Ho Chi Minh City promotes investment opportunities to Australian firms

With huge potential and many advantages, Ho Chi Minh City will become one of most attractive destinations in the world for Australian enterprises.

The statement was made by Vietnamese Consul General to Sydney Hoang Minh Son at a conference on investment, trade and tourism promotion in Ho Chi Minh City, held on October 25 in Sydney, Australia.

The conference aims to enhance the cooperation between Sydney and Ho Chi Minh City, as well as introducing the investment and trade environment in the upcoming development strategy.

Speaking at the conference, Consul General to Sydney Hoang Minh Son emphasised that the bilateral cooperation relations between Vietnam and Australia have continuously developed in all fields, particularly in economy and trade, over the past 45 years.

During the course of the past ten years, the two-way trade has doubled from US$3 billion to US$6 billion, however, Vietnam's merchandise exports to Australia accounted for just 1.8% of the total merchandise export turnover of Vietnam and 1.7% of the total import turnover of Australia.

Regarding tourism, Vietnam welcomed 218,000 Australian tourists in the first seven months of this year and around one million Vietnamese people traveled to Australia in 2016.

He also affirmed that the Vietnamese government and diplomatic agencies in Australia will always create favourable conditions to enhance the cooperation between the two sides.

At the conference, Director of Ho Chi Minh City Investment and Trade Promotion Centre Pham Thiet Hoa introduced the city’s business environment and its preferential policies to attract investment.

He stated that Ho Chi Minh City attracted the most foreign investment capital in the country in 2016, with 836 new projects and a total registered capital of US$3.42 billion.

Representatives of the city’s departments and agencies answered many questions and concerns of the Australian and Vietnamese firms on the investment procedures, preferential policies and measures to promote tourism.

After Sydney, the similar conferences will also be held in Melbourne city in Victoria state and then in New Zealand.

FWD begins three-year partnership with Tiki

FWD Life Insurance has struck up an exclusive partnership with Vietnamese e-commerce firm Tiki.

This is the first time Vietnam has witnessed a deal between an online commerce website and an insurance firm, signalling a new distribution channel for insurers in this fast-growing market.

“Through this exclusive partnership with Tiki, we will leverage technology to protect customers with simple, practical, and easy-to-understand products. This is a good opportunity for young Vietnamese people to access and experience online insurance through a modern and digital channel,” said Anantharaman Sridharan, general director of FWD Vietnam.

At the start of the partnership, FWD and Tiki will offer free online insurance products for 100,000 customers on Tiki.vn. Tiki's customers will be offered financial protection against the risk of death and accidental injuries via online personal accident insurance policies, with a three-month protection and a maximum payout up to VND300 million ($13,203).

According to the two partners, these online life insurance products require simple registration, no health examination, and no premiums either. The sign-up process, which is done entirely online, takes only five minutes.

This programme is open to Tiki users from 18 to 54 years of age, from October 24 to November 23, 2017. Afterwards, new online life insurance products will continue to be launched by FWD Vietnam and Tiki.  

Through this partnership, FWD strives to fulfil its ambition to focus not only on enhancing the quality of existing sales channels, but also on pioneering the digital distribution of life insurance.

Meanwhile, Tiki’s founder Tran Ngoc Thai Son said that this handshake with FWD demonstrates Tiki’s commitment to partnerships, innovation, and customer service.

Digiworld sets foot in fast-growing FMCG sector

Digiworld JSC, through its subsidiary Digiworld Venture, has announced completing the purchase of a 50.3 per cent stake in CL Co., Ltd. as a move to set foot in the fast moving consumer goods (FMCG) segment, according to newswire Cafef.

CL is known as the partner of one of Lion Corporation, the top Japanese corporations in toiletry and household business. In 2001, CL started distributing Lion’s high-end FMCG products, including the Essence series, Kodomo, Fresh & White, Zact toothpastes, and Bio-Zip, Look & Top powder detergent, and Systema Toothbrush.

Through CL’s distribution network across 63 cities and provinces, Digiworld expected to save time in penetrating in the FMCG market, which has great growth potential.

Established in 1997, Digiworld is considered the leading market expansion services provider in Vietnam and is the authorised distributor of more than 30 world-renowned technology brands.

Digiworld has a distribution network with 6,000 points of sale nationwide and excellent tailor-made solutions, including the top five market expansion services customised to each client’s needs, namely market analysis, marketing, sales, logistics, and after-sale services.

In the third quarter of this year, Digiworld reported a net revenue of VND1.14 trillion ($50.1 million) with an after-tax profit of VND27 billion ($1.18 million), signifying increases of 10 per cent in net revenue and 14 per cent in after-tax profit. In the first three quarters, Digiworld earned VND2.69 trillion ($118.4 million) in revenue and VND56 billion ($2.46 million) in after-tax profit.

Regarding the potential of the FCMG sector, according to a report issued by the Ministry of Industry and Trade, the medium-term potential of the market appears strong. FMCG spending is expected to climb modestly to $173 billion by 2020.

The consumer market carries significant potential, and the penetration rate of many FMCGs has yet to be maximised.

Especially the rural regions, which are home to roughly two-thirds of the population and are almost entirely ignored by foreign companies entering the Vietnamese market, are considered a potential market for selling FCMG products.

