Vietnamese firms supported in gaining foothold in US market

Vietnamese enterprises received updates on fresh information, policies, and business opportunities for the US market at a workshop held in Hanoi on July 27.

Le Hoang Tai, deputy head of the Vietnam Trade Promotion Agency under the Ministry of Industry and Trade (MoIT), said that the US has maintained its position as the leading trade partner of Vietnam over the past decade. Last year, Vietnam’s export to the US hit 41.6 billion USD, accounting for over 20 percent of its total export value. 

Besides main exports such as garment and textiles, footwear, wood products, and seafood; new products, including electronic products, processed food, and iron and steel, are beginning to have a firm foothold in this market too, Tai added.

According to Nguyen Thang Vuong from the MoIT’s Department of European and American Markets, since the Vietnam-US Bilateral Trade Agreement took effect, two-way trade enjoyed a 47-fold increase from 220 million USD in 1994 to 50.8 billion USD in 2017.

Vietnam currently ranks 12th amongst those exporting goods to the US, and 27th in terms of those importing goods from the US. It is the American nation’s 16th largest trader. 

Former Vietnamese Trade Counselor in the US Dao Tran Nhan said that the US is a potential but choosy market, which requires Vietnamese exporters to improve their capacity and take the initiative in cooperation in order to build a supply chain.

When working with US partners, especially through e-transactions, if the US side requests for a change in transaction banks, it is necessary for Vietnamese businesses to stop contacting via email and directly call to ask for the reasons behind this in order to avoid unexpected incidents, Nhan advised.

He also recommended food and beverage firms pay special attention to the Food Safety Modernisation Act. 

Supporting Industry Show 2018 hoped to connect domestic, foreign firms

The Supporting Industry Show 2018 will be held on October 11-13 in the Saigon Exhibition and Convention Centre in Ho Chi Minh City, introducing more than 500 brand names with the latest metal processing technologies from 25 countries.

The expo aims to foster connectivity among businesses in the support industries of Vietnam and Japan, promoting the growth of the automobile and electronics sectors in Vietnam. 

The event is expected to draw 18 big brands from Japan as buyers, and 30 Vietnamese firms as suppliers who are supported by the Ho Chi Minh City Investment and Trade Promotion Centre (ITPC) and the city’s Centre for Support Industry Development (CSID).

According to ITPC Vice Director Cao Thi Phi Van, engaging in the Supporting Industry Show is part of the centre’s plans to develop the support industry.

The plans include forming a domestic production network meeting demand for complete products and joining global value chain, encouraging foreign direct investment (FDI) firms to enter the support industry and assisting small and medium-sized enterprises to supply supporting products to reduce imports of the products and enhance added value.

Recently, Vietnam has seen positive changes in its investment environment. 

Suttisak Wilanan, Vice Director of Reed Tradex company noted that last year, Vietnam leaped five steps to 55th position in the Global Competitiveness Index by the World Economic Forum.

Takimoto Koji, head of the Japan External Trade Organisation (JETRO) in Ho Chi Minh City said that total Japanese investment in Vietnam has increased sharply to 8.64 billion USD in 2017 from 2.15 billion USD in 2016. Also in the period, new investment rose from 1.18 billion USD to 7.76 billion USD.

Some 70 percent of surveyed Japanese firms said they will expand business in Vietnam in the next 1-2 years, the highest number in six surveyed countries together with the Philippines, Indonesia, Malaysia, China and Thailand.

With a network of 16 bilateral and multilateral free trade agreements, Vietnam is a link in the high value chain.

The deals have considerably eased barriers in taxes and opened the door for foreign investment. But the localised product ratio of Vietnam in 2017 was 33.2 percent, the lowest among the six surveyed countries, according to JETRO.

Meanwhile, statistics from the Ministry of Industry and Trade showed that there are 661 businesses in supporting industry, 591 of which produce electronic accessories, 56 make computers and peripheral devices and 15 produce magnetic disks and optical products.

Luu Hoang Long, President of the Vietnam Electronic Industry Association said few domestic firms in the electronics supporting industry supply FDI firms due to limited mutual understanding and loose links.

Some experts said this is a good time for some sectors, including automobiles, to seek stronger ties with support industry firms, as one car is made of more than 30,000 parts, making it hard for one country to provide all of the parts.

Vietnam, with its strategic position in the centre of the ASEAN with many big seaports, has abundant opportunities to cooperate with carmakers of Thailand and Indonesia to create a sustainable automobile sector, they said.

