VEI unveils most trusted brands in Vietnam

The Vietnam Enterprise Institute (VEI) on December 19 announced some 149 recipients of its trusted brand title in recognition of sustainable development of their brands based on the factors of benefiting the nation’s economy, environment, society and culture.

"Trust has always been an integral component of the fabric that makes up a successful business," said VEI Vice Chairman Tran Minh Khue.

"This survey allows us to help shed light on which Vietnamese businesses are complying with general accepted international standards for brand development and greatly helps to improve the competitiveness of the nation’s domestic businesses."

He said the selections were made based on the results of surveys of more than 12,000 business enterprises.  

Entertainment project to be probed for covering Nha Trang Bay in Vietnam

An entertainment project in the south-central province of Khanh Hoa will be dealt a tough hand following complaints against numerous violations, including filling up part of a national attraction.

Tran Son Hai, deputy chairman of the provincial People’s Committee, confirmed to Tuoi Tre (Youth) newspaper on Saturday that competent agencies will look closely into a rule-breaking recreation-sports complex called Nha Trang Sao, which stretches along the beach in Vinh Tho Ward, Nha Trang City.

The inspection would follow mounting public protests that the project developer has been scooping up coral before dumping rubble in a bid to reclaim a substantial part of the sea surface of Nha Trang Bay, a national attraction that is supposed to be kept intact.

Hai added that an earlier inspection had exposed the investor’s infringements, but the rule breaker would not rectify their wrongs and will thus be sternly penalized this time.

Also on Saturday, Mai Van Thang, deputy head of the provincial Department of Natural Resources and Environment, divulged that the local inspectorate have looked closely into the project developer’s compliance with rules on natural resources and environmental protection, but they have yet to arrive at any conclusion.

The current construction site belongs to Hon Chong-Hon Do Islets, considered national relics.

To make matters worse, the Nha Trang Sao project investor finished building an illegal seafood restaurant called Ocean Seafood Village early this year.

The Khanh Hoa People’s Committee then demanded the investor stop the infringement, but they have defiantly run the restaurant without being punished.

Ngo Phi Hung, board chair and general director of Nha Trang Sao Joint Stock Corp, which is the project investor, admitted to filling up a stretch spanning dozens of meters in Nha Trang Bay.

But Hung further explained that it is for building temporary dykes and roads for trucks to carry construction materials to the work site.

He claimed the entire volume of rubble will be removed from the bay upon the project’s completion.

Hung also said that the project, which is supposed to reverse pollution impacts on the water, involves dead coral removal and piling sand to create a man-made beach.

He asserted that the project had been approved by the Ministry of Culture, Sports and Tourism.

Hung acknowledged wrongdoing regarding the construction of the seafood restaurant, adding his company removed the restaurant’s sign on Saturday.

The Nha Trang Sao project, to stretch over a total area of 103,000 square meters, consisting of more than 44,000 and 59,000 square meters on land and sea surface respectively, broke ground in October 2014.

Land facilities comprise a park, a hotel, cafés, a speedboat wharf, aquatic sports areas and bathing sections, while coastal underground structures encompass areas offering recreation and cuisine services, a restaurant, a bar, karaoke and spa parlors, and a discotheque.

Experts urge start-ups to develop plan

Young people should work three to five years at organisations to understand how a business run before starting their own company, delegates said at the Viet Nam Young Leaders Forum 2015 held in HCM City Friday.

Organised by the Business Start-up Support Centre in collaboration with the HCM City Young Businesspeople Association and Viet Nam Youth Federation in HCM City, the forum attracted the participation of more than 600 young people and company executives. - VNA/VNS Photo Quy Trung

Tran Vinh Du, CEO of TNK Capital Partner and chairman of Viet Nam-America Vocational Training College, said people at start-ups should be patient.

"Start-ups usually have limited capital, so you need to prepare detailed plans to call for investors as well as specific plans on what you will do if you receive money from investors," he said.

"I have seen start-ups in Viet Nam that did absolutely nothing to prepare before trying to convince investors to fund them," he added.

Many young startups thought that their ideas were excellent and worthwhile, but as speakers at the forum said, ideas contributed only 1 per cent to success, while execution represented more than 90 per cent of success.

Nguyen Trung Tin, CEO of Trung Thuy Group and Dreamplex's founder, said: "The most important factor to help a start-up project succeed is market opportunities. If you have a good start-up idea but lack good market opportunities, it will be difficult to succeed."

He recommended that young people conduct market research before starting their own businesses.

Organised by the Business Start-up Support Centre in collaboration with the HCM City Young Businesspeople Association and Viet Nam Youth Federation in HCM City, the forum attracted the participation of more than 600 young people and company executives.

At the forum, Le Thi Tuong Vy, representative of the Business Start-up Support Centre, encouraged young people to consult the centre about their ideas so they can seek opportunities to convert their projects into reality.

