More Vietnamese firms invest in Australia’s real estate: workshop

More and more Vietnamese enterprises have invested in housing and commercial property in Australia, said Vietnamese Consul General to Sydney Trinh Duc Hai at a workshop held by the Vietnamese Entrepreneurs Association (VEAS) in Sydney on November 3. 

He cited Vietnam’s investment capital in real estate in Australia amounted to 1.7 billion AUD (1.2 billion USD) in the first eight months of this year.

Since Vietnam and Australia established a strategic partnership in March 2018, the bilateral ties have developed outstandingly across fields, Hai noted.  

As of August 2018, Australia ranked third among countries and territories investing in Vietnam, he said. 

The workshop, which gathered more than 100 representatives of Vietnamese and Australian firms operating in real estate, offered an insight into the property market in Australia, as well as necessary procedures for foreign investment. 

Experts said Vietnamese enterprises have big opportunities to invest in Australia’s real estate as the market has seen stable development for many years. 

Established in February 2018, the VEAS plays a role in connecting and promoting the capacity of Vietnamese businesses in Sydney, thereby contributing to the development of Australia-Vietnam economic cooperation.

Can Tho leaders meet Japanese investors

Leaders of the Mekong Delta city of Can Tho November 3 held a meeting with representatives from a number of Japanese enterprises who came to the city to attend the 4th Vietnam-Japan culture and trade exchange. 

The meeting, chaired by former President Truong Tan Sang, saw the participation of representatives from more than 10 Japanese firms and the Japan External Trade Organisation (JETRO) in Ho Chi Minh City. 

Speaking at the event, former President Sang said Vietnam and Can Tho city in particular are calling for investment in agriculture, electronics, health tourism, and training cooperation. 

He stressed that if Japanese businesses invest in these fields, they will surely receive the attention of Vietnamese customers because Japan's qualification and technology have been acknowledged. 

Meanwhile, Chairman of the municipal People’s Committee Vo Thanh Thong said the city is very interested in the field of car recycling that a Japanese business introduced in the framework of the exchange, and hopes for an investment project in this sphere. 

Can Tho is also looking for cooperation with a Japanese enterprise which specialises in mushroom cultivation, he said, adding that the enterprise can connect with Can Tho University to  consider the possibility of implementing the model in the locality. 

Thong also suggested cooperation between Kobe Technology University of Hyogo prefecture and Can Tho University of Engineering and Technology to develop information technology sector. 

Kyoshiro Ichikawa, General Director of I.B.C Vietnam Co., Ltd, who is also a consultant from the working group on Japan-related issues (Japan Desk) in Can Tho, said through the exchange, Japanese enterprises got an insight into Can Tho city, adding that he hopes they will introduce more Japanese firms to the Vietnamese city in the time to come.

The fourth Vietnam-Japan cultural and trade exchange programme was projected to host 120 pavilions, including 90 introducing the nations’ commercial products.

A series of activities have been held during the programme, including a photo exhibition on the Vietnam-Japan friendship, a forum on Japan-Mekong cooperation, and a ceremony announcing the establishment of the Vietnam-Japan friendship industrial zone.

Symposium on advances in offshore engineering opens in Hanoi

Scientists, businesspeople and policymakers from more than 20 countries are gathering in Hanoi for the Vietnam Symposium on Advances in Offshore Engineering (VSOE 2018). 

The VSOE 2018, themed Energy and Geotechnics, is designed as a platform for researchers, policy makers and entrepreneurs to discuss and promote technology and policy changes toward renewable energy as well as generate business opportunities in oil and gas and offshore renewable energy. 

Addressing the event, Minister of Natural Resources and Environment Tran Hong Ha said Vietnam has just adopted a strategy on sustainable development of maritime economy to 2030 and a vision to 2045, which envisions the restructuring of the maritime economic sector with the top target being developing towards tourism in connection with conservation and development of the natural ecology. 

As part of the target, renewable energy is a factor of decisive significance to Vietnam’s sustainable development, Ha said, noting that many countries in the world have been successful in using advances in science and technologies to develop renewable energy. 

The minister went on to say that however, fossil energy is still widely used, generating large volume of emissions. Therefore, seeking ways to ensure a balanced and sustainable development for the world is the shared responsibility of all, he said. 

The VSOE is an initiative of the Association of Vietnamese Scientists and Experts (AVSE Global), which will be held every two years in collaboration with universities and research bodies in Vietnam. 

This year’s event, hosted by the National University of Civil Engineering, seeks to gather knowledge and experienced gained recently in offshore engineering and technology innovations, cost-effective and safer foundation and structural solutions, environmental protection, and risk management in the related fields.

