Workshop looks to boost SMEs’ participation in Industry 4.0

Opportunities and challenges facing small- and medium-sized enterprises (SMEs) in getting involved in the Fourth Industrial Revolution and global value chains were discussed at a workshop in northern Hai Phong city on November 21.

Vu Viet Ngoan, head of the Prime Minister’s economic advisory group, said to be part of global value chains and Industry 4.0, SMEs should be confident and active in integration.

He noted SMEs contribute more than 30 percent of Vietnam’s GDP and provide jobs for more than 50 percent of the workforce.

Bidhan Roy, a director at the US-based Cisco Systems, said digitalisation helps SMEs in ASEAN not only take part in cross-border trade but also expand their business and cut expenses.

SMEs have different scales and are in different development stages, and not all of them can reserve resources for IT. Therefore, more support from the Government and major businesses is needed to develop a concentrated digital economy.

Vice Chairman of the Hai Phong municipal People’s Committee Le Khac Nam noted that many companies are still weak in integration and foreign language skills, do not dare to face challenges and lack vision and capacity of engaging in international labour chains. 

Michael W. Michalak, Senior Vice President and Regional Managing Director of the US-ASEAN Business Council (US-ABC), said the workshop, held by the US-ABC and the Hai Phong municipal People’s Committee, showed the US and Vietnamese business communities’ commitment to supporting the Vietnamese Government’s agenda, which looks to improve local SMEs’ competitiveness amidst Industry 4.0 and global value chains.

The US-ABC and Hai Phong encourage SMEs to capitalise on sci-tech advances and opportunities to integrate into regional markets, he noted.

Over 125 million USD collected from latest G-bond auction

The State Treasury of Vietnam raised more than 2.93 trillion VND (125.5 million USD) from Government bonds (G-bonds) in an auction at the Hanoi Stock Exchange (HNX) on November 21.

According to the HNX, the auction offered a total of 5 trillion VND (214.2 million USD) worth of G-bonds with different maturities.

Four tenures were available, including five-year and seven-year bonds valued at 500 billion VND (21.4 million USD) each, and 10-year and 15-year bonds worth 2 trillion VND (85.7 million USD) each.

The auction of 10-year bonds mobilised over 1.83 trillion VND (78.4 million USD) at the average yield rate of 5.06 percent per year, up 0.03 percent from that of the previous G-bond auction on November 14.

Meanwhile, the 15-year bond auction collected 1.1 trillion VND (47.1 million USD) at the average interest rate of 5.3 percent per year, the same as the last auction.

There was no successful bid for five- and seven-year bonds.

So far this year, the State Treasury has raised nearly 133.7 trillion VND (5.72 billion USD) from G-bond auction at the HNX, accounting for 74.3 percent of the yearly target.

According to the Ministry of Finance, Vietnam expects to issue 180 trillion VND (7.7 billion USD) worth of G-bonds this year, with the focus being on long-term maturity and keeping the interest rate at low levels.

G-bonds valuing at 159.9 trillion VND (7.03 billion USD) and having an average maturity of 13.52 years, up 4.81 years against 2016, were issued last year. The bonds had an average annual interest rate of some 6.07 percent, down 0.2 percentage points against 2016.

Phillip Morris pays attention to Vinataba’s equitisation    

 

The world’s leading tobacco group Philip Morris International (PMI) wants to learn more about the strategic vision of Viet Nam’s Government for equitisation of the Viet Nam National Tobacco Corporation (Vinataba).

The statement was made by Stacey Kennedy, president of South and Southeast Asia Region at Philip Morris International, at a meeting with leaders of the Committee for Management of State Capital (CMSC) held in Ha Noi on Monday.

According to Kennedy, PMI wants to discuss the value that PMI brings when the firm is selected as a strategic investor in the equitisation process of Vinataba.

Ho Sy Hung, deputy chairman of CMSC, affirmed that the Committee always welcomes foreign investors investing into Viet Nam, especially enterprises under the management of CMSC such as Vinataba.

Ha Noi, HCM City spend VND47 trillion for Tet goods
     
Industry and trade departments in Ha Noi and HCM City are planning to spend VND28.5 trillion and VND18.4 billion, respectively, to prepare goods for next year’s Tet festival.

Tran Thi Phuong Lan, deputy director of the Ha Noi Department of Industry and Trade, said the plan on preparing goods for the New Year and the Lunar New Year in 2019 will focus on increase of essential commodities.

