3rd Vietbuild expo to open in Ha Noi     

Up to 450 enterprises will showcase their products at more than 1,600 pavilions at the third Vietbuild international exhibition in Ha Noi from November 23 to November 27, following the success of the two previous events.

Nguyen Tran Nam, head of the Vietbuild organising board and chairman of the Viet Nam National Real Estate Association, told a press conference held in Ha Noi on Monday that the five-day exhibition will see the participation of 273 domestic enterprises, 108 joint venture enterprises and 60 foreign enterprises from 22 countries and territories around the world.

The exhibitors will introduce a range of new products in the areas of construction, building, real estate and interior and exterior design. Exhibitors participating in the event will have booths of between 36 and 160sq.m.

Products on show will include modern technologies such as smart home systems and lighting technology.

“Over the past 10 years, the Vietbuild expo has become a bridge connecting and accompanying the construction, building material and property sectors as well as offering co-operation opportunities to businesses,” Nam said.

In addition, the organising board will also hold meetings between businesses, ministries, associations and localities in the northern region to provide them with opportunities to study new construction technologies.

Forums and seminars will also be held within the framework of the event. 

Viettel Post shares begin to be traded at UPCoM     

Viettel Post’s shares were traded for the first time on the Unlisted Public Company Market (UPCoM) on Friday.

By close, the price of the stock had risen to VND95,000 ($4.15) with buyers waiting to buy another one million shares.

The company had sold nearly 41.4 million shares at VND68,000 (US$3).

Last year, the company’s turnover rose by 37.6 per cent to over VND4 trillion ($174 million). Its profit before tax was VND213.5 billion ($9.3 million).

In the first half of this year, they were respectively VND1.9 trillion ($82.6 million) and VND147 billion ($6.4 million).

“Viettel Post’s success is thanks to combining electronic commerce with traditional postal services,” Tran Trung Hung, general director of the company, said.

It has 1,300 post offices around the nation and 17,000 staff.

It also offers international and domestic express delivery services, logistics and other related services.

Since July this year it has been managing 1,000 telecom shops and 6,000 delivery spots.

It is the only company to offer express delivery services to Cambodia and Myanmar.

“Viettel Post plans to dramatically change its operations, especially from express delivery to logistics,” Hung said.

“The strategic goals of Viettel Post are to become the first logistics company in Viet Nam with a turnover of $500 million and achieve 30 - 35 per cent market share by 2020.” 

Vietnam announces top 100 sustainable enterprises in 2018

The top 100 sustainable enterprises in 2018 were announced at a ceremony held by the Vietnam Business Council for Sustainable Development (VBCSD), under the Vietnam Chamber of Commerce and Industry (VCCI), in Hanoi on November 22.

The top 100 were selected from 500 firms participating in the VBCSD’s programme on ranking the most sustainable businesses based on their corporate sustainability index (CSI). Launched in 2015, the CSI has 131 indicators for enterprises to assess their economic, social and environmental aspects. 

Leading the top 100 this year are Nova Real Estate Corporation (Novaland), Thuduc Housing Development Corporation, Swiss Post Solutions Ltd, Tin Nghia Corporation, and Sai Gon Thuong Tin Real Estate Joint Stock Company (Sacomreal).

Speaking at the ceremony, Deputy Prime Minister Vuong Dinh Hue praised the annual CSI ranking and contributions of the business community to local economic growth.

He urged all members of the community, no matter big or small, domestic or foreign-funded, state-run or private, to join hands for sustainable development.

VCCI Chairman Vu Tien Loc said in past three years, the CSI programme has helped increase corporate awareness on sustainable practices and encourage them to work for the realisation of the UN’s 17 sustainable development goals (SDGs). 

VCCI General Secretary Nguyen Quang Vinh noted this year, the organiser and experts have designed a specific standard for sustainability. 

Accordingly, each indicator of the CSI is classified into basic and advanced criteria. For example, if a company has a development plan, it meets the basic level. But when its plan is aligned with the 17 SDGs, the company reaches the advanced level.

Loc affirmed that the VCCI and VBCSD want the business community to think of sustainability not as a faraway story of global big companies but as a vital requirement of growth.

McDonald's focusing on Vietnamese tastes

McDonald’s expects to trigger a new wave in Vietnam’s fast food sector by adding a dish familiar to the vast majority of the population, especially the younger generation: crispy fried chicken. There are still challenges the famous fast food chain must deal with, however, to successfully conquer the hearts of Vietnamese customers.

More than 60 per cent of the population are under the age of 35 and seek rich experiences in the fastest-growing economy in the region and the country is becoming a magnet for fast food brands. “Vietnamese consumers are demanding a variety of modern dining styles, which open up opportunities for foreign brands to offer a wide range of options,” a representative from a business in the fast food field said.