Seminar spotlights social networks in authorities-businesses dialogue

The usefulness of social networks in enhancing dialogue between administration and businesses was highlighted at a seminar in the northern province of Quang Ninh on November 2.

The event was held by the provincial People’s Committee and the Vietnam Chamber of Commerce and Industry with the support of social networking giant Facebook. It attracted representatives of the Government’s e-portal, the Ministry of Finance, Facebook, and 12 northern provinces and cities.

Chairman of the Quang Ninh People’s Committee Nguyen Duc Long said that realising the importance of IT application in institutional reform and the steering of socio-economic activities, the province set up the Facebook fanpage DDCI QUANG NINH in order to contact people and businesses. This fanpage has attracted more than 5,500 followers and over 100,000 likes and interactions since its creation just over a year ago.

Over the last three years, Quang Ninh has sustained fourth place among the 63 provinces and cities on the Vietnam ICT Index, greatly helping to improve its business climate and competitiveness.

Long partly attributed Quang Ninh’s top position in the country’s Provincial Competitiveness Index in 2017 to the opening of the DDCI QUANG NINH page, which has facilitated dialogue between provincial administration and the public.

At the seminar, Noudhy Valdryno, a representative from Facebook’s Asia-Pacific division, affirmed the necessity and effectiveness of using this social network in boosting dialogue.

He noted that globally, there are about 2.2 billion users active on a monthly basis and 1.4 billion daily users on Facebook. Around 378 million users visit the network on a daily basis in Southeast Asia alone.

With such a big number of frequent users, through more open and friendly policies, e-governments can make use of the social network to win over the public’s support, he added.

Nguyen Viet Hung, Deputy Director of the Department of Financial Informatics and Statistics under the Ministry of Finance, said this ministry has stepped up IT application in its activities over the past few years, and gained encouraging outcomes. It is also working to apply new technologies considered “core” to Industry 4.0 which will facilitate the ministry’s dialogue with businesses.

At the seminar, participants discussed ways to utilise Facebook in this work, along with experiences in using social networks to boost the dialogue between authorities and enterprises, and the provision of administrative services.

Vietnam makes progress in improving business climate

Vietnam has made encouraging achievements in improving the local business climate and national competitiveness since the issuance of Resolution No.19 in 2014, as heard at a seminar held in Hanoi on November 2. 

Speaking at the opening ceremony, Director of the Central Institute for Economic Management (CIEM) Nguyen Dinh Cung said the issuance of the resolution affirms the Vietnamese Government’s determination in the effort. 

  Vietnam ranked 69th in the 2019 Doing Business Report. 

Among the ten sectors that the report covered, Vietnam earned higher scores in seven indicators, including getting electricity (up by 9.25 points) and starting a business (up by 2.80 points).

The Advisory Council of Administrative Procedures Reform announced in its 2018 report that business registration ranks second of eight in the index for the lowest administrative procedure compliance costs. 

Director of the Ministry of Planning and Investment (MoPI)’s Department of Business Registration Tran Thi Hong Minh urged the MoPI to speed up the process of business registration applications to within three days, instead of the current five days, in line with the Corporate Law. 

The Ministry of Finance needs to reduce the waiting time for purchasing and printing VAT invoices to four days from the current 10 days for the business startup process, she said. 

Deputy head of the Department of Reform and Modernisation from the Ministry of Finance’s General Department of Taxation Hoang Thi Lan Anh also suggested supplementing the Law on Tax Management and relevant policies. 

Anh proposed that the finance ministry should amend accounting rules for micro-sized enterprises and launch e-tax services. 

Vice President and General Secretary of the Vietnam Tax Consultants’ Association Nguyen Dinh Cu stressed the need to develop accounting software for businesses, especially small- and medium-sized enterprises. 

Minh called for considering a plan to connect business, labour, and social insurance registration procedures online, thus laying an important foundation to build e-government and improve the efficiency of State management of business operations.

Development of supply chain financing under discussion

A workshop was held in Ho Chi Minh City on November 2 to discuss measures to further promote the development of Vietnam’s supply chain financing market in the digital age.

The event, jointly organised by the APEC Business Advisory Council (ABAC) and the Ministry of Planning and Investment (MoPI), was part of activities for the “Upgrading micro-, small-, and medium-sized enterprises (MSMEs)’s access to finance in the digital age” project.

Experts focused their discussions on financial supply chains and financial services in the linkage between foreign investment firms and local suppliers.

According to CEO of BCR Publishing Ltd Michael Bickers, financial support for supply chains can be understood as a form of supply chain financing before factoring.

