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Central region introduces priority tourism investment wish-list
Foreign tourists in Hoi An
A raft of priority tourism investment projects in the central region’s tourism hotspots recently got exposure to the investor circle.
A workshop presenting priority investment projects in several localities in the central region and the importance of Industry 4.0 in hotel investment and operation took place on November 2 in Danang.
The workshop, hosted by the central region's Small and Medium Enterprise Promotion Centre, attracted more than 100 corporate entities.
Tourism leaders in the three localities of Hue, Danang, and Quang Nam province took the occasion to introduce the tourism strengths of each locality, presented measures to develop regional linkages, as well as major tourism projects to solicit investment.
the investment wish-list featured 19 projects from the province of Thua Thien Hue, 48 projects from Quang Nam, and 5 projects from Danang.
Accordingly, the investment wish-list featured 19 projects from the province of Thua Thien Hue, 48 projects from Quang Nam, and 5 projects from Danang.
The workshop also provided enterprises information to support and guide investment in the tourism sector of each locality, creating favourable conditions for investors and supporting enterprises in the area to improve the efficiency of hotel and tourism investment and operation in the 4.0 era.
In fact, the above localities have posted quite impressive growth in tourism in the past year. According to statistics, the total number of visitors to Danang are estimated at 6.83 million in the first 10 months of 2018, a 21.5 per cent jump on-year.
Total tourism revenue is estimated at VND23.661 trillion ($1.03 billion), up 43.1 per cent over the same period in 2017.
Meanwhile, in the first eight months of 2018, total tourism revenue in Thua Thien Hue is estimated to have surpassed VND3 trillion ($130.4 million).
Tourism in Quang Nam has also been growing robustlyduring the period, with tourism revenue touching VND4.650 trillion ($202.2 million), up 24.6 per cent over the same period in 2017.
The workshop aims to widen the opportunities of domestic SMEs to expand their investment portfolio into tourism development.
Dong Nai attracts FDI thanks to brand development
In addition to singed free trade agreements, the brands of a locality, infrastructure companies, and industrial zones are important factors in the decision making process of many FDI enterprises. Dong Nai province, attracting the highest rate of FDI investment in Vietnam for the past three years, provides an example.
Dong Nai province drew more than US$1.3 billion in foreign direct investment (FDI) throughout a period of nine months in 2018, surpassing their yearly target by 30%. The amount included more than US$600 million from newly licensed projects.
These figures have affirmed FDI investors’ trust in the security of Dong Nai’s as an investment location and are attributed to local authorities’ efforts to improve the competitiveness capacity, investment climate, administrative reform, and readiness to accompany enterprises apart from its potential in geographical position, population, and geology.
More importantly, infrastructure companies have greatly contributed to Dong Nai’s success.
They are Sonadezi Long Binh, Tin Nghia, and industrial parks like Bien Hoa 1, Long Thanh, and Amata, to name a few.
Guru Mallikarjuna, managing director, Bosch Vietnam said, “We plan to build a factory in Vietnam because of the country’s favorable investment conditions. Among them are political stability, a young and competent young human resource sector, and geographical advantages. From Vietnam, we can easily gain access to other regional customers.”
According to a representative of Dong Nai industrial zones’ management board, a well-located industrial zone is a leading factor in attracting investment.
But the brand, investment attraction results, service quality of infrastructure companies, and the investment efficiency of enterprises there are also factors that FDI enterprises often consider carefully in choosing an investment location.
Those are the reasons why Dong Nai has attracted a great number of major firms like Hisamitsu, On Semiconductor, Fujitsu, Taekwang Vina, CP Group, and Shell Vietnam.
In recent years, Dong Nai has given priority to projects using hi-tech, skilled laborers, and environmentally-friendly practices with stricter regulations instead of casting a wider net at the expense of quality projects.
“Dong Nai has a good infrastructure and qualified human resources to ensure the security of investment projects. It has also made impressive advances in public services and administrative reform.
Previously Dong Nai planned to attract as many projects and capital as possible but now it has changed its approach to selecting projects with priority given to the most advanced technologies of the day,” said Mai Van Nhon, Deputy Director of the provincial Industrial Zone Management Board.
One of Vietnam’s largest private conglomerates, Masan Group, has reported outstanding nine-month performance, leveraging its premiumisation and beverage strategy to double and triple the fast-moving consumer goods growth rate in the forthcoming years.