Ca Mau calls for investment in renewable energy

The southern province of Ca Mau will put into place a number of appropriate policies and mechanisms to encourage enterprises to invest in the renewable energy sector.

Vice Chairman of Ca Mau provincial People's Committee, Lam Van Bi made the commitment at a conference on renewable energy development, held in Cau Mau, on October 24.

The geographic location and natural conditions of Ca Mau are highly favourable for the development of renewable energy, such as wind, solar and biomass energy. The province is surrounded by sea on three sides and has over 250 km of coastline, with an average wind power of 6.3-7 m/s.

According to the approved planning, Ca Mau will generate up to 3,600 MW of wind energy, 1,500 MW of solar energy and over 60 MW of biomass energy by 2030.

Lam Van Bi pledged that Ca Mau will develop appropriate policies on planning, land and the investment environment in order to mobilise resources from society and enterprises for investment in renewable energy.

So far, 20 domestic and foreign investors have carried out surveys to seek investment opportunities in wind and solar power in Ca Mau but only three investors have been approved by the provincial People's Committee to carry out their projects.

According to Pham Trong Thuc, Director of Renewable Energy Department under the General Directorate of Energy, although the coastal provinces and cities (including Ca Mau) have great potential for renewable energy development, enterprises remain hesitant to invest in this area for many reasons.

Therefore, the total renewable energy capacity is only about 1,215 MW, accounting for 3.4% of the renewable energy potential of Vietnam, Thuc noted.

To Hoai Dan, general director of Cong Ly Company, the unit directly participating in several wind power projects in the Mekong Delta region, said that the authorities should provide long-term and specific policies, in addition to incentives related to tax and the purchasing prices of electricity, in order to attract more investors in this area.

Pham Minh Ngoc, director of Hau Giang Power Plant JSC also shared the same view, stating that there are inadequacies in the policies and mechanisms related to renewable energy.

Ngoc added that the Government should provide clear and comprehensive support for enterprises, while providing funding for research and pilot activities and facilitating the technology transfer process in order to increase the efficiency of renewable energy projects.

Viettel wins big at international business awards

The military-run telecom group Viettel has outshone many other strong candidates to win five awards at the 2017 International Business Awards –Stevie Awards held in Barcelona, Spain.

Accordingly, Viettel was presented with one gold and four silver prizes.

The gold award was given to Viettel's Youtube package, which has been deployed in Cambodia, Peru and Tanzania, in the ‘Best New Product or Service of the Year - Media & Entertainment – Service’ category.

Following 6 months since its launch of the Youtube package in Cambodia, Peru and Tanzania, there are more than 1 million people who have registered to use the service. The package has created a breakthrough in the use of smartphone entertainment in the three countries, saving users from 40% up to 80% when using their data.

In addition, Viettel was also honoured with four silver awards in the "Fastest-Growing Company of the Year in the Middle East and Africa" category for Viettel’s Halotel brand in Tanzania; “Viral Marketing Campaign of the Year” category for the Silent Hero Video clip; “Customer Service Department of the Year” category for My Viettel and “Best New Product or Service of the Year - Telecommunications – Service” category for Telecom Security Solution (TSS).

Created in 2002, the Stevie Awards are the world's premier business awards aimed at honouring and generating public recognition of the achievements and positive contributions of organisations and working professionals worldwide, including those working in the IT and telecom services.

The awards are held annually, consisting of a range of categories covering business, such as management, new products, marketing, public relations and customer care.

Experts call for acceleration of digital economy

Many countries that have underestimated and attempted to remain outside of the wave of the digital economy have to quickly change their strategies and take the initiative in approaching the "new game," experts stated at a Hanoi conference on the issue, on October 23.

The event is part of three seminars organised by the Vietnam Private Sector Forum (VPSF) and the Association of Vietnamese Scientists and Experts (AVSE Global), prior to the Vietnam Digital Economy Forum (VDEF) 2018, to be held from January 15-17 next year in Ho Chi Minh City.

The Monday workshop was attended by leading global and national experts, such as the Vice President of the French Digital Council Sophie Pène, Innovation Director of the international financial corporation Société Générale Aymeril Hoang, Chief Data Scientist from Capgemini consulting group Bertrand Hassini, CEO of VinaCapital Fund Than Trong Phuc and Vice President of FPT University Nguyen Thanh Nam.

At the event, experts drew a panorama of the digital economy with the emergence and diffusion of new economic models, as well as strong the influences on not just any one country or one area but every corporation, business and individual globally. The information gave an insight into a very large issue that exists in the perspectives of many parties: specifically, the behaviours and attitudes towards changes in the global economy.

In fact, many countries initially chose a relatively unobtrusive behaviour towards the new economy in order to maintain and preserve their traditional way of operating. However, the desire to stand outside this wave of change presents many difficulties. Developed countries have therefore rapidly changed their strategies to actively engage, approach and become the operators of the "new game". Particularly, the issue for Vietnam has been considered across several aspects but will be fully visualised through the first workshop in the series of events towards VDEF 2018.

Against the dramatic shift in global economy, AVSE Global has developed the annual VDEF, targeting a dynamic Vietnam, as well as Southeast Asia and the world, with strongly developed knowledge and technology, by connecting the top international experts, Vietnamese intellectuals, corporations and policy makers in the world.

