over a year. Meanwhile, firms lowered their output prices for the third month running accordingly,” Andrew Harker said.

Reports of stock shortages at suppliers were a key factor behind the further lengthening of delivery times. That said, the rate of deterioration in vendor performance was marginal, and the least marked in the current six-month sequence of lengthening lead times.

Manufacturers upped their purchasing activity in July, but as with output and new orders, the rate of expansion weakened. The latest increase was the slowest in 17 months. Stocks of purchases rose slightly, with the rate of accumulation easing for the second month running.

“Manufacturers remained confident that output will increase over the coming 12 months, thanks to predictions of higher new orders and planned expansions. Sentiment rose to a three-month high as close to 50 per cent of panellists predicted an increase in production,” the survey showed.

VN firms to show off products at ASEAN-India Expo in Thailand     

The High Quality Vietnamese Product Business Association will lead a business delegation that will participate in the 2017 ASEAN-India Expo and Forum to be held in August in Bangkok.

Organised by the Thai Ministry of Commerce, the event is meant to strengthen the strategic partnership between ASEAN and India and enhance trade, investment and tourism connectivity between them.

The event will have nearly 160 booths.

The Vietnam Pavilion will promote the country’s image as well as specific cultural, culinary and tourism features, and introduce Vietnamese products with geographical indication status, national cuisine programmes, organic products, and porcelain.

The national pavilion will also showcase 44 producers who make products that qualify as “high-quality Vietnamese goods - integration standards”.

There will also be individual booths set up by 10 leading Vietnamese firms -- in sectors like dairy, cocoa, processed foods, and foods by Vinamilk, Vinamit, Co May, Bích Chi, and Vietnam Cacao and in others like ceramics, stationery, footwear, plastic, electric lights by Minh Long, Thien Long, Dien Quang, Qui Phuc, and Biti’s.

Four Cuu Long (Mekong) Delta provinces – An Giang, Ben Tre, Can Tho and Dong Thap, collectively known as ABCD Mekong -- will introduce their specialities like coconut masks, dried lotus seeds, and green skin pomelos.

The association will also organise an international conference on “Promoting Trade between Viet Nam and Thailand: Where are the Market Opportunities for Businesspeople of the Two Countries in the Current ASEAN Context?” and a meeting between Vietnamese firms and Thai and international distributors and importers.

The Thai Commerce Department will invite dozens of importers and distributors like Berli Jucker Public Co. Ltd, CP ALL Public Company Limited, Ek-Chai Distribution System Co, the Mall Group, and Foodland Supermarket to connect with Vietnamese businesses at the event.

The event will be held from August 2-5 at the Queen Sirikit National Convention Centre. 

Seafood exports estimated at 8 bln USD in 2017

Vietnam’s export turnover of aquatic products is forecast to reach 8 billion USD in 2017, up 14 percent year on year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

The sector saw a slight increase of nearly 5 percent in the first quarter 2017, and a strong surge in the second quarter, thanks to the growth in key export products, including octopus by 50.8 percent, tuna by 18.9 percent, shrimp by 15.6 percent, and tra fish by 6.1 percent.

July export was estimated at 714 million USD in July, raising the total in the first seven months of this year to 4.32 billion USD, up 17 percent and 15 percent year-on-year, respectively.

Two-digit growth was seen in the key export markets, like Japan, China, the Republic of Korea, Russia, Canada, and Brazil, mostly thanks to increase in the exports of shrimp. However, a remarkable fall was recorded in the US and Australia.

According to VASEP, export turnover of aquatic products is expected to continue growing in the remaining months of the year, however, it will be affected by difficulties in the US market.

HCM City seeks to trace pork origins     

Starting on Monday, only pork with traceable origins is ostensibly allowed to enter HCM City’s two wholesale markets, but inspections by authorities found that only around 13 per cent of the pork in the markets actually had clear origins, according to the Department of Industry and Trade.

The department in collaboration with other agencies and the managements of Hoc Mon and Binh Dien markets checked the pork that was entering them.

Nguyen Ngoc Hoa, deputy director of the department, said on July 30 night and July 31 morning, for instance, some 8,400 pig carcasses were brought in, but only 1,205 had traceable origins.

He said that 35 per cent had information entered in their rings by farmers, but the rate falls to 21 per cent when they leave slaughterhouses following lapses by veterinary staff, and falls further to 13 per cent when they reach the two wholesale markets. 

The city’s programme to trace the origin of pork involves four locations – farms, abattoirs, wholesale distributors, and retailers.

It has a connected information system, and if any part of the chain does not record information, consumers cannot check the origin of the meat, Hoa explained.

Around 85 per cent of the pork consumed in the city market is supplied from other cities and provinces, and the city is the only locality in the country to have such a programme.

So the city can only request authorities in other provinces to help in this regard, he said.

To improve the situation, relevant city agencies should co-operate with their counterparts in other provinces to persuade pig farmers to record information about pigs and instruct abattoirs and traders to accept only pigs with clear origins, he said.

The department has called on the city government to take a tougher line with violators.