They also pointed to big opportunities for the mechanical industry of Ho Chi Minh City, especially automobile production as the city’s industrial production index during 2016-2017 was high at 7.9 percent.

Forging stronger ties with CSID and foreign organisations such as JETRO will help local firms to enhance their supplying capacity, foster links with other firms in and outside the country and prepare to join global supply chains.

HCM City focuses on transforming business households into companies

Ho Chi Minh City has applied several measures to boost the development of enterprises, including turning business households into companies.

Experts said there are three main sources for business development –new startup firms, existing enterprises expanding their operation and business households developing into companies.

However, the success ratio of startups is low, meaning they make modest contributions to growth in the number of businesses. Meanwhile, existing firms are likely to improve their quality rather than multiply in number. Therefore, the city has put much stock in switching business households into companies, a quick way to increase the quantity of local enterprises.

Developing companies from business households has been integrated into business development policies of the city, including a programme to support new companies launched by the municipal Tax Department in May 2017.

After a year of implementation, the programme has assisted more than 21,000 startups and companies that began as household businesses. But the Ho Chi Minh City Tax Department also pointed to difficulties in encouraging households to form companies, explaining the low ratio of transformation.

Most of the households are small scale with instable operation, while the owners find accounting and tax declaration procedures complicated.

The department reported that after a year, only 3,100 business households had turned themselves into companies, lower than the target and much under the total 36,200 business households with potential to become companies.

Nguyen Nam Binh, Vice Director of the department, said the households have limited awareness of the Law on Enterprises and modest knowledge and skills in business management. They maintain the habit of doing small business without paying attention to receipts or tax policies. Moreover, becoming companies means the households must pay more taxes and insurance premiums, added Binh.

Binh stressed that regulations in accounting and tax declaration are complicated, especially for small firms.

Experts asserted that transforming business households into companies benefits both businesses and the economy, as the policy urges the Government to implement more measures to improve the business environment and speed up administrative reform.

However, one of the obstacles hindering households from forming companies is the increase in legal obligations and indirect costs. A lack of business management skills also makes business households less confident to develop into companies.

At the same time, the high percentage of enterprises that close every year also showed that businesses still face many difficulties in their operation, they said.

The Ho Chi Minh City’s Statistics Office revealed that in the first six months of 2018, the city granted licences to 20,194 enterprises with registered capital of 226.1 trillion VND, up 8 percent in quantity but down 10.4 percent in capital.

Also in the first half of 2018, 1,145 enterprises were dissolved, while 2,920 others halted their operations.

Dr. Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry, said the number of firms quitting the market was high, which reflects the abundance of difficulties they face.

Only by solving problems from administrative procedures, business conditions as well as weaknesses in technology and management, will give the city hope for a  high rise in the number of businesses and low ratio of bankruptcy, he stated.

Economist Huynh Thanh Dien also mentioned that enterprises can only develop in a favourable environment with fair competition as well as supporting tools related to storage, logistics, production site, finance and telecommunications.

He said that Ho Chi Minh City should roll out solutions to boost the improvement of all the factors to facilitate businesses’ growth.

On the other hand, the city should help business households recognise opportunities when becoming companies, while taking advantage of the guiding role of big firms for small and medium-sized ones by fostering links in technology, vocational training and capital, he added.

Techcombank’s pre-tax profit doubles in first half

The Vietnam Technological and Commercial Joint Stock Bank (Techcombank) posted a record pre-tax profit of 5.19 trillion VND (223.5 million USD) in the first half of the year – approximately double that of the same period in 2017.

Techcombank, at a press conference held in Hanoi on July 24, said that the bank’s return on equity (ROE) and return on assets (ROA) in the six month period were 24.32 percent and 3.16 percent, respectively, higher than the same period last year.

The positive results were thanks to Vietnam’s economic growth in 2018, which was forecast to be the second fastest in the Asia-Pacific region. As GDP in the first six months grew by 7.08 percent, Vietnam is well on track to achieve this forecast. The growth rate of 7.08 percent would be also the highest growth rate recorded since 2011.

In addition to the positive economic signals, Techcombank’s performance in the first six months of 2018 reinforced its position as the leading bank. Its total operating income (TOI) represented a 20 percent year-on-year increase, said Nguyen Le Quoc Anh, Techcombank’s CEO.

Anh said the bank had seen improvements in all of its businesses in the first half of the year.

Furthermore, the bank’s focus on strengthening and deepening relationships with business partners to diversify its income brought non-interest income to 41.7 per cent of TOI. Income from business activities showed impressive growth in comparison to 2017, especially fee income (up 8 per cent from last year).