The VDEF 2018 aims to share the strategic vision and practical experience of the digital economy by pioneers in the area, as well as the trend in the digital economy. The event also aims to assess the current status, challenges and opportunities of Vietnam, while promoting discussions among specialists, policy makers and businesses in order to make concrete recommendations to help Vietnam to navigate and implement strategic decisions.

In particular, VDEF 2018 is the first handshake between Vietnamese intellectuals globally with domestic intellectuals and businesses through the role of AVSE Global and its working groups on digitisation and creation of VPSF.

The issues and challenges in the country will be clearly defined so that Vietnamese intellectuals around the world can join with international experts to evaluate, review and analyse them in order to make recommendations and solutions that are beneficial to the Government and the business community in Vietnam.

Vietnam’s rubber export rise sharply

The 2017 Rubber Conference of the Association of Natural Rubber Producing Countries (ANRPC) was held in Ho Chi Minh City yesterday.

The conference attracts 12 ANRPC member countries including Bangladesh, Cambodia, China, India, Indonesia, Sri Lanka, Malaysia, Papua New Guinea, the Philippines, Singapore, Vietnam and Thailand.

Currently, Vietnam is ranked the third position about rubber export output and rubber area with total 976,000 hectares. 

At the conference, the member countries discussed on measures for the rubber industry’s stable and sustainable development in the context of the recent fall in natural rubber prices. 

According to Vietnam Rubber Industry Group, around of 18 percentage of rubber latex exploitation output is processed with value increase of 3-5 times, which was estimated to reach 33.8 percent of total rubber export turnover.

In addition, output of rubber tree wood was used for rubber wood processing contributed 22.1 percent of total export wood processing and 31.7 percent of total rubber export turnover.

In the first nine months, Vietnam exported more than 955,600 tons of rubber with total value of US$ 1.6 billion, increased 10.6 percent of volume and 49.2 percent of value.

Prices for rubber latex next year is predicted to be maintained as this year.

BOT toll stations cause public concerns – Fatherland Front report

Voters have expressed concerns over the approval, investment, management and operation of build-operate-transfer (BOT) road toll stations, says a Dan Tri news website report, citing a report delivered by the president of the Vietnam Fatherland Front Central Committee.

Speaking on the first day of the fourth session of the 14th National Assembly in Hanoi on October 23, Tran Thanh Man said voters had complained about the rising density of road toll stations and prohibitively high toll fees.

They have called for the Ministry of Transport to review BOT infrastructure projects and propose solutions to cope with shortcomings, Man said.

Most voters showed concerns over issues like production and trading, healthcare and food safety, corruption and wastefulness, and personnel appointments at State agencies.

They praised the Party’s and the Government’s determination to fight corruption and wastefulness, and deal with loss-making projects and violations of high-ranking officials, he told the month-long NA meeting, but legal proceedings against graft cases have been slow and the retrieval of assets from corrupt officials has remained meager.

The Party and the Government should act more strictly to root out corruption and impose heavy sanctions against officials involved in corruption, including retirees, he said.

The public proposed lawmakers amend the anti-corruption law in a way that makes the corruption fight more effective, holds leaders of State agencies and organizations accountable for any wrongdoing, and highlights the roles of the Vietnam Fatherland Front Central Committee, the public and the press in the fight against corruption and wastefulness.

The public was also dissatisfied with the abuse of power in State employee appointments at all levels.

Poor urban planning, especially the mushrooming of residential blocks at downtown areas, and traffic congestion and flooding were also mentioned in Man’s report.

Residents in cities including Hanoi and HCMC suggested the Government direct local authorities to publicize and carry out the approved projects. Local authorities should consult the public over large projects and their impact on the environment must be assessed thoroughly, according to the report.

Seafood processors fret over new criteria, standards

That Government agencies have set out new criteria and standards has forced enterprises to shoulder a heavier cost burden, heard a seminar on October 23 on wastewater standards in the seafood processing sector.

Nguyen Quoc Viet, a lecturer of the University of Economics and Business under Vietnam National University Hanoi, said at the seminar in HCMC that any business conditions would put local companies under greater economic and opportunity cost pressure.

The corporate sector is already struggling with costs for compliance with regulations on goods quality safety, and fire and explosion prevention; costs for customs, logistics, tax and social insurance procedures; and costs for meeting technical standards, among others.

According to the lecturer, the Government’s Resolution 19-2017/NQ-CP is intended to make the business environment more favorable and improve the nation’s competitiveness through the abolition of business conditions.

“The Ministry of Industry and Trade has already removed as high as 600 business conditions,” he said, but State agencies would find ways to convert their business conditions into criteria and standards.

He took the Transport Ministry’s new regulation on speed limits as an example. “In principle, setting speed limits is vital to protect human lives but the regulation would cause high compliance costs for residents and businesses if improperly implemented,” he noted.

“If we do not thoroughly look into the rationale of criteria and standards, they would result in additional costs for residents and companies.”

Le Van Quang, chairman of Minh Phu Seafood Corporation, said his enterprise spent more than VND50 billion (US$2.2 million) on a wastewater treatment system for his seafood processing factory.