Hoa said pork sold through modern trade channels is properly regulated. Thus, if the portion sold through traditional retail channels – which get their pork from the two wholesale markets – is also tightly controlled, all the pork sold in the city would have traceable origins, he said. 

Steel production steadies, room for growth     

Despite stagnation in the second quarter of 2017, Viet Nam’s steel industry managed to turn a profit in the first seven months of the year, led by a rebound in construction and real estate demand.

According to reports released by the Vietnam Steel Association (VSA), the domestic steel market in the first seven months of 2017 grew significantly from the same period last year. In particular, 9.5 million tonnes of steel was produced, with 7.8 million tonnes sold domestically, both increases of 11.7 per cent.

Nonetheless, individual businesses reported second-quarter income below the same period in 2016, including the Tien Len Steel Corporation with income of VND178.8 billion (US$7.9 million), down 30 per cent year-on-year and the Thai Nguyen Steel Corporation at VND83.34 billion, down nearly 48 per cent.

In total, accumulated post-tax income for Viet Nam’s steel industry in Q2 of 2017 was VND1.916 trillion, down 32 per cent from 2016.

Few firms reported an increase in revenue in the period, with one example the Vietnam – Italy Steel JSC recording more than VND3.9billion, 70 per cent higher than 2016’s number.

At least 76 steel making firms noted in their financial report for the second quarter of 2017 that their post-tax income fell, including big names like Hoa Phat Steel JSC or Nam Kim Steel JSC.

The drops can be attributed to exchange rate fluctuations and hikes in cost, pushing output prices higher, explaining the fall in revenue despite the production increases.

For instance, SMC Trading Investment Joint Stock Company reported a 40 per cent increase in selling price, with revenue falling 73 per cent to VND45 billion from 2016’s second quarter.

Similarly, the Vietnam – Germany Steel JSC suffered from a change in exchange rate between Vietnamese dong and US dollar, as it increased from VND22,275 per one dollar in 2016 to VND22,750 in 2017, making the company’s revenue drop 50 per cent to VND12 billion in the second quarter of 2017.

However, thanks to many firms earning big in the first quarter of 2017, with at least nine steel producers reporting an increase in revenue of up to 600 per cent from 2016’s first quarter, the total accumulated post-tax revenue for the first six months of 2017 VND4.3 trillion, an increase of 9 per cent from the same period in 2016.

The VSA report also cited the introduction of the Ministry of Industry and Trade’s safeguard measures for Vietnamese steel industry driving the rise in production and selling steel and steel related products.

Nguyen Van Sua, VSA Vice Chairman, said at a conference earlier this year that in the next five years, the growth rate for the steel industry will hit 12 to 15 per cent annually, with the rest of 2017 set for rising productivity.

However, the VSA warned of the need for higher technology products, and an improved intersectoral value chain, diversified products and more efficiency to cut costs and help export competitiveness. 

JETRO connects food and agriculture enterprises

The number of Japanese restaurants has been rapidly increasing in the two major cities of Hanoi and Ho Chi Minh City in recent years as domestic food consumption becomes more diversified.

Vietnam is becoming a promising market for exported food products from Japan, the “Business Matching of Japanese Agriculture, Fisheries, and Food in Vietnam” seminar, held by the Japan External Trade Organization (JETRO) a few days ago in Ho Chi Minh City, heard.

According to figures for 2016, Vietnam ranked seventh among countries where Japan exported agricultural and food products, by turnover. As a result, JETRO has organized many business connection programs between Vietnamese and Japanese enterprises in Vietnam, contributing to boosting trade relations between the two countries.

In 2015, it organized a connection program for Sake and one for the agriculture, forestry, and fishery sector in 2016. In 2017, based on the rapid growth of the two countries’ enterprises, JETRO a second matching business seminar for the agriculture, forestry, and fishery sector, attended by 35 Japanese enterprises, or double the number in 2015 and expressing the rising appeal of Vietnam’s food market among Japanese companies.

Mr. Hideo Ogata, Business Development Manager at the Itsukifoods Co., said it specializes in producing noodles and began to export products to Vietnam three years ago, some of which can be found at the AEON and FamilyMart chains. “Vietnam is a market of potential for Japanese food producers as the country has a population of 90 million, most of whom are young,” he said. “We would therefore like to expand our businesses in the market and bring more offerings to Vietnamese consumers in the future.”

In November 2016, JETRO joined hands with FamilyMart and Ministop to hold the Japan Fair in Vietnam, which introduced around 70 Japanese food and beverage products in convenience stores, of which one-third continue be sold in the chains.

At the seminar, many Japanese companies said that with a population of 90 million and a young population structure, demand for food, especially clean and safe food, has been increasing in Vietnam and presents opportunities in the market.

According to industry insiders, many major retailers, convenience stores, as well as Japanese restaurant chains are now present in Vietnam, which is a good chance for businesses in Japanese goods, agriculture and food products, and processed seafood.

Bao Viet's insurance revenue up 25% in Q2

The Bao Viet Group (Stock code BVH) has released its financial report for the second quarter and first half of 2017.

