HCMC to see soaring office demand in next four years

As Southeast Asian economies expand, office demand, particularly from technology, e-commerce, and co-working space companies, is expected to rise by an estimated 6 per cent annually between 2018 and 2021, with Ho Chi Minh City seeing a rate of 10 per cent in the period, according to JLL Vietnam.

As at the end of the second quarter of 2018, total stock in Ho Chi Minh City’s office market increased to 1,945,000 sq m, with overall Grade A and B occupancy rates standing at a high of above 95 per cent. The overall rental rate is expected to continue its upwards trend with support from healthy demand and increased quality in future supply. 

A large volume of high-quality Grade B supply is also projected to be completed by 2020 and will likely put pressure on Grade A in the future, especially long-standing Grade A projects with deteriorating construction quality. 

In Hanoi, demand for Grade A and B office space in 2018-2019 will increase on the back of positive economic growth. Higher occupancy rates were observed in both as new set-up and relocation purposes continue to be the main drivers of office demand.

“Vietnam is considered one of the fastest-growing e-commerce and flexible space markets in the region,” said Mr. Stephen Wyatt, Country Head of Vietnam, JLL. “This rising trend will have a positive impact on the office market as companies, both foreign and local, will be looking for a suitable place to set up operations in this promising economy.”

Based on JLL’s latest outlook report for the second half of this year, “Southeast Asia set for further outperformance”, office take-up in the region has accelerated over the last six quarters as demand continued to surprise on the upside, notably in Manila, Singapore and Jakarta.

“Technology, e-commerce and flexible space operators were key demand drivers,” said Ms. Regina Lim, Head of Capital Markets Research, Southeast Asia, at JLL. “Looking forward to 2018-2022, we expect office take-up in Southeast Asia to stay strong, growing at 6 per cent annually, amid GDP growth of 5 per cent per annum.”

HCMC releases transparent information to stabilize housing market

To stabilize the city’s housing market, People’s Committee in Ho Chi Minh City asked the Department of Construction to release transparent information of property project progress and infrastructure.

City authorities will implement the plan to carry out project “Developing HCMC property market in the period 2016-2020 oriented to 2025 with the vision to 2030.
City authorities also asked the police force to deal with those who spread wrong information of property projects and infrastructure or defraud in property deals.
People’s committees in district have to enhance management on separating land plots as per the regulation and use purpose.
The Banks of Vietnam’s branch in HCMC will prioritize loans for buying social houses as per the Housing Law 2014, for building social housing projects as well as for repairing houses.
Mekong Capital fully exits investments in three private equity funds

Most recently, Mekong Enterprise Fund (MEF), a fund run by Vietnam-focused private equity firm Mekong Capital, has divested its final remaining investment in Minh Hoang Garment JSC.

The deal came after the divestment of Mekong Capital’s stake in Asia Chemicals last month and the liquidation of Vietnam Azalea Fund last year.

“With the exit from Minh Hoang, we are delighted to have completed the divestments of all of our first three funds. This enables us to focus on our newer investments in Mekong Enterprise Fund III, partnering closely with each company to ensure they each achieve their vision,” said Mekong Capital founder and partner Chris Freund.

With the divestment form the first three funds, Mekong Capital plans to raise its Mekong Enterprise Fund IV in the first half of 2019.
Minh Hoang is a local producer of sports apparel, active-wear, and outerwear. Overall, Mekong Capital's funds have completed 33 private equity investments in Vietnam, 26 of which have been fully exited, getting substantial profit for Mekong Capital as well as its funds.

Notably, MEF II completed the sale of its last remaining five million shares in Mobile World Group in January 2018, resulting in 56.9x of gross return multiple and 61.1 per cent gross IRR, making this investment one of the most successful investments in the history of Asian private equity. Prior to that, the fund generated a gross return of 4.5x and 9.0 times for its investments in Vietnam Australia International School and Golden Gate, respectively.

A number of exits under Vietnam Azalea Fund were investments in privatised state-owned companies.

The fund manager has a value creation platform called Vision Driven Investing with the aim to generate at least a gross return of 5x for each investment, and is intensively applying it to all portfolio companies in its active Mekong Enterprise Fund III (MEF III).

