Flight	Date	Departure Time (local)	Arrival Time (local)
NZ269 Auckland to Ho Chi Minh City (Departure: Tuesdays, Thursdays and Saturdays)	Until 24 September 2016	12:45	19:45
	27 September – 29 October 2016	13:45	19:45
NZ268 Ho Chi Minh City to Auckland (Departure: Tuesdays, Thursdays and Saturdays)	Until 22 September 2016	21:45	13:35 +1
	24 September – 29 October 2016	21:45	14:35 +1

Leather, footwear exports strong, local consumption weak

The leather and footwear industry posts the annual growth rate of 9.7 percent on average. Made in Vietnam shoes have been exported to 50 nations but met only 40 percent of local demand, approximating 150 million pairs a year, according to statistics by the Ministry of Industry and Trade.

The main export markets of Vietnam are the EU, the US, Japan, China, Mexico, Brazil and South Korea.

Of these, exports to the EU hold the highest ratio with 35.3 percent, followed by the US with 31.55 percent, Japan 4.57 percent and China 4.46 percent.

Handbags have been present in 40 nations with the largest market being the US making up 41.6 percent. Exports to the EU account for 26 percent, Japan 11.6 percent and China 3.51 percent.

Mr. Diep Thanh Kiet, deputy chairman of the Vietnam Leather, Shoes and Handbag Association (Lefaso) said that the industry’s export turnover has been increasing year by year. It was $7.8 billion in 2011 and increased to $8.8 billion, $10.4 billion, $12.85 billion and $14.88 billion in 2012-2015.

Of the 2015 turnover, footwear reached $12 billion and hats, suitcases and umbrellas neared $2.9 billion.

In the first half this year, it was estimated to hit $7.94 billion, of which footwear brought $6.34 billion while hats, suitcases and umbrellas contributed $1.6 billion.

Vietnam is ranked among the top four footwear producers in the world and the third largest exporter in term of value after China and Italy.

Despite export strenght, businesses have not interested in local market because of strong competition from Chinese products which hold 50-60 percent of local market share now, said Lefaso chairman Nguyen Duc Thuan.

Domestic footwear consumption has mainly been in low and middle segments and production has met only 40 percent of demand. High grade Vietnamese products have been insignificant and inferior to large brand names in the world.

Moreover, local businesses have faced with counterfeits, and low quality and price products. Therefore, large firms have chosen the safe way of focusing on exports. Production for local consumption has mainly undertaken by small and medium firms.

A Lefaso representative affirmed that the association’s members will still give priority to exports in short term to take advantage of tax incentives from the already signed ASEAN Economic Community and free trade agreements (FTAs).

This year, Vietnam-South Korea FTA will abolish the current export tax rate of 10-13 percent on Vietnamese footwear.

With the Vietnam and the Eurasian Economic Union (EAEU), Vietnamese footwear with rubber uppers will enjoy 0 percent tax rate when being shipped to Russia, Armenia, Belarus, Kazakhstan và Kyrgyzstan.

Vietnam-EU FTA will also reduce the existing 12.4 percent rate to 0 percent on handbags and suitcases from Vietnam right after taking effect. The EU will remove tariff on Vietnamese shoes within 7 years after the agreement becomes effective.

Most Vietnamese footwear products will see the tax rate drop from 13-14 percent to 0 percent thanks to the Trans-Pacific Partnership, opening a big opportunity for businesses to exploit American market.

Despite the positive signs, director of Khatoco Ostrich - Crocodile Business Company Nguyen Van Phong, said that Vietnamese businesses have mainly done outwork in the leather and footwear industry with material source depending on import.

Major products of the industry such as leather and leatherette have low localization rate and have gained small added value.

Local material supply has met 30 percent of the demand of leather and leatherette producers.

The Ministry of Industry and Trade has adjusted a plan to develop the leather and footwear industry by 2025 and vision till 2035.

According to the plan, a network of leather and footwear industry will be built across the country, production capacity will be distributed more reasonably among regions in the country.

The plan will supplement suitable and synchonous mechamisms and solutions on investment capital, science-technology and human resources to develop material source fast and sustainably.

It will also work to remove localities’ policy of licensing restriction to material producers for the footwear and leather industry as they concern about environmental pollution.

Many businesses hope that the ministry will focus on assisting them to boost exports, have more effective solutions to create a fair competitive environment in Vietnam so that they can develop both foreign and domestic markets and speed up sustainable growth for the industry.