Accordingly, the company’s core nine-month net profit after tax (NPAT) post minority interest (Post-MI) reached VND2.307 trillion ($100.3 million), up 90.2 per cent against the VND1.213 trillion ($52.7 million) one year ago. This came as its core NPAT Post-MI margin increased to 8.7 per cent during the period, compared to the 4.4 per cent last year.
Masan Group delivered VND26.630 trillion ($1.16 billion) in net revenue for this nine-month period, down 3 per cent compared to the corresponding period in 2017, which was VND27.451 trillion ($1.19 billion), mainly due to the impact of the pig price crisis on one of its member units Masan Nutri-Science’s (MNS) top-line.
Excluding MNS, the group’s consolidated net revenue would have grown by 29 per cent on-year during the period.
Pig farmers have finally re-invested to increase their pig population after regaining confidence as prices have stabilised at approximately VND45,000-VND50,000 ($1.96-2.17) per kilogramme in the past two quarters. The company’s management, therefore, expects a 10 per cent growth in the commercial feed market for the 2019 fiscal year, starting from the first quarter of 2019.
MNS’ pig feed revenue grew by 1.3 per cent in the third quarter of 2018, compared to the previous quarter. Based on the latest forecasts for this year’s fourth quarter, pig feed revenue is expected to grow by 2-5 per cent on-quarter.
Masan Group will trim down interest expenses by approximately VND1 trillion ($43.5 million) per year, starting from the fourth quarter of this year. Gross debt to earnings before interest, depreciation, and amortisation (EBITDA) is expected to decrease to 2.5x by the end of 2018 as a result of the planned pay down of over VND11 trillion ($478 million) in debt in the fourth quarter of this year.
The group’s deleveraging is part of its effort achieve a credit rating on par with Vietnam’s long-term sovereign credit rating of BB- within the next 12 months.
One of Masan Group’s member units, Masan Consumer Holdings (MCH), sustained its growth momentum above 20 per cent during the nine-month period supported by “premiumisation” (premium brand optimisation) and successful innovations.
In the food portfolio, these innovations led to 36.1 per cent growth on-year in seasonings and more than 50 per cent growth in the premium portfolio.
Besides, 32 per cent growth in convenience foods was driven by premium products growing by more than 60 per cent, as the Omachi cup innovation has achieved three-fold run rate revenue since its launch five quarters ago.
As for the beverage portfolio, the 38 per cent growth in the beverage portfolio was anchored by the strong performance and growing brand power of performance-enhancer drink Wake-up 247.
Beverage points of sales had grown from 75,000 last year to 130,000 as of the third quarter of 2018.
The instant coffee portfolio registered a 17 per cent growth compared to the third quarter of 2017, mainly driven by the rebound of the Vinacafé brand. Vinacafé delivered 25 per cent top-line growth on-year as MCH has revitalised premium heritage brands.
Focus will be on upgrading the coffee research and development (R&D) platform, as sustaining growth above 15 per cent going forward will require breakthrough innovations.
Meanwhile, the group is making the first steps into the beer segment with the introduction of White Lion brand. The company’s management realised that cross-selling beer with current food and beverage distribution platform would not be the correct operating model. Thus, MCH has set up a separate beer distribution platform led by a dedicated sales force with significant beer-specific experience. The management expects to ramp-up the sales force to 150-200 by mid-2019.
Despite its full potential, the processed meat segment performed under the management’s annual forecast due to the lack of innovation and technology capabilities.
The partnership with Korean partner Jinju provides MCH world-class innovation and new product development capabilities. The first co-products are set to be launched in the fourth quarter of this year, while the innovation pipeline for 2019 is being solidified.
Another member unit, Masan Resources (MSR), generated $30 million of free cash flow during the period and is expected to deliver $55-60 million of free cash flow for the full year, a 30 per cent jump on-year.
In the nine-month period, MSR completed the acquisition of H.C Starck’s 49 per cent stake in Masan Tungsten (formerly known as Nui-Phao-H.C Starck Tungsten Chemicals Manufacturing).
“Masan Resources’ acquisition of the high-tech tungsten chemical plant is a strategic step to generate strong cash flows across commodity cycles. We aim to double the plant’s capacity to further consolidate our ex-China tungsten market share,” said Nguyen Dang Quang, chairman and CEO of Masan Group.