Its latest investment vehicle, MEF III announced investments in seven companies, including lending firm F88, logistics companies Nhat Tin and ABA, restaurant operator Red Wok, Ben Thanh Jewelry, Yola Education, and mattress retailer Vua Nem.

With the divestment from the first three funds, Mekong Capital plans to raise its Mekong Enterprise Fund IV in the first half of 2019.

Grab Vietnam responds to fine by Singapore competition watchdog

Grab Vietnam has issued a response to the fines from the Singapore competition watchdog for its takeover of Uber's Southeast Asian business. 

Grab acquired Uber’s Southeast Asia business in March, but the Competition Commission of Singapore (CCCS) has declared the deal “anti-competitive” following an investigation into its impact on Singapore. CCCS levied a combined fine of $9.5 million on Uber and Grab, but it will not unwind the deal.

Jerry Lim, country head of Grab Vietnam, said that they are glad that CCCS has completed its investigations on the Grab-Uber transaction and did not require the unwinding of the transaction. Following the Philippines Competition Commission (PCC)’s approval of the legality of the Grab-Uber transaction in July 2018, the decision by the CCCS in not overturning the transaction marks yet another step in the right direction in appreciating the benefits brought about by such a transaction.

Grab proceeded with the transaction in the good faith that there is no breach of competition laws. The key point of contention lies in the difference in the authorities' and Grab’s definitions of what constitutes a competitive playing field.

According to Lim, established taxi operators, among other transport operators, remain strong competitors to ride-hailing players like Grab in all countries where it operates. Customers have the choice to switch to other forms of transport, including street-hails and alternative apps, and drivers have the choice to switch to join other companies if prevailing conditions such as pricing and income are not favourable to them.

In Vietnam, taxi companies such as Mai Linh and Vinasun have always considered ride-hailing players as their direct competitors. Vinasun and Mai Linh are two of the largest taxi companies in Vietnam who have invested in their own car and taxi ride-hailing mobile applications to compete.

Under Decision 24, the Vietnamese government has granted e-hailing pilot licences to nine other companies, including established taxi companies, to operate car e-hailing services in five cities and provinces. All companies approved by the pilot licence were given equal opportunity to compete and innovate to maximise the efficiency of public transportation with the best interests of consumers at heart.

He stressed that unlike in Singapore and the Philippines, in Vietnam, Grab can only provide transport connecting services by entering into contracts with eligible transport cooperatives and enterprises, and such transport cooperatives and enterprises will provide transport services to the passengers who book a ride using the Grab app platform. As a technology company, Grab does not own vehicle fleets nor contract directly with drivers.

The Vietnam Competition Authority (VCA) is carrying out the antitrust investigation into Grab’s takeover of Uber’s business in Vietnam. The investigation is estimated to take 180 days, starting from May 18 to November. Once it is completed, VCA will transfer the case to the Vietnam Competition Council for a resolution.

The representative of Grab Vietnam stated that competition dynamics, market conditions, and the regulatory landscape in Vietnam is unique in Southeast Asia, which Grab believes the VCA will take into consideration in its investigation.

Textile and apparel firms eyeing rising orders from US market

Local textile and apparel firms have enormous opportunities to boost exports to the US, Vietnam’s top export market for textile and garment products, amid the intensifying US-China trade spat.

The representative office of TNG Investment and Trade JSC in New York has been doing a smart job with trade promotion through signing major export contracts with well-known business partners like Nike and A&F, maybe even GIII Apparel Group in the near future.

In the first eight months of this year, TNG, a major textile and apparel firm in the northern market, raked in VND2.359 trillion ($104 million) in revenue, meeting 86 per cent of its full-year target, and VND117 billion ($51.7 million) in after-tax profit, a 54 per cent jump on-year and reaching 93 per cent of the annual projection.

As the US accounts for 33.7 per cent of TNG’s total export value, the company’s opening a representative office in New York is considered a sound step helping the firm to directly reach out to foreign partners and reduce intermediary costs.