Mercedes-Benz completes the full MPV line-up in Vietnam

Mercedes-Benz Vietnam (MBV) has completed a multi-purpose vehicle (MPV) lineup through the launch of the new V 250 and the Vito Tourer 121, besides the V 220 d debut last year.

Vietnamese customers now have more choices for their active family lifestyle or business solution from Mercedes-Benz.

MBV pioneered in the premium MPV segment with the V-Class, which has led to a revolution in passenger compartment space and interior quality.

The new V-Class has also won the pestigious design prize ‘Red Dot Award’ soon after its global launch. It is a combination between space, versatility of MPV and technology, design benchmarks of Mercedes-Benz.

For the V 250, the two-louver radiator grille and silver three-pointed star at the center helps to build its dynamic front bumper. Its full-LED headlamps are shaped for an accurate look, which is an identified design of the V-Class.

The V 250 has proved itself as a real Mercedes-Benz through its ‘modern luxury’ interior. It utilizes premium materials like leather, wood and metal at the highest refinement while its energetic atmosphere is rounded by subtle AMBIENCE LIGHTING in three colors.

The car integrates the high level of equipment including the 3-spoke steering wheel covered by fine Nappa leather, 5.5-inch screen in table shape, touchpad controller and pre-installation Navigation and GPS. Thanks to the Active Parking Assist system, parking this MPV is far easier.

Besides, each seat on the V 250 gets certain comfort by THERMOTRONIC three-zone automatic climate control with air-vents for three rows. The second row with two independent seats can rotate 180 degrees creating space for all family members to interact or turn into a mobile meeting room.

Roomy luggage compartment is a plus with the storage capacity of two sports bikes and two sets of golf bags (third row partly folded). In addition, the EASY-PACK automatic powered tailgate with a separate opening rear window can save a lot of time for owners in loading and unloading luggage.

The Crosswind Assist function also keeps the vehicle balanced against gusting cross-winds in rainy days. The V 250 is equipped with up to 10 airbags, with two front, two front side and six windowbags. The V 250 is rated 5-star safety by EURO NCAP.

Owners of the V 250 can switch this family and business friendly MPV into a personality statement with

nearly 20 optional extras from MBV, from the AMG exterior package to 18-inch five-spoke alloy wheels and from the 15-speakers Burmester sound system to Nappa leather interior.

The V 250 is priced at VND2.569 billion with VAT included, exactly the same with the V 220 d.

MBV has also introduced the Vito 121 Tourer with a price of VND1.849 billion, includingVAT. This is a reliable and efficient transportsolution for business.

The Vito 121 Tourer targets customers who appreciate Mercedes-Benz’s core values of performance and safety, and the practicality of the MPV. With a 211-HP engine and a 7G-TRONIC Plus transmission, drivers can choose up to three driving modes for different operation conditions.

The ‘Comfort’ suspension is designed to deliver a smooth cruise. The Vito 121 Tourer is setup for eight people with a 2-3-3 seating plus THERMOTRONIC climate control.

It features key safety functions such as ESP, ABS/BAS, ATTENTION ASSIST, Hill-start Assist Control and Airbags for front seats. Customers can also upgrade the Vito with a wide range of additional options such as 17-inch multi-spoke alloy wheels or LED headlights.

Most Vietnamese opt for fuel-efficient autos

Nearly 70% of Vietnamese who joined a recent survey of carmaker Ford said fuel efficiency is more important than capacity when they decide to buy cars.

Ford Motor Company last week announced the survey of more than 9,500 drivers in 11 Asia Pacific countries, including 774 Vietnamese.

When asked about fuel efficiency, four in five Vietnamese respondents said they would choose fuel-efficient cars to save money. Other reasons are awareness of environmental protection (77%) and worry about high fuel prices (51%).

Up to 42% of people who currently own cars with large displacement engines said they regretted for not purchasing fuel-efficient versions.

The survey revealed that the need to save money is also reflected through the habit of fuel purchase and the way respondents drive. More than half said they would change the way of driving to consume less fuel, 42% said they plan to drive less over the next 12 months while 33% said they will use public transport more often.

By cutting fuel consumption by 20% a month, 60% of respondents said they can save more money for their other daily expenses. About 46% said they do not think fuel prices would stay stable over the next year.