The environmental impact assessment report on the system which was approved prior to its construction does not necessarily include phosphorus criteria for controlling seafood processing wastewater, he said.

“However, a set of relevant criteria is now included. We cannot manage (to meet the criteria), as the treatment system has been already built,” he said. Consequently, the corporation was imposed a hefty fine of VND750 million (around US$33,000).

Some delegates at the seminar wondered whether it would be necessary to control phosphorus criteria or not.

Luu Duc Hai, deputy president of the Vietnam Association of Environmental Economics, said seafood is mainly for export, so local companies should pay special attention to regulations in foreign markets.

If these regulations are a must, local enterprises should voice their objections as they may be technical barriers, he said.

PVN told to hand over petroleum industrial park

The Government Office has again requested the State-owned Vietnam Oil and Gas Group (PVN) to transfer Soai Rap Petroleum Industrial Park in the Mekong Delta province of Tien Giang to the provincial authority due to a long period of poor performance.

Deputy head of the Government Office Nguyen Cao Luc’s official letter calling for the urgent transfer of the petroleum industrial park in Go Cong Dong District came out last week, saying this was the instruction given by Deputy Prime Minister Trinh Dinh Dung.

In 2014, the Government agreed in principle to hand over the project in line with a master plan for developing industrial parks until 2015 with a vision toward 2020.

Nguyen Van Cuong, deputy director of the Tien Giang Investment, Trade and Tourism Promotion Center, told the Daily in July 2016 that the biggest obstacle to the handover process was to determine the value of the project.

He said at the time that the center would hire an independent auditing agency to re-evaluate the project so that the provincial government could develop additional infrastructure for the park.

Speaking to the Daily on Sunday, Nguyen Hieu Le, head of investment at the provincial Department of Planning and Investment, said the evaluation is basically complete but he did not reveal the value.

Meanwhile, Tran Hoang Phong, deputy director of the department, said the department is carrying out handover procedures but the process now rests with PVN.

According to Phong, PVN manages the 285-hectare industrial park but has yet to operate it effectively, leading to a waste of land. Therefore, the province wants to take over the project.

The park is in a prime location suitable for development of the marine economy, and especially the oil and gas industry.

New formaldehyde and aromatic amine limits in textiles come out

The Ministry of Industry and Trade on October 23 issued new regulations governing the permissible amounts of formaldehyde and aromatic amines in textiles on the local market.

According to the national standards for formaldehyde and aromatic amines derived from AZO colorants in textile products, or QCVN 01 2017, which are provided in Circular 21/2017/TT-BCT of the ministry, formaldehyde content is capped at 30 milligrams per kilogram of textile for kids under three years old, 75 milligrams for textiles for direct skin contact and 300 milligrams for textiles without direct skin contact.

The content of aromatic amines derived from AZO colorants is not above 30 milligrams per kilogram of textile.

Levels of formaldehyde and aromatic amines in textiles can be announced by manufacturers, importers and traders or by labs based on testing results. Such results should be sent to the provincial departments of industry and trade before the Ministry of Industry and Trade publishes the list of eligible products twice a year.

The new regulations do not affect the products brought into the country by immigrants, movables, tax-exempt goods of diplomats and diplomatic organizations, samples, goods for research, products temporarily imported for re-export, goods in transit, goods stored in bonded warehouses, gifts eligible for tax exemption, goods for exchange by border residents, and fabrics, unbleached and undyed garments and textiles.

Nguyen Minh Thao, head of the Business Environment and Competitiveness Department at the Central Institute for Economic Management (CIEM), told the Daily that for the first time, Vietnam has issued national standards for limits of formaldehyde and aromatic amines in textiles.

The ministry earlier released two circulars limiting formaldehyde and aromatic amines derived from AZO colorants in textiles in the Vietnamese market.

Garment and textile enterprises had difficulty complying with the time- and money-consuming procedures as the volume of unqualified items was small. In October last year, the ministry withdrew the circulars amid criticisms from the industry and the Ministry of Planning and Investment.

Russian tourists flock to HCMC

There were 251 Russians flying to HCMC on a chartered flight on October 22, signaling the peak holiday season which lasts until early next year.

Some of them are coming to Phan Thiet and Vung Tau, while the others are visiting HCMC for 10-15 days.

Hoang Thi Phong Thu, chairwoman of Pegas Misr Travel Vietnam Co Ltd, the tour operator, said more Russian visitors would come to the city. In the past, most Russians visited Phan Thiet before they went to HCMC for several days but now they visit HCMC only.

Thu told the Daily that chartered flights transporting Russian tourists to Vietnam are expected to increase threefold to nine or ten a month compared to the same period last year. Besides, they spend more time in HCMC.

Pegas Misr Travel Vietnam has also welcomed many Russian visitors to Cam Ranh International Airport in Khanh Hoa Province, who also arrived on chartered flights. Vietnam is forecast to attract 180,000 Russian travelers this year, up by 40,000 year-on-year.

In addition to a resort in Phan Thiet, Binh Thuan Province and another in Cam Ranh, Khanh Hoa Province, the company has opened a five-star beach resort in Cam Ranh to cater to Russian guests, Thu added.