Net revenue from its insurance business increased 25 per cent, reaching VND10.93 trillion ($480.92 million) in the second quarter, with gross profit at VND600 billion ($26.4 million). Profit from financial activities reached VND2.2 trillion ($96.8 million), up 31 per cent, with after-tax profit at VND709 billion ($31.19 million).

Total consolidated revenue in the first half grew 28.8 per cent year-on-year, while after-tax-profit reached VND1.1 trillion ($48.4 million), up 56 per cent year-on-year and accounting for 92.3 per cent of the annual plan.

Baoviet Life continued to record high growth in the first half, with total revenue growth of 31.4 per cent year-on-year. Insurance premiums increased 30.5 per cent and it continued to lead the market in terms of new revenue growth, with 35 per cent in 1H/2017.

Bao Viet Insurance’s revenue increased to 22.3 per cent of total revenue in the first half 2017.

Original premium income continued to maintain double-digit growth, of 22.43 per cent. Revenue from financial activities accounted for 71 per cent of the annual target and increased 15.3 per cent in 1H/2017

As at June 30, total asset managed by the Bao Viet Fund stood at VND41.3 trillion ($1.81 million), up VND3 trillion ($132 million), or 8.5 per cent, compared to the end 2016 and 8.8 per cent year-on-year.

Bao Viet Securities’ revenue reached 66.1 per cent of the annual plan, soaring 42.8 per cent year-on-year. After-tax-profit was 60.8 per cent of the annual plan.

The Bao Viet Group has also scheduled a 10 per cent dividend payment for August 2 worth a total of VND680 billion ($29.92 million).

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

Singaporean group wants to build high-class hospital in Binh Dinh

Singaporean CPG Corporation wants to build a high-class hospital with around 150 beds in Quy Nhon City, Binh Dinh province, said Jimmy Tsen Chee Nam, General Director of CPG Vietnam at a recent meeting with Phan Cao Thang, vice chair of the provincial People’s Committee.

During a working tour of Binh Dinh on July 7 to seek investment opportunities, Mr Chee Nam said CPG is one of the leading development professionals in the Asia-Pacific region, providing building and infrastructure development and management services.

CPG Vietnam is taking part in more than 100 infrastructure development projects and the design of some airports, hospitals and hotels.

CPG also wants to cooperate with Binh Dinh province in medical personnel training in order to develop Quy Nhon City into a destination for health tourism, said Mr Chee Nam.

For his part, Mr Thang appreciated the goodwill of CPG and believed that it will join some projects in the province, especially in urban development.

He pledged to create favourable conditions for the group to participate in local projects in an earliest time.

Nghi Son 2 thermal power plant to be kicked off by year-end

The construction of the $2.8-billion Nghi Son 2 thermal power plant, located in the central province of Thanh Hoa, will start by the end of this year.

It was announced by the investor, namely the consortium of Japanese company Marubeni Corporation and Korea Electric Power Corporation (KEPCO), at the working session between the investors and representatives of Japan Bank for International Cooperation (JBIC), Export-Import Bank of Korea (K-Eximbank), and leaders of the Thanh Hoa People’s Committee.

Earlier in June, the Ministry of Planning and Investment granted the investment certificate for the investor. Accordingly, Nghi Son 2 is the first international tender for a large-scale coal-fired power plant in Vietnam. The project is going to be carried out under the build-operate-transfer (BOT) format.

The $2-billion plant will be located in the province’s Nghi Son Economic Zone. It will have a capacity of 1,200 megawatts, produced by two units of 600MW each. 

Once completed, the consortium will operate the thermal power plant for 25 years before handing ownership over to the Vietnamese state.

By July 28, 2011, three tenders including EDF, Marubeni-Kepco, and Suez Tractebel-Mitsui, had submitted bid offers for this project. In 2013, former Prime Minister Nguyen Tan Dung issued a decision allowing the Ministry of Industry and Trade to offer Marubeni-Kepco Consortium the BOT contract.

The consortium of Marubeni-Kepco held a ground-breaking ceremony of the Nghi Son 2 power plant in September 2015, with its first turbine expected to come online in September 2019. The plant is projected to be fully operational the following year.

This project is Marubeni’s first international partnership programme (IPP) business in Vietnam. In addition to supplying power plant facilities, which account for approximately 20 per cent of Vietnam’s total generation capacity, Marubeni intends to expand its IPP business in Vietnam and take part in the development of power generation facilities to support economic growth, the firm stated on its website.

Transforming business households into firms difficult to meet target

HCMC has set a target of establishing 60,000 enterprises in 2017, of these 20,000 will be transferred from business households. However, agencies and districts said that it would be difficult to gain the target.

By 2020, HCMC aims at having 500,000 enterprises basing on two sources including naturally established companies and business households.

Statistics from authorized agencies show that the city now has 280,000 individual business households. Of these, 14,800 households issue invoices, over 21,200 ones with revenue topping VND100 million a month do not issue invoices. Business households are contributing about 2 percent to the city’s budget.

According to Decision 1482 of the city People’s Committee to develop 500,000 enterprises by 2020, the city has assigned norms for districts to mobilize about 10 percent of business households in their localities to transfer into enterprises.