The survey found as many as 53% admitted they do not carefully consider the operation costs of their cars, including those for fuel and vehicle maintenance, when buying new autos. Up to 32% said they should have purchased cars which are more expensive but more fuel efficient to save money in the long term.

People with plans to buy autos in the coming year said they will opt for vehicles that offer fuel economy, with 55% of them favoring fuel-efficient cars, 18% hybrid or electric cars and 14% smaller engine displacement cars.

However, 57% said they will weigh performance as an important factor when buying cars, and 58% of people in urban areas said they prefer cars with bigger capacities, compared to 46% in rural areas.

Hanjin Shipping Global stops operations in Viet Nam

The Vietnamese Representative Office of Hanjin Shipping Global, South Korea's giant container shipping company, announced that it would not accept any new booking of freight orders from August 31.

According to the Ministry of Industry and Trade, bankruptcy of the Hanjin shipping line would possibly affect local businesses' export and import shipping and receiving activities.

The ministry recommended businesses to quickly complete procedures to receive imported goods at the ports and take them out of the Hanjin containers. With regard to export goods which were already inside the firm's containers, the ministry asked businesses to get back the goods as soon as possible and contact their foreign partners to find ways to change to other shipping firms and to organise the goods booking schedule.

Those batches of goods that had already been shipped, the businesses were told to keep in touch with the Hanjin representative office in Viet Nam to keep track of the itinerary and co-ordinate with their foreign partners to ensure the goods were received at the ports on time.

The ministry, in co-ordination with the Ministry of Transport, said it would direct the ports to support businesses to ship and receive goods to avoid affecting the businesses' schedule and traffic congestion at the sea ports.

According to the Associated Press, Hanjin, the world's seventh-largest container shipping company, filed for bankruptcy protection on August 31 and stopped accepting new cargo. With its assets being frozen, ships from China to Canada were refused permission to offload or take aboard containers because there were no guarantees that tugboat pilots or stevedores would be paid. This also led to a rise in shipping rates and could also hurt some trucking firms with contracts to pick up goods from Hanjin ships.

The South Korean giant represents nearly 8 per cent of the trans-Pacific trade volume for the US market. While some retailers may already be hit with their merchandise for the holiday season getting delayed, experts say it is important for the issue to be resolved before the critical shipping month of October.

Tax cuts aid foreign livestock investment

Tax cuts mandated by ASEAN Economic Community commitments and Vietnam’s growing demand for meat are producing a rise in foreign livestock investment and meat imports.

In this year’s first eight months, the rate of foreign firms asking for permission to import animal feed materials was up 20% year-on-year, according to the Ministry of Agriculture and Rural Development (MARD). The on-year rate hit 30% last year.

“Foreign animal feed firms are boldly expanding their businesses in Vietnam. Many new investors are working with the ministry for their upcoming projects in the country,” said Dang Dinh Quyet, deputy director of the General Affairs Division under the MARD’s Livestock Production Department.

“Import tariff cuts under the ASEAN Economic Community (AEC) are also luring foreign meat imports into Vietnam,” he said.

China’s New Hope Liuhe Company is said to invest US$407 million into building additional seven pig complexes in Vietnam by 2018, with a combined annual capacity of 2.3 million pigs. Construction will start from September. Currently the firm has six animal feed mills in Vietnam.

In another case, the Republic of Korea (RoK)’s CJ will invest millions of dollars into building its sixth animal feed plant in the south-central province of Binh Dinh. This 120-hectare project will also comprise a pig-breeding farm. Local farmers’ households will cooperate with CJ in raising the pigs, which will later be bought by CJ for food processing.

Rusagro, one of leading Russian agricultural groups, is also completing final procedures to export its pork to Vietnam, starting from 2017, with an expected volume in the tens of thousands of tonnes per year.

In late July 2016, Vietnam’s BRG Group, SeABank, and Japan’s Michinoku Bank announced the establishment of a consortium to promote quality agriculture, meat, and processed food trade between Vietnam and Japan.

The consortium aims primarily to provide Japanese and Vietnamese firms with financing, export consulting, training, transport, logistics, compliance, and regulatory issues.

Australian meat imports have not dropped off either. Vietnam has been one of Australia’s fastest growing export markets for live cattle, rocketing from just 1,441 cattle four years ago to almost 310,000 cattle last year. The number was about 200,000 in this year’s first eight months.