Many other travel firms also plan to expand markets and launch more chartered flights to bring visitors to Phu Quoc Island off mainland Kien Giang Province. A tour operator in HCMC said it would sign a cooperation contract with its Russian partner to bring a large number of tourists from Russia to Vietnam.

U.S., Vietnam need to cement ties in IT for agriculture

The United States and Vietnam should strengthen cooperation in the use of information technology (IT) for developing agriculture, said experts at a seminar as part of the Vietnam IT Outsourcing Conference last week.

American and Vietnamese IT experts discussed the possibility of stepping up cooperation in hi-tech agriculture.

Tu Minh Thien, deputy head of the management board of the HCMC Agricultural Hi-Tech Park (AHTP), said the nation’s agriculture sector mainly uses IT solutions to improve farming productivity and check product origin, among others.

The sector has yet to provide financial technology services for farmers such as smart payment cards and mobile banking. AHTP and the Quang Trung Software City (QTSC) have been working together to apply IT solutions.

They have so far gained some positive results such as greenhouse farming backed by the Internet of Things (IoT) and establishment of an agricultural ecosystem.

QTSC has teamed up with some IT companies to offer useful IT solutions for agriculture. Some have been applied at hi-tech agricultural parks on a trial basis, and have been officially conducted at local farms.

IT experts were of the opinion that agricultural ties between Vietnam and the U.S. remain loose as the Southeast Asian nation mainly relies on technology from Israel, the Netherlands and Japan.

Therefore, they called for the two countries to improve cooperation, prop up commercial activities, and research and develop tech solutions for agriculture.

They said a mere 1% of the U.S. population relies on agriculture but their farming products are enough for the domestic market and foreign countries thanks to hi-tech agriculture.

The Vietnam IT Outsourcing Alliance will team up with the U.S. Silicon Valley Forum to promote commercial activities and receive IT solutions for agriculture from the U.S.

Digiworld Venture acquires half of CL

Digiworld Venture Company Limited, an arm of Digiworld Corporation, last quarter acquired a 50.3% stake in CL Co Ltd, a provider of fast-moving consumer goods (FMCG) in Vietnam, according to a statement of Digiworld.

This is the first mergers and acquisitions transaction conducted by Digiworld this year.

Established in 1998, CL provides high-quality FMCG of Japan such as Kodomo toothpaste, Systema toothbrush, Essence liquid detergent, Bio Zip powder and Bubbi King dishwater. These products have been distributed through traditional channels and modern supermarkets in Vietnam’s 63 cities and provinces.

CL is also a partner of Lion Group which trades in FMCG in Japan with annual revenue of US$3.4 billion. CL’s FMCG distribution system together with various commodities of Lion will help Digiworld enter, expand and develop the FMCG market in the future.

According to a report on Digiworld’s business performance in the previous quarter, the corporation made VND1.1 trillion (US$48.31 million) in net revenue and VND27.1 billion in consolidated after-tax profit, up 10% and 14.2% year-on-year respectively. In the first nine months of the year, Digiworld got VND2.7 trillion in revenue and VND56.1 billion in after-tax profit.

Coal imports surpass US$1 billion in nine months

Vietnam imported more than 1 million tons of coal in September, bringing the total import volume in the first nine months of this year to 10.4 million tons with a value of US$1.03 billion, according to the General Department of Vietnam Customs.

Meanwhile, coal exports in the period reached only US$207 million, equal to 15% of the import quantity.

Most of the imported coal came from Indonesia, Australia, Russia, China and Malaysia, 8.7 million tons of which were from Indonesia, Australia and Russia which made up nearly 84% of the country’s total import volume.

Although the import volume inched up 0.1% (around 1 million tons), the import price rose by nearly 53%, pushing the value up to US$1.03 billion.

From a coal exporter, Vietnam officially became an importer of coal as from 2016. The import volume rose from US$2.27 million tons in 2013 to 13.3 million tons in 2016.

Minister of Industry and Trade Tran Tuan Anh said coal imports will continue to go up in the next decades. He attributed the increase to rising consumption of major electricity, oil and gas groups.

Ngo Son Hai, vice general director of Electricity of Vietnam (EVN), said the group plans to import around 4.7 million tons of coal this year and may raise the volume to 11 million tons in 2020 and 19 million tons in 2025.

Besides EVN, foreign-invested thermal-power plants and plants run by Vietnam National Coal and Mineral Industries Group (Vinacomin) and Petrovietnam need to import coal for their performance.

Vinacomin estimated that Vietnam needs more than 75 million tons of coal by 2020, but local production only meets 50%.

The development of coal-fired thermal power plants makes Vietnam more dependent on coal imports. As planned, Vietnam has to import 50 million tons of coal by 2020 and 80 million tons by 2030.

BIDV’s pre-tax profit touches $266 million

Bank for Investment and Development of Việt Nam (BIDV)’s total assets reported pre-tax profit of VNĐ6 trillion (US$266 million) in 2017’s first nine months, posting a year-on-year increase of 6.7 per cent.

The bank on Wednesday announced that its total assets reached some VNĐ1.12 quadrillion until the end of September, up 12 per cent from the beginning of this year and representing an increase of 8.42 per cent from the same period last year.