MSR is positioned as an integrated Ex-China tungsten chemical champion and is building capacity to double its mid-stream tungsten market share. In addition, MSR continues to explore strategic opportunities with downstream tungsten players to deliver on its shareholder value creation plans.
Global tungsten prices have softened in the third quarter of 2018 due to seasonality factors in Europe and the on-going US-China trade tensions. However, the tungsten concentrate market continues to remain tight and only a limited supply is available globally.
With the recent shutdown of an Ex-China tungsten mine, the company’s management forecast tungsten prices to trade up to $300 per MTU level in the fourth quarter of 2018. The management therefore envisages boosting tungsten chemicals capacity to 12,000 MTU in 2019 from the current 7,500 MTU.
Recently, the pig feed segment, which is managed by MNS, had the largest impact on the group’s revenue. There was a slight improvement in sales in the third quarter of 2018, but the management expects there are still two quarters away from full recovery.
As the number of small- and medium-sized farmers have reduced significantly during the market crisis, the MNS management team will focus on penetrating large-scale farmers and will launch an innovative solution to target these customers in the fourth quarter of this year.
The management will also shift its operating model back to brand building and productivity-led innovation. MNS expects to launch its first fresh meat products in the last quarter of this year. The company is finalising its route to market model and working with a third party supply chain logistics partner for a year-end launch.
“However, not all has gone according to plan. Masan Nutri-Science is still recovering from the pig price crisis. We have started selling pig livestock with great results, but this will cease in 2019 as we begin to fully process our pig supply into branded meat products for consumers,” CEO Quang said.
Masan Group and its largest shareholder SK Group will set up a Strategic Cooperation Committee in the fourth quarter of this year which will be responsible to implement operational synergy and explore additional partnership opportunities across Masan Group’s business units.
The management expects consolidated fourth-quarter net revenue to grow by 15 per cent compared to the same period in 2017 and its NPAT Post-MI to touch VND4.7-4.8 trillion ($204.4-208.7 million), representing over 50 per cent growth compared to last year.
“We continue to execute our medium-term growth plan. Masan Consumer’s premiumisation and beverage strategy is showing sustainable traction, positioning us to grow 2-3 times faster than Vietnam’s fast-moving consumer goods (FMCG) market over the next few years,” said CEO Quang. “We look forward to closing the year on a strong note and crystallising our foundations to deliver double-digit growth in 2019 and beyond.”
As Vietnam’s investment potential has turned attractive, now is the right time for foreign enterprises and investors to come and seek opportunities in Asia’s fastest-growing economy, said Henri-Charles Claude, president of the French Chamber of Commerce and Industry in Vietnam (CCIFV).
The Vietnam economy is making significant moves forward, thus offering numerous opportunities to foreign businesses, including those from France. Foreign investors should not be slow-paced or let this chance slip, Claude said at the France-Vietnam Business Forum taking place in HCMC on November 4.
Over 200 enterprises from Vietnam and France joined the forum, which was organized given the framework of the three-day official visit of French Prime Minister Edouard Philippe to Vietnam starting November 2.
According to Eurocham Vice Chairman Jean Jacques Bouflet, Vietnam has signed many regional and international free trade deals such as the Comprehensive and Progressive Trans-Pacific Partnership and the Vietnam-EU Free Trade Agreement (EVFTA), helping businesses active in the country enjoy huge tariff advantages.
For the deal signed with the European Union, the nation will see significant impacts like better legal framework for business doing. As the nation is moving towards the last steps to put the EVFTA into reality, enterprises from France as well as Europe should speed up cooperation and investment in Vietnam to benefit from the deal, he said.
Valentin Tran, general director of Andros Group specializing in fruit product processing, said that Vietnam was chosen for the group’s investment before expanding to regional markets due to its rapid economic growth, large population of nearly 95 million and plentiful material sources.
Vietnam is a dynamic market and has large potential for business and exports to neighboring countries such as Cambodia and Thailand. Notably, the flourish relationship between Vietnam and France is also a reason for Andros’s decision, he said.
Aside from direct investment, Andros also cares about the merger and acquisition market, joint venture establishment and cooperation with domestic suppliers. “We have a long vision for production and domestic sale development in Vietnam, and then expansion to other Southeast Asian markets,” Tran added.
Fabrice Carrasco, regional director of Kantar Worldpanel Asia, said the nation has seen a high demand for domestic consumption, with its growth rate averaging out at 12% per year, which is higher than regional markets’. The market still has big potential thanks to a young population, rapid urbanization and high market demand.