In 2017, District 1 will have to call on 2,324 households to upgrade into companies, District 5 mobilizes 632 households, District 12 1,161, Binh Tan 1,754, District 7 1,531, Binh Thanh 1,462, Thu Duc 1,492 and Go Vap 1,333.

The city has carried out many policies to encourage and assist businesses households to transform into enterprises. City leaders have affirmed their point of view to create advantageous conditions for all types of businesses, not mobilize not force households to transform into enterprises, not follow quality but focus on quality, efficiency and sustainability.

Districts said that it would be difficult to reach the target of transferring business households into enterprises. The number of transformed households has so far reached 100 at the highest in some districts while other districts have reported tens of households.

The owner of a food shop in Xo Viet Nghe Tinh street, Binh Thanh said that the district had popularized the policy of transforming business households into enterprises. It sounds suitable with items sold at her shops because she will receive tax deduction if having input invoices. Still the transfer brings her shop some problems in tax declaration and tax levels might be different. Meanwhile, she and her daughter has run the shop for the last many years and just simply pay tax twice a year.

Groceries have been able to compete with other modern business types thanks to flexible prices and low costs. Upgrading into enterprises will cost increase making it difficult to compete, she added.

Mr. Do Ba, owner of an aluminum and glass shop which has been changed into company many years ago, said that the transfer brings a complicated human resource than a shop but he has been familiar with that. The important matter of enterprises after transforming is seeking new partners, expanding size and raising revenue unless the transfer will not be efficient.

Sharing the same view, many business households said that the problem is benefits of the transfer and the development possibility of enterprises afterwards.

Mr. Phan Duc Hieu, head of the Central Institute for Economic Management, said that in nature, business households and small enterprises are one. But current policies have discriminations among them. Business households face many limitations in business rights, for instance, they are just permitted to register business at one location, operate in their districts, not open branches or offices and face difficulties in capital mobilization.

Despite these, business households still have advantages compared to enterprises. Companies take at least 24 days to start business, 60 months to close down and 540 days to pay taxes. Establishment cost of business households account for only 50 percent of enterprises.

Business households have only six types of bookkeeping while small and medium enterprises have tens. They just pay excise tax not VAT or personal or corporation income taxes. It is also easy to recruit employees for businesses households. That why they have been afraid of upgrading into enterprises.

Experts say that it is time to reform business environment and create better conditions for small and medium enterprises to encourage residents to start business under the model of an enterprises rather than business household.

Economic levers should be used instead of administrative orders to boost business households’ transfer into enterprises. The most important thing is that business households must see benefits bigger than costs while transforming. Of these, tax exemption will be the core factor to nurture newly transformed enterprises to grow up.

HCMC to guide enterprises to enjoy benefits from FTA

Vietnam signed 12 free trade agreements (FTA) with 56 nations and economies in the world and ten agreements have been taken in effectiveness.

In the period of 2017- 2020, the most of tax incentives from the free trade agreements focused on a huge tax reduction or deletion.

If Vietnam takes opportunities from FTA, the country could increase export turnover into foreign markets.

In order to help Vietnamese enterprises to update information as well as enjoy tax incentives, the Ho Chi Minh City Trade and Industry Department in collaboration with Ministry of Trade and Industry respectively will hold two seminars named “FTA between Vietnam and Europe for footwear” and “Taking advantage of FTA tax incentives in garment and textile” at Ho Chi Minh City Conference Center from August 2-3.

The seminars will guide how way to report and prepare for documents to gain preferential certificate of origin (C/O), and provide guidlines to overcome difficulties in targeting C/O.

More investment funds in the offing

The stock market is expected to lure more investment funds as many fund managers are launching new products to meet increasing demands of investors.

Thien Viet Asset Management Company, which is 99% owned by Thien Viet Securities Company, last Friday announced the establishment of Thien Viet Growth Fund 2 (TVGF2) at the first anniversary of the Thien Viet Growth Fund (TVGF1).

According to the firm, TVGF2 is a closed-end fund with a size of over VND200 billion. The fund will be active on the Hochiminh Stock Exchange in three years.

The new fund is expected to debut in October with the same goals as TVGF, such as seeking long-term profitability and maximizing investor returns.

Nguyen Duy Quang, investment director of the fund manager, said the new fund aims to succeed positive results earned by TVGF1 and seek profits from the local stock market.

According to industry insiders, the fund management industry is improving while investor demand is increasing because of the positive outlook of the stock market. This has resulted in the establishment of new investment funds.

Earlier, PVI Asset Management Joint Stock Company introduced PVI Infrastructure Investment Fund as a member fund with total chartered capital of VND520 billion and an operation duration of five years. The fund focuses on stocks of property management and development firms with an estimated profit margin of 9.5% per year.

Along with the PVI Opportunity Fund, the company is managing two member funds with combined capital of over VND1.5 trillion. By managing an investment portfolio of nearly VND10 trillion, it is one of the largest asset management companies in Vietnam.