Urbanization and household changes are affecting consumers’ buying decisions in the fast-paced consumer segment, according to market researchers Nielsen. This is also why figures from the Ministry of Industry and Trade (MoIT) show that more than 40 fast food brands in cakes, coffee, beverages, restaurants, and hot pots have been licensed in the last ten years.

As one of the giants, the McDonald’s chain in the country has been recording growth of nearly 40 per cent each year and now has 17 restaurants after only four years in Vietnam. The locations selected for its expansion are strategically located in the central business districts (CBDs) of Ho Chi Minh City and Hanoi, where there are a large number of potential customers.

The reality, however, is not all rosy. A developing market like Vietnam presents many challenges to fast food chains. Brands such as KFC and Lotteria have seen slower growth, making increasing their market share and opening new outlets anything but straightforward.

“In order to open a new store, McDonald’s has to fully prepare for a year, from choosing the right location to training staff and preparing logistics to meet standards,” a company representative said. “And McDonald’s is still eager to expand its coverage to many other locations, not only Hanoi and Ho Chi Minh City.”

In addition, the localization of supply and menus to provide dishes with appropriate taste and quality is also a challenge. The process of expanding chains to other areas besides large cities such as Ho Chi Minh City and Hanoi requires fast food chains strictly control the quality of products, services and staff training, which is a major challenge for any fast food chain.

Market challenges have not dampened the plans of fast food brands to penetrate further and expand their market share in Vietnam. In order to conquer the market, a fast food brand needs to understand the needs of customers and, especially, the country’s culinary culture. They need to strike a balance between serving traditional items and modifying and offering the right menu for local tastes.

For example, McDonald’s fast food restaurants have recently come up with a great selection of Vietnamese fries alongside the famous Big Mac and Cheeseburger. Its new crispy fried chicken has been well received by customers and is considered by many to be one of the best types of fried chicken available.

Creation is a must for fast food chains to reach the top of a fast-moving market like Vietnam. Young consumers in the country, including Generation Z, are willing to try new and exciting things even when they are familiar with a brand, according to Nielsen. Loyalty towards a brand among this young generation is quite low, however, due to their curiosity and improvisation. But this also presents a great opportunity for brands to offer exciting, innovative and unique experiences, products and services.

It is still too early to confirm the success of McDonald’s in Vietnam, but it can be seen that the fast food chain still has strong belief in the prospects of the market with 95 million people. “We will continue to expand the system and develop our restaurant network on the general principle of taking prudent steps, with quality products and services placed at the top,” the company representative said. “We are always listening to the needs of customers, to offer products with the right taste and price as well as to always improve the quality of service, apply new technology, and provide the best experience possible to customers.”

Agribank divests OCB

Vietnam Bank for Agriculture and Rural Development (Agribank) has just announced withdrawing its capital from Orient Commercial Bank (OCB) by auctioning off its shareholding.

Accordingly, Agribank will publicly offer to sell 468,446 shares, representing 0.07 per cent of the total issued shares of OCB. The initial offering price is VND18,130 ($0.788) per share.

The starting price was determined based on Valuation Certificate No. 9051 issued on September 5, 2018 by Vietnam Valuation and Finance Consultancy company (VVFC) (formerly Vietnam valuation centre – the Ministry of Finance) and Decision No. 1120 dated October 24, 2018 of the Agribank Member Council.

The auctioning organisation is Agribank Securities Joint Stock Corporation (Agriseco), one of the subsidiaries of Agribank. The auction is scheduled to take place at 9:00 am on November 29, 2018 at Agriseco.

Besides Agribank, on September 6, 2018, Vietcombank withdrew its capital from OCB by successfully auctioning off more than 1.47 million shares at the starting price of VND18,876 ($0.82) per share. With the average bidding price of VND20,501 ($0.87) per share, Vietcombank collected over VND30.2 billion ($1.3 million) in proceeds.

Before “saying goodbye” to OCB, Agribank also announced selling 5.29 million shares of Vietnam Agriculture Tourism Trading Joint-Stock Company (Agritour) which is a wholly-owned subsidiary of Agribank. With the starting price of VND17,100 ($0.74) per share, Agribank earned VND90.5 billion ($3.93 million) on the sale, fully divesting the company.

In addition, Agribank is in the process of implementing its Strategic Business Plan for 2016-2020 with a vision to 2030 and is implementing the second phase of restructuring to prepare for equitisation under the directions of government. Since 2014, Agribank has successfully withdrawn from seven enterprises, earning over VND1 trillion ($43.48 million) in the process.