Vietnam among ten countries with highest entrepreneurial spirit: report

Vietnam ranks 7th out of 44 countries surveyed on entrepreneurial spirit around world, announced a recent report on the issue carried out by the Amway Corporation in collaboration with German university Technische Universitat Munchen (TUM) and the market research company Gesellschaft fuer Konsumforschung (GfK).

The biggest-ever 2015 Amway Global Entrepreneurship Report (AGER) surveyed nearly 50,000 respondents in 44 countries. This year’s study focused on ‘Defining the Entrepreneurial Spirit’, including factors such as inquisitive spirit, desire to experiencing life and taking responsibility for future entrepreneurs.

Accordingly, Vietnam ranks seventh for entrepreneurial spirit, after Denmark, South Africa, Thailand, the UK, China and India.

Around 71% of respondents in Vietnam have a positive attitude towards business start-up, 89% of them wish to start their own business, 75% think that starting business is viable, and 67% express that they are less susceptible to social impacts on their decision to launch business.

The study also indicates that, groups from 34 and younger have the strongest desire to master a business. As age increases, startup desire decreases, but the middle-aged (35 to 49) are with the most confidence in running business because they have necessary resources and needed skills.

The research also identifies specific attitudes towards entrepreneurship. Factors related to income and independence are the motivation for entrepreneurship. Fear of failure is a major obstacle for more than two thirds of respondents for entrepreneurship, mainly due to fear of financial consequences of business failure. Generally, independent and self-improvement are the most compelling reasons for people to start startups. Resolving the issues may give potential entrepreneurs the impetus for them to start their business.

As a country of nearly 100 million people and in its golden demographic structure when the workforce outnumbered dependents, Vietnam has tremendous opportunities to accelerate development with the faster in entrepreneurship for all, particularly the youth force.

Amway released its first report on entrepreneurship in 2010. The initial survey focused on the European market. In 2013, the survey has been expanded worldwide, including 24 countries.

This year's report was conducted in 44 markets, through the form of direct interviews and telephone interviews, on nearly 50,000 people aged 14-99.

Tuna value chain project results disappoint

The first year of a four-year-long trial project on tuna fishing, buying, processing, and consumption has not yielded expected results, a recent meeting held in Khanh Hoa Province to review it heard.

Carried out by the Ministry of Agriculture and Rural Development in Binh Dinh, Phu Yen, and Khanh Hoa Provinces since August last year, the programme was aimed at efficiently and sustainably exploiting and using offshore tuna stocks to add value as part of efforts to industrialise and modernise the industry.

According to the Directorate of Fisheries, the project created linkages in the tuna value chain but they have been modest.

There was not much difference in terms of profits for both fishermen and businesses, discouraging both.

Deputy Minister of Agriculture and Rural Development Vu Van Tam said local authorities and other relevant agencies should focus on resolving problems to enable companies and farmers to develop co-operation models in all stages from fishing and buying to processing and selling.

Next year the project should focus on transferring modern exploitation and preservation technologies to local fishermen, and supporting businesses and fishermen in the import, transfer, and use of new technologies in tuna fishing, preservation and processing.

More than 91,300 tonnes of tuna was caught in the first 11 months of the year, the directorate said.

Exports of the fish fetched US$408.67 million as of November 15, a year-on-year decrease of 4.1 per cent. The US remained the biggest importer of Vietnamese tuna, followed by the EU, ASEAN, and Japan, it said.

Of the more than 2,000 tuna fishing vessels operating in the three provinces this year, 30 per cent incurred losses causing many fishermen to switch to fishing for other species.

Climate change and El Nino have pushed up the temperature of sea water, and tuna tend to migrate to the middle and the east of the Pacific Ocean.

This has caused stocks in the East Sea to dwindle, especially that of big-eye and yellow fin tunas.

Yen Bai aims to draw investors

The northern mountainous province of Yen Bai was willing to facilitate investors with top priority given to providing adequate electricity and water in addition to banking, telecommunications and information technology services.

Chairwoman of the provincial People's Committee Pham Thi Thanh Tra delivered this message during an investment promotion conference in Ha Noi on Monday.

Yen Bai planned to open more vocational training centres as a move to improve the quantity and quality of the workforce, she said, adding that the province also offered incentives in terms of land, workforce training and trade promotion.

In his speech at the forum, chairman of the Viet Nam Chamber of Commerce and Industry Vu Tien Loc spoke highly on the province's untapped potential, including those to develop hi-tech, mining, trade and service industries.

Deputy Minister of Industry and Trade Tran Quoc Khanh said foreign investors were mostly concerned about land and environment information as well as the realisation of commitments by the State and local authorities. Thus, if Yen Bai could better meet these demands, the province would then have advantages in attracting foreign investment.

At the conference, the provincial People's Committee licensed Japan-invested Nippon Zoki Viet Nam to develop a 30-ha rabbit farming and processing project, capitalised at US$78.6 million, in Thuong Bang La Commune, Van Chan District.