Meanwhile, SSI Asset Management Company earlier this month launched an initial public offering for the SSI Bond Fund with the initial minimum capital mobilization of VND50 billion. The fund is expected to start operating in mid-August, focusing on individual and institutional investors wishing to get safe and long-term portfolio growth.

The bond fund is the third domestic exchange-traded fund managed by the firm, after the open-end SSI Sustainable Competitive Advantage Fund and the ETF SSIAM HNX30 Fund.

The investment portfolio of the bond fund will be structured towards diversification, combining low-risk and high-risk assets to achieve long-term investment objectives, as well as to ensure financial security. The new fund will allocate an expected investment of 80% on bonds, certificates of deposit and fixed-income instruments, and an investment of 20% in shares, including listed stocks and stocks that are in the preparatory process for listing.

Besides, Manulife Balanced Fund run by Manulife Vietnam Asset Management Company and VietinBank Bond Investment Fund managed by VietinBank Capital have recently been licensed.

Currently, the market has around 30 investment funds, including nearly 20 open-end funds, closed-end funds, member funds, exchange traded funds and property investment funds.

According to some experts, domestic funds are of smaller scale than foreign funds. They meet numerous difficulties in issuing fund certificates to individuals while founders remain the biggest certificate holders.

Satrafoods to open more convenience stores in Mekong Delta

The Saigon Trading Group (Satra) will open more convenience stores in the Mekong Delta, having operated 10 stores in Can Tho City.

Talking with the Daily at the opening ceremony of its 10th store in Can Tho last Friday, Tran Van Bac, deputy general director of Satra, said the group has focused on expanding business in the delta since the opening of its first store there on January 18.

As Satra convenience stores are highly welcomed in Can Tho, the group is planning to open more stores in Ben Tre and Vinh Long this year, five in each province. The group had already opened 123 stores in HCMC, Bac said.

In the Mekong Delta, Satra will sell clean and fresh pork, chicken and beef supplied by Vissan, VietGAP-standard vegetables, fresh local fruits and those imported from the U.S., France, New Zealand, the Netherlands and South Korea. Some 80% of goods will be sold at competitive prices at Satra stores.

Recently, Satra has brought to its stores some of its own semi-processed food such as fish, meat and soup. Stores in the Mekong Delta will sell some other local specialties like Ca Mau dried shrimp and Ben Tre coconut candy.

Long Son Petrochemical Complex yet to operate in next five years

Thailand’s Siam Cement Group (SCG) is still pursuing the Long Son Petrochemical Complex project in Ba Ria-Vung Tau Province, but the complex will not start operation until 2022, the group said in a press release.

Roongrote Rangiyopash, CEO of SCG, said the group will continue to expand business in the ASEAN market, and the Long Son Petrochemical Complex is a sizable project in Vietnam which SCG has been pursuing for years. SCG now holds a 71% stake in the US$5.4-billion project while its local partner Vietnam Oil and Gas Group (PVN) holds the remaining 29%.

The Long Son Petrochemical Complex would be able to turn out 1.6 million tons of olefin per year and is expected to start operating in 2022 after about five more years of construction.

In the first quarter of 2017, SCG acquired a 25% stake in the project from Qatar Petroleum, raising its holding to 71%.

In particular, Vina SCG Chemicals, a wholly-owned subsidiary of SCG in Vietnam, signed a contract to take over QPI Vietnam Limited, a subsidiary of Qatar Petroleum, to get the entire 25% stake worth US$36.1 million of the latter in Long Son Petrochemicals Co Ltd, the owner of the petrochemical project.

The project, also known as the Southern Petrochemical Complex, would be developed on a total area of over 460 hectares in Long Son Petroleum Industrial Park with an initial cost estimated at US$4.5 billion. The project was kicked off in 2008 and scheduled for completion by the end of 2012. However, it has fallen behind schedule due to slow site clearance, change of partners and other difficulties.

As of late 2013, SCG had held a 28% stake in the project while the remainder belonged to Qatar Petroleum, PVN and the Vietnam National Chemical Group (Vinachem). However, Qatar Petroleum and Vinachem withdrew.

Despite the latest assertion by SCG, S&P Global Platts, a leading global energy and commodities information provider, said the Thai group’s target to put the complex into operation in 2022 is unachievable, citing PVN general director Nguyen Vu Truong Son as saying that the project lagged behind schedule because the Vietnamese investor has not been able to secure sufficient funding for the project although site clearance has been finished and the engineering, procurement and construction (EPC) contractor has been selected.

Government advised to speed up restructuring process

The just-established Economic Advisory Group suggested the Government speed up the economic restructuring process to increase the nation’s gross domestic product growth rate to over 7%, according to the Government news website.

Prime Minister Nguyen Xuan Phuc on Saturday held his first working session with the Economic Advisory Group at the Government Office, which was established on the same day.

According to Vu Viet Ngoan, former chairman of the National Financial Supervisory Commission, the Government’s economic restructuring process should be quickly revved up.

To achieve an economic growth rate of above 7%, Vietnam needs to enhance investment efficiency and labor productivity, in addition to improving supply to increase the potential output of the economy and not relying solely on public investments and the extraction of natural resources, he said.