These include rice, meat, seafood, eggs, processed foods, fresh vegetables, dried agro, forestry and seafood products, confectionery, wine, beer beverage and fresh fruit.

The total value of goods under the plan is estimated to increase by 10 per cent compared to the VND28.5 trillion spent this year.

The volume of goods in stock will also increase by 10-15 per cent compared with normal months of the year to meet consumer demand during those occasions and to make sure goods are still available after Tet, Lan said.

This plan on production, business and stockpiling of goods has been built based on the population, business situation of companies, market development and purchasing power in the first nine months of this year in the city, she said.

Ha Noi’s goods will include 190,600 tonnes of rice, 44,000 tonnes of pork, 14,600 tonnes of chicken, 12 tonnes of beef, 256 million eggs, 254 tonnes of vegetables, 3,000 tonnes of confectionery and 200 million litres of beer and beverage.

According to General Director of Trading Hanoi (Hapro) Vu Thanh Son, they plan to keep essential goods in stock and will organise sales points to avoid lack of goods before, during and after the Lunar New Year.

Big supermarkets such as Big C, Fivimart and Vinmart have prepared enough supplies and avoid a lack of goods and overpricing. In addition, large supermarkets have prepared a large volume of fruit and imported food to serve high-end consumer.

The HCM City Department of Industry and Trade has completed a plan with a growth of 23-36 per cent in volume against the same period of 2018, reported the Lao dong (Labour) newspaper.

The total value of food and foodstuffs for two months before and during the Tet in 2019 was estimated at VND18.4 trillion, up 3.44 per cent compared to the same period of 2018.

According to the department, to ensure goods reach consumers with the best price, enterprises will increase the sales points in remote areas, industrial parks, export processing zones, residential areas for worker and companies having a large number of workers.

Meanwhile, Ha Noi’s authorities will also create good conditions for businesses to bring stocks to the rural areas, export processing zones and industrial zones, said deputy chairman of Ha Noi People’s Committee Nguyen Doan Toan.

The city will promote control of smuggled, fake and poor quality goods as well as food hygiene and safety violations.

According to the Ministry of Industry and Trade, in the last months of the year, demand on raw materials for production of consumer goods and goods for Tet has begun to increase so there is little increase in price as the supply of local and import goods is plentiful.

With these developments, the ministry forecasts the local market this year will basically remain stable and ensure supply meeting local demand. Therefore, total revenue from retail sales and services in 2018 will increase by 10-11 per cent compared to 2017.

In the first 10 months of this year, Viet Nam’s total revenue from retail sales and services grew as consumers paid more, reaching VND3.6 quadrillion (US$154.51 billion), a year-on-year increase of 11.4 per cent, according to the GSO.

The increase accounting for inflation was 9.31 per cent, higher than the 8.79 per cent growth seen in the first 10 months of 2017.

New high-rise factory in Long An
     
The Long Hau Corporation, owner of the Long Hau Industrial Park, has built a high-rise factory with many facilities that can help businesses save on operating costs.

One of the biggest barriers of small- and medium-sized enterprises is the investment cost in factories.

With high-rises, businesses can reduce initial capital expenditures and operating costs through shared use of common facilities in the building.

The building is high quality, but offers lower rental costs than other standard factories. It also has a refrigeration system.

The factory in Long Hau Industrial Park is designed according to modern standards with a solid structure and many functions. It has the necessary equipment for production and supporting industries.

In addition, the high-rise factory in the industrial park has elevators, garages, power stations, backup generators, and a fire protection system.

As the first high-rise factory in the Mekong Delta province of Long An, it aims to serve high technology and supporting industries.

The industrial park is conveniently located three km from the Tan Cang – Hiep Phuoc Port, 25km from the Cat Lai Port, and 12km from Phu My Hung.

The park has over 170 companies, including Vietnamese and foreign firms from Japan, Korea, India, the US and Europe.

Viet Nam-Korea trade up but deficit grows
     
Over the past 25 years, the economic ties between Viet Nam and South Korea have flourished, but the trade imbalance between the two countries has reached an alarming level.

Bark Tae Ho, South Korea’s former Minister of Trade, spoke on the topic during a seminar in Ha Noi on Friday.

The seminar – themed “Future prospects for Viet Nam-South Korea investment-trade ties” – was organised by the Global Commerce Institute Lee & Ko, South Korea’s Trade-Investment Promotion Agency and the Viet Nam Chamber of Commerce.

At the event, delegates assessed achievements in Viet Nam’s bilateral trade ties after three years of the Viet Nam-South Korea Free Trade Agreement (VKFTA) and discussed remaining issues.