“Based on our current performance and our signed export contracts, TNG is expected to reach VND3.45 trillion ($152 million) in revenue and VND157 billion ($6.9 million) in after-tax profit in the whole year, up 25 per cent on-year on both counts,” said Nguyen Van Thoi, the company’s chairman.

With nearly $20 billion in total export value in the first eight months, a 17 per cent jump on-year (equal to $2.86 billion), and half of the value coming from the US, Vietnam’s textile and apparel export growth hit a five-year record.

With nearly $20 billion in total export value in the first eight months, a 17 per cent jump on-year (equal to $2.86 billion), and half of the value coming from the US, Vietnam’s textile and apparel export growth hit a five-year record.

Forecasts for the rest of the year are bright as the year-end period is often the peak production season for the sector, leading to soaring revenue and profit figures, especially amid new occurrences in the US-China trade spat.

The US administration’s imposition of import tariffs on billions of textile and apparel products from China has created opportunities for Vietnamese firms to gradually grow their market share in the US.

The performance of Thanh Cong Textile Garment Investment Trading JSC (TCM) was quite upbeat so far this year.

Accordingly, in the first eight months TCM reaped VND2.46 trillion ($109 million) in the revenue, equal to 80 per cent of its full-year revenue target and VND185 billion ($8 million) in after-tax profit, reaching 98 per cent of its full-year after-tax profit target.

Industry experts assumed that the local textile and apparel sector will be one of the biggest beneficiaries of the US-China trade spat.

The US continues to be Vietnam’s largest export market for textile and apparel products, with $9.1 billion in total export value in the first eight months of 2018, a 12 per cent jump on-year, accounting for 46 per cent of Vietnam’s textile and apparel product export value.

The sector is expected to rake in $13.8-14 billion in total export value from the US this year.

According to the Vietnam Textile and Apparel Association (Vitas) chairman Vu Duc Giang, with the current favourable market conditions, the textile and apparel sector could reach $35 billion in export value this year, compared to the $31 billion last year.

Figures by Trademap, which provides trade statistics for international business development, showed that the US’ total textile and apparel import value amounted to $114 billion last year, with $40.8 billion coming from China and $12.26 billion from Vietnam, making up 35.79 and 10.75 per cent of the US total, respectively.

Pakistan’s pharma companies seek Vietnamese opportunities

A delegation of 11 Pakistani businesses operating in pharmaceuticals and surgery have come to Vietnam for the International Exhibition for medicine, pharmacy, hospitals and rehabilitation (Pharmedi Vietnam) in Ho Chi Minh City.

With the support of the Pakistani Embassy in Vietnam, the delegation introduced their range of advanced products to the Vietnamese market at Pharmedi Vietnam and met directly with Vietnamese partners who have an interest in importing medicines and medical equipment from Pakistan.

According to the Pakistani Embassy, the country’s pharmaceutical sector is highly regarded, boasting more than 400 advanced manufacturing units with products meeting the Current Good Manufacturing Practices (CGMPs) in drug production.

At present, Pakistan is exporting its medicines to 80 countries at reasonable prices. The country has 25 licensed International subsidiaries of Pharmaceutical Corporations with a global reputation.

The HCM City Medical Equipment Association said Vietnam’s demand for medical materials and drugs is still quite high and there is an opportunity for collaboration between the business communities of Vietnam and Pakistan.

10-year economic crisis cycle not on the cards for Vietnam: BIDV experts

Economists at the Bank for Investment and Development of Vietnam (BIDV) have played down the possible repetition of the 10-year economic crisis cycle in the 2018-2019 period, according to a recent report released from its research center.

In Vietnam, recession indicators were clear in one form or another in each of the ten-year cycles of the 1988-1989, 1998-1999 and 2008-2009 periods. However, these signals are not apparent in 2018 and 2019.

The economic growth of the country has been maintained quite stably alongside the macroeconomy. Vietnam’s income per capita is on the rise, and its global economic integration has deepened, according to the report.

The Government has not over expanded the credit and investment capital growth and has focused on improving the quality of this growth.

From 2011 to 2017, the annual credit growth was recorded at an average 13.9%, while the rate for gross domestic product (GDP) per capita was some 32.3% per year.