Ngoan recommended that the Government take into account two basic contents including the removal of difficulties for enterprises and the improvement of the State corporate sector.

Meanwhile, Vu Thanh Tu Anh, director of research at the Fulbright Economics Teaching Program, said macro balances of the economy such as saving-investment, the balances of payments and budget are approaching their limits. The expert also stressed the need to restructure the economy with a focus on increasing productivity in large economic hubs, such as Hanoi and HCMC.

Economic expert Tran Du Lich, meanwhile, said the best solution for the economy is raising the aggregate demand.

Deputy Prime Minister Vuong Dinh Hue said the group’s suggestions are in line with many solutions being applied by the Government, indicating that the solutions are on the right track.

Inter-bank rate hits new record low of 0.5%

Inter-bank lending interest rates have continuously slipped to hit a new record low, according to the latest monetary report by Saigon Securities Incorporation’s (SSI) Retail Research.

The rates for overnight loans in the inter-bank market on Friday declined to 0.5 per cent from 0.82 per cent on Monday, the lowest level since October last year.

The rates for one-week and one-month loans also dropped by 13 basis points to 1.14 and 2.29 per cent, respectively

Thanks to the good liquidity, the central bank last week issued bills worth more than VNĐ40 trillion (US$1.75 billion) with a yield of 0.3 per cent against 0.5 per cent in the previous week.

During the week, the central bank withdrew VNĐ2.5 trillion from the banking system.

Natural gas distribution businesses form strategic alliance

Tokyo Gas Asia Pte Ltd, a wholly owned subsidiary of Tokyo Gas Co, Ltd, has acquired a 24.9% equity interest in PetroVietnam Low Pressure Gas Distribution JSC, a subsidiary of the PetroVietnam Gas JSC.

Along with the equity interest acquisition, Tokyo Gas Asia and PVGas D have agreed upon a strategic alliance under which the Tokyo Gas Group will utilize its technologies and expertise in such areas as demand development to enhance the business value of PVGas D.

The Tokyo Gas Group announced it would continue to utilize its technologies and expertise in total energy businesses on behalf of customers operating in Southeast Asia and North America, helping them with energy solutions, while engaging in local infrastructure development.

The Tokyo Gas Group is also taking up the challenge of value chain development in each region, including through joint ventures with local energy companies.

Digiworld records high profit in Q2

Electronics distributor the Digiworld Corporation (DGW) has released its financial report for the second quarter and first half of 2017, with second quarter after-tax profit reaching nearly $900,000, up an impressive 77 per cent year-on-year.

Sales in the second quarter, however, reached just $34.8 million, down 16 per cent quarter-on-quarter. Cost price also fell 17.5 per cent, which led to a rise of 14 per cent in gross profit, to $2.57 million.

In the first half it recorded revenue of $68.3 million and after-tax profit of $1.28 million, down 11 and 10 per cent year-on-year, respectively, for an earnings per share (EPS) of $0.03, and representing 52.7 per cent of the annual revenue plan.

According to DGW, significant growth rate in the second quarter’s after-tax profit was mostly driven by the company’s streamlined restructuring strategy to accelerate efficiency.

It changed its product structure in the phone sector, focusing on mobile earth station (MES) product lines to boost profit margins to 7.4 per cent. This includes profits from Xiaomi products, which began to gain recognition in the second quarter.

Moreover, the office equipment sector continued to grow strongly and increased its contribution to gross profit. In addition to steady growth in current product lines, new products lines such as those from LG also contributed to the company’s profit in the second quarter.

Enterprise management costs fell, meanwhile, due to efficiencies from human resources restructuring with more specialized and streamlined strategies, preparing for long-term business expansion plans. Good debt management also optimized the use of cash flow, saving on interest costs.

One of the country’s leading electronics distributors, DGW previously announced its new business strategy of jumping into the lucrative healthcare product retail market by aiming to begin functional food distribution in mid-2017.

Mr. Doan Hong Viet, Chairman of DGW, told VET that according to the plan the company will spend around $2 million on extending its portfolio by investing in human resources and sales outlets along with warehousing improvements. It has targeted the new business category to earn profit by 2018 and contribute to the company’s revenue of about nearly $4 million in 2017.

Earlier this year, DGW entered into a partnership with Xiaomi mobile phones to distribute its products in Vietnam. Describing the agreement as a long-term strategic partnership, the Chinese company said that DGW would distribute, market, and provide after-sales support for its offerings in Vietnam, including smartphones and its Mi Ecosystem products.

Vietnamese firm signs trade MOU with Iranian company

An Việt International Operation Investment JSC and Iran’s Rahavaran Tosee Mihan company signed a Memorandum of Understanding (MoU) last week to achieve a two-way trade volume of US$500 million by 2018.

Under the MoU, the two companies will implement two-way export-import activities, in which An Việt will export Vietnamese fruits and agricultural products such as banana, rice, coffee and pepper to Rahavaran Tosee Mihan, while the Iranian firm will export various local agricultural products to Việt Nam through An Việt.

The two sides have set a goal of achieving an export-import volume of US$250 million each.