Director of the MARD’s Livestock Production Department Hoang Thanh Van said Vietnam’s livestock production industry is expected to witness robust growth by 2018, thanks to new investments in breeding operations this year.

According to the Vietnam Institute for Economic and Policy Research’s recent survey on impacts of the AEC, new investments in the local husbandry sector are attributed to slashed import tariffs under the AEC, plus Vietnam’s great husbandry growth potential.

Import tax rates for a series of items such as cattle, animal products, sheep, goat, and horse meats, raw milk, and dairy products will be reduced to 0% over the next two years.

With these advantages, investors may concentrate production lines in a chosen ASEAN member, and then export the finished product tariff-free to other ASEAN members as well as to ASEAN’s free trade partners in the region (China, India, the Republic of Korea, Japan, Australia, and New Zealand).

HCM City to host Vietnam Foodexpo

The Vietnam International Food Industry Exhibition (Vietnam Foodexpo 2016) will take place in Ho Chi Minh City from November 16-19.

More than 300 businesses from 30 Vietnamese localities and 15 countries and territories are expected to participate in the event, selling various products at about 500 booths including dried fruits, seafood, beverages, and food materials.

The event allows enterprises to promote their products and services as well as gain access to domestic and foreign markets, said Director of the Trade Promotion Agency Bui Huy Son.

Participants could also connect with wholesale and retail distributors and potential food importers and investors, he added.

Information on the latest technologies in processing high-quality foodstuffs was also available, he said.

This year, Italy was selected as the Country of Honour at the expo. An Italian delegation will bring modern technology and unique Italian products to the event.

Some Italian importers also plan to attend Vietnam Foodexpo 2016 to look for Vietnamese business partners.

The third international conference of the food industry (Food Vietnam 2016) will be held as part of the expo to discuss national branding strategies and producing safe and high-quality food.

Other activities hoped to draw visitors include a cooking contest, a trade exchange programme, a signing ceremony of business contracts, and an award ceremony for impressive products at the expo.-

Kido on the market for vegetable oil companies

Foodstuff producer Kido Joint Stock Company (KDC) is increasing stake acquisitions in vegetable oil manufacturing companies as part of its strategy to penetrate deeper into the food and spice market.

According to newswire Vnexpress.net, KDC has sent a document to Tuong An Vegetable Oil (TAC) to express its interest in buying a 65 per cent stake, equalling 12.34 million shares.

The purchase’s value has yet to be disclosed, however, based on the market price of TAC’s shares at the end of August 31, which stood at VND63,500 ($2.85), KDC may spend well over VND783 billion ($35.1 million) on the purchase.

Earlier in June, KDC announced a plan to raise its stakes in cooking oil company Vietnam Vegetable Oil Industry Corporation (Vocarimex) from 24 per cent to at least 51 per cent this year.

In addition, the company is expected to earn VND2 trillion ($89.68 million) from the sale of its remaining 20 per cent stake in Kinh Do Binh Duong JSC, now Mondelez Kinh Do, its cake and candy arm, to Mondelez International Inc. The sale is expected to be completed this year. In 2014, KDC sold 80 per cent of its shares to Mondelez International for $370 million.

KDC is currently manufacturing and trading ice-cream, dumplings, vegetable oil, and instant noodles. In the first six months of this year, KDC earned VND590 billion ($26.5 million) in net revenue and VND134 billion ($6.01 million) in net profit. The company expects to achieve a revenue of VND1.8 trillion ($80.8 million) and a pre-tax profit of VND1.5 trillion ($67.3 million) this year.

A pilot auction to stabilize the sugar market

A pilot auction for sugar import quotas was proposed to help curb soaring prices in the domestic market, amid the elevated demand.

On September 7, 2016, an auction on the right to import 85,000 tonnes of sugar under Vietnam’s World Trade Organisation (WTO) commitment will take place at the Ministry of Industry and Trade (MoIT) headquarters in Hanoi.

The auction aims to find a corporate entity to import 40,000 tonnes of raw sugar and 45,000 tonnes of refined sugar to feed domestic production. Under current regulations, the bidders must be those directly engaged in using sugar for production or using raw sugar for refined sugar production. The bid winners are also banned from sale or transfer of the quotas.

According to the MoIT, with sugar prices in the domestic market staying at a high level and speculation running rampant, they decided to organise this auction to offset sugar shortfall and restore domestic sugar prices to a reasonable level.