The report also said capital mobilised was relatively high at VNĐ1.05 quadrillion in the nine-month period, increasing 12.1 per cent from the beginning of the year and meeting its credit growth requirement.

Its loans have focused on the production and trading sector with emphasis on short-term lending. Its total credit and investment was VNĐ1.08 quadrillion, up 13.7 per cent from the beginning of the year.

The bank’s credit growth has been higher than the banking sector’s average level of 12.16 per cent, of which loans to companies and residents amounted to VNĐ828 trillion, BIDV said.

Its outstanding loans in the period in prioritised sectors -- agriculture, rural development, exports, small-and-medium sized enterprises, support industry and companies applying hi-tech industries -- rose 19.2 per cent from the beginning of the year, accounting for 50 per cent of the total outstanding loans.

BIDV’s leaders said results in the January-September period were positive, creating momentum for it to complete targets this year. High credit growth in the beginning months of the year resulted in increased profit. In addition, the bank’s services and foreign exchange activities also contributed to growth.

In the last quarter of the year, BIDV will continue to enhance management of credit in each sector to ensure capital demand. It will focus its resources on implementing the restructure plan and resolving bad debts in the 2017-20 period, while accelerating capital increase under its roadmap.

Vietnam to levy tough penalties, jail sentences for insurance evasion

Businesses that purposely find ways to evade paying social insurance for their employees will not only receive administrative fines but also attract steep monetary penalties once a new law comes into effect next year.

In Vietnam, insurance is not calculated based on the full salary of an employee, rather a part of it only, known as the ‘fund used to calculate insurance payment.’  

For instance, an engineer might have a total wage of VND7 million (US$308), however, the fund used to calculate his or her insurance payment may be only VND4 million (US$176).

As of June 2017, an employer is required to pay 17.5% of this fund to social insurance, three percent to healthcare insurance and one percent to unemployment insurance on behalf of its employees.

Employees must themselves also contribute to the insurances, with respective rates of 25.5%, 4.5% and two percent of the ‘salary fund used to calculate insurance payment.’

From January 2018, when the amended law on social insurance takes effect, any employer caught evading these payments on purpose will be fined between VND50 million (US$2,200) and VND200 million (US$8,810).

They may also face non-custodial sentences of up to one year, or imprisonment of three to 12 months, Nguoi Lao Dong (Laborer) newspaper reported on Sunday.

The new law also stipulates cash fines ranging from VND200 million to VND500 million ($22,000), or jail terms of six months to three years for violations including evading insurance payments worth between VND300 million ($13,200) and VND1 billion ($44,000) and for dodging payments for between 50 and 200 employees.

If the evaded insurance payments are worth more than VND1 billion, or more than 200 employees are involved, fines will be set at VND500 million to VND1 billion, or two to seven years of imprisonment.

Experts call for acceleration of digital economy

Many countries that have underestimated and attempted to remain outside of the wave of the digital economy have to quickly change their strategies and take the initiative in approaching the "new game," experts stated at a Hanoi conference on the issue, on October 23.

The event is part of three seminars organised by the Vietnam Private Sector Forum (VPSF) and the Association of Vietnamese Scientists and Experts (AVSE Global), prior to the Vietnam Digital Economy Forum (VDEF) 2018, to be held from January 15-17 next year in Ho Chi Minh City.

The Monday workshop was attended by leading global and national experts, such as the Vice President of the French Digital Council Sophie Pène, Innovation Director of the international financial corporation Société Générale Aymeril Hoang, Chief Data Scientist from Capgemini consulting group Bertrand Hassini, CEO of VinaCapital Fund Than Trong Phuc and Vice President of FPT University Nguyen Thanh Nam.

At the event, experts drew a panorama of the digital economy with the emergence and diffusion of new economic models, as well as strong the influences on not just any one country or one area but every corporation, business and individual globally. The information gave an insight into a very large issue that exists in the perspectives of many parties: specifically, the behaviours and attitudes towards changes in the global economy.

In fact, many countries initially chose a relatively unobtrusive behaviour towards the new economy in order to maintain and preserve their traditional way of operating. However, the desire to stand outside this wave of change presents many difficulties. Developed countries have therefore rapidly changed their strategies to actively engage, approach and become the operators of the "new game". Particularly, the issue for Vietnam has been considered across several aspects but will be fully visualised through the first workshop in the series of events towards VDEF 2018.

Against the dramatic shift in global economy, AVSE Global has developed the annual VDEF, targeting a dynamic Vietnam, as well as Southeast Asia and the world, with strongly developed knowledge and technology, by connecting the top international experts, Vietnamese intellectuals, corporations and policy makers in the world.

The VDEF 2018 aims to share the strategic vision and practical experience of the digital economy by pioneers in the area, as well as the trend in the digital economy. The event also aims to assess the current status, challenges and opportunities of Vietnam, while promoting discussions among specialists, policy makers and businesses in order to make concrete recommendations to help Vietnam to navigate and implement strategic decisions.

In particular, VDEF 2018 is the first handshake between Vietnamese intellectuals globally with domestic intellectuals and businesses through the role of AVSE Global and its working groups on digitisation and creation of VPSF.

The issues and challenges in the country will be clearly defined so that Vietnamese intellectuals around the world can join with international experts to evaluate, review and analyse them in order to make recommendations and solutions that are beneficial to the Government and the business community in Vietnam.