Strictly following its strategy, Techcombank continues transition from providing medium- and long-term loans to short-term loans. Its loan balance increased by 4 percent from 2017 year end, reaching 166.7 trillion VND as of June 30.

Its deposits grew by 9 percent from 2017 year end to 186.3 trillion VND, of which current account and saving account balance (CASA) made up 25 percent. Capital adequacy ratio (CAR) was 15.9 percent, well above the State Bank of Vietnam’s regulatory requirement of 9 percent.

By continuing to make strong investments in human resources, technological platforms and infrastructure, as well as by managing costs, the cost per income ratio (CIR) was reduced to 27.94 percent in the first six months of 2018 (down from 29.09 percent as of the same period in 2017).

Riding on the back of the positive economic and market outlook in the remaining six months of 2018, Techcombank said it would continue to attract more customers from its targeted affluent and mass affluent segments.

Startup Space for young people inaugurated in HCM City

Startup Space - The Youth Five (Y5 office) - for young people has been inaugurated in District 1, Ho Chi Minh City, by the municipal Ho Chi Minh Communist Youth Union.

Addressing the inaugural ceremony on July 24 held, Truong Ly Hoang Phi, CEO of the Ho Chi Minh City’s Business Startup Support Centre (BSSC), said at the Y5 office, which plays its role as an information provider, startup enterprises have opportunities to access support sources in the startup ecosystem as well as chances to join startup activities in the community and meet experts, thus increasing development opportunities for business and startup activities of young businesses.

Covering an area of nearly 500 sq.m., the Y5 office is home to startup enterprises and groups with the aim at connecting, sharing and developing startup ideas.

The Y5 office has about 15 working and meeting rooms and public space using energy and water saving technologies, thus helping saving operation costs for startup enterprises.

In addition, the Y5 office is to link between investors, enterprise and the city’s startup community, providing startup information, trends for young people.

Business associations have voiced their support for stricter management of scrap imports, but they also underlined the need to continue importing these goods to serve domestic production.

The Ministry of Natural Resources and Environment (MoNRE) hosted a meeting in Hanoi on July 24 to look into the scrap import situation.

Deputy Director General of the Vietnam Environment Administration Hoang Van Thuc said scrap imports into Vietnam increased sharply in the first few months of 2018 and are forecast to continue rising for the time ahead. The congestion of imported scrap materials at seaports is currently a great public concern as it has affected the operation capacity of ports and shipping companies, slowing down their flow of goods, he added.

A large volume of scrap imports are currently stuck at ports in Ho Chi Minh City. As of June 26, up to 4,480 containers of scrap materials had been stuck at the ports under the Saigon Newport Corporation’s management for at least 30 days. Up to 3,464 of the containers are at Cat Lai Port.

Meanwhile, 737 containers have been stored for more than 90 days and 507 others have stayed for between 30 and 90 days at ports in northern Hai Phong city.

About 20 percent of the imported scrap is paper, and the rest is plastic and other types of scrap materials, according to the MoNRE.

Minister Tran Hong Ha said it is necessary to overhaul legal documents on scrap imports in line with the laws on environmental protection, trade and customs, and the maritime code. In particular, specific mechanisms need to be created to manage and control scrap trading activities before scrap enters Vietnam, he said, adding that technical standards should also be tightened to ensure that imported scraps are clean.

He urged stricter control on temporary imports of scrap for re-export out of Vietnam.

The MoNRE is also asking Prime Minister Nguyen Xuan Phuc to permit the removal of scrap types which either may pollute the environment or can be supplied locally from approved import lists.

Supporting the stricter management of scrap imports, business associations said it will also help improve enterprises’ awareness of using clean materials.

Vice Chairman of the Vietnam Steel Association Nguyen Van Sua said banning the import of unqualified scrap or scrap that can be sourced domestically or is not in demand is an appropriate action. However, take Vietnam’s steel industry for example, it is growing strongly and yet the domestic supply of ore, bituminous coal, and scrap metal is not enough to meet its needs, and so these materials still need to be imported, he said.

A representative of the Vietnam Pulp and Paper Association said although there are only two pulp factories in the country at present, the industry produces up to 3.6 million tonnes of paper. The association suggested authorised agencies license the import of scrap paper basing on production demand.

Meanwhile, Secretary General of the Vietnam Plastics Association Huynh Thi My said the industry has demand for about 5 million tonnes of plastic materials each year, but only 20 percent of that is supplied domestically. 