According to chairman of Vietnam Sugarcane and Sugar Association (VSSA), Pham Quoc Doanh, a 10% decrease in the domestic sugarcane output has led to a shortfall of about 200,000 tonnes in annual supply levels. Complicating matters is a jump in the demand of about 100,000 tonnes.

Sugarcane quality has also reportedly fallen, as the average commercial cane sugar (CCS) ratio of raw materials supplied to processing factories stood at 9.64 in recent measures, against the 10.2 measured the previous season.

According to Hanoi-based state-owned Sugar Corporation 1, importing sugar will help balance the supply and demand in the domestic market, as the current demand for sugar from confectionery businesses has been soaring in preparation for the upcoming Mid-Autumn Festival and year-end market needs.

The Ministry of Agriculture and Rural Development has confirmed that sugar prices have been on the rise consistently from early 2016 to the present. From February to April of this year, prices inched up 10-%-15% compared to early in the season, and jumped 20%-30% compared to a year before.

Lasting drought, salt intrusion, a shift from planting sugar to other more profitable crops, and speculation were all cited to blame for local sugar prices hitting such high levels.

Doanh said that due to shortfall in the domestic supply, some businesses had to cancel contracts they had signed at the year’s beginning, after sugar trading firms refused to deliver their products, saying that they had failed to buy sufficient supplies from sugar factories.

“Firms using sugar and sugar producers told us that there was a speculative mentality among sugar trading firms”, a source from the VSSA revealed.

The VSSA, therefore, applauded the MoIT’s intention in holding the sugar import quota sale auction, saying that it could help limit speculation and stabilise the market. 

Sugar millers attempt to manipulate prices, pocket millions

Sugar consumption in Vietnam has for decades far outpaced domestic production with the nation relying on imports to bridge the deficit between supply and demand, said the Vietnam Sugar Association as a recent business forum.

The Ministry of Industry and Trade (MOIT), said Nguyen Hai, general secretary of the Association, has employed a tariff rate quota (TRQ) import system as a tool to regulate both the volume of imports and domestic prices.

The TRQ system has allowed other countries such as Thailand to export specified quantities of sugar to Vietnam without having to pay any import tariff, but subjected all imports of sugar above the pre-determined threshold to a higher tariff.

The threshold levels of imports have been determined by the MOIT in line with the country’s World Trade Organization open market commitments and with overall domestic demand.

This year the MOIT, he said, had bumped up the TRQ by an additional 100,000 metric tons bringing the total sugar imports allowed for 2016 into Vietnam without the imposition of import tariffs to 185,000 metric tons (the original TRQ of 85,000 plus the added 100,000 metric tons).

This increased TRQ of 100,000 metric tons was the subject of much discussion and debate at the conference.

Bui Thi Quy, general director of the Con Long My Phat Sugar and Sugarcane Joint Stock Company voiced his objection to the increased TRQ on the basis that he believed domestic inventories were adequate to cover the additional 100,000 metric tons.

Mr Quy said sugar stock inventories nationwide had been estimated at roughly 400,000 metric tons, which he believed were more than adequate to satisfy the need without having any negative downward impact on the market price of sugar.

Allowing more Thai sugar into the Vietnam market would put downward pressure on the market price, because as a rule, it sells for much less than home grown sugar.

Pham Quang Vinh, deputy general director of the Can Tho Sugar and Sugarcane Company in turn agreed that the TRQ should not have been raised by an additional 100,000 metric tons.

An additional factor that the Ministry had failed to take into account in its analysis to lift the TRQ was the amount of sugar that had been illegally imported through border gates from Thailand.

The Vietnam Sugar and Sugarcane Association has estimated that annually on average about 200,000 metric tons of sugar illegally finds its way across the border from Thailand into Vietnam.

Mr Vinh said that if the 400,000 of domestic inventories and the black market sugar of 200,000 metric tons crossing the border were to have been factored in properly, there would be no need for the increased TRQ.

As a result, the increased TRQ imports would drive down the market price of sugar, creating huge financial losses to sugarcane growers, processing companies and others in the sugar segment of the economy.

Vu Thi Huyen Duc, CEO of the Sugarcane and Sugar Corporation No 1, also voiced strong objections to the increased TRQ of 100,000 metric tons and agreed with others that the need wasn’t properly assessed by the Ministry.