Businesses at the forum also expressed their interest in the equitization of State-owned enterprises, appreciating successful State capital divestment at large companies such as Vinamilk and Sabeco. French enterprises have also found investment opportunities in the fields of infrastructure, urban development and clean energy.
On the same day, Prime Minister Edouard Philippe met with Secretary of the HCMC Party Committee Nguyen Thien Nhan.
He also attended a ceremony to inaugurate the French medical center and took part in French Tech, an event for startup businesses. This was part of the activities to mark 45th anniversary of bilateral diplomatic ties and five years of strategic partnership between Vietnam and France.
A hi-tech pig slaughterhouse of the international standard run by Bien Dong DHS, one of the biggest of its kinds in the north, was inaugurated in Hai Nam commune, Hai Hau district, the northern province of Nam Dinh on November 4.
The 21-hectare pork processing complex uses automated slaughtering line from the Republic of Korea with a designed capacity of 300 pigs per hour, according to Director of Bien Dong DHS Vu Trong Nghia. The complex has a total investment of about VND300 billion (nearly US$12.8 million).
Pigs will be purchased from farms within supply chains in Nam Dinh and neighbouring provinces which must satisfy Vietnamese Good Agricultural Practices (VietGAP) based on four standards in production techniques, food safety, work environment, and origin traceability.
The plant’s main products include frozen pork and heat-treated pork products which will be distributed domestically and exported to foreign markets like Japan, the Republic of Korea, China and Malaysia.
Agriculture is Nam Dinh’s key industry with a strong development of animal husbandry, said Chairman of the provincial People’s Committee Pham Dinh Nghi. Local farms raise a total of about 800,000 pigs which produce more than 150,000 tonnes of pork per year, accounting for over 81% of the province’s meat output, he added.
The province houses around 300 large-scale animal farms and thousands of household farms, many of which have been verified to meet VietGAP standards and recognized as free of foot-and-mouth disease and African Swine Fever (ASF), Nghi said.
However, the province still lacks large-scale slaughterhouses, he noted, adding that the launch of Bien Dong DHS pork processing plant marks a new milestone in the development of local agriculture.
Speaking at the launching event, Deputy Minister of Agriculture and Rural Development Tran Thanh Nam said to ensure sufficient input for the complex’s production, the company and the province must build disease-free zones for animal farming and develop safe and clean supply chains of pigs. He also urged the company to further advance its production technology to provide pork for not only the local market but also overseas ones.
Only 19% of Vietnamese firms in a survey feel the ongoing US-China trade friction would hinder their business over the next three years.
According to a recent survey conducted by HSBC, Vietnamese businesses are among the world’s most optimistic about international trade prospects and also among the most confident when it comes to succeeding in the current environment.
HSBC’s latest report, ‘Navigator: Now, next and how for business,’ which polled over 8,500 businesses across 34 markets, showed that 91% of Vietnamese respondents, compared with 75% globally, indicated they believe the outlook for trade is favorable in spite of geopolitical factors that are curbing enthusiasm elsewhere.
They cited a favorable economic environment, decreasing costs of shipping, logistics and storage, and an increasing demand for their products as the top three drivers of trade growth.
This could reflect the prospective boost to exports in sectors such as textiles as well as electronics as production and demand shift away from China.
Free-trade-agreements (FTAs) are another factor that makes Vietnamese companies enthusiastic about international trade since 60% of the firms participating in the HSBC survey believe FTAs will have a positive impact in emerging markets, while 45% of firms in developed markets have high hope for these agreements.
The majority of Vietnamese respondents are positive about the partnerships established with key trading partners, with 69% believing that ASEAN membership will help their business in the next three years.
Similarly, 65% of Vietnamese firms believe the forthcoming European Union-Vietnam free trade agreement will have a positive impact on their business in the near future. The two sides agreed on a final text for the trade agreement earlier in June.
“Vietnamese businesses’ optimism reflects an economy that’s been one of Asia’s star performers, which has been growing fast,” said Winfield Wong, Head of Wholesale Banking, HSBC Vietnam.
“They are optimistic as they consider themselves well-positioned thanks to a strong domestic economy, confidence in the global economy, as well as far-reaching trade deals and burgeoning trade relations with major markets.”