The province is now home to 21 foreign-invested projects, with a combined investment capital of more than $311 million. Most of these projects are involved in mineral resources mining and processing, and agro-forestry-fishery.

Seminar promotes VN-Thai trade

A seminar promoting Viet Nam – Thailand trade was held in the Cuu Long (Mekong) Delta city of Can Tho yesterday.

At the event, the Thailand Convention and Exhibition Bureau (TCEB) introduced the Thailand Extra Exhibition "Expand your business opportunities in ASEAN" and the Trade Promoter Reward Programme to participants.

TCEB Director Jaruwan Suwannasat said TCEB would work hard to boost bilateral trade via leading exhibitions in Thailand.

According to the TCEB, Thailand hosted a total of 103 international commercial fairs featuring food industry, agriculture, automation, and health care, in addition to infrastructure last year.

During the period, more than 2,400 Vietnamese visited exhibitions in Thailand, becoming the fourth largest source of arrivals from Southeast Asia.

Nguyen Phuong Lam, deputy director of the Viet Nam Chamber of Commerce and Industry's branch in Can Tho, said Viet Nam was the 11th largest importer of Thailand with goods accounting for 20.4 per cent of the total imports in the country.

Thailand is currently among top 10 investors in Viet Nam with over 300 valid projects. It predominantly sells polymer materials, motorcycles and spare parts, chemicals and steel to Viet Nam, while importing electrical household appliances, iron, steel, and crude oil, apart from fisheries.

The two countries are striving to lift two-way trade to US$15 billion by 2020.

Ha Noi promotes use of biofuel

The Ha Noi People's Committee has said local committees and other city agencies should use only the E5 biofuel, which contains five per cent ethanol, in their official cars.

The committee will stop reimbursing the bills for regular fuel purchases by offices and authoritative bodies being funded by the state budget from the beginning of next year. The committee also said its officials should use the biofuel in their personal vehicles.

The city's department of trade and industry has been asked to ensure stable and sufficient supply of the E5 biofuel to meet the market demand.

Bank's reputation impacts stock

The higher the communication reputation of banks, the higher their stock prices, the Vietnam Report Joint Stock Company said.

The company's report on the banking sector with the topic ‘Communication reputation and stock price fluctuations' released by the company yesterday said the reputation of corporates has been considered one of the decisive factors in forming risks or expectations. Investors believed that good investment opportunities would come from prestigious companies in the market.

Moreover, the reputation of businesses also conveys important information on growth potential in the long-term as well as their attractiveness to investment selection. Stock price fluctuation has been seen as one of the signs for the belief of investors towards the value of businesses.

The report said securities prices of the three most prestigious banks this year, which included the Bank for Foreign Trade of Viet Nam (Vietcombank), Vietnam Joint Stock Commercial Bank for Industry and Trade and Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank) have been on an upward trend.

Vietcombank top the list as its key business targets last year surpassed set levels. Its mobilised capital saw a surge with return on assets reaching 0.9 per cent and return on equity touching 10.5 per cent.

This meant that banks have not had bad news affecting their reputation, according to their shareholders and investors. In reality, the stock market has been an extremely sensitive place for information relating to listed companies.

This is the reason stock prices have been considered a relatively exact measure for a firm's reputation and reliability. On the other hand, a company's reputation could also have a significant impact on their stocks.

The report also said that the ranking this year saw some newcomers such as Tien Phong Bank (TPBank), Vietnam International Bank (VIB), Maritime Bank and PVCombank.

The company applied a media analysis in making these reports, through coding and analysing articles about 31 selected banks in the sector published in newspapers from July 2014 to June this year. Of the 31 banks, 26 had information about their development prospects in the future. This could be seen as a positive result for the banking sector's image and operations.

ACV announces upgrade to Noi Bai terminal T1

The Airports Corporation of Viet Nam (ACV) plans to upgrade domestic terminal T1 at Noi Bai International Airport, with expenditure expected to reach VND244 billion (US$10.84 million).

In a document recently sent to the Ministry of Transport, the company said it would expand the area of the terminal and repair the staircases, check-in desks and luggage conveyor belts.

The work will begin next June and be finished within two years, helping increase the capacity of the terminal to serve about 15 million passengers a year instead of the current nine million.

"This is needed to meet rapid growth of the aviation market and assure the quality of passenger services at Noi Bai International Airport by 2018," a representative of the ACV reportedly said.

"It is possible that the terminal will not be able to meet necessary exploitative requirements in the coming months without the upgrade," the representative added.

The passenger throughput at T1 is expected to reach 12 million in 2015, after hitting nearly 10 million during the past nine months, according to the company.

T1 currently has an area of 115,000 square metres with 100 check-in desks, six luggage conveyor belts and 19 boarding gates.

International terminal T2 at Noi Bai began operations a year ago with an investment capital of $900 million, with the capability of handling some 10 million passengers each year.