Currently, An Việt is promoting the establishment of a fish sauce factory and a collagen drinking water production plant in Iran for export to Việt Nam and other countries in the region.

Ninh Thuan invests 1.2 billion VND to agricultural industrialisation

The southern province of Ninh Thuan plans to invest 1.2 billion VND (52,800 USD) to encourage the use of technology and industrial equipment in farming in the locality.

The sum will be used to implement 11 projects in different areas, including helping farmers purchase machines for farm produce processing, assisting rural firms to join trade fairs in other localities, improving management capacity and product quality and vocational training.

According to the provincial Centre for Industry Encouraging and Trade Promotion, the province currently has more than 5,570 rural industrial production and trade facilities, including 179 companies and 5,391 household businesses, employing some 21,500 labourers.

The majority of facilities are small scale, with the average capital of a company about 21.9 billion VND, while that of a household business is 70.4 million VND and 80 million VND for each cooperative. Their access to capital and new technology is limited and growth is slow.

Director of the centre Vo Viet Hieu said that the centre will continue calling on businesses to replace outdated technology with modern and environmentaly-friendly models for greener production.

At the same time, rural industrial facilities will receive advice on investment information to expand their business in line with the development strategy of each locality, he said.

The province will also help the firms with administrative procedures, capital and land, while assisting them in improving their products’ quality through trade promotion programmes, added Hieu.

Taiwan's TTL to launch three beers in Vietnam

The Taiwan Tobacco & Liquor Corp. (TTL) is the latest contender joining Vietnam’s dynamic beer market, as it seeks to expand into Southeast Asia in line with the Taiwan’s New Southbound Policy.

“We are accelerating our pace to expand our reach in Southeast Asia,” TTL Vice President Mr. Chang Lei-min told the media after the opening ceremony of the Taiwan Expo in Ho Chi Minh City last week.

The company will choose a local distribution agent early next month and begin product shipments to Vietnam in early October, he said, adding that to differentiate itself from existing competitors, it will introduce three products: Golden Medal Taiwan Beer, Taiwan Beer Sweet Touch, and its pineapple flavored beer.

“We have not seen fruit-flavored beer in Vietnam,” Mr. Chang said. “This is an opportunity for us to grow in the market.” The entry into Vietnam follows the company’s penetration into the Philippines in January and Singapore in 2011. 

TTL will gradually increase its product portfolio in Vietnam and aims at a 1 per cent share of the market within three years. It will position itself as a rival of Heineken and Budweiser by selling its products at similar prices, of between $1 and $1.15 a can, Mr. Chang added.

To reduce costs and save on taxes, TTL plans to outsource production to a local brewery next year at the earliest and is also considering setting up a local brewery in the longer term.

As Vietnam is part of the ASEAN Free Trade Area, TTL plans to establish a subsidiary in the country next year to be able to export its products tariff-free to other ASEAN members, company President Mr. Tseng Chun-kai said in May.

An expanding middle class and youthful population helped drive a 300 per cent surge in beer demand in Vietnam since 2002, according to market researchers Euromonitor International, which estimates the market was worth VND147.2 trillion ($6.5 billion) in 2016. It predicts that per-capita consumption will reach 40.6 liters this year, making Vietnam the biggest consumer of the amber fluid in Southeast Asia.

Given the country’s appeal, international and domestic beer companies are vying for a stronger presence in Vietnam, which is set to be the next key battleground for international brewers as the government’s plan to dispose of brewery assets will leave the door wide open to foreign rivals, Euromonitor said in a report earlier this month.

“There aren’t many markets left that have the growth potential Vietnam has,” said Mr. John Ditty, Managing Partner of KPMG Vietnam’s Deals Advisory Unit.

Vietnam among ASEAN’s most dynamic economies: Ambassador

Vietnam is among ASEAN’s largest and most dynamic economies with robust growth reflected by its GDP in recent years, said Singaporean Ambassador to France Zainal Arif Mantaha on July 29.

Vietnam has seen rapid development in many areas, particularly the digital economy, the ambassador told Vietnam News Agency at the ASEAN Family Day in Croissy-sur-Seine city. 

He was impressed by Vietnam’s efforts and contribution to building ASEAN and strengthening cooperation between its members, he said, hoping the country will continue playing an important part in the bloc’s development. 

Speaking of ASEAN’s 50-year journey, he hailed the group’s dedication to stability and peace in Southeast Asia and enhancing partnerships in the entire region. ASEAN has made consultation and dialogue a principal for how its ten member states work together and with partners, Mantaha added.

In the past five decades, ASEAN has made fundamental achievements that will nurture its increased cooperation and development in the future, the diplomat noted.

On East Sea issues, he affirmed ASEAN’s confidence in the UN Convention on the Law of the Sea and the bloc’s regulatory frameworks, and voiced his support for freedom of navigation in Southeast Asia, which is part of an important global maritime trade route.

He believed that ASEAN countries will do everything possible to ensure regional stability and peace.

HCM City welcomes 23,000 newly established firms

 An additional 22,972 new enterprises were established in HCM City in the first seven months of the year with a combined registered capital of 297 trillion VND (13 billion USD).