Vietnamese firms are also looking to expand and enter overseas markets. Over a quarter of businesses are eyeing opportunities in Japan, while 23% are looking to expand into China, and a fifth are considering the Republic of Korea for expansion.
“We are seeing an increasing demand from clients, particularly those in manufacturing and energy sectors, looking to expand their operations," Wong said.
These ambitions are supported by sustainable local economic growth and interest from overseas firms looking to move here, he added.
“We are seeing an increasing demand from clients, particularly those in manufacturing and energy sectors, looking to expand their operations,” Wong said. “These ambitions are supported by sustainable local economic growth and interest from overseas firms looking to move here.”
Moody’s Investors Service has upgraded the baseline credit assessment (BCA) of Vietnam International Bank (VIB) to B1 and Counterparty Risk Assessment (CRA) to Ba3.
The upgrade to VIB’s BCA and other banks’ was driven by the higher macro profile of Viet Nam, progress in writing off legacy problem assets and profitability of banks, according to a report from Moody’s.
In his speech at a recent conference hosted by Moody’s in HCM City, VIB Deputy CEO Ho Van Long said VIB and other healthy banks had taken four measures, including raising capital from increasing profits, raising Tier 1 capital from domestic and foreign funding and Tier 2 capital, beside optimising risk-weighted assets in order to raise capital and CAR.
Long was the only representative from local banks to be invited by Moody’s to the event, which assessed Viet Nam’s economy, the banking system’s ratings, and forecasts on the economy’s outlook and local banks’ performances in 2019.
After upgrading the Government of Viet Nam’s long-term issuer and senior unsecured ratings to Ba3 from B1, Moody’s upgraded the long-term local and foreign currency bank deposit and issuer ratings of VIB to B1 from B2 in August.
In addition to the upgrade, VIB was recognised by the State Bank of Viet Nam (SBV) and Viet Nam Asset Management Company (VAMC) as one of five banks to have re-purchased all bad debts that they had sold to the VAMC. The move was expected to improve the bank’s profitability over the next 12-18 months as the burden of credit costs dropped, VIB said in a statement.
VIB is also one of the only two local banks ready to apply Base II standards. To date, the bank has completed the implementation and waited for the SBV’s approval for applying the standards in 2018.
In terms of retail banking (RB), the bank’s transformation which started two years ago had helped VIB develop and become one of the biggest retail banks in Viet Nam with non-performing loans in RB under 1 per cent. VIB had maintained first position in car financing and ranked in the top three for bancassurance sales.
Over the past nine months, VIB’s pre-tax profit reached VND1.72 trillion (US$75.5 million), up 176 per cent year-on-year, while its return on equity ratio (ROE) reached nearly 20 per cent and was expected to go up in the fourth quarter, according to the bank’s financial statements.
From January to September, the bank’s total assets topped over VND132.5 trillion, up 8 per cent year-to-date, while lending and deposits experienced respective rises of 13.1 per cent and 15 per cent to VND95.2 trillion and VND89.2 trillion. Its non-performing loan ratio remained at 2.5 per cent in the nine-month period.
The bank’s capital adequacy ratio (CAR) was more than 12 per cent and CAR, under Basel II, was over 9.5 per cent. Ratio of short-term deposits used for long-term loans stood at 38 per cent this year to September 30, lower than the permitted maximum limit of 45 per cent.
Forum discusses ways to cut shrimp production costs
Viet Nam, which is among the world’s largest shrimp exporters, is expected to encounter difficulties in the future due to the impact of climate change, high production costs and other factors, according to experts.
Speaking at a forum on production costs in brackish-water shrimp aquaculture held in Bac Lieu Province last week, Dr Vo Nam Son, an aquaculture expert, said: "The biggest challenge in our shrimp industry is the high input costs. After harvest, farmers have no profits.”
Breeding shrimp also consumes a lot of electricity.
According to the EVN Southern Power Corporation, electricity demand for aquaculture increased from 7,800 MW in 2015 to more than 9,500 MW last year and is expected to continue to rise in the coming years.
The use of electricity to run equipment in shrimp ponds has resulted in overloaded electricity grids in some places.
“A strategy for efficient use of electricity in shrimp farming should be introduced to save electricity in the production process, and to reduce production costs," he said.
Vu Duyen Hai from the Directorate of Fisheries said that production costs were affected by feed, broodstock, electricity, labour costs and bank interest rates.