Therefore, plastics companies still need to import scrap plastics to serve production. To minimise environmental pollution, the sector will set up an industrial park using modern technologies to collect and recycle plastics, she added.

The Hanoi Stock Exchange (HNX) raised 4.5 trillion VND (approximately 193.5 million USD) at the latest auction of Government bonds (G-bonds) issued by the State Treasury on July 25.

The auction aimed to sell 7.5 trillion VND, or 322.5 million USD, worth of G-bonds with 5-year, 7-year, 10-year, 15-year, 20-year and 30-year maturity.

Some 300 billion VND (12.9 million USD) was mobilised from 5-year bonds with annual interest rate of 3.9 percent, up 0.05 percent from the previous auction on July 18.

Eight bidders bought 10-year bonds at a total of 2.1 trillion VND (90.3 million USD) with annual yield rate of 4.48 percent, up 0.02 percent from the July 18 auction.

G-bonds with 15-year maturity also fetched 2.1 trillion VND, winning interest rate of 4.78 per year, up 0.02 percent from the last auction.

There were no successful bids for 5-year, 20-year or 30-year G-bonds.

From the outset of 2018, the State Treasury collected more than 90 trillion VND (3.87 billion USD) through G-bond auctions at the HNX.

The National Financial Supervisory Commission has predicted that the G-bond market in 2018 will see modest changes from last year thanks to economic growth of more than 6.7 percent and inflation below 4 percent. It expects the value of G-bonds issued this year to reach 180 trillion VND (7.92 billion USD).

Last year, Vietnam sold some 159.9 trillion VND, or 7.03 billion USD, worth of G-bonds with average maturity of 13.52 years and annual interest averaging 6.07 percent, down 0.2 percentage points against 2016.

The interest rates of Government bonds have risen lately, after a long period of decline throughout 2017 and the first four months of 2018.

Southeastern provinces report stable growth in H1

The seven provinces in the southeastern region have reported stable economic growth in the first half of this year, with an average GRDP expansion of 7.79 percent. 

The growth was attributable to patriotic emulation campaigns, said officials from Tay Ninh, Dong Nai, Binh Duong, Ninh Thuan, Binh Thuan, Ba Ria-Vung Tau and Binh Phuoc at a conference in Tay Ninh on July 25 to review the outcomes of emulation campaigns in the region during January-June.  

Ninh Thuan province posted the highest GRDP growth rate at 10.1 percent, followed by Binh Thuan with 8.58 percent, and Tay Ninh 7.7 percent. 

Dong Nai saw a growth of 7.5 percent, while both Binh Duong and Ba Ria-Vung Tau enjoyed an expansion of 7 percent, and Binh Phuoc, 6.64 percent. 

The region earned a total of 24.16 billion USD from exports, with Binh Duong alone accounting for 12 billion USD. 

Also during the period, the region absorbed 2.422 billion USD of foreign direct investment (FDI). 

The seven provinces contributed more than 98.3 trillion VND (4.25 billion USD) to the State budget, led by Ba Ria-Vung Tau with 37.1 trillion VND (1.6 billion USD) completing 72.7 percent of its yearly plan. Binh Duong collected 24.6 trillion VND (1.06 billion USD, 47 percent of yearly plan), and Dong Nai, 23 trillion VND (994.3 million USD, 44 percent of yearly plan).

Outstanding examples in emulation campaigns in the region were rewarded on the occasion.

Seafood exports likely to fall short of 10-billion USD target

Vietnamese seafood companies need to work harder to realise the export target of 10 billion USD set by the Ministry of Agriculture and Rural Development (MARD) when oversea shipments in during January-July were estimated at only 4.66 billion USD.

The yearly growth rate of seafood export in the period this year, at 6.4 percent, was much lower than the same time last year, with 19.3 percent.

According to Truong Dinh Hoe, General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), instability in the world market and oversupply of shrimp worldwide are the main causes of the dwindling growth. 

“Exports of seafood products are likely to fetch 9 billion USD, but 10 billion USD is a far cry. However, we are trying our best,” Hoe said.

He noted that revenue from seafood exports in July was less than 700 million USD, adding that however, the season for export are in the last months of the year, and if export value can maintain an increase of 100 million USD each month, Vietnam will pocket 9 billion USD from seafood exports by the end of this year.

As shrimp, tra fish, and tuna are the largest contributors to the nation’s export revenue, a fall in shipment of one of the three products will affect results of the whole sector.