Noi Bai is an important airport linking air routes from Europe, Southeast Asia, Northeast Asia and the Asia Pacific. Thirty-six domestic and international airlines are operating here, with an average 340 flights per day.

The ACV has VND22.43 trillion ($996.89 million) in charter capital. It was designated by the Government this year to develop the Long Thanh airport, which will be located in southern Dong Nai Province to handle up to 100 million passengers a year when it is fully completed by 2050.

The company launched an initial public offering on December 10, and plans to offer strategic investors a stake of 20 per cent.

CPI in Ha Noi, HCMC down compared to November

The Consumer Price Index (CPI) in December of both, Ha Noi and HCM City, have reduced in comparison with November, according to the statistics offices of the two cities.

The Ha Noi Statistics Office reported on Tuesday that in December the CPI decreased 0.03 per cent against November but had a year-on-year increase of 0.89 per cent as compared to 2014.

The reduction was due to a fall in prices of catering services at 0.05 per cent and transport services at 1.45 per cent, as well as a drop in the world oil price and local petrol retail price twice this month.

Meanwhile, seven groups of goods saw an increase in prices, while prices of telecom and education services were unchanged against the previous month, the office said.

The housing, tapped water, fuel and building material reported the highest increase in price at 0.47 per cent. Next was the price of the drinking and tobacco with a surge at 0.17 per cent and home appliances, with an increase of 0.16 per cent.

The office said the Ha Noi market saw a reduction of 3.67 per cent in gold prices but recorded a 0.55 per cent rise in the United States dollar price against those prices in the month of November.

HCM City also saw reduction of 0.11 per cent in the CPI of December as against the previous month. The city's CPI dropped 0.2 per cent this year, HCM City Statistics Office said.

The reduction of the CPI this month was due to lower fuel prices on the world and local markets.

Five of the 11 goods items used to calculate the CPI saw a drop in prices. The price of transport services witnessed the highest reduction at 1.83 per cent due to the impact of lower fuel prices.

Prices of other goods which plunged included home appliances, down 1.23 per cent, cultural, entertainment and tourism services, which dropped 0.58 per cent, and catering services which went down 0.17 per cent.

Meanwhile, some other goods saw a spurt in prices. The prices of housing, electricity and tapped water increased 0.6 per cent, while medicine and health care services increased 0.18 per cent, drinking and tobacco rose 0.14 per cent, and educational services rose 0.04 per cent.

In the HCM City market, the gold price in December dropped 1.53 per cent but the US dollar price surged 1.11 per cent as against those prices in November.

Vinamotor to auction shares

Ha Noi Stock Exchange has announced it will host the auction of State-owned shares in a lot for Viet Nam Motors Industry Corporation (Vinamotor) on January 11, 2016.

The investors who want to take part in the auction will have to buy the entire 85.58 million shares, or 97.7 per cent of Vinamotor's registered capital, at a starting price of VND14,612 per share (US$0.64), for a total of more than VND1.15 trillion ($51.1 million).

The list of investors who have met the conditions for the auction will be announced on January 4. They will have ownership capital of no less than VND926 billion ($41.16 million) as of June 30, 2015, and no cumulative losses. They will have to commit to not transferring their stakes in Vinamotor for five years.

The sale of shares in the lot is expected to help Vinamotor achieve success in the coming auction.

Last year, Vinamotor conducted its initial public offering with expected registered capital of VND1 trillion ($44.4 million). It offered 51 per cent of the registered capital, or 51 million shares, at a starting price of VND10,000 per share. However, the IPO failed, selling only 1.5 million shares, or 3 per cent of the offering.

After the IPO, it held registered capital of VND876 billion ($38.9 million), of which the State owned 97.7 per cent.

Vinamotor mainly operates in auto mechanics. It owns an auto assembly factory in northern Bac Giang Province and has invested in many subsidiary companies.

The corporation owns 6.65 million shares, or 21.6 per cent of shares in TMT Auto Company, which is listed on the stock market. The TMT share price tripled this year to reach nearly VND50,000 per share.

TMT is also one of several investors who have asked to buy Vinamotor shares from the transport ministry.

PM approves COMA equitisation plan

The State-owned Construction Machinery Corporation (COMA) will become a joint stock corporation, after the Prime Minister gave his approval recently.

Established in Ha Noi in 1975, COMA is a State-owned enterprise under the management of the construction ministry (MoC).

COMA is expected to have a charter capital of VND350 billion (US$15.52 million) after equitisation.

Under the equitisation plan, COMA will issue 35 million shares at VND10,000 ($0.44) each, with the state holding 17.85 million shares or a 51 per cent stake. By 2018, it will reduce the State ownership to 40 per cent.

The plan also divides the remaining shares into three parts, according to which 1.3 million shares or 3.74 per cent will be sold to employees, 10.5 million or 30 per cent will be sold to strategic partnerships and the last 5.34 million shares or 15.26 per cent will be sold at an initial public offering.