VIETRADE supporting brands in entering South Korea

The Vietnam Trade Promotion Agency (VIETRADE) under the Ministry of Industry and Trade organized a conference on October 12 in Hanoi on “Promoting the Development of Vietnamese Brands in the South Korean Market”, within the framework of the National Branding Program to support businesses in approaching the country.

Mr. Do Kim Lang, Deputy Director General of VIETRADE and Deputy Secretary General of the National Branding Program, told the conference that the strengthening of strategic cooperation between Vietnam and South Korea has always been a priority of the two governments. 

South Korea is currently the largest investor and trading partner of Vietnam, while Vietnam is South Korea’s third largest trading partner after the US and China. South Korea is a market of potential and it shares many similarities with Vietnam in terms of culture and business.

Mr. Lang emphasized that the National Branding Program is the only national brand development program approved by the Prime Minister and recognized under the Foreign Trade Administration Act. It is a great opportunity for enterprises who are “national brands” because it also helps increase their prestige in foreign markets.

In order to build a brand in South Korean, Vietnamese enterprises should actively participate in the country’s value chains through distribution channels such as Lotte Mart, 7-Eleven, and E-mart, according to Mr. Le An Hai, Deputy Director of the Pacific Market Department under MoIT.

They also need to address issues such as product positioning, packaging design, and target markets, while also focusing on the domestic market. All of this would help companies ensure distribution systems and develop their brand in foreign markets.

A number of Vietnamese brands are already in South Korea, such as Trung Nguyen’s G7 coffee, which appears on the shelves of large supermarkets. Others, such as Pho Xua Va Nay noodles, Trung Thanh chili sauce, and Nam Ngu fish sauce are sold via informal distribution systems. “There are products from Vietnam but foreign brands are being sold and are preferred in South Korea,” Mr. Hai said.

For his part, Mr. Yoon Sang Ho, President of the Korea Federation of Small and Medium Business Associations, said that South Korean customers prefer to choose brands they are familiar with, so building a durable brand is important. “Enterprises should study the habits of South Korean consumers,” he advised. “New Vietnamese brands have already made a mark on shopping habits.”

The conference attracted a great deal of attention from organizations and enterprises and contributed to increasing export opportunities for Vietnamese enterprises and promoting brand names in particular and national brands in general to the South Korean market.

2018 economic targets undergo NA inspection

The government has submitted a plan on socio-economic development for 2018 to the National Assembly for discussion and approval, with an expected growth rate of 6.5-6.7 per cent, buoyed by a surging manufacturing and processing sector and a strong inflow of foreign investment.

Under a report on the plan compiled by the Ministry of Planning and Investment (MPI), to ensure a growth rate of 6.5-6.7 per cent for next year, the government has set on-year targets for some key sectors in the economy, including agro-forestry-fishery (up 3.07-3.19 per cent), industry and construction (up 7.17-7.59 per cent), and services (up 7.3-7.39 per cent).

Of the industrial sector’s growth, the manufacturing and processing sector, which creates 80 per cent of Vietnam’s industrial growth, is expected to rise 12.15-12.7 per cent on-year.

The export growth target is set at  7-8 per cent.

Registered foreign investment is expected to be $27.5-28.5 billion, while disbursements are projected to hit around $21 billion – higher than the forecast $18 billion for this year.

“These targets are thoroughly weighed, based on the resolution of the 12th National Party Congress [organised in January 2016], the five-year Socio-Economic Development Plan for 2016-2020 already adopted by the National Assembly, estimations of achievements of 2017’s socio-economic development, domestic and international situations, and disadvantages and difficulties for 2018,” said MPI Minister Nguyen Chi Dung.

Spain-based FocusEconomics, which provides in-depth economic analysis globally, wrote last week in a report that Vietnam’s economy is expected to expand 6.5 per cent in 2018 – which is up 0.1 per cent from last month’s forecast – and 6.5 per cent in 2019. 

FocusEconomics estimated that industrial output will grow by 7.6 per cent in 2018, and 7.4 per cent in 2019.

“The economy is projected to continue along this robust growth trajectory for the remainder of the year and into 2018, buoyed by resilient performance in exports as new factories funded by foreign investment open, and a flourishing influx of foreign direct investment (FDI), fuelled by more attractive investment opportunities,” read the report.

“Stellar growth in the manufacturing sector, a strong service sector, and a boost in private consumption buoyed by a rapid rise in private-sector credit, propelled the fastest economic expansion in over nine years,” the report said.

Also highly commending Vietnam’s economic prospects, HSBC forecasts that the country will grow 6.4 per cent next year, thanks to strong increases in manufacturing and FDI.

“FDI jumped sharply in this year’s third quarter and should continue to trickle in toward the end of the year. FDI (newly registered capital) is up 30 per cent year-to-date year-on-year as of the third quarter to reach $14.5 billion,” said HSBC economist Noelan Arbis. “As a comparison, new FDI in 2016 totalled just over $15 billion, which suggests that this year’s numbers should easily surpass last year’s.”

In another case, the Asian Development Bank (ADB) has predicted that Vietnam’s economy will grow 6.5 per cent next year, also crediting a jump in FDI and manufacturing.