“Viet Nam is Korea’s fourth biggest trade partner after China, the US and Japan,” Bark Tae Ho said. “Two-way trade jumped from $500 million in 1992 to $64 billion in 2017, $14.8 billion of which came from Viet Nam’s exports, up 30 per cent from the previous year, and $46.7 billion from its imports, up 45.3 per cent.”

“Two-way trade is expected to grow to $100 billion by 2020, equivalent to an annual increase of 18 per cent over the next two years,” he said.

“South Korea is the third largest export market for Viet Nam after the US and China,” he said. “It is also Viet Nam’s second largest import market behind China.”

Since VKFTA took effect in 2015, South Korean firms have capitalised on lower tariff duties under the FTA to boost exports to Viet Nam while Vietnamese firms have not taken the same step. As a result, Viet Nam’s trade deficit with Korea has widened sharply, Bark said.

According Bark, exports from Korea to Viet Nam in 2017 were worth $48 billion, up 70 per cent after three years of VKFTA. However, exports from Viet Nam to Korea that year reached only $17 billion.

In 2017, Korean firms poured $1.9 billion into projects in Viet Nam, but Viet Nam spent only $4 million on projects in Korea.

South Korea remains by far the largest foreign investor in Viet Nam, having signed on to pour US$58 billion into more than 6,500 foreign direct investment (FDI) projects in the country as of the end of October, said Nguyen Duy Loi, Deputy Editor-in-Chief of the World Economic and Political Issues, Institute of World Economics and Politics under The Viet Nam Academy for Social Science.

“Viet Nam is a key investment destination of South Korean firms in the ASEAN region,” Loi said. “Among 8,600 Korean enterprises investing in ASEAN, about 5,500 are in Viet Nam.”

“Assessing products imported from Viet Nam to Korea by technological level, 44 per cent of the products are using low technology and only 20 per cent of them use high technology,” said Heo Yoon, a Professor from Sogang University Graduate School of International Studies and President of the Korean Association of Trade and Industry Studies. “The rest use medium technology or are resource-based products.”

He added that Korean investment in Viet Nam is moving from labour-intensive industries to capital-intensive industries, especially in manufacturing sectors.

In the future, Viet Nam and Korea should speed up the negotiation of the Regional Comprehensive Economic Partnership (RCEP), promote infrastructure exports from Korea to Viet Nam, widen and deepen the machinery production network between the two countries and accelerate technology transfer from Korea to Viet Nam as the Vietnamese government has changed the FDI strategy to induce more high-value-added industries, Heo said. 

Thanh Hoa plans aviation complex
     
FLC Group will build a complex of commercial aviation services, tourism resorts, industrial sites and hi-tech agriculture in the central province of Thanh Hoa’s Tho Xuan District between 2018 and 2023.

The plan was discussed at a meeting between FLC and the province’s leaders on Wednesday.

The complex is expected to cover an area of 3,700 hectares with an investment of VND10 trillion (US$430 million) in the first phase. The group has a plan to build the complex to international standards. It will take advantage of Tho Xuan Airport in the district.

Bamboo Airways received an aviation business licence from the Ministry of Transport a day before, becoming Viet Nam’s fifth airline after Vietnam Airlines, budget operators Jetstar Pacific and Vietjet Air and Viet Nam Air Service (VASCO).

FLC’s chairman Trinh Van Quyet said domestic aircraft repair services meet only 10 per cent of the demand and the remaining repairs are done overseas. The project will partly meet the needs of Bamboo Airways and will repair aircrafts in the region.

There will also be a centre to train students in the aviation sector. Bamboo Airways alone will need at least 1,000 flight attendants and 500 pilots by 2019. However, all of them were sent overseas for training. If there were an academy, the cost of training would be reduced by at least 30 per cent.

The group targeted co-operating with big aircraft manufacturers such as Airbus and Boeing to build spare part plants and even aircraft assembly line. However, project implementation would depend on land clearance of 3,000ha from the province.

Nguyen Dinh Xung, chairman of the provincial People’s Committee, said the committee would accelerate land clearance and provide favourable water, electricity, transport infrastructure and administrative conditions for the project.

FLC said that as soon as it is handed the first 60ha from the province in early 2019 it will start construction of the complex.

The chairman granted a certificate to FLC Group to establish a branch of Bamboo Airways in Thanh Hoa Province. Thanh Hoa has been one of localities to which FLC has tried to bring both local and foreign tourists by air travel. 