In the long term, the sector, which breeds mostly two species, sugpo prawn and white-legged shrimp, needs comprehensive measures to reduce production costs.
Tran Dinh Luan, deputy general of the Directorate of Fisheries, said that scientists, management agencies and local authorities must use the Government’s existing mechanisms and policies to help shrimp farmers.
In addition, businesses and processing plants should join hands with authorities to create more linkages between businesses, scientists and breeders. This would help farmers significantly reduce costs for broodstock, feed and other inputs.
Speaking at the forum, Duong Thanh Trung, chairman of the Bac Lieu Provincial People’s Committee, said that after the Prime Minister asked the province to focus on high-tech shrimp farming, it developed more than 1,000ha of industrial shrimp farming with high technology, which had positive results.
"Bac Lieu has many high-tech shrimp farming models that have reduced input costs, improved the quality of shrimp and ensured increased income for farmers. Businesses have also paid a lot of attention to environmental protection,” he said.
According to the Viet Nam Association of Seafood Exporters and Producers, the country earned US$2.62 billion from shrimp exports in the first nine months of the year, a year-on-year reduction of 4.1 per cent.
Viet Nam’s total export revenue of shrimp products is expected to hit $5.5 billion by 2020 and $10 billion by 2025, according to the targets in the national plan.
The industry aims to develop large-scale models with high technology, without the use of chemicals and antibiotics during the entire shrimp production process.
Cement industry surpasses 85 million tonne target
High demand, especially in global markets, have helped the cement industry surpass its annual sales target of 83-85 million tonnes in just ten months.
According to the Ministry of Construction, the cement industry sold 85.23 million tonnes of cement products in the first ten months of the year, a massive 51 per cent increase against the same period last year.
Exports accounted for 26.05 million tonnes, surging sharply by 65 per cent year-on-year. The high growth helped the industry surpass the export target of 18-19 million tonnes set for 2018.
Mainland China has become the largest importer of clinker and cement from Viet Nam with 6.56 million tonnes valued at US$235 million in the first three quarters of the year. The Philippines, Bangladesh and Taiwan followed with 4.75 million tonnes, 5.64 million tonnes and 1.23 million tonnes, respectively.
According to analysts from Saigon Securities Inc, Viet Nam’s cement market could benefit from lower production in China in the wake of the country’s new policies. By the end of 2017, China had shifted from being a global exporter of clinker — a semi-product used in the production of cement — to an importer of cement. The country closed a series of cement plants from November 2017 to March 2018 because of environment pollution and a shortage of electricity during the winter.
China faces a shortage of electricity during the winter because the nation needs more electricity for heating. Cement production is one of the industries that consumes a large volume of energy.
Demand for cement imports in China had increased significantly, leading to an increase in Viet Nam’s cement exports, the analysts said, noting that China is the world’s largest cement producer with an annual capacity of about 2.5 billion tonnes, accounting for nearly 60 per cent of the world’s capacity and roughly 25 times higher the capacity of Viet Nam.
In the domestic market, the consumption of cement products was also forecast to keep rising from now to the year-end thanks to high demand from local property developers wanting to complete projects before Tet (Lunar New Year) and whilst the weather is favourable for construction.
The Ministry of Construction’s Building Material Department estimated that the industry would also reach its sales target of 65-66 million tonnes in the domestic market set for 2018. The product’s local consumption in the first ten months of the year stood at 59.18 million tonnes.
On top of Viet Nam’s large cement capacity, the list of cement projects that are expected to come into operation after 2018 include some very large factories. These include Song Lam Cement’s production lines 3 and 4 with a total capacity of 3.8 million tonnes per year, Thai Nguyen Group’s Ha Tien Cement Project in Binh Phuoc with an annual capacity of 4.5 million tonnes and the Tan Thang Cement Project in Nghe An Province with an annual capacity of 1.8 million tonnes.
Mekong Delta calls for Japanese investment in tourism, agriculture
Localities in the Mekong Delta region have called for investment in 63 projects related to industry, tourism, agriculture and logistics infrastructure, with total capital of VND250 trillion (US$10.71 billion).
The projects were announced at the 6th Annual Mekong Delta Investment Forum (MekongInvest) 2018 in Can Tho City, hosted by the Viet Nam Chamber of Commerce and Industry (VCCI) – Can Tho branch on November 3.
The forum, which connected Japanese investors with the 13 provinces of the Mekong Delta, drew more than 150 Japanese enterprises as well as local trade promotion agencies and businesses.