These two figures were much lower than in the previous periods but were more effective, partly thanks to the application of science and technology.

During the period, the nation’s incremental capital output ratio reached 5.3 compared with the 6.29 achieved during the 2006-2010 period.

Labor productivity rose by 5.1% per year, against a 3.45% rise in the previous period. The total factor productivity contributed 31% to economic growth, the highest since 1986.

The major drivers of economic growth – investment, export, industry and private sector business – have witnessed improvements.

Also, the financial and banking system has been consolidated. The system saw a sharp drop in nonperforming loans, from 17.2% in 2012 to 6.7% in June 2018.

The system’s liquidity has been quite stable, as its loan-to-deposit ratio declined from 98% in late 2011 to 87% in late 2017. Besides this, its annual interest rate was stable at around 9.8% in the 2011-2017 period, compared with 12.3% in the 2006-2010 period.

The nation’s macroeconomic indicators have shown positive improvements. The ratio of the State budget deficit to GDP fell from 4.4% in 2011 to 3.48% in 2017, thereby meeting the target of 3.5% set by the National Assembly.

The majority of outstanding loans were allocated to priority sectors such as agriculture, real estate and construction. Loans for the agriculture and rural development sector rose by 25.5% against late 2016 to over VND1.3 quadrillion (US$55.6 billion), making up some 20% of the total loans.

Vietnam has gained an annual trade surplus of some US$2.2 billion since 2012 after a lengthy trade deficit from 2005 to 2011. In addition, the overall balance of payments achieved a surplus of US$12.5 billion in 2017.

Since 2013, the Government, the Ministry of Finance, and the State Bank of Vietnam have taken various measures to put inflation under control.

As a result, the consumer price index in the last four years has been under 4%. The rise in value between the US dollar and the Vietnamese dong has not exceeded 3% per year in the last five years, thus stabilizing the macroeconomy, supporting economic growth and increasing the confidence of businesses and investors.

At the same time, the strong increase in foreign exchange reserves is an important factor contributing to the stability of the exchange rate and the foreign exchange market.

Other major markets such as the stock exchange and real estate have experienced positive changes.

The Government has adopted policies aimed at improving the investment and business environment, leading to a rise in the confidence of residents, businesses and international organizations.

Though the signs of a crisis are different, economists at BIDV stressed that the national economy has been facing many difficulties and challenges, as well as external factors that are more risky and complicated than before. Therefore, the Government should take flexible and effective measures to overcome these obstacles for the sake of sustainable growth.

Experts fear foreign rivals too strong for Vietnam ride-hailing firms

Vietnamese ride-hailing services are struggling to compete with foreign firms Grab and Go-Viet due to a lack of resources.

FastGo last month claimed to have 15,000 taxi and motorbike partner drivers in Hanoi and Ho Chi Minh City, but they are not a common sight on the streets unlike the ubiquitous red and green uniforms of Go-Viet and Grab drivers.

VATO, which received funding of US$100 million from local transportation firm Phuong Trang, is also having trouble expanding after launching in May, its CEO Tran Thanh Nam admitted to the media.

Another competitor, Aber, run by a group of young Vietnamese based in Europe, had said August 10 it would “temporarily cease app operations for an upgrade.” It has not made a return so far.

Bui Danh Lien, former chairman of the Hanoi Transport Association, said operators need to give drivers a steady income to keep them and at the same time offer customers plenty of discounts and cheap fares, and “this is a tough challenge.”

Economist Do Hoa told local media that the ride-hailing market is "a race to spend money”, and those without deep pockets won’t be able to compete.

Grab and Go-Viet are willing to charge their customers as low as VND1,000 (4.3 cents) for a ride, he pointed out.

“Vietnamese ride services are not financially capable of sustaining such losses like the foreign companies.”

Even major players like Grab and Uber report big losses in Vietnam. According to the General Department of Taxation, Grab, with a total registered capital of only VND20 billion (US$881,000), has incurred losses of nearly VND1 trillion (US$43.48 million) during its three years in Vietnam.

But this cash burn strategy is how Grab and Uber are eating up traditional taxi firms’ market share. In 2014-15 they launched promotion after promotion, including free rides and discounts, to attract customers. They expanded their driver networks by offering subsidies and big rewards based on performance.