According to its financial statement, as of October 31, Agribank’s pre-tax profit exceeded VND6 trillion ($260.87 million). This year, Agribank is expected to report the highest growth rate in profit in its entire history.

However, the bankruptcy of Agribank Financial Leasing Company No.2 (ALC II) and the recent arrest of Le Bach Hong (former general director of Vietnam Social Security) for intentional violations of state regulations on economic management, causing serious consequences for Vietnam Social Security and ALC II make Agribank customers worried that the institution might go bankrupt, initiating a wave of withdrawals.

Vinaconex to lock foreign holdings at 0%

The State Securities Commission (SSC) has approved a request from the Vietnam Construction and Import-Export JSC (Vinaconex) to lock its ceiling on foreign ownership at zero per cent, according to a report from the Vietnam News Agency, which quoted the SSC as saying the move complies with regulations.

Vinaconex previously sought permission to adjust its foreign ownership limit to zero per cent from the current 49 per cent to prepare for a share offload by the State Capital Investment Corporation (SCIC) and the military telecommunications giant Viettel. 

Both SCIC and Viettel will sell their entire stakes, collectively 79 per cent and worth VND7.43 trillion ($317.6 million), in Vinaconex in a public auction on November 22 on the Hanoi Stock Exchange (HNX).

With the lock, foreign investors will be ineligible to participate in the auction.

Foreign shareholders owned a combined 10.86 per cent of Vinaconex’s capital as at November 9, including the PYN Elite Fund with 7.1 per cent and the Market Vector Vietnam ETF with 1.79 per cent. These investors will have to sell their holdings to meet the company’s new policy.

According to Mr. Do Trong Quynh, a member of Vinaconex’s board of management, the decision is to ensure compliance with State regulations on foreign ownership prior to the auction.

In its business registration, Vinaconex had certain sectors subject to foreign investment restrictions, including labor exports and the construction and operation of large power plants, which allow no foreign investment as per the Law on Investment 2014, Mr. Quynh was quoted as saying on ndh.vn.

Regarding whether foreign shareholders are required to sell their shares immediately or gradually, Mr. Quynh said guidance was needed from the SSC.

Vinaconex underperformed this year, with nine-month revenue down 4 per cent year-on-year to VND6.4 trillion ($275.2 million) and profit after tax down 41 per cent to VND368 billion ($15.82 million).

Its shares, with the sticker VCG, are trading at around VND18,000 ($0.77) on HNX.

Expectations from centralised state capital management

As planned, the transfer of state ownership of Vietnam’s 19 leading corporations and groups from five ministries to the Committee for Management of State Capital in Enterprises has been completed after the committee officially came into operation.

From now on, the total assets of more than VND2.3 quadrillion (US$98.9 billion) will be centrally managed by a single entity instead of being distributed between various ministries, as was the case previously. This is the first time in Vietnam that a specialised agency has exercised the function of representing state ownership in groups and corporations in line with the international practice on corporate management.

Moreover, the enterprises recently transferred to the committee are all critical enterprises to the Vietnamese economy. Therefore, there are huge expectations from the entire political system, society and market on the performance of the committee.

Undertaking this monumental task, the committee must demonstrate renovations in thinking, management, administration and operation of state-owned enterprises (SOEs) in order to address their weaknesses and create a substantial difference in the performance of these enterprises in the future.

To achieve that goal, the committee must be a professional and modern agency that pushes for bold reform to enhance the effectiveness of all SOEs. The centralised capital management mechanism needs to be accompanied by a modern supervisory mechanism in accordance with international standards.

Currently the committee is employing an online management system in line with the standards of the OECD. This system connects with the enterprises under its management so that the committee can monitor all the operations of these enterprises around the clock, from production and productivity to capital, human resources and paying taxes.

The system also has a set of indexes for supervising and assessing the health of each enterprise, with the function to warn of financial and management risks when the component index exceeds the safe threshold.

This is a proactive supervisory mechanism, allowing the committee to keep abreast of the health of each enterprise, issue warnings and request enterprise leaders to take remedy actions; replacing the old mechanism which was entirely dependent on the reports of enterprises and was ineffective in uncovering and preventing wrongdoing.

Among the companies transferred to the committee, some are Vietnam’s leading enterprises in terms of economic strength and innovation, such as EVN and VNPT, but there are also struggling ones, such as Vinalines and the Vietnam Expressway Corporation. After the handover, the committee will need to have a specific solution for each group and corporation so that already healthy enterprises will become stronger and weak ones can recover and grow larger.

For the ministries which have relinquished control of the enterprises, they will have more time to focus on their state management function, including building laws concerning areas of their management, formulating sectoral planning, and inspecting the obedience of enterprises to the law. They will also have more time and resources to fine-tune the state management mechanisms in order to create a supportive and enabling environment for enterprises.