Deputy Minister Tran Thanh Nam of the Ministry of Agriculture and Rural Development (MARD) pointed out, in defence of the decision to increase the TRQ, that it was made as part of an effort to counter ongoing price manipulators in the market.

MARD in collaboration with the MOIT had conducted an extensive investigation and concluded that a number of sugar millers were intentionally hoarding and concealing sugar inventories in an attempt to artificially drive up the sales price.

The Vietnam government, he said, has an obligation to protect the best interest of consumers and keep market prices of sugar stabilized where they ought to be and not allow profiteering.

The increase of the TRQ by 100,000 metric tons will keep market prices stable where they should be in the absence of unfair trading practices and not allow sugar millers to pocket millions through fake inventory shortages and price manipulation.

At the beginning of this year, sugar was selling for with US$.58-US$.63 (VND13,000-VND14,000) per kg, but in May, the price had reached US$.76 (VND17,100) per kg largely as a result of price manipulation.

OV professionals keen to return home: survey

70% of overseas Vietnamese professionals are interested to return home to work, according to a recent survey by recruitment firm Robert Walters.

The survey, released on August 31, found the three main sectors in Vietnam which they are keen on seeking employment fall within the accounting and finance, banking and financial services and information technology.
It also found that overseas Asians consider returning home because of three main reasons: caring for ageing parents, the perceived ability to command higher pay after working overseas and the affinity with their cultures back home.

Employees work behind a counter inside an HDBank branch in Ho Chi Minh City in a file photo.

The top three factors overseas Asians look for in an employment package are a salary increment (over local rates), clear career progression and flexible working arrangements.
Gerrit Bouckaert, Country Manager at Robert Walters Thailand and Vietnam, said in a statement that outbound mobility in Vietnam has increased significantly over the past decade and many firms in the country face a severe shortage of skilled local talent.
As a result, local businesses are now “very keen to hire skilled Vietnamese professionals who have gained international experience but understand the local culture and language better than any expatriate,” he said.
“This will enable organizations to develop high-potential local talent and prepare them to take on middle-management and senior positions,” he added.
According to the survey, 88% of hiring managers polled in Southeast Asia say they are currently facing challenges in attracting and recruiting talent. And 86% of the hiring managers polled in the region see hiring returning locals as a viable option to address their recruitment challenges.

Power equipment companies embrace SEA’s growing electricity demand

A number of foreign cable and wire companies are planning expansion in Vietnam in order to take advantage of the growing local and Southeast Asian demand.

Late last week, the Republic of Korea's cable manufacturer LS Cable & System announced the initial public offering (IPO) of its subsidiary LS C&S Asia on the country’s main bourse, Korean Composite Stock Price Index (Kospi) next month.
This subsidiary is a holding company of LS Cable & System’s two Vietnam-based locally incorporated operations LS-VINA and LS CV.
The reason for the listing, according to CEO Myung Roh-hyun, is the Vietnamese operation’s gleaming prospect of growth. According to a release posted on the company’s website, as the Vietnamese government is now carrying out many power projects due to its high economic growth, the sales of extra high voltage cables are expected to increase sharply. 

ASEAN countries are also expected to expand their investments in their power and communication infrastructure as their economies are growing by more than 5 per cent a year on average.

“We will transform LS C&S Asia from No. 1 in Vietnam to the best total cable-maker in Southeast Asia,” Myung said.

He added that the company is aiming for 1 trillion won ($890 million) in sales in 2021, compared with the 490 billion won ($436.5 million) last year.

LS C&S Asia reported a market share of 30% in Vietnam in 2015, ranking as the leading company in the industry.

Talking to local media, Myung said he is confident in the company’s ability to stay at the top in the following years because “Vietnamese competitors have yet to catch up with LS Cable & System in terms of technology.”

LS C&S Asia is also planning an additional investment of  US$15 million in Vietnam to be disbursed from now to 2020, and to export products to other fast growing economies in the region, including Myanmar, Laos, and Cambodia.

Late last year, the company secured a $13-million contract with Myanmar’s Ministry of Electricity and Energy.

LS C&S is not the only company planning expansion in Vietnam. Late last month, Taihan Electric Wire acquired complete ownership of Taihan Sacom Cable (TSC), its joint venture established in 2005, and renamed it to Taihan Cable Vina (TCV).

CEO Choi Jin-yong said the company decided to pick Vietnam as a strategic location to expand its global market share due to its geographical advantages as well as the growth potential of its economy and electricity market.