Though the lack of funding is a weakness of local ride-hailing firms, there are other ways for them to grow, Dr Nguyen Duc Thanh, head of the Vietnam Institute for Economic and Policy Research, told VnExpress.

“Since the lack of resources is a disadvantage for Vietnamese ride-hailing apps, they should not enter the cash burn race.”

Going head-to-head with bigger rivals is not the right strategy to follow, he said.

“They can enter niche markets like delivery, car rentals and long-distance ride services. Instead of trying to divide market share in the beginning, newcomers should think of a long-term strategy to build a solid foundation.”

Nguyen Manh Hung, former chairman of the Vietnam Automobile Transport Association, was quoted by Tuoi Tre newspaper as saying local firms are unable to compete with Grab and Go-Viet because they are divided.

If they join hands they could compete, he said.

Go-Viet, the Vietnamese operation of Indonesia’s Go-Jek, came early last month seeking a share of the market that Grab has been dominating after the departure of Uber.

Go-Jek founder and chief executive Nadiem Makarim said Go-Viet has grabbed a 35% share of the motorbike ride-hailing market in Ho Chi Minh City within six weeks of its launch on August 1.

Gia Lai pepper production failure

Farmers in Gia Lai Province are incurring huge losses, up to VND4trn (USD172m), as their pepper trees keep dying.

Many districts including Chu Puh and Chu Se used to be covered in pepper trees which brought in huge profits to the growers. However, the situation has worsened as the pepper trees died en masse.

69-year-old Van Viet Sy said, "Men go to big cities like Binh Duong and HCM City to find jobs to pay bank loans, leaving behind women, children and elderly people."

Sy said he used to hire 20 people to pick the pepper alone. But most of his pepper garden had died, causing about VND3bn (USD128,500) losses. The surviving pepper trees are weak and may die soon. His brother, Van Viet Nhan, had to give up his newly-built house as collateral for bank loans and left for Binh Duong after the pepper trees died.

Before 2015, a kilo of pepper was sold for VND200,000 (USD8.57) to VND250,000. The growers earned huge profits and the living standards shot up greatly. The pepper trees started dying in 2015 and in 2016, a vast majority of trees died. In 2018, a kilo of pepper is sold for VND47,000. 

90% of the growers in Ia Blu Commune are up in debts with the banks. Some borrowed from VND200m (USD8,570) to VND2bn to grow and try to revive the pepper trees but it proved to be fruitless.

A local named Vui still decided to spend all of his money to buy land located a bit far away to grow pepper trees. At first, the peppers grew up well but died mysteriously on harvest day. The growers in Gia Lao have borrowed a total VND4.38trn for the pepper gardens. 8,104 households in Chu Puh borrowed VND1.5trn. Some had to borrow money from black market to pay bank debts.

The locals are trying to sell their houses and the children can't go to school. If there is no solution then in the next two years, most people will forfeit their land to the banks and move elsewhere.

Hoang Phuoc Binh, vice president of the Chu Se-Gia Lai Pepper Association, said "Firstly, the farmers must stop growing peppers for at least five years."

According to Binh, world pepper supply has surpassed demands. Binh suggested investing in other trees such as avocado and coffee trees. Binh said since the pepper prices fell, farmers stopped investing and caring for the pepper trees. As the result, disease spread and destroyed the trees.

There are many causes for the mass tree die-off including climate change, sub-standard seeds, wrong cultivation methods and price falls. As the result, Gia Lai authorities can't declare the case as a natural disaster.

Truong Phuoc Anh, director of Gia Lai Department of Agriculture and Rural Development, said the farmers should burn the dead trees and clear the land from excessive pesticides and fertilizers. Nguyen Hai Son, vice head of the State Bank of Vietnam branch in Gia Lai asked the banks to extend the deadlines or lower interest rates to help the farmers.

Dong Nai requires 1.5 billion USD for transport infrastructure by 2020

The southern province of Dong Nai has announced that it needs a total of 55.4 trillion VND (2.37 billion USD) to develop its infrastructure during the 2018-2020 period.