The prices of the shares at the IPO will be decided by MoC, which represents the state ownership in COMA.

COMA is strong in the field of manufacturing steel structures for construction. The projects it has completed include the National Conference Centre, the Ha Noi Museum project, national exhibition planning and Indoorgame, besides a roof gallery exhibition in Da Nang City, Viet Nam Television Centre and the Houses of Parliament.

COMA is also involved in design, consultation, fabrication and equipment installation at hydropower projects across the country.

By August, COMA had earned VND9.3 trillion ($412.47 million) in revenue.

Web trading model Agromart opens

The Trade Promotion Centre for Agriculture under the Ministry of Agriculture and Rural development inaugurated the Agro-forestry-fisheries online market (Agromart) on Tuesday.

Agromart is expected to attract 1,000 members to participate with 3,000 products.

Agromart will be connected with domestic and international e-commerce sites in order to encourage enterprises to participate in the potential trading model to enhance their competition in the context of international integration.

Transactions of businesses, organisations and individuals through the e-commerce market at agromart.com.vn are expected to help managers build development strategy for the sector, as well as market forecasts.

The online market is also hoped to help enterprises grasp market's tastes, information and production orientation for enterprises and farmers.

As it is getting harder for consumers to distinguish safe farm produce, the e-commerce market is considered a channel for buyers to choose products with certification as well as clear origin, said Nguyen Nhu Tiep, director of the National Agro-forestry-fisheries Quality Assurance Department.

The director also said that the site would help consumers select safe farm produce because the products were controlled from roots and were certificated by authorities before selling to consumers.

This is also the bridge for domestic and international enterprises to exchange, connect and trade technological and service products in the agricultural sector, said Dao Van Ho, director of the trade promotion centre for agriculture.

The site will create opportunities for businesses to conduct direct transactions with each other in any place and at any time, he added.

Simultaneously, the site will be a channel for businesses to introduce and promote their products, images and cooperation potential for large customers, Ho said.

Canada imposes anti-dumping duties on Vietnam OCTG

The Canada Border Service Agency (CBSA) has announced its final decision on re-investigation into oil country tubular goods (OCTG) imported from some countries, including Vietnam, according to the Vietnam Competition Authority under the Ministry of Industry and Trade.

On December 14, the CBSA concluded that Vietnam businesses did not provide full information for investigation agencies so it decided to levy anti-dumping duties of 37.4% on OCTG products imported from Vietnam.

Earlier, CBSA initiated a re-investigation program to consolidate the investigation agency’s conclusion on April 2, 2015 on damage for the domestic industry.

During the investigation process, the CBSA asked the plaintiff and exporters to supply information about the necessity to update normal value for future shipments.

For Vietnam, the CBSA has collected information related to the Article 20 of the Special Import Measures Act (SIMA) to evaluate market economic issues for the country’s steel sector, including OCTG. However, it could not give out the final conclusion because it did not receive full information from Vietnamese exporters.

Tariff cuts help cheap cars from Thailand dominate market

With a total of 23,516 cars shipped to Vietnam in the first 11 months, up 84%, Thailand is now the biggest auto seller in the country, local media reported recently, citing new customs data.

Up until October, Vietnam's car imports from the neighboring country was still ranked third but Thailand sped up in the race to the top last month.

In comparison, the Republic of Korea exported 23,232 cars to Vietnam during the period and China, 22,496 cars.

The market shift came as Thailand was boosting its auto exports amid falling domestic sales. Vietnam has become one of its key markets given tariff cuts the country is obliged to apply under an ASEAN agreement, local analysts were quoted as saying in news website VnExpress.

Since 2012, Vietnamese government has reduced tariffs on cars imported from regional countries to 50 percent. It is expected to cut the tax rate further until ASEAN cars become tax-free in 2018.

Another advantage of Thai cars is that they are much cheaper compared to those imported from China and the Republic of Korea, analysts said.

That explains why, in terms of value, Thailand auto imports remain small.

The value of cars imported from Thailand was estimated at US$406.2 million in the first 11 months, compared to China's US$869.58 million and the Republic of Korea's US$511.85 million.

Power plant seeks jump- start by foreign investors

The investor of the long-delayed $6.7 billion Kien Luong 1 power plant is seeking foreign investors to help kick-start the stalled operations and avoid the looming prospect of licence revocation.

Tan Tao Investment and Industry Corporation (ITACO) recently signed a memorandum of understanding on developing the BOT (build-operate-transfer) project with the Ministry of Industry and Trade, paving the way for the beleaguered project’s resurgence following six years of financing trouble.

ITACO’s general director Thai Van Men said that foreign investors from Korea, Japan and Australia were interested in collaborating to develop this project.

Under the latest MoU, Kien Luong 1 is scheduled to start generating power by February 2025. The plant will have two generators with the combined capacity of 1,200 megawatts with the total investment capital of more than $2.4 billion, and it will be located in Kien Luong district in the Mekong Delta province of Kien Giang. The coal-fired plant is a pivotal part of the southern region’s economic development and national energy security over the years to come.