Long Hau industrial park works toward sustainable growth

The Long Hau industrial park, located in the Mekong Delta province of Long An, is working to become greener.

Currently, 18 percent of its total area is covered with trees, with each investor at the park requested to use at least 20 percent of their leased land to develop green space.

The management board, meanwhile, has been paying close attention to effective waste classification and treatment and energy saving.

The industrial park has attracted more than 170 domestic and foreign enterprises, including those from Japan, the Republic of Korea, the US and India. Half of the total foreign-funded firms at the park are from Japan. 

By mid-2018, the park’s export value amounted to nearly 400 million USD.

Long Hau Corporation, which runs the establishment, was among nine Vietnamese enterprises included in the 2017 Forbes Asia's “200 Best Under A Billion List”. The annual list honours 200 small- to medium-sized enterprises in the Asia Pacific region with sales under 1 billion USD and a track record of strong top- and bottom-line growth.

More actions needed to boost reforms: businesses

Businesses expect to see quicker actions from state management agencies in the enforcement of the Government’s Resolutions No 19 and 35 to boost reforms and promote business development.

This need was highlighted at the launch event for the report on the implementation of the resolutions from the view of businesses, held by the Vietnam Chamber of Commerce and Industry (VCCI) on November 20 in Hanoi.

"More than anyone, businesses have felt the results and efficiency of reforms over the past few years,” VCCI Chairman Vu Tien Loc said. “They understand best how changes in the business environment affect their operations. The satisfaction of enterprises is the most important measure for the success of reforms.”

The VCCI survey, which was conducted on some 10,000 private firms, found that the companies saw significant improvements in the business climate in recent years. However, the level of improvement remained uneven across different sectors and localities.

Loc said the space for reforms remained large, adding more efforts were needed for the State management agencies and local authorities to boost efficiency and benefit enterprises.

Loc said the report would serve as a reference for the evaluation of the Government’s Resolution 19 about improving the business environment and national competitiveness and Resolution 35 about business development for the compilation of new resolutions.

According to Dau Anh Tuan, Head of VCCI’s Legal Department, surveyed businesses felt that starting a business and getting electricity were the two areas that saw the most improvements. However, trading across borders, protecting investors and resolving insolvency did not improve much.

The deregulation of business conditions, an important task in Resolution 19, was still far below the goal, although Ministry of Planning and Investment statistics showed that as of October 15, decrees about deregulation of business prerequisites had been issued, Tuan said.

The application for sub-licences remained difficult, he said, citing the report’s finding that 42 percent said that they met difficulties when applying for these licences.

It was necessary to have an independent organisation to evaluate the progress of deregulation and the level of transparency in applying business prerequisites, Tuan said.

The VCCI survey also found the procedures for registering a property lacked co-ordination between relevant agencies, such as land management agencies, tax agencies and notary offices. In some provinces, databases of these agencies had not been linked to each other.

Tuan added that reforms in import inspections had also progressed slowly. As of September, 68 procedures were conducted via the national single window, out of 284 targeted by 2020. To date, only one was conducted completely electronically while others still required hard copies.

Tuan said firms complained that they were inspected more than once per year, citing statistics of the 2017 provincial competitive index report that said nearly 40 percent of firms were inspected at least two times per year and 13 percent saw overlaps in the inspections of different groups.

“Many reforms are introduced but it is a long road before they truly benefit businesses,” Tuan said.

Nguyen Dinh Cung, Director of the Central Institute for Economic Management (CIEM), said an independent organisation to review the issuance of legal documents should be set up, which would play important role in improving the business climate.

Conference calls for more foreign aid in Gia Lai province

A conference promoting foreign non-governmental aid into the Central Highlands province of Gia Lai for the 2018-2020 period took place in Hanoi early this week. 

Speaking at the event, Vice Chairman of the provincial People’s Committee Nguyen Duc Hoang said Gia Lai has a population of over 1.4 million people with 34 ethnic groups, 44.7 percent of them are minorities. 

According to Hoang, the province’s economic growth is estimated at 8 percent this year. The rate of poor households accounts for 13.34 percent of the total. There are 39,217 poor ethnic households, making up 86.5 percent while the rate of near-poor households accounts for 9.83 percent. 

From 2007-2017, the province attracted 36 projects worth 10.63 million USD. In the first half of this year, as many as 300,000 USD was disbursed for eight projects, focusing on health care, education and rural development. 