Of the total, 34.9 trillion VND (1.5 billion USD) will be invested in transport infrastructure, according to the provincial Party Committee.

Specifically, construction on a number of roads connecting Dong Nai with other localities in the key southern economic region will be carried out, including the Ben Luc-Long Thanh highway, the Dau Giay-Phan Thiet highway, the Dau Giay-Da Lat highway, and the Tan Van-Nhon Trach belt road 3.

In addition, the province is working with related offices at the central level to reach a consensus on the implementation of projects on a highway linking Bien Hoa with Vung Tau of the southern province of Ba Ria-Vung Tau, as well as a metro line connecting Bien Hoa with Ho Chi Minh City.

For roads managed by the province, it will give priority to important ones such as 25B Nhon Trach road, Road No.768 and Road No.319 which link up to the Long Thanh-Dau Giay highway, and a road leading to Phuoc An port.

Along with upgrading roads, from now until 2020, Dong Nai will focus on developing the port system, including Phuoc An and Go Dau ports, as well as several inland container depots and logistics centres.

The local Party Committee expects that these infrastructure facilities, once completed, will help create a breakthrough for the province’s socio-economic development. 

Opportunities open for local exports to UAE, Kuwait

Kuwait and the United Arab Emirates (UAE) are two potential markets in the Middle East which Vietnamese enterprises could begin intensifying their exports to, heard a workshop held in Ho Chi Minh City on September 25.

The workshop was jointly organised by the city’s Investment & Trade Promotion Centre (ITPC) and the Kuwaiti Consulate General in the city.

Pham Thiet Hoa, ITPC Director, said that the UAE and Kuwait belong to the six-strong Gulf Cooperation Council (GCC), which has been assessed as holding much potential for cooperation in trade and investment with Vietnam.

The UAE is the second biggest economy in the Middle East, playing a pivotal role as a commercial and financial centre in the region, and the world’s third largest re-export centre.

The UAE’s import turnover reached 265 billion USD in 2017. However, Vietnam’s exports to the country were valued at just over 5 billion USD, accounting for only just under 2 percent of the market share, Hoa said.

He suggested Vietnamese enterprises step up their exports of seafood, pepper, cashew nuts, coffee, vegetables, fruit, garment and textiles, footwear, and construction materials to the Middle Eastern nation.

Kuwait is a wealthy country in the Middle East which imports almost all kinds of goods, noted Hoa. Its import turnover hits around 30 billion USD each year, of which Vietnam’s exports are worth 70-75 million USD, or 0.25 percent of the total.

Therefore, there remains huge potential for Vietnamese businesses to export goods to this market, he added.

Jasem Abomarzouq, Kuwaiti Deputy Consul General, said that trade ties between Kuwait and Vietnam are developing strongly.

With bilateral trade at 350 million USD in 2017, the figure enjoyed a four-fold rise to 1.43 billion USD in the first eight months of 2018. Of the total, only 54 million USD came from Vietnamese exports.

He said that due to unfavourable conditions in land and labour force, Kuwait and other GCC nations – namely the UAE, Saudi Arabia, Quatar, Bahrain, and Oman – have a huge demand for imported food, food stuffs, seafood, construction materials, machinery, automobiles, and garments and textiles.

This is a big chance for Vietnamese enterprises, especially those exporting agricultural products and seafood, he affirmed.

However, he stressed the need for enterprises to pay attention to ensure their products meet Muslim-specific requirements.

Nguyen Thi Ngoc Hang, a representative from the Halal Certification Agency in Vietnam, stated that Halal certification is the most simple and trustworthy way to prove that the origin of materials is suitable to Muslim consumers.

With the certification, Vietnamese products will have more chance to compete with other products in the Middle East and the world at large, she said.

At the event, enterprises with experience in exporting products to the Middle Eastern market also advised that when accessing these markets, businesses should be selective in assigning male workers to liaise with partners from the region. 

Dong Nai steps up effort to lure foreign investors

To be a top destination for foreign investors, the southern province of Dong Nai has accelerated public administrative reforms and facilitated foreigners doing business in the province.