Ha Nam gets new animal feed plant
     
South Korean investor Sunjin Group on Friday inaugurated an animal feed plant at Dong Van IV Industrial Park in the northern province of Ha Nam.

The factory covers an area of 4.4ha with a total investment of US$25 million and a capacity of 240,000 tonnes of products per year.

According to Sunjin Group’s chairman Lee Bum Kwon, the highlight of the Sunjin Plant in Ha Nam was to provide a completely different product that addressed the difficulty of feeding piglets.

Speaking at the ceremony, vice chairman of the provincial People’s Committee Truong Quoc Huy, said the operation of Sunjin F&F would meet increasing demand, contributing to boosting the livestock sector in Viet Nam and the province.

Huy also hoped that Sunjin would comply with the law and fulfill its obligations while achieving high revenue and efficiency.

The vice chairman requested industrial parks and other departments and sectors in the province to continue to support and create a favorable environment for Sunjin F&F factory to do business in the area.

Sunjin F&F in Ha Nam Province is the fourth animal feed plant of Sunjin Group in Viet Nam. Construction of the factory started in February 2017. 

Quang Binh eyes tightening real estate loans
     
Quang Binh Province’s Department of Construction has urged commercial banks to tighten control over real estate loans to prevent speculation which is pushing up land prices in the central province.

Vo Van Tuan, head of the Housing and Real Estate Management Department, was quoted by Xay Dung (Construction) newspaper as saying that raising interest rates for real estate loans should be considered as a way to prevent speculation.

The provincial construction department would make the land planning and projects’ information available to the public so that people could get accurate market information.

Tuan said that the management on real estate brokerages should also be enhanced.

The department’s statistics showed that land prices in Quang Binh increased by around 10-15 per cent annually over the past three years but saw a whopping rise of 40-50 per cent in 2018 compared to the end of 2017, triggering worries about a land price fever. 
New digital lending platform for small businesses
     
At the 48th World Chief Financial Officers Congress in HCM City on Friday, the AsiaInvest Group and MoolahSense signed a memorandum of understanding to jointly launch a digital lending platform to benefit small and medium-sized enterprises in Viet Nam.

“This is an opportunity for SMEs and start-ups in Viet Nam to have a transparent and effective funding source when loans from local banks are limited and hard to access,” Nguyen Ngoc Bach, chairman and CEO of AsiaInvest, said.

The MOU puts in place a roadmap to establish a joint venture that taps into their respective strengths to provide tech-driven financing solutions to address the financing gap plaguing small business in the country.

According to the 2017 economic census by the General Statistics Office of Viet Nam, there were 517,900 businesses in the country, 98 per cent of them SMEs which account for 40 per cent of GDP and 50 per cent of jobs.

But according to the Viet Nam Chamber of Commerce and Industry, only 30 per cent of SMEs have access to loans from the formal sector while the rest still have to use their own funds or depend on unregulated loans.

The joint venture lending platform is expected to change that.

Established in Singapore in 2013, MoolahSense has received a full capital markets services licence in its home market.

It has so far lent over US$51.4 million to more than 600 companies with loan sizes ranging from $36,700 to $1.47 million.

With a network of 14,000 registered investors, the platform has offered instantaneous funding to some of its SME borrowers to grow their business.

Borrowers can either procure their funds with a fixed rate or subject their rate to the market via a reverse Dutch auction mechanism. Investors can subscribe to an auto-allocation algorithm to ensure that their portfolio will be diversified across multiple SMEs across various sectors. 
Vietnamese firms win contracts at Private Label Show

Many Vietnamese firms have won export contracts at the Private Label Show 2018 recently held in the US city of Chicago, according to the Ministry of Industry and Trade’s Vietnam Trade Promotion Agency. 

Specifically, the GOC Food Processing Export JSC signed a deal for a shipment of 350 containers of cucumber, chili and others worth 4.2 million USD. 

In particular, coconut milk by Bitremex Vietnam has been selected to be among the 200 new and innovative products on display at the event’s Idea Supermarket space. 

Others reached a number of deals to ship farm produce and processed products to the US such as cocoa, milk, aloe juice, fresh coconut juice valued at nearly 1 million USD. They were also requested by major US merchants to send samples to consider the possibility of future cooperation. 

During the event, the Vietnamese businesses had a chance to meet 1,500 partners from 60 countries worldwide, including those from supermarket chains, megamarkets, pharmacies, distributors for the militaries and governments, wholesalers, importers and online outlets.