The provincial People’s Committee issued Decision No.395/QD-UBND dated August 22, 2018 on a portfolio of projects calling for foreign non-governmental aid for the 2018-2020 period, including 80 projects in need of more than 8 million USD, mostly in dealing with social issues, agro-forestry, rural development, climate change, health care, education, vocational training and orientation. 

Hoang wished that international and foreign non-governmental organisations (NGOs) and individuals with underway projects in Gia Lai would continue providing the province with more aid targeting more areas. 

He committed all possible support in administrative procedures so that funded projects will be deployed in the shortest time. 

Head of the People’s Aid Coordinating Committee (PACCOM) Phan Anh Son said PACCOM will continue working closely with NGOs to make it easier for the province to access their aid. 

On the occasion, the provincial authorities signed cooperation agreements with the Asia Injury Prevention Foundation, the Foundation for International Development, the People Resources and Conservation Foundation, the Centre for Supporting Community Development Initiatives with a total commitment of over 2 million USD, focusing on safety for school, watering technology in response to climate change, biodiversity preservation, and fight against dengue fever with community involvement. 

In 2019, International SOS plans to launch a project on caring for children at SOS Pleiku children’s village with a total aid of 270,000 USD.

CPTPP to clear cooperation barriers with Latin America

Following Vietnam’s ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), many Latin American countries have arrived in Vietnam to seek business opportunities. 

In a meeting with Latin American corporate executives recently held in Ho Chi Minh City, Deputy Minister of Industry and Trade Do Thang Hai said that economic and trade ties between Vietnam and Latin American countries are growing. Vietnam has now formed trade ties with all countries in the region, with two-way trade up nearly 20 times from 245 million USD in 2000, to 3.95 billion USD in 2010, and 13.49 billion USD in 2017. 

Vietnam has poured hundreds of millions USD into oil and gas exploration and exploitation in Peru, telecommunications networks in Haiti and Peru, and instant noodle production in Brazil. 

Meanwhile, Latin American investment in Vietnam remains modest, with four projects worth 3.2 million USD by Argentina, one project by Mexico, one by Chile, and two Peruvian companies in Vietnam. 

It is attributable to the extended geographical distance, resulting in high transportation costs and the lack of information about each other’s business environments. 

Uncertainties about global trade, the impact of the US-China trade war, and the return of protectionism in major markets in recent years are among some of the obstacles they share. 

According to Latin American firms, barriers will be cleared once the CPTPP and bilateral trade agreements take effect. 

Pham Huynh Mai Thanh from Vietnam Cacao JSC said that the entry of three Latin American countries to the CPTPP will help cut down on customs procedures and import tariffs. 

Nguyen Van Thanh, Director of Long Long Chemicals Ltd, said that the region boasts a population of more than 650 million and an average income per capita of 15,000-16,000 USD each year, meaning that the consumption demand is huge. He added that the region is also an important supplier of materials for production. 

Vice General Secretary of the Vietnam Association of Seafood Exporters and Processors To Thi Tuong Lan said that the association started planning to expand into the region five years ago. 

Several Vietnamese seafood companies have already accessed Brazil, with an export value of over 120 million USD, as well as Mexico with nearly 80 million USD, and Colombia with around 50 million USD. 

VASEP targets that export revenue from Latin America will surpass 500 million USD by 2020.

Nhon Trach 2 thermal power plant produces 35 billion kWh in 7 years

The Nhon Trach 2 thermal power plant in the southern province of Dong Nai has generated 35 billion kWh for the national grid over just seven years of operation, announced the PetroVietnam Power Nhon Trach 2 company on November 20.

With a designed capacity of 750 MW, the facility was estimated at needing around eight to nine years of commercial operation to reach that level of output. However, its automatic run at 80 percent of the total load on average has ensured the maximum mobilisation of power productivity.   

The outstanding productivity has greatly contributed to supplying electricity for key economic areas in the southern region, like Ho Chi Minh City, Dong Nai, and Ba Ria - Vung Tau.

The plant, fueled by natural gas, began commercial operation in late 2011. With three turbines, it is designed to churn out an average of 4.5 billion kWh each year.

The Nhon Trach 2 company was listed among the top 50 best-listed Vietnamese enterprises in 2018 by Forbes Vietnam.

Kymdan latex mattress endorsed by Osteopathy Australia

Kymdan latex mattress exported to Australia has been approved as an Osteopathy Australia endorsed product, which can support treatment in the field of osteopathy.

It is the first and only brand of mattress of an Asian firm to earn the recognition.

Chairman of the Vietnamese Businesses Association of Australia (VBAA) Tran Ba Phuc said Vietnam’s Kymdan nature latex mattress has met standards of the Australian market, and was nominated to receive endorsement of Osteopathy Australia.