Although the number of newly established enterprises only increased 12.2 percent over the same period last year, the registered capital increased 69.1 percent, according to the HCM City’s Department of Planning and Investment.

In addition, 33,521 businesses registered to change the nature of their business in the period with a total additional capital of 160.4 trillion VND (7 billion USD), a rise of 10.6 percent in the number of businesses and a surge of 40.5 percent in additional capital compared to the same period last year.

In total, newly registered and supplemented capital of the enterprises in the city in the past seven months reached 458 trillion VND (20 billion USD), up 57.8 percent over the same period last year.

Of the number of newly established enterprises, one-member limited companies have the highest proportion (58.4 percent) with 13,406 enterprises, followed by two-member limited companies (28.4 percent) with 6,527 enterprises, joint-stock companies (11.8 percent) with 2,710 enterprises, private enterprises (1.4 percent) with 326 enterprises and three joint-venture companies (0.01percent).

By sector, real estate has the most newly established businesses (39 percent) with total registered capital of 116 trillion VND (5.1 billion USD).

In addition, the retail, automobile repair and motorbike industries also accounted for a high proportion (17.7 percent) with total registered capital of 52 trillion VND (2.3 billion USD).

According to the Department of Planning and Investment, HCM City is continuing to implement many solutions to support and encourage household businesses to convert into enterprises.

To date, 849 household businesses have been transformed into enterprises in the city, mostly in Districts 5, 6, Binh Thanh and Binh Chanh.-

CPI experiences slight rise in July

Vietnam’s consumer price index (CPI) in July rose again by 0.11 percent, following the rebound of food prices, according to the General Statistics Office (GSO).

The rise was reported after the index slid or remained unchanged for three months. In April, the monthly CPI remained unchanged, and it dropped by 0.53 percent and 0.17 percent in May and June, respectively.

Compared to the same period last year, the index increased 2.52 percent, the office reported.

However, the monthly rise of CPI in July was still the lowest in the past nine years. The figure from 2008 to 2016 was between 0.13 percent and 1.17 percent.

According to deputy director of GSO’s Consumer Price Index Department Do Thi Ngoc, the increase in CPI for July was mainly driven by the 3.19 percent price hike of food, including the increase in the price of pork, following six-months of declining prices, and the price rise in vegetables due to the impact of rainstorms and floods. 

Pork prices are from 40,000 VND to 49,000 VND (1.8-2.1 USD) per kilo, increasing from 25,000 VND per kilo of the last three months following programmes to stimulate demand and to control the number of pigs raised by farmers, according to the Ministry of Agriculture and Rural Development.

Besides this, another reason was the higher prices of housing and construction materials, which was due to the tightened management of sand mining in localities, resulting in a higher price for sand, Ngoc said, adding that the good item saw a rise of 1.07 percent in July.

The 0.46 percent rise in medicine and health care services also contributed to the country’s average CPI, she said.

In addition to this, the entrance exams to the 10th grade and the national high school graduation exams held in July helped boost the demand for dining out and beverages, contributing to the CPI increase. The good item rose by 0.54 per cent in July.

Besides the above good items, July also saw another five out of the 11 groups of goods and services used to calculate the CPI posted price increases, including apparel, hats and footwear, up 0.04 percent; beverages and cigarettes, up 0.04 percent; education, up 0.05 percent; household equipment and appliances, up 0.09 percent; and goods and other services, up 0.73 percent.

Meanwhile, the remaining three groups of goods and services suffered price decreases, namely traffic, down 1.52 percent; post and telecommunications, down 0.06 percent; and culture, entertainment and tourism, down 0.03 percent.-

Japanese, Vietnamese enterprises seek cooperation opportunities

Japanese and Vietnamese enterprises in the areas of agriculture, fisheries and food gathered at a meeting in Hanoi on July 28, with the aim of seeking partners and business opportunities.

This is the third time the event has been held by Japan External Trade Organisation (JETRO) and the eventattracted the participation of 21 Japanese enterprises including nine that are approaching the Vietnamese market for the first time.

This year’s event focused on products that meet the demands of the Vietnamese people including farm produce, seafood, confectionery, wine, green tea and powdered milk.

At the meeting, Hironobu Kitagawa, chief representative of JETRO Hanoi, said that Vietnam and Japan share many similarities in culinary culture, therefore, the cooperation between the two sides take into account the culture of the two countries.

He noted that Japanese products are well-known for their brands and safety and will offer Vietnamese customers high quality products.

Vietnam is a country with a young population who are eager to enjoy new products thereby providing great potential for the development of Japanese products in Vietnam, Hironobu Kitagawa said.

Meanwhile, Japanese people also wish to purchase agricultural and food products from Vietnam but the Japanese market is demanding with strict requirements, particularly the requirements concerning the quality of products, Hironobu Kitagawa said.

Vietnam ranked seventh among the countries posting high import revenue of agricultural and food products from Japan in 2016.

Last year’s event attracted the participation of 63 enterprises with many large deals being signed in the trading of powdered milk.