Dong Nai is home to more than 1,200 valid FDI projects with registered investment of more than 23 billion USD. Since 2014, an average of about 1.7 billion USD has been invested in the province’s FDI projects each year. Besides large investors, the province has also called for foreign enterprises with medium-sized investment in high technology. Currently, 80 percent of FDI firms in the province have invested 10 million USD or more.

Various dialogues have been held annually by the local government to help enterprises remove barriers while the province has asked for cooperation from other provinces like Nghe An and Dong Thap to help recruit workers.

Before, enterprises employing more than 5,000 workers were priorities when seeking investment permits due to the province’s effort to create local jobs. But now, labour-intensive projects are no longer in its favour. The province has also rejected many projects using outdated technology or those that could harm the environment.

Mai Van Nhon, deputy head of the provincial management board of industrial parks, said in 2014, an investor had to spend 50,000 USD to create a job and this number increased to 80,000 USD this year. Also before, an investor had to spend 10 million USD to open a factory that employs 500 workers but now, with the same amount of money, they only need 300 labourers. Most of the spare funds are used to buy technology and equipment, he added.

Additionally, Dong Nai has stepped up efforts to fast-track key infrastructure projects, including Long Thanh International Airport, the Dau Giay – Phan Thiet, Dau Giay – Lien Khuong and Bien Hoa – Vung Tau Highways, and Tan Van – Nhon Trach belt road. It also plans to construct roads connecting Trang Bom and Vinh Cuu, Trang Bom and Thong Nhat, and Long Thanh and Cam My.

The province attracted 902 million USD in foreign direct investment (FDI) in the first six months of the year, more than 90 percent of the yearly plan and up 48 percent from the same time in 2017.

According to the provincial Department of Planning and Investment, investment licenses were granted to 54 FDI projects with total registered capital in excess of 420 million USD. Meanwhile, 49 projects applied to increase their investment capital. 

The FDI inflow came from the Republic of Korea, Taiwan (China), Japan, China, the British Virgin Islands and Germany.

Large projects included a 40-million-USD Hi KNIT Co., Ltd project developed by a Korean investor at Nhon Trach industrial park, a 33-million-USD Air Manufacturing Innovation Vietnam project by Dutch investor at Giang Dien industrial park and a 32-million-USD DH Logistic Property Vietnam Co.,Ltd project by Singaporean investors at Loc An-Binh Son industrial park.

Hoa Sen Group construction fire adds salt to injury

A trade centre of a Hoa Sen Group subsidiary under construction caught fire, adding to the mounting debt problems of the corporation.

Hoa Sen Group has issued an announcement about the fire at its four-star complex including a trade centre, hotel, and event place at Nguyen Tat Thanh Street in the northern province of Yen Bai's Yen Bai city.

Accordingly, at 2.20PM on September 23, a huge fire broke out from the basement and first floor of the project. Although the construction units complied with safety regulations, during welding works, the wind blew ash into the area where combustible material was kept on the first floor of the building, which resulted in fire.

“Workers tried to bring the fire under control with fire extinguishers, sand, and water, but the wind was too strong and the fire spread too fast. They had to call the fire department for support. By 2.40PM the fire was extinguished. The incident was detected soon and caused no damage to life or property, and has not affected the quality or the progress of the project. The construction unit suffered some damage, around VND200 million ($8.850),” noted Hoa Sen Group.

The project construction was kicked off on May 19, 2016, at the centre of Yen Bai city on 1.5ha of land. The total investment of the project is estimated at VND1.2 trillion ($53.1 million) and it is developed by Hoa Sen Yen Bai Building Materials One Member Limited Liability Company (HSYB-Ltd), one of the member companies of Hoa Sen Group JSC.

This will be the biggest and highest building in Yen Bai city. The shell of 15 floors of the building has been completed, and the contractor is currently installing inside equipment. The complex is expected to be put into operation in the first quarter of 2019.

Over the last two years, Hoa Sen Group’s profit margin has been falling. The after-tax profit of the last two quarters was under VND100 billion ($4.4 million), far from the VND855 billion ($37.8 million) peak in the first two quarters of the 2016-2017 fiscal year.