To receive the title, the product underwent a long period of test and evaluation, as Osteopathy Australia assessed Kymdan mattress’s support in treatment for osteopathic patients in many years.

The Vietnamese product made its debut in the Australian market in 2000 and is recommended by osteopaths in Australia in bone and joint-related diseases. 

The recognition of Osteopathy Australia is expected to promote Kymdan mattress to international consumers as a safe product for their health.

Fourth Industrial Revolution to create new industries in Vietnam

The fourth Industrial Revolution will create new industries, which are expected to give new momentum to Vietnam’s economic growth, said an economic expert.

Speaking at a workshop in Hanoi on November 21, Nguyen Thi Tue Anh, Deputy Director of the Central Institute for Economic Management (CIEM), explained that the revolution will change the structure of sectors as well as growth resources. 

The government has assigned the Ministry of Planning and Investment, and the CIEM to draft a national strategy on the fourth Industrial Revolution, build an innovation and creation centre, and develop a network of talents, she said. 

Dang Quang Vinh, deputy head of the CIEM’s Business Environment and Competitive Ability Department, held that with huge economic potential and ability of businesses and labourers, Vietnam can capitalise on the revolution. 

Vinh cited services launched by FastGo, the first ride-hailing app to offer insurance to customers for all trips, not charge drivers for discounted rates and provide driver partners with many benefits. 

However, he said, new management methods and good supportive policies are necessary for Vietnam’s new technological sectors, he said. 

The CIEM pointed out challenges facing Vietnam when the country enters the fourth Industrial Revolution such as a shortage of IT workers, especially high-quality labour resources, unclear institutions, limited domestic capital and difficulties hindering foreign investment in startups. 

Many experts suggested competent agencies cooperate with businesses to grasp information, build suitable institutions, create a favourable legal corridor for business activities and reduce risks to society, while promptly adjusting unsuitable business regulations and issuing new ones. 

Many underlined the need to set forth tax policies to attract human resources, especially Vietnamese abroad, enhance cooperation between universities and businesses, build training programmes in enterprises and expand EduTech/Learning models in the IT sector.

VinaLand divests stake in 2 real estate projects in HCM City

The divestment is part of VinaLand’s plan to liquidate in 2019.

VinaLand, a real estate investment arm of Vietnam’s leading asset management firm VinaCapital, has announced its intention to divest stake in the last two remaining projects, according to the company’s statement. 

The company said it is divesting its stake in the Green Park Estate project, located in Ho Chi Minh City. The project consists of a total land area of approximately 15.7ha and was acquired by VinaLand in 2007, with the land designated for a future mix-use development. 

According to VinaLand, the project has been sold to local developer Van Thanh Real Estate Investment Company for net cash proceeds of approximately US$35.3 million, which includes the repayment of shareholder loans, resulting in an IRR of 0.9% to the company. The total valuation is recorded at 22.5% above the unaudited net asset value posted on September 30, 2018. 

As of present, US$35.2 million or 99.5% of the net proceeds have been received by the company, and it is expected that all proceeds will be received by the VinaLand by the end of November 2018.

Additionally, Vinaland has now received the final return from the development of Garland project, also located in Ho Chi Minh City, with net proceeds of USD0.9 million, which is equal to the unaudited net asset value on September 30, 2018.

Speaking on the transactions, Managing Director David Blackhall stated: "The divestment of VinaLand's last two projects are in accordance with the stated policy to divest projects in a controlled and orderly manner.  The proceeds received from these final disposals, in conjunction with proceeds collected from earlier disposals will be used for shareholder distributions after setting aside funds to cover VinaLand's commitments including operating and liquidation costs as the company proceeds towards delisting in 2018 and ultimately liquidation of the company in 2019."

Meanwhile, VinaCapital Vietnam Opportunity Fund (VOF), the flagship fund of VinaCapital, also announced that it is divesting its stake in the Green Park Estate project. 

VOF is divesting its entire stake in the project to a domestic investor for net cash proceeds of approximately US$18.9 million, which includes the repayment of shareholder loans. The net cash proceeds are in line with the audited net asset value recorded on June 30, 2018.

"The divestment of Green Park Estate project is in accordance with our strategy to reduce the direct real estate (DRE) exposure in the portfolio in a controlled and orderly manner. With this divestment, VOF will effectively have zero exposure to DRE,” said Andy Ho, VinaCapital’s managing director.

South Korea's Lotte to revive largest trade complex in Hanoi

Lotte Mall Hanoi is designed to offer 1,200 shops, 48 restaurants and cafés, a supermarket of 8,500 square meters (sq.m), a cinema, and 71,000-sq.m of underground parking lots.