Licensed in January 2008, the local private industrial developer ITACO planned to build the Kien Luong power and port complex, approximately 300 kilometres south of Ho Chi Minh City, with the total generation capacity of up to 4,400-5,200MW and the total investment capital of $6.7 billion. However, ITACO could not keep the plan on track for its commercial operation deadline of 2018. The main reason for the delay was the group’s trouble in mobilising funds for the project.

Last year, to address the investor’s problem and get the project back up and running again, the Vietnamese government allowed ITACO to modify its investment model from build-own-operate (BOO) to BOT, so that it could receive government guarantees to help it realise the project.

Lam Thanh Hung, deputy director of the Kien Giang Department of Industry and Trade, told VIR that the revival of the Kien Luong thermal power plant would play a key role in managing the power demand in the vast Mekong Delta region.

In addition to this project, the Vietnamese government has recently given the nod to state-run oil and gas group PetroVietnam to develop a gas-to-fertiliser complex in Kien Giang. PetroVietnam will use natural gas as fuel for the complex, instead of coal. This follows the group’s complete acquisition of Chevron’s Vietnamese offshore assets and rights in gas developments in June this year, namely blocks B, 48/95 and 52/97.

FMCG pick up in Q3

Fast-moving consumer goods (FMCG) growth in the six key cities in Vietnam (Hanoi, Ho Chi Minh City, Hai Phong, Can Tho, Nha Trang, and Da Nang) gained momentum in Q3 2015, with 4.5 per cent growth compared to 0.9 per cent in the last quarter, due to an increase of 3.6 per cent in volume growth (vs. 0 per cent in Q2), according to the quarterly Market Pulse Report released by global performance measurement company Nielsen.

“Although FMCG growth in Q3 shows recovery, the signal reflects the volatility of Vietnam, which puts a lot of challenges on manufacturers to make sound decisions to fully seize the market growth opportunities and drive a profitable business,” said Ms. Nguyen Huong Quynh, Executive Director of Retail Measurement Services at Nielsen. “Compared with FMCG growth across Asia-Pacific, where it has been around 5 per cent each quarter for two years, growth in Vietnam has not yet reached 5 per cent in any quarters over the last two years. Asia-Pacific growth has been mainly driven by volume increases while price increases have slowed down. Similarly, price increases have slowed down in Vietnam but has not been compensated for entirely by volume growth.”

The Market Pulse Report is based on the results of the Nielsen Retail Measurement study of FMCG in major categories. The study provides continuous tracking of product movement through defined retail outlets and the data is used to measure manufacturer and retailer effort as well as consumer off-take.

When breaking down FMCG in Vietnam into seven super categories: beverages (including beer), food, milk base, household care, personal care, cigarettes, and baby care, only beverages shows consistent growth both long term and short term. Beverages continued to be the biggest contribution to total FMCG growth (38 per cent) in Q3 2015 and grew a healthy 9.9 per cent, mainly led by volume increase (+7.3 per cent). The other super categories all stagnated.

“The sustainable growth of beverages is due to three trends that stand out among many others,” said Ms. Quynh. “The first is health, which has been the top concern of Vietnamese people over recent periods. The second is convenience, which can be easily applied across any category. And the last is innovation, which requires manufacturers to think of what exactly should be done to extend their categories to drive consistent growth.”

According to the report, health factors have become a very important influencer of purchasing decisions, as highlighted by 51 per cent of Vietnamese prioritizing nutritionally fortified products, 39 per cent loving products with natural ingredients, and 32 per cent paying attention to low fat/sugar/calories.

Convenience really stands out when looking at in-category pack trends. For impulse categories like food and beverages, convenience is available everywhere in a small/single use pack, which is necessary for impulse purchases associated with personal consumption. Regarding regular consumption categories such as home care and personal care, convenience means products have to be available in an easy-to-use pack. These categories are seeing big packs growing faster, which has the potential to lead to uneven growth. When using bigger packs consumers do not need to go to the store so often and worry about running out, which makes the categories’ future growth slower.

Last but not least, the study also revealed that the trend of innovation requires a lot of effort to identify what manufacturers have to invest to expand their categories rather than just provide something new for a new stage. This is the key factor to make a breakthrough innovation to ensure sustainable growth for the long term.

Pressing ahead

Business conferences and events these days often feature talk of the latest startup receiving hundreds of thousands of dollars in investment. The success stories of Facebook, Apple, and Uber push many a budding entrepreneur to try their hand at getting a startup off the ground. The thought that “I can create something great” comes from their innovative nature and success could drive the country’s economy forward.