At present, cross-border supply chain financing efforts are underway to limit the complexity of administrative procedures and reduce the time spent waiting for administrative handling procedures, making use of digitisation technology, he said. 

Technology can help to create tremendous influence and progress, enabling the launch of a smooth supply chain financing programme, while MSMEs are also able to access the programme easier and faster, he added. 

Statistics show that in Vietnam, more and more lenders, leading companies, buyers, suppliers, and service providers are starting to take part in business and supply chain financing activities more seriously.

However, the challenge for the field are issues related to the business and investment environment, knowledge, experience, and technological solutions in digitising trade finances and supply chains in the region, as well as in the global market.

According to Nguyen Hoa Cuong, Deputy Director of the MoPI’s Department of Enterprise Development, Vietnam has been implementing a strategic plan on developing domestic supporting industries, with the aim of meeting 70 percent of the demand by 2030.

Ministries and sectors have taken measures to link foreign direct investment enterprises with local SMEs and suppliers, he said, adding that the banking system has been increasingly involved in not only the supply chain financing, but also in infrastructure investment.

This shows that technology has promoted change, improved perception, and brought opportunities to market development, he noted. 

Meanwhile, Jinchang Lai, an expert of the World Bank, underlined the important role played by governments in promoting the supply chain financing market.

Governments of many countries have been engaging with the market to improve the competitiveness of domestic supply chains, in particular making it easier for SMEs to join global supply chains, he said. 

Promoting the supply chain financing market is also a solution to boosting capital flows into production and business, contributing to further economic growth, he noted.

Participants said the development of the market in Vietnam is important, stressing that it is necessary to build initiatives and specific policies to boost this kind of activity. 

The Vietnamese Government should provide specific regulations and guidelines to create a legal basis for entities, such as banks or different economic sectors to participate in the supply chain financing market, the suggested.

Vuong Thi Huyen, Deputy General Director of Vietnam International Commercial Joint Stock Bank (VIB), said that the market in Vietnam is still modest, in need of motivation to be pushed forward, especially SMEs.

Participants said in the Asia-Pacific region, some types of electronic finance platforms have proven to be valuable to strengthening the link among members of supply chains and towards increasing the ability to attract financial service providers.

This is a trend that will create a driving force to support the development of enterprises in both quantity and quality, in accordance with the target set by the Vietnamese Government for the next few years.

Vietnam – Japan Friendship Industrial Park inaugurated in Can Tho

The People’s Committee of the Mekong Delta city of Can Tho on November 3 inaugurated the Vietnam – Japan Friendship Industrial Park, as part of the activities to mark the 45th anniversary of the establishment of the bilateral diplomatic ties.

Located in Tan Phu ward, Cai Rang district, the park covers 30 hectares in the first phase. The modern complex boasts a complete system of technical infrastructure which can ensure the standards of a green industrial park. It prioritizes the production in the fields of electricity, electronics, information technology, engineering, and pharmacy.

The location of the park is described as favourable for investors as it lies just 5 km from the city’s administrative centre and 15 km from the Can Tho International Airport. It is also near two international seaports which can accommodate ships with a tonnage of up to 20,000 tonnes and help connect Can Tho with industrial parks in the nearby provinces of Hau Giang and Soc Trang.

On behalf of the Can Tho People’s Committee, Chairman Vo Thanh Thong pledged to create the best conditions for investors, especially those from Japan, in their production and business.

Speaking to the press, President of the Vietnam Chamber of Commerce and Industry Vu Tien Loc said in the context of the increasing international economic integration, the inauguration of the park is a milestone marking a new stage in the economic cooperation, trade and investment between Japan and Can Tho in particular and the Mekong Delta in general.

The official highlighted that Can Tho and the region have made active preparations for a wave of Japanese investment through annual cultural and economic exchange activities. The effort is working well as it has helped attract more and more Japanese investors to the locality, he said.

According to a report by the Chamber’s Can Tho branch, by the end of October this year, the Mekong Delta had attracted 169 investment projects from Japan with a combined registered capital of 2.2 billion USD, representing 10.5 percent of the total foreign investment to the whole region.

New forum on reform and development to be kicked off in December

As Industry 4.0 unfolds in Vietnam, the country’s new development vision will be discussed at an upcoming first-ever annual forum on reform and development.

After intensive discussions, the plan to organise the Vietnam Reform and Development Forum 2018 has almost been fixed, with the date expected to be December 5, 2018, at Melia Hanoi Hotel.