South Korean Lotte Group is preparing to kick off construction of a US$600-million trade complex in Hanoi later this year, becoming the city’s largest mall once it is put into operations in 2021, CafeF reported.  

Lotte Group acquired this project from Nam Thang Long Urban Area Development Co., Ltd in 2017. The value of the acquisition deal was not disclosed, but sources said the Hanoi authority licensed a Lotte trade complex project worth US$300 million after the acquisition.

The original mall project, called Ciputra Mall, was designed to cover an area of 7.3 hectares, with 1,200 shops, 48 restaurants and cafés, a supermarket of 8,500 square meters (sq.m), a cinema, and 71,000-sq.m underground parking lots. 

The completion of Lotte Mall Hanoi might turn Nhat Tan-Noi Bai zone into a bustling region of Hanoi in the coming years thanks to the operation of a mega smart urban area invested by BRG Group, Sun Group-invested Kim Quy park or Disneyland Hanoi, and Vingroup’s national exhibition center, local experts said.  

According to Nikkei Asian Review, Lotte has planned to expand investment in Vietnam through mergers and acquisitions (M&A) to quintuple its shopping centers to 60 in Vietnam by 2020.  

In 2009, Lotte acquired Coralis SA’s project to develop the 65-floor Lotte Center Hanoi trade complex with an investment of US$400 million. The mall began operations in 2014.  

At present, Lotte Group is running 285 shopping centers across Asia, mostly in China, South Korea, and Indonesia. 

SOEs efficiency remains low: Prime Minister

PM Phuc made the statement at the conference on renovating and improving the efficiency of the State owned enterprises (SOEs) held on Wednesday in Hanoi.

“Better corporate governance and the emphasis on the investment in science and technology will help SOEs thrive, raising the efficiency of the use of investment capital enhancing its business efficiency and contributing better to the national economy development,” the PM said.

The Government has set up a special committee that acts as the ownership representative of State capital at wholly State-owned enterprises.

According to the PM, the committee focuses on two key long term tasks, which are bolstering the equitisation and divestment of State capital and improving the capacity and efficiency of State-owned enterprises, especially large-cap corporations.

“But they must not cause difficulties and bottlenecks for SOEs’ production and business. These committees need to help firms grow, not to slow them down,” PM Phuc said.

However, he added that many SOEs had been holding large amounts of assets but their production, business efficiency and contributions to the State budget were low. A number of projects had suffered big losses. Equitisation and divestment from SOEs had not reached the Government’s targets.

The main reason was a number of business leaders were unwilling to change, avoiding responsibility or worrying about loss if the business model changes. Problems related to land, asset valuation, institutional inefficiencies, regulations, obstacles in handling labour arrangements and propaganda had not been solved effectively, he said

Equitisation and divestment were key tasks for restructuring State-owned enterprises (SOEs), Phuc said, adding that the privatisation process must follow the principles of publicity and transparency.

He stressed that due attention must be given to the fight against vested interests and corruption in every phase of the process, concrete measures must be chalked out to prevent corruption, losses and waste.

“Even profitable SOEs with promising business performance must be privatised to attract social capital resources. Equitisation must be associated with listing on the stock market because loses and corruption easily incur during this process,” the PM said.

Addressing the conference, Deputy Prime Minister Vuong Dinh Hue said SOEs should put emphasis on key areas such as national defense, security and essential sectors that private sectors do not get involved in, and urgently divest capital from the other areas among which SOEs are performing effectively.

Regarding capital management at enterprises, especially post-equitisation period, Hue insisted on the determination of the extent and scope of the State holding in each specific field or enterprise, the rights and responsibilities of organisations and individuals representing State capital in enterprises.

According to Nguyen Dinh Cung, Director of the Central Institute for Economic Management, SOEs are focusing on equitisation and divestment but not paying adequate attention to corporate management adjustment and improvement as well as market adaptation.

Regarding equitisation, Cung suggests focusing on quality rather than on quantity, restructuring shareholder portfolio towards more effective orientation.

Chairman of State Capital Investment Corporation (SCIC) Nguyen Duc Chi urged ministries and sectors to quickly provide guidance on the implementation of the Government’s guidelines, avoid losing business opportunities.

“For example, the Government issued Decree No.32/2018/ND-CP stating that enterprise value includes the historical, culture and trademark value of the enterprise. If specific guidance on the valuation is soon public, equitisation can soon be implemented as enterprise valuation helps firms determine the shares put up for auction,” Chi said.

Pharmaceutical market abuzz with activity

The local pharmaceutical market registers robust performance in the wake of growing M&A deals and outsiders’ new ventures into drug store chain launching.