According to the 2018 second quarter financial statement of Hoa Sen Group, the corporation’s revenue increased by 40 per cent on-year to over VND10 trillion ($442.5 million). However, the group’s profit continued to decrease to VND83 billion ($3.7 million), down 70 per cent on-year. This is the second consecutive quarter that HSG’s profit was under VND100 billion ($4.4 million) and is at a four-year low.

Viet Capital Securities assessed that the fall in HSG’s profit was due to the fierce competition. In 2016-2018, the capacity of the leading steel companies has increased sharply.

In 2016, Hoa Sen produced 1.5 million tonnes more, which is 121 per cent of its 2015 production volume. Nam Kim’s production rose by 800,000 tonnes (190 per cent). Additionally, Hoa Phat, a new player, produced 400,000 tonnes in the first quarter of this year.

Moreover, the high input costs also eat into HSG’s profit. In the three first quarters of 2016, the company’s gross profit margin was 24-26 per cent. In the next five quarters, this figure reduced sharply to around 15-18 per cent, and was only 10 per cent in the last quarter.

As of the end of June 2018, the short-term debts of HSG were VND12.42 trillion ($550 million), increasing by VND3.4 trillion ($150.4 million), or 38 per cent, compared to the beginning of the year. Long-term debts also rose by 22 per cent to VND3.46 trillion ($153 million).

As a result, the accumulated debts of HSG stand at nearly VND16 trillion ($700 million), and the group had to pay VND190 billion ($8.4 million) of interest in the last quarter.

On the stock exchange, the HSG ticker has been falling since April and is at VND12,000 currently.

Toyota Vietnam imports 3 new car models

Toyota Motor Vietnam (TMV) today, September 25 introduced three new car models, Wigo, Avanza, and Rush, with all of them imported from Indonesia. These models are available at Toyota dealers nationwide from today.

Wigo is the “youngest” model, which debuted globally in 2013, developed primarily for emerging countries such as the Philippines and Indonesia. Despite being a newcomer to the compact-car segment, Wigo has gained success, achieving the No. 1 position in its class in major markets such as the Philippines and Indonesia. With its unique design, top of the line roomy interior, easy steering and fuel economy, Wigo is typically chosen by young customers for their daily urban commutes.

Two models of the Toyota Wigo 2018 were introduced: the 1.2AT and the 1.2MT with a 3NR-VE engine, four cylinders and 1.2 liter displacement. This engine delivers 86 horsepower at 6,000 rpm and reaches a maximum torque of 107 Nm at 4,200 rpm, delivering both powerful performance and optimal fuel economy. The MT model has a retail price of VND345 million, while the AT model has a retail price of VND405 million (VAT included).

Meanwhile, Avanza, a compact MPV, has sufficient space for 7 persons. Since its global launch in 2003, Toyota Avanza has become a best-selling car in the mid-size segment in Indonesia, the Philippines, and Thailand.

Avanza 2018 has two versions, the 1.5AT and 1.3MT. The 1.5AT grade offers a 4-speed automatic transmission and 1.5-liter four-cylinder 2NR-VE engine that produces 102 horsepower at 6,000 rpm and 136 torque Nm at 4200 rpm. The 1.3MT version uses a five-speed manual transmission with a 1.3-liter 1NR-VE engine, providing 94 horsepower at 6000 rpm and a maximum torque of 121 Nm at 4200 rpm. It has a retail price ranging from VND537 million to VND593 million (VAT included).

Finally, Rush – the “eldest brother” – was first introduced in 1997. Along with Wigo and Avanza, Rush was developed mainly for emerging countries and holds a leading position in its segment in the Philippines, Indonesia, and Thailand. In the more than 20 years since it was introduced, Toyota Rush has released three generations and is now sold in more than 100 countries.

The highly efficient Toyota 2NR-VE engine, paired with Toyota’s latest technology VVT-i, optimized combustion chamber, lightweight moving parts and low friction piston, contributes to both excellent power and fuel efficiency. In addition, the aerodynamic design of the car’s exterior also provides smooth driving and contributes in reducing fuel consumption. The 1.5 AT Rush has a retail price of VND668 million (VAT included).