Statistics from VASEP showed that shrimp exports in the second quarter of the year fell 4.9 percent to 893 million USD due to fluctuations in both domestic and foreign shrimp prices. However, thanks to a robust growth of 20 percent in the first quarter, total export for the first half of the year still showed a slight increase of 5.1 percent to 1.6 billion USD.

With shrimp demand expected to rise in the second half, Vietnamese shrimp exports are forecast to reach some 4 billion USD. 

In contrast to the rough seas faced by shrimps, tra fish export revenue grew nearly 20 percent from the same time last year to over 1 billion USD in the first six months. Strongest growth was seen in the Chinese market (46.7 percent with more than 251 million USD), followed by the EU (16.2 percent, 117 million USD), and the US (11.6 percent, 197 million USD).

Tuna exports during January-June also picked up 12 percent to nearly 303 million USD. Shipments to Israel are expected to increase while those to the EU will have favourable conditions as both sides are concluding the negotiations of free trade agreement.

However, exports to the US will face challenges due to fierce competition, and falling demands.

Japan top foreign investor in Vietnam

Japan poured 6.88 billion USD, 30 percent of the total foreign direct investment (FDI), into Vietnam in the first seven months of 2018, the biggest figure among 96 countries and territories investing here.

Japan was followed by the Republic of Korea with 5.46 billion USD or 23.8 percent of total FDI and Singapore with 2.73 billion USD or 11.9 percent, according to the Foreign Investment Agency (FIA) of the Ministry of Planning and Investment.

Foreign investors registered a total 22.94 billion USD for new and existing projects and buying shares in Vietnam during the period, up 4.6 percent from a year earlier.

Of that sum, investment registration certificates were granted to 1,656 new FDI projects worth 13.2 billion USD as of July 20, up 2.2 percent year on year. Meanwhile, 4.95 billion USD was added to 627 existing projects.

Among the 17 sectors receiving FDI, processing and manufacturing attracted most with 9.63 billion USD, accounting for 41.95 percent of total capital. Real estate ranked second with 5.6 billion USD or 24.4 percent while the wholesale and retail sector was in third place with 1.69 billion USD or 7.4 percent.

The FIA said foreign capital entered 59 of the 63 provinces and cities nationwide between January and July. Hanoi topped the list with 6.17 billion USD or 26.9 percent. It was followed by Ho Chi Minh City with 4.12 billion USD or 17.9 percent and Ba Ria-Vung Tau province with 2.15 billion USD or 9.4 percent.

As of July 20, FDI projects disbursed about 9.85 billion USD, rising by 8.8 percent from the same period last year.

FPT Retail sees profit up 30% to US$6.38 million in 6 months

FPT Retail holds 18% of the mobile phone retail market in Vietnam, second only to Mobile World with 45%.

FPT Retail's after-tax profit in the January - June period reached VND146.5 billion (US$6.38 million), up 30% year-on-year, equivalent to earnings per share (EPS) of VND2,155 (US$0.094), and meeting 39% of the year target.  

During this period, the retail arm of Vietnam's biggest information technology company FPT saw its revenue grow 18% year-on-year to VND7.48 trillion (US$324.7 million), stated FPT Retail's quarterly financial statement. 

In the second quarter, FPT Retail's revenue jumped to VND3.6 trillion (US$156.3 million), up 19% year-on-year. 

FPT Retail's gross profit in the second quarter (Q2) reached VND498 billion (US$21.6 million), equivalent to a gross margin of 13.8%, lower than the rate of 14.2% from the same period last year. 

The company's financial activities income in Q2 saw a reduction of 31% to VND7.81 billion (US$339,024). 

In the April-June quater, sale expenses increased by 14% to VND310.1 billion (US$13.46 million), while financial and administrative expenses also increased, albeit at a slower pace, to VND26.43 billion (US$1.14 million) and VND73.7 billion (US$3.2 million), respectively. 

FPT Retail recorded a after-tax profit of VND82.65 billion (US$3.58 million) in the second quarter, up 28% year-on-year. 

In 2018, the company set target for after-tax profit of VND377 billion (US$16.36 million).

By the end of the second quarter, FPT Retail's total assets value reached VND4.16 trillion (US$180.5 million), in which inventories amounted to VND1.89 trillion (US$82 million) of the total. 

The company increased its charter capital from VND400 billion (US$17.5 million) to VND680 billion (US$29.6 million) through a share dividend payout in May.

FPT Retail owns two retail chains: FPT Shop (selling mobile phones, laptops and accessories of many brands) and F.Studio (providing genuine Apple products and accessories).