Ecosystem growing

The startup ecosystem is now much stronger than it was three years ago, according to Mr. Pham Quoc Dat, Director of the HATCH! Program. “Initially it was startup founders and venture capitalists (VCs) who played active roles in the ecosystem, but now there are many more players,” he said. “Not only has the number of entrepreneurs and VCs targeting Vietnam increased, there are more startup incubators and accelerator programs, more sources of funding from both private (angel investors) and the public sector (in projects like IPP, BIIP and VIIP), and there are dedicated media channels and network connectors.”

A key factor is financial resources. Vietnam has proven it has potential for investment in recent times, Mr. Quoc Dat believes. It is a young and rapidly-growing economy with hubs for innovation (Hanoi, Ho Chi Minh City, and Da Nang). This is supported by the high rate of internet and mobile access, plus a willingness to implement and adopt new products and services.

The Vietnamese Government is more open to adjustments to policies and meets more frequently with startups in Vietnam to understand their needs. “The ecosystem has received support over the last two years not only from the private sector but also received greater attention from the public sector,” Mr. Quoc Dat said.

Human resources, also a critical factor, though lacking certain skills at the moment, actually have the qualities to create something huge. “There are plenty of good ideas among Vietnamese startups but people need more methods and advice on how to go global, how to speak to investors and so on,” said Mr. Yoann Fauché, Co-Founder of Uniity, an incubator, and Echoes.xyz (a startup and winner of Tech in Asia Hanoi 2015). “Vietnamese are hard workers and if you take some time to share with them they share everything and try to progress with you,” he added. And he believes that foreigners like him have a lot to learn from the strength and positive attitude of Vietnamese.

To connect all the factors are community builders. They may not be entrepreneurs or investors, but without their role the startup system would not have the growth it sees today. “Community builders are the connectors, who call for support and introduce entrepreneurs to resources, which saves them much time in finding the right partners for their businesses,” said Mr. Dat.

Looking at the bigger picture, the role of startups has been contributing to Vietnam’s economic development. “We have 500,000 active enterprises, 97 per cent of which are small and medium-sized enterprises (SMEs), and we also have well-developed internet infrastructure,” Deputy Minister of Planning and Investment Dang Huy Dong told the HATCH! Fair 2015 and IPP Mid-term Demo. “And, more importantly, we have a young, creative workforce with many Vietnamese engineers who contribute to the development of famous software around the world.”

These factors can give Vietnamese startups a significant profile internationally and a value in the billions of dollars in the future, according to Mr. Dong. This is something worth looking forward to, as at the moment Vietnam already has successful startups extending to foreign markets, creating jobs and contributing to economic development, such as Vatgia, Appota, Coc Coc, Joomart, and Foody. The growth potential of startups is there to be exploited.

Positives & negatives

With the explosion of the startup trend many anticipate the positive impact it may have on Vietnam’s economy and the development of the new generation of entrepreneurs. Experts, though, are wary of the negative factors accompanying the startup movement. Mr. Tran Quoc Khanh, a famous blogger on entrepreneurship, actually views it as a “dangerous trend”.

The media is full of stories that “Vietnam is an attractive destination for investment” and “Vietnam is developing, so the business opportunities are great”. Mr. Khanh agrees with the sentiment but believes it’s not applicable to everything. The media, he said, also report on “thousands of enterprises being dissolved”, “difficult business conditions”, “low competitive capacity”, and other ills.

The stories of the success that came the way of Steve Jobs, Bill Gates, and Mark Zuckerberg make too many entrepreneurs become deluded about what they themselves can achieve. Entering into a highly competitive market place requires resources and the right mentality, both of which many budding entrepreneurs lack.

Agreeing that there are negatives to be considered, Mr. Bui Huy Thang, CEO of BraveBits, said that most startups will fail and in a painful way. Not everyone is cut out to be an entrepreneur and some people can’t cope with the pain of failure and lose all their passion. Part of being an entrepreneur, he said, is being mentally prepared.

Companies also suffer when success fails to arrive. “One obvious effect is that it becomes difficult to retain employees and find new ones, because many then turn their attention to building their own startup,” he said, emphasizing the importance of human resources in the sustainability of an organization.

Views differ, as they do on most business matters, and the debate will continue. “For us, starting up a new business is for true entrepreneurs who have a passion for their innovation as a solution to a particular market problem,” Mr. Quoc Dat said, acknowledging there are different attitudes toward the startup trend. “Some people know they are not entrepreneurs but others will only know by trying,” he explained. What is important is that any failure sharpens the entrepreneur’s skills and mindset, and that they continue to be brave and accept that nothing may come from their investment and effort.

According to Mr. Quoc Dat, starting up is about creating something from challenges. Innovation won’t come if there are no challenges to face and the economy stagnates as a result. Vietnam needs SMEs to thrive, as they created 51 per cent of all new jobs and contributed 40 per cent to GDP in 2014, according to the General Statistics Office.