Cooperation potential in tourism and agriculture were the main topics discussed by participants.
Vu Tien Loc, VCCI’s chairman, said the region aimed to have 52 million visitors with total revenue of VND111 trillion, under the tourism development plan for the Mekong Delta approved in 2016 by the Prime Minister.
However, although the number of foreign tourists to Viet Nam has grown strongly over the last 10 years, arrivals in the Mekong Delta remain modest, with only 1/20 of total arrivals per year being foreign tourists.
Accommodations are also seriously lacking, as the entire region has only 60 3- to 5-star hotels, mainly on Phu Quoc Island and in Can Tho, and two major entertainment areas, Vinpearl Phu Quoc and Bac Lieu’s Nha Mat Resort. This has resulted in hotel occupancy of about 4 per cent, lower than in other areas of the country.
“This shows that the Mekong Delta tourism development has not been on par with its potential,” Loc said.
At the forum, localities in the Delta called for investment in major tourism projects in various provinces, including the U Minh Thuong Eco-tourism Area (Kien Giang), HAPPYLAND Commune Tourism Service Complex (Long An), Con Giong Resort and Tourist Area (Vinh Long), and Bung Binh Thien Ecological Tourism Area (An Giang), with total investment capital of VND15 trillion.
Takahashi Ayumi, chief representative of the Japan Tourism Promotion Agency in Viet Nam (JNTO), said that enterprises in the sector should improve linkages to avoid duplicative tourism products.
Attention should also be paid to improving the quality of human resources in the tourism sector, focusing on customer communications and foreign language skills.
Ayumi noted that tourism promotion activities in the region had not attracted many foreign tourists. Most tourists are not familiar with the region and would rather visit big cities like Ha Noi, HCM City and Da Nang.
He said the JNTO would work with local administrators to introduce Japanese culture through cultural exchanges with arts programmes and exhibitions of traditional Mekong Delta products.
The JNTO would also connect the local tourism sector with the Japan Association of Travel Agents to share information about foreign tourists’tastes.
Ayumi said that it was crucial that local provinces and cities step up their call for investment in expanding airports, improving power systems, and upgrading infrastructure to meet the demand of visitors.
As for agriculture, the Mekong Delta has great demand for advanced technologies to improve its farm production and seafood processing for exports, according to Nguyen Phuong Lam, deputy director of VCCI Can Tho.
With favourable conditions for agriculture, the Delta plays a very important role in the country’s economy. It contributes over 50 percent of food output, nearly 70 percent of seafood exports, 90 percent of rice exports, and 20 percent of the nation’s GDP.
However, "the per capita local income has not matched their contributions because most farmers still use traditional cultivation methods and depend on weather conditions," Lam said, noting that the rate of mechanisation in rice harvesting was only 65 percent and that breeding techniques remained poor.
Each year, rice growers suffer from post-harvest losses of VND3.2-3.6 trillion ($143 million – 161 million), or 12 per cent of total output, equivalent to 2.16 million tonnes of rice.
The limited application of advanced equipment in the processing stage has also made it difficult for locally made products to make inroads into choosy markets.
The region hopes to collaborate with foreign agri-tech companies to improve its competitiveness.
According to Takimoto Koji, chief representative of the Japan External Trade Organisation in Viet Nam (JETRO), the Vietnam Agricultural Information Centre Company in Japan (VAIO) is launching a project to build ideal model farms in the Mekong Delta, under the supervision of Japanese agricultural experts.
The main focus will be to establish an integrated farming system within the region, including organic farming methods, refrigeration systems for commodity circulation, frozen preservation techniques, stable harvesting techniques, and improved product quality.
Japanese agricultural businesses also use this kind of system.
The project will be implemented first on the campus of Can Tho Technical Economic College, using investment funds from the Japanese Government and enterprises of both countries.
The model will also serve as a reference for other provinces and will be replicated after it shows success.
To reduce production costs and create jobs, Japanese firms also have plans to expand investment in local farming factories.
Secondhand machines with high capacity will be imported from Japan after quality examinations, while “smart” and small machines will be used in the delta to help farmers take on dangerous jobs.
Speaking at the forum, Consulate General of Japan in HCM City Kawaue Junichi said that in recent years more Japanese enterprises had shown interest in investing in the Mekong Delta.