The recent extraordinary general shareholders’ meeting of Medipharco JSC (MTP) have approved the plan to merge with the joint venture Medipharco Tenamyd BR SRL (MTBR) in an attempt to restructure the company’s operations, augment the two companies’ existing brands, and ensure unity in corporate governance.

The merger will take place via the stock swap method. Accordingly, MTP will issue additional shares to swap for MTBR stock from other shareholders at a 1:1 ratio. After the merger, Medipharco will inherit all of MTBR’s existing business lines.

At the same time, Imexpharm JSC (IMP) is divesting from S.Pharm, while simultaneously buying into Agimexpharm (AGP).

Accordingly, IMP will transfer its entire 1.25 million shares at S.Pharm to one individual at the face value of VND10,000 (0.43) apiece and spend about VND10.6 billion ($460,870) on buying nearly 1.06 million shares of AGP.

IMP holds around 3.2 million AGP shares. The company’s intended purchase of AGP stock comes in the wake of the latter’s plan to issue additional stocks to existing shareholders at a 3:1 ratio.

In another case, Nguyen Kim Investment and Development JSC (Nguyen Kim Holdings) is set to purchase more than 2.1 million shares, equal to 27.14 per cent stake, in Lam Dong Pharmaceutical JSC (Ladophar) at an estimated price of VND23,500 ($1.02) apiece.

Nguyen Kim Holdings already holds 24 per cent of Ladophar. After the deal, the company’s ownership in Ladophar will surpass 51 per cent, turning the latter into its subsidiary.

The transaction is expected to take place between November 30 and December 30, 2018. After the acquisition, Nguyen Kim will develop the core business lines of the pharmaceutical company, including oriental medicine production, commercial medicines, medical equipment, and importing drugs.

The pharmaceuticals market sees robust appetite for M&A deal-making, as evidenced by Vingroup’s recent move of inaugurating a chain of 11 drugstores under the VinFa brand across Hanoi.

In April 2018, the leading private conglomerate had launched the project to establish the VinFa drug research and production centre in Gia Binh district in the northern province of Bac Ninh.

Before Vingroup, Mobile World Group and FPT Retail jumped into the distribution of drugs, with the former investing in the Phuc An Khang drug chain and the latter in Long Chau Pharmacy.

According to Business Monitor International (BMI) data, the revenue of the Vietnamese pharmaceutical market was $5.2 billion last year and is forecast to reach $7.7 billion in 2021.

The pharmaceutical market also anticipates several incoming investors as the State Capital Investment Corporation (SCIC) plans to divest from a raft of businesses in the industry, such as Hau Giang Pharmaceutical JSC (DHG), Traphaco (TRA), and Domesco by 2020.

According to Business Monitor International (BMI) data, the revenue of the Vietnamese pharmaceutical market was $5.2 billion last year and is forecast to reach $7.7 billion in 2021.

The demand for pharmaceutical products in Vietnam has expanded rapidly due to high economic growth, rising per capita incomes, and the growing population.

Per capita spending on drugs increased from $9.85 in 2005 to $22.25 in 2010 and $37.97 in 2015, and is expected to reach $85 in 2020 and $163 in 2025

The average annual growth of drug expenses was 14.6 per cent in 2010-2015 and is expected to maintain an annual growth of at least 14 per cent until 2025.

Chinese rice importers visit Vietnam to find new partners

Chinese importers of rice have arrived in HCM City and Long An Province to find trading opportunities with Vietnamese counterparts, according to the Ministry of Industry and Trade’s Import-Export Department.

The Chinese delegation of 22 enterprises included rice import companies from Guangdong Province, China. This was the second time this year the Chinese business delegation visited Vietnam to promote co-operation between the two countries in the rice sector.

China is a major importer of Vietnamese rice, accounting for about 25 per cent of Vietnam’s total rice exports. In the first 10 months this year, export volume to China reached 1.24 million tonnes, worth US$640 million. In the Chinese market, Vietnamese rice products accounted for nearly 50 per cent of China’s total rice imports.

Vietnam and China have great potential to boost their rice trade thanks to Vietnam’s strong capacity of rice production and favourable location next to China, according to the department.

The department said strengthening trade with China will expand Vietnam’s consumption market. Meanwhile, the Chinese market will have a stable supply of quality rice from Vietnam with competitive prices and convenient delivery to meet demand.

The visit, which ended on November 17, was one of the activities under the trade promotion programme for rice this year. The visit was organised by the Export-Import Department and the Asia-Africa Market Department in co-operation with the Vietnam Trade Office’s branch in Guangzhou Province, China and Long An Province’s Department of Industry and Trade.

During the visit, the Chinese delegation attended events connecting Vietnamese enterprises and Chinese partners, trips to rice production and processing facilities in Long An Province and a Food Expo in HCM City.