FPT Retail holds 18% of the mobile phone retail market in Vietnam, second only to Mobile World with 45%, according to VietnamFinance.

Vietnam spends US$14 million per day paying interest on loans

Vietnam saw a budget surplus of VND2.5 trillion (US$107.58 million) in the first six months this year, indicating a sharp improvement from the budget deficit of VND20 trillion (US$860.5 million) from the same period of last year, according to the Ministry of Finance.

During the January - June period, Vietnam set aside around VND59.3 trillion (US$2.55 billion) for interest payments, up 6% year-on-year, equivalent to an expenditure of VND330 billion (US$14.18 million) per day, according to the MoF. 

Moreover, the government issued government bonds worth VND89.5 trillion (US$3.85 billion) to cover state budget deficits and principal repayments, stated Huynh Quang Hai, vice finance minister at a conference on state budget on July 18. 

Overall, state budget revenues in the first half of 2018 reached VND651.7 trillion (US$28 billion), equivalent to 49.4% of the year's estimates, and up 14.3% year-on-year, he added.

Among the figures, domestic collection for the period grew 15.5% year-on-year in revenues and crude oil exports 25.3%.

Meanwhile, Vietnam's state budget expenditures in the first six months totaled VND649.2 trillion (US$27.93 billion), equivalent to 42.6% of the year's plan. Of the total, regular spending reached VND455.8 trillion (US$19.62 billion) or 70% of total spending and up 5% year-on-year. Expenditure for development investment soared to VND130 trillion (US$5.59 billion), representing an increase of 42% year-on-year. 

This resulted in a budget surplus of VND2.5 trillion (US$107.58 million), indicating a sharp improvement from a budget deficit of nearly VND20 trillion (US$860.5 million) in the same period of 2017. 

However, revenue collection from the three economic groups was lower compared to yearly estimates. Speciafically, the state sector met 43.7% of the estimate, the FDI sector 38.7% and the private sector 47.8%, Thang informed.

No state representatives are nominated for Sabeco board next term

As the Vietnamese government aims to fully divest from Saigon Beer Alcohol Beverage (Sabeco), the presence of state representative in the brewer`s board is not necessary in long-term, according to the Central Institute for Economic Management (CIEM)`s expert.

Nguyen Thanh Nam, Sabeco's current chief executive officer and representative of the Vietnamese Ministry of Industry and Trade (MoIT) at the brewer, is not on the list of nominees and candidates for the company's board of directors next term, according to Sabeco's recent proposal ahead of its annual general meeting. 

Another state representative at Sabece in the name of Bui Ngoc Hanh - currently board member, is in the same situation. 

Pham Duc Trung, head of CIEM's Corporate Development and Reform Department told CafeF that this is a normal practice and a subsequent step of state divestment process.

In the long term, the government intends to fully divest from Sabeco, thus, without state capital, such representative will no longer be necessary, he added.

According to Trung, there will be no disruption in the company's operation, as the board member election process represents the will of its shareholders. 

However, with 36% stake in Sabeco, the MoIT has the rights to nominate a maximum of three candidates for the board. Thus, it is likely that a state representative will be included in Sabeco's board for the term 2018 - 2023, Trung continued. 

The current list of seven candidates for the board of the next term includes Koh Poh Tiong, Michael Chye Hin Fah, Pramoad Phornprapha, Tran Kim Nga, Nguyen Tien Dung, Luong Thanh Hai and Nguyen Tien Vy. 

Sabeco is currently Vietnam's largest domestic brewer with 40% of the market share, followed by Hanoi Beer Alcohol Beverage (Habeco) with 18%. 

Last December, the Vietnamese government sold nearly 54% stake in Sabeco to Vietnam Beverage for US$4.89 billion. ThaiBev, controlled by tycoon Charoen Sirivadhanabhakdi, through its local unit Vietnam Beverage, purchased 343.42 million shares at the starting price of US$14.05. The only other bidder, a Vietnamese individual, bought 20,000 shares, or 0.003%, at a price of US$14.07 each. 

In 2017, Sabeco alone produced 1.77 billion liters of beer, an increase of 6.6% year-on-year, while Hanoi-based Habeco brewed 657.6 million liters, down 6.5%.

FedEx Express’s new air route connects Hanoi to Guangzhou

FedEx Express, one of the world’s largest express service providers, on July 25 launched a new flight connecting Hanoi with the FedEx Asia-Pacific Hub in Guangzhou, China.