Japanese businesses hoped to receive support from local governments through clear legal regulations, and transparency and openness of local development planning, he said.
This would help investors accurately predict economic development, and thus better manage cash flow, while enhancing confidence in their investment decisions.
“With a high development growth rate, the Mekong Delta is expected to become an important hub for Japanese enterprises in the coming time,” he said.
Awards given for best annual report, corporate governance and sustainability
Bao Viet Holdings, Hau Giang Pharmacy, FPT, HCM City Securities Corporation and Vinamilk are the top five winners of the Best Annual Report Awards and Best Corporate Governance Awards in the large cap (capitalisation) category in the Viet Nam Listed Company Awards (VLCA).
Five other listed companies in the large cap category in the Top 10 for Best Annual Report prize included the Asia Commercial Bank (ACB), Ca Mau Petroleum Fertiliser, Nova, Thanh Thanh Cong - Bien Hoa, and Sai Gon Securities Inc.
Organised jointly by the HCM City Stock Exchange (HOSE), the Ha Noi Stock Exchange (HNX) and Viet Nam Investment Review (VIR) magazine, and sponsored by Dragon Capital Group, the VLCA awards are an extension of the Viet Nam Annual Awards (ARA), an event that has accompanied the growth of Viet Nam’s stock market and listed companies for a decade.
Besides the annual reporting awards and sustainability reporting awards, this year’s contest also conducted an in-depth review of corporate governance standards at listed companies. The aim of the review was to encourage listed firms to adopt international standards of governance and promote sustainability.
A corporate governance set of standards developed by VLCA’s organising committee is based on the standards of the countries in the Organisation for Economic Co-operation and Development (OECD), with adjustments made to suit the local situation.
Judges took into account information published by companies between July 1 last year and April 30, such as their own website or policymakers’ websites.
An independent third-party judge was invited to evaluate the corporate governance section.
The preliminary results of the awards and corporate governance review were checked by global auditors Deloitte, E&Y, KPMG, and PwC to ensure the highest level of transparency, impartiality and professionalism.
Another new aspect of the VLCA this year is that participating companies, wherever they are listed, were classified into three groups based on their market capitalisation (large cap, mid cap or small cap).
This classification creates opportunities for mid- and small-sized companies, encouraging them to take part in the awards.
There were awards in three categories: Annual Reports, Corporate Governance, and Sustainability Reporting.
In the Annual Reports category, 10 large-cap and medium-cap companies each and five small-cap companies were chosen for the awards. The Corporate Governance category had five each.
The Sustainability Reporting Awards were given with assistance from the International Finance Corporation and the Association of Chartered Certified Accountants.
Bao Viet Holdings won first prize and Vinamilk second prize. Three consolation prizes were given to Hau Giang Pharmacy (DHG), Pan and Traphaco based on completeness, reliability and presentation of reports for Sustainability Reporting Awards.
The awards ceremony was organised after four months of preparation.
Le Hai Tra, executive member of the HCM City Stock Exchange (HOSE) and head of the organising board, said: “Transparency and protection of investors’ legal rights are not only the targets of the legal system on securities and securities market, but also the effort under the name of the Viet Nam Listed Company Awards.”
The listed companies’ awareness of the importance of transparency has continued to improve since the first year of the awards, according to Tra.
Fruit, vegetable exports valued at 3.3 billion USD
Vietnam earned some 3.3 billion USD from vegetable and fruit exports during January-October, up 15.5 percent from the same time last year, the Agro Processing Market Development Authority (AgroTrade) under the Ministry of Agriculture and Rural Development has said.
Of the total shipments, 90.3 percent were raw products while the processed ones only accounted for 9.7 percent.
China remained the largest market of Vietnamese fruits and vegetables. Vietnam shipped nearly 2.2 billion USD worth of the products to the neighbouring country in the first nine months of the year, a year-on-year surge of 10.4 percent.
Strong growth was seen in the exports to Thailand (35 percent), Australia (31.6 percent), the US (30 percent), and the Republic of Korea (24.4 percent).
In October, Vietnam splashed out 134 million USD on purchasing foreign fruits and vegetables, raising the total import value of these products in the ten-month period to 1.43 billion USD, rising 13.1 percent against the same period last year.
The AgroTrade said that many fruit and vegie processing plants will be put into operation in the last months of 2018, helping Vietnam improve its production capacity in order to realise its set goal of 4 billion USD in export revenue this year.
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