SCIC fully divests from Kim Lien JSC

On the morning of December 22 the Hanoi Stock Exchange organized an auction of shares held by the State Capital Investment Corporation (SCIC) in the Kim Lien Tourism Joint Stock Company (KLC). The total offering was 3.6 million shares, accounting for 52.4 per cent of KLC’s total charter capital.

One domestic investor purchased all of the shares at a winning price some nine times higher than the offering price.

Thirty-six investors registered to buy shares, including 19 institutional and 16 individual investors, seeking 36 times the volume on offer. The offering price was VND30,600 ($1.36) per share, making these orders worth VND112 billion ($4.96 million).

The first minimum ordering price was VND46,000 ($2.04) and the maximum VND102,000 ($4.52) per share by 8.53am.

The price then increased quickly and at 9.05am the eventual winning investor placed an order at VND274,200 ($12.16) per share, for a total outlay of around VND1 trillion ($44.35 million).

Other major shareholders in the company include GPBank, with 21.6 per cent, PTFinance with 6.7 per cent, and GP Invest with 6.6 per cent.

KLC primarily operates in the field of restaurant and catering services. In 2014 it recorded revenue of VND127 billion ($5.7 million) and after-tax profit of VND13.5 billion ($607,500).

It also manages the Kim Lien Hotel in Hanoi, which has a long history in the capital and sits on 3.5 ha in Dao Duy Anh Street, Dong Da district. It was opened in 1961 and was formerly known as the Bach Mai Hotel. The hotel has nine buildings, 437 rooms, and five restaurants.

Muong Thanh to build five-star hotel in Ha Nam

Muong Thanh Hospitality was granted an investment license on December 23 to develop a five-star hotel and shopping mall complex in northern Ha Nam province.

With total investment of VND600 billion ($26.6 million) the project spans an area of over 12,000 sq m in Phu Ly city.

After researching the investment environment in Ha Nam, which holds many advantages from its position as Hanoi’s southern gateway, Muong Thanh decided to develop the complex to meet demand among domestic and foreign visitors, Mr. Le Thanh Than, Chairman of Muong Thanh Hospitality, said at the license granting ceremony.

The number of foreign tourists visiting Vietnam in November stood at 732,740, a 12.9 per cent increase against October and 20.4 per cent higher year-on-year, according to the Vietnam National Administration of Tourism. For the year as a whole Vietnam targets welcoming 7 to 7.5 million international tourists and 36 to 37 million domestic tourists, with total revenue to reach $10 to $11 billion, contributing 5.5 to 6 per cent to GDP.

The Ha Nam government has been active in creating the most favorable conditions possible for investors, according to Mr. Nguyen Xuan Dong, Chairman of the Ha Nam Provincial People’s Committee. “We believe Muong Thanh will see positive results from this investment,” he was quoted as saying.

With 17 years experience in hospitality, Muong Thanh is one of the largest hotel chains in Vietnam, owning 47 three- to five-star hotels nationwide, including in Hanoi, Ho Chi Minh City, Bac Giang, Quang Tri, and Can Tho. Each features the characteristics of the local region.

C&W appoints new Valuation & Research Director

Cushman & Wakefield has recently announced the appointment of Mr. Vo Van Huu Phuoc as Director of its Valuation & Research Department in Vietnam, replacing Mr. Jonathan Tizzard. The appointment took effect on December 16.

“Mr. Phuoc has been the beating heart of our valuation business since he joined five years ago, building an exceptional business and best-in-class team,” said Mr. Alex Crane, General Manager of Cushman & Wakefield Vietnam. “The appointment underpins Cushman & Wakefield’s desire for the ongoing sustainable growth of our business with our long-term, high-performing, and respected leaders the key to this success.”

“We have a market leading focused team that I had the pleasure of developing and look forward to leading in a formal position at Cushman & Wakefield,” said Mr. Phuoc. “I look forward to another great year in 2016 and, critically, want to express my gratitude to all of our clients that have helped myself and our business to grow over the last few years.”

Mr. Phuoc has over nine years of real estate valuation and consultancy experience within Vietnam, running valuations of a vast array of properties, including industrial, office, retail, hotel, and residential property on a sale/lease basis for both international and local clients. He has provided expert advice to a broad range of clients, from landlords and developers to investors and investment funds, both local and overseas.

Upon joining Cushman & Wakefield Vietnam Mr. Phuoc took up the position of Senior Property Valuer. He was recognized as Employee of the Year in 2011, 2012 and 2014. In early 2012 he was promoted to Valuation Manager. After accomplishing significant deeds in 2013 he was promoted to Senior Valuation Manager in early 2014. Prior to Cushman & Wakefield Mr. Phuoc worked with CBRE from early 2008 and was recognized as its Best Member of Staff in 2009.

Mr. Phuoc has been handling more than 250 valuation and consultancy assignments. Key clients he has recently advised with Cushman & Wakefield Vietnam since 2011 include Pepsico, Coca-Cola, Deutsche Bank, HSBC, ANZ, UOB, HDBank, VinaCapital, and Vingroup.

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