According to Managing Director of FedEx Express Indochina Hardy Diec, the new air service will improve transit times for all inbound flights to Hanoi and for the first time, enable next business day delivery within Asia.

The flight, using B-757 freighter, will operate four times per week to and from Hanoi. Vietnamese exporters will benefit from the best transit times, which is just one business day for shipments from Hanoi to big business centres across Asia, such as in China, Singapore, Malaysia, and the Philippines.

Shipments to Europe and North America will arrive in two business days. For all shipments to Hanoi, the transit time is reduced to one business day, except for those from Europe and North America which will reach Hanoi in two and three business days, respectively.

The service enhancements delivered by the new flight is expected to further support the development of businesses in Vietnam by giving them better, faster access to global markets.

Recent research carried out by FedEx found that 58 percent of Vietnam’s small- and medium-sized enterprises (SMEs) are exporting to markets in the Asia-Pacific region and 80 percent are shipping to markets beyond. The US, China, India and key European markets are the top export destinations. SME leaders were optimistic about the continued growth of exports and support from logistics partners.

Vietnamese firm unveils patented IT product

eLinkKVM USB device, which enables users to connect with and receive support from global IT experts, made its debut at the Saigon Hi-tech Park Incubation Centre in Ho Chi Minh City on July 25. 

Initiated by ElinkGate Joint Stock Company, the product is considered a foundation for developing one-touch IT support service.

The startup ElinkGate possesses the monopoly technology of remote computer control, which was patented in the US and Vietnam. The technology allows remote control of smart devices such as computers, tablets, smart phones in all situations, even those without operating systems. 

The first commercial product of this technology,  eLinkKVM USB device  features auto-recognition with high speed and security.

With this product, customers requesting the service just need to connect ElinkGate’s USB device to computers that need support. IT expert can remotely access the computer  to fix any problems, including re-installation of operating system or fixing errors of system boot. 

According to Nguyen Xuan Hoang, Director of ElinkGate,  eLinkKVM’s price is  more competitive compared to similar products in the market. 

In 2018, the company will work with its partners to quickly market the product, with two versions for businesses and individuals.

It aims to help people learn about IT and has also patented a similar technology called eLinkMe  which also allows IT experts to remotely access computers, smart phones or tablets to fix any problem that users  may encounter.

Forbes Vietnam Business Forum: economy could grow by 6.8 pct

Experts forecast that the Vietnamese economy will grow by more than 6.8 percent in the last half of this year at the Forbes Vietnam Business Forum 2018 held in Ho Chi Minh City on July 26. 

Speaking at the event, General Director of Vietjet Air Nguyen Thi Phuong Thao underscored the need to fully tap the potential of the private sector to make it a driving force of the economy. 

It is time for the private sector to effectively use State incentives, train human resources and adopt technological advances to meet diverse demand, she said. 

She warned that if the US – China trade war escalates, many sectors will be hurt because Vietnamese firms will incur higher manufacturing costs and competition with low-cost Chinese goods will become fiercer. 

Director of the Public Policy Programme at the Fulbright School Nguyen Xuan Thanh mentioned machinery and mechanical products as sectors hit by the trade war. As the US imposes tariffs on 34 billion USD, then 200 billion USD worth of Chinese goods, interior décor and agro-fisheries will also be hurt. If the figure moves to 500 billion USD, almost all sectors will be affected, including footwear and apparel. 

Apart from the trade war, exchange rate fluctuations will also impact Vietnamese growth between now and the year’s end. Despite the State Bank of Vietnam’s flexible foreign exchange management policy, controlling risks brought by currency exchange rate fluctuations is also necessary. 

Pham Hong Hai, General Director of HSBC Vietnam urged the Government, ministries and agencies to reform to control trade fraud risks via close State management while creating an environment that helps businesses rapidly adapt to changes. 

Oil and gas and exports also indirectly impact the Vietnamese economy. As more global firms divest in emerging markets, the Vietnamese economy needs to speed up institutional reform, he said, adding that Vietnamese businesses will easily become technologically backward if they aren’t ready to join the fourth industrial revolution. 

President of the Vietnam Chamber of Commerce and Industry Vu Tien Loc said easier access to incentives, State funding and land should be given to business community to fuel domestic growth and ensure fair competition.