“Continued buoyancy in FDI inflows should add impetus to growth in the coming months, as should the recent easing of monetary and credit conditions,” said an ADB report on Vietnam’s economic prospects released last month. “Other economic indicators also point to strong growth next year. The manufacturing Purchasing Managers’ Index continues its rising trend. New orders have risen continuously since December 2015 to signal improving business conditions for manufacturers.”

However, the government admitted that achieving a 6.5-6.7 per cent economic growth for next year, which might be the same as this year, is a difficult mission. This comes in light of new potential challenges the economy could face next year, such as import tax reductions due to international and regional commitments and decreases in the exploitation of minerals, coal, crude oil, and gas.

For example, the government will likely reduce the exploitation of crude oil by two million barrels against 2017.

“All of these challenges will have a big impact on our goals for 2018,” Minister Dung said.

Lending grows 12.16% in nine months

Credit growth of the entire banking system in the last 10 days of September rose 1.14 per cent, pushing the total increase in the first nine months of this year to 12.16 per cent, the latest report from the State Bank of Việt Nam (SBV) showed.

Loans to the agricultural and rural areas increased by 17.6 per cent year-on-year, the industrial sector was up 17.75 per cent, construction was up 19 per cent, and trade and services was up 18.1 per cent.

Outstanding loans to small- and medium-sized enterprises by the end of August accounted for 21 per cent of the total outstanding loans, up 7.5 per cent compared with the period till December 31 last year.

The high credit growth has helped boost GDP in the first nine months to 6.41 per cent, much higher than the 5.99 per cent increase in the first nine months of 2016.

SBV also reported that in the first nine months of 2017, over 300 meetings and dialogues between banks and enterprises were organised to assist enterprises in getting access to bank loans. Accordingly, banks committed to lend to firms nearly VNĐ570 trillion (US$25.11 billion), of which more than VNĐ550 trillion was disbursed for corporate customers.

In addition, banks also provided other forms of support, such as reducing lending rates for firms’ old loans totalling nearly VNĐ20 trillion.

To support the economic growth, the Government has also requested SBV to continue the monetary policy in the direction of lowering lending rates, at the same time raising outstanding credit to 21-22 per cent in 2017, based on credit quality and macro stability.

Together with the extension approval, SBV also instructed commercial banks to conduct scrutiny to ensure bank capital went to effective sectors, avoiding non-performing loans.

SBV noted that it is ready to supply capital to the economy; however, the terms of lending will remain strict, in accordance with legal regulations and procedures.

Nghi Sơn economic zone to welcome ecological resort

The People’s Committee in the central province of Thanh Hóa has recently given the go-ahead to a US$15.6-million eco-tourist resort project in the Nghi Sơn economic zone in Tĩnh Gia District. 

The project is jointly invested by Phú Thịnh Phát General Trading Joint Stock Company and Tecco Investment Corporation Joint Stock Company. Some 62 per cent of the project’s investment capital comes from equity and the rest is sourced from bank loans.

Spanning an area of 28.9ha, the project will include a 6,000sq.m three-star hotel, a 16,400sq.m condominium complex, a 5,000sq.m restaurant, a 4,500sq.m spa, a 3,000sq.m swimming pool and several other facilities.

Construction of the resort is divided into two phases, expected to be completed and put into operation in the fourth quarter of 2020.

With the project, the investors aim at building an eco-tourism resort for tourists, diversifying the province’s tourism services and promoting cultural exchange.

VinaCapital invests $11m into OCB

The Việt Nam Opportunity Fund (VOF), managed by VinaCapital Group, invested US$11 million into the Orient Commercial Bank (OCB), owning nearly 5 per cent stake in the bank.

This investment is expected to help OCB diversify its services to targeted customer segments, including affluent individual clients and small- and medium-sized enterprises.

Andy Ho, chief investment officer of VincaCapital and managing director of the Việt Nam Opportunity Fund, told enternews.vn that this investment was a rare opportunity to own a meaningful stake in a bank that had high lending and earnings growth.

However, the details of the purchase price or the number of shares VOF has acquired from the deal have not been disclosed.

In August, VOF had also invested in Tasco Joint Stock Company and FPT Digital Retail Joint Stock Company, with $11 million being poured into each company.

Established in 1996, OCB currently ranks 17 out of 34 commercial banks in Việt Nam in terms of total assets. The bank has a compound annual growth rate (CAGR) of 23 per cent, and expects earnings growth of approximately 100 per cent and 30 per cent in 2017 and 2018, respectively.

The bank expects to list on the HCM Stock Exchange (HOSE) before the end of 2019. Late in June, OCB received approval from the central bank to increase its registered capital from VNĐ4 trillion ($176 million) to nearly VNĐ4.2 trillion via issuance of bonus shares.

VOF is an investment fund company founded by VinaCapital in 2003 with initial capital of $10 million. Now, this number has increased to more than $20 million. VOF’s profitability in the years from 2010 until now reached 42 per cent, contrary to the market loss of 18 per cent.

This year, VOF implemented 25 private equity (PE) transactions, with a total investment of $476.3 million.

Since the beginning of the year, VinaCapital has divested capital in a number of real estate companies, in order to restructure investment categories to suit the new situation.