“We will make aggressive investments in new facilities and technologies to make Vietnam our second production base, following our plant in Dangjin in South Korea,” he told newswire businesskorea.co.kr. Taihan Electric Wire is planning to build a plant in Vietnam for high-margin products, such as ultra-high voltage cables and aluminium conductor composite core cables, to strengthen the competitiveness of TCV.

The company expects its annual sales revenue to rise from $36 million in 2015 to US$190 million by 2020.

Germany-based cable producer Helukabel GmbH, meanwhile, is ramping up sales activity in the region. The company recently opened its 26th global subsidiary in Ho Chi Minh City. The office will initially be operated by a seven-member sales and logistics team, but the company projects it to grow to about 20 people over a five-year span. 

The office is currently just 765 square feet and only carries small quantities of single conductor wire, but a larger warehouse is expected to be completed in 2017.

The firm said Southeast Asia is one of the world's fastest growing regions, with Vietnam's industrial sector accounting for more than 40% of the country's economic output. “We expect solid, double-digit growth in Asia overall,” a Helukabel spokesman said. 

Electricity demand in Vietnam is expected to see a remarkable increase of more than 10% per annum in the near future, due to the rapidly increasing population and economic growth. 

In particular, southern Vietnam faces a critical situation due to the current imbalance between existing supply and the increasing electricity demand. 

There is an urgent need for the development of power generation and transmission infrastructure in the region.

For Southeast Asia, the demand for electricity is expected to triple from now to 2040, according to a forecast by the International Energy Agency.

Glutton for work: Thien Tan to develop second solar power plant

After kicking off the construction of the first solar power plant in the central province of Quang Ngai, Thien Tan Group continues to co-operate with US partner Black & Veatch to study investment opportunities for another solar power plant in Ninh Thuan province.

Notably, representatives of Thien Tan and Black & Veatch attended a working session to discuss the feasibility of a solar power plant in the province.
Accordingly, Thien Tan plans to develop a 1,000MW solar power plant with a total investment capital of $2 billion, using batteries imported from First Solar Group from the US.

 Regarding Black & Veatch, the company said that it specialises in consulting and constructing infrastructure for energy projects.

 The company has plenty of experience in implementing solar power projects and wind farms up to a capacity of 3,500 and 2,200 MW, respectively, in over 100 countries. Black & Veatch currently has over 100 offices across the world.

In August 2015, Thien Tan has also started developing a 19.2MW solar power project in Quang Ngai, with the total investment of nearly $41 million. It is one of the two solar power plants implemented in Vietnam to date.

The plant will be kitted out with modern technology and equipment. Once it comes into operation, it will have an output capacity of 28 million kWh per year.

Along with solar power projects, Thien Tan is negotiating with US-based Global Universal Inc. to form a joint venture to upgrade and expand the Chu Lai airport expansion projec in the central province of Quang Nam under a build-operate-transfer (BOT) format.

Besides, in July, Thien Tan signed a consultancy agreement with Nikken Sekkei Civil Engineering Ltd. from Japan to aid the infrastructure development of Ly Son Island District in Quang Ngai province.

Big C Vietnam pays off US$93 million tax arrears

Big C Vietnam, representing its new owner Central Group, has paid off the whole VND2.034 trillion (US$93 million) it declared in tax earlier.

The tax amount was incurred from the transfer of ownership over Big C Vietnam from French Groupe Casino to Thai Central Group in April this year.
This is the largest sum the Vietnamese tax authorities have ever collected from a capital transfer. Earlier, German company METRO Group paid VND1.9 trillion ($85.25 million) in tax after the sale of METRO Cash & Carry Vietnam to Thai company TCC.
The tax authorities previously estimated the tax bill at VND3.6 trillion ($165 million). Currently, they are inspecting the retailer’s compliance with tax laws, to check whether the declaration of the lower tax bill was illegal.

Meanwhile, affiliated relationships in the trading activities of Big C Vietnam and its partners have triggered investigations into transfer pricing.

At the end of April, Central Group paid US$1.14 billion to Groupe Casino to take over Big C Vietnam. 

The retail chain has a network of 43 stores and 30 shopping centres and achieved a net sales of €586 million (US$666 million) in 2015.

The General Department of Taxation is in the process of drafting a decree on preventing transfer pricing and tax evasion.

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