Themed “Building Sustainable Growth”, the event gathered top business leaders, experts, thinkers and policy makers to discuss strategies to ensure growth is sustained, through long term investment in core industries that Vietnam has the best capacity to develop

Vietnamese, Japanese firms seek to boost sustainable partnership

Measures to build sustainable partnerships with Japanese producers is the focus of a workshop organised in Ho Chi Minh City on July 27 by the Vietnam Chamber of Commerce and Industry in Ho Chi Minh City (VCCI-HCM) and the Vietnam-Japan Human Resource Cooperation Centre. 

The event heard that Japan is stepping up investment and business activities in Vietnam, creating more cooperation opportunities for local enterprises.

However, only a small number of Vietnamese enterprises are able to participate in the supply chain of Japanese enterprises.

According to Vo Tan Thanh, Director of VCCI-HCM, in 2017, Japan again became the largest foreign investor in Vietnam with total investment capital of 9.11 billion USD, accounting for over 25 percent of the total foreign direct investment (FDI) inflow into Vietnam. 

In the first six months of 2018, Japanese enterprises poured nearly 6.5 billion USD into investment projects in Vietnam, making up nearly 32 percent of the total FDI in the country.

Japan’s investment in Vietnam will continue to increase for the time to come, reflected by the number of Japanese firms interested in and wishing to expand their investment and business in Vietnam each year.

Moreover, the prestige of Japanese enterprises has been confirmed through the many years of the Vietnam-Japan comprehensive strategic partnership, he said. 

These factors have created more feasible and effective cooperation opportunities for Vietnamese businesses, Thanh noted. 

Tsuyoshi Shimizu, from the Japan International Cooperation Agency, said that there are over 1,600 Japanese enterprises operating in Vietnam, nearly 70 percent of which said that they will expand their business in the next one to two years. 

The main reason Japanese businesses want to increase their business in Vietnam comes from the forecast that the Vietnamese economy will grow positively, which will help increase their revenue and promote the growth of enterprises, he stressed.

Japanese firms are interested in fields with high growth potential such as trade, manufacturing of high-added value products, and production of consumer goods, said Shimizu.

Representatives from Japanese enterprises said they give priority to purchasing raw materials and components in Vietnam and using local workers because this is one of the most effective solutions to cutting costs and shortening delivery times, thus improving their competitiveness.

However, they can source only one third of materials in Vietnam.

Experts underlined that Vietnam needs to have more enterprises which are able to produce materials, components and machinery to meet the demand of Japanese partners. 

Vietnamese enterprises should invest in producing items such steel, copper, aluminium, plastic materials, processing and shaping machines, punching and casting machines, and electronic components.

Vietnamese firms were also advised to think about long-term strategies and visions if they want to establish cooperation with Japanese peers as the latter are very cautious in setting up partnerships with new suppliers. However, if they have confidence in their partners, Japanese firms are likely to establish long-term collaboration with and create favourable conditions for their partners to develop. 

Vinh Phuc calls for investment from Republic of Korea

The northern province of Vinh Phuc promoted its potential and called for investment at a conference held in Gyeonggi province of the Republic of Korea (RoK) on July 27.

Speaking before an audience of RoK businesspeople, Chairman of Vinh Phuc provincial People’s Committee Nguyen Van Tri highlighted the province’s convenient location in Vietnam’s northern key economic zone and favourable natural conditions suitable for industry, tourism and hi-tech agriculture.

He informed the Korean business circle that the province has made efforts to streamline its administrative procedures, upgrade infrastructure, especially at industrial zones, and train the local labour force.

The provincial leader reported that Vinh Phuc is now home to more than 300 foreign direct investment (FDI) projects, including many run by RoK corporations such as Partron Vina, Haesung Vina, Bangjoo and Interflex. Several more RoK firms, namely Interflex, Young Poong Electronics and Korea Circuit, are planning investments worth close to 1 billion USD in the Dong Soc industrial cluster.

He urged RoK firms consider investing in such fields as support industry for automobile and electronic part production, farm produce processing, urban areas, hotels, eco-tourism, education-training and health care.

Vietnamese Ambassador to the RoK Nguyen Vu Tu briefed the conference on the growing strategic cooperative partnership between Vietnam and the RoK.

The RoK is currently the top foreign investor in Vietnam with accumulated investment of more than 60 billion USD as of July this year. Bilateral trade topped 60 billion USD in 2017, making the RoK the second largest trade partner of Vietnam, while Vietnam is the fourth largest trade partner of the RoK.

Each country has around 150,000 citizens living and working in the other country.

The ambassador said sound political ties and close people-to-people exchange are factors that help boost economic cooperation between the two sides. 

He stressed that with a high GDP growth of 6.8 percent last year, Vietnam is an attractive destination for investors.