Co-organised by the World Bank and the Ministry of Planning and Investment (MPI), the event, themed “New vision and new drives in a new development era,”will collect ideas and proposals from domestic and foreign experts, as well as leaders from international organisations and businesses. The proposals will serve as valuable inputs for the government to outline its new development vision and actions in the context of Industry 4.0.

In addition, with the new development vision, the government will look for new growth momentum for the country based on innovation and renewal, with a focus on the development of the private sector.

Thanks to the government’s pro-business policies, the number of newly-established enterprises has been growing, from 110,000 registered at $38.74 billion in 2016 to 127,000 ($56.34 billion) last year. It is expected that a record number of 130,000 enterprises will be established this year.

The government last week reported to the National Assembly that the ratio of private sector investment in the GDP, an important part of economic growth, is expected to climb to 42.4 per cent this year. The ratio is estimated to be 40.8 per cent in the 2016-2018 period, which is higher than the 38.3 per cent in 2011-2015.

“The forum will focus on discussing obstacles and technological gaps between Vietnam and other nations and Industry 4.0 requirements, while analysing the country’s policies for innovation and scientific-technological development in the time to come,” said an MPI document on the preparation of the forum.

In addition, the event will also see the launch of Vinanomics, a booklet about Vietnam’s economic policy framework. The book, compiled by the World Bank, the MPI, as well as domestic and international experts, will provide updates about Vietnam’s socioeconomic development policies, “showing the strong will and determination of the Party and the state to effectively build up a facilitating, action-oriented, and pro-business and pro-people government with integrity, in service of the country’s furthered doi moi and the attraction of more resources for further development.”

The forum will be chaired by Prime Minister Nguyen Xuan Phuc, Minister of Planning and Investment Nguyen Chi Dung, and Ousmane Dione, country director for the World Bank in Vietnam. Participants will also include representatives of the National Assembly, the Central Party Economic Commission, ministries, agencies, provincial representatives, development partners, domestic and international experts, scholars, as well as foreign enterprises and investors.

Unlike the annual Vietnam Development Forum organised every December, which concentrates on the policy dialogue between the government and development partners and donors, this annual national-level forum is solely focused on reform and development issues.

After being organised this year, the forum will be organised again in 2019, 2020, and 2021.

PPP – solution for Ho Chi Minh City – Moc Bai Expressway

The expressway connecting Ho Chi Minh City with Moc Bai Border Gate (Tay Ninh) is 53.5 kilometres long and is recommended for investment under the PPP format. However, it is still uncertain whether this proposal will succeed due to land clearance issues and huge project costs.

Currently, National Highway 22 is the only way connecting Ho Chi Minh City and Moc Bai Border Gate, the international gateway to the ASEAN, while traffic flows grow by 8-10 per cent per annum. National Highway 22 is predicted to be overloaded in the next few years, especially as the trans-Asia route connecting Vietnam, Cambodia, and Thailand is finished.

The Second Project Management Unit (PMU2) has just proposed the Ministry of Transport (MoT) to approve the pre-feasibility study for the Ho Chi Minh City-Moc Bai Expressway project. “It is time to invest and build a high transportation capacity expressway connecting Ho Chi Minh City and Moc Bai Border Gate to ease traffic flows on National Highway 22 and shorten travel time,” said Le Thang, deputy general director of PMU2.

As proposed, the 53.5km Ho Chi Minh City-Moc Bai Expressway project starts at the intersection of Provincial Road 15 and Ring Road 3 (expected) in Hoc Mon District, Ho Chi Minh City and will end by connecting to Highway 22 (about 2km to the north from Moc Bai Border Gate).

To avoid waste, the project will be divided in two phases. Accordingly, the first phase will build a complete four-lane highway with a 27m cross-section and a designed travelling speed of 120km per hour for the section with heavy traffic (Ho Chi Minh City-Trang Bang), while the second phase will build a four-lane expressway with a 17m cross-section and travelling speed of 80 km per hour.

Preliminary estimates show that the total investment of the first phase is VND10.45 trillion ($454.6 million), in which the two largest investments are construction and equipment costs (VND5.74 trillion – $249.78 million), and land clearance and resettlement costs (VND2 trillion – $87.13 million).

If the input costs are controlled well, the Ho Chi Minh City-Trang Bang section will have an investment cost of VND234.8 billion ($10.2 million) per kilometre, while the Trang Bang-Moc Bai section will cost VND145 billion ($6.3 million) per kilometre.

Previously, at a working session with leaders of Tay Ninh in early August 2018, Prime Minister Nguyen Xuan Phuc assigned the MoT to co-ordinate with Tay Ninh province to accelerate the investment preparation of the expressway project. The prime minister also ordered the MoT to submit a pre-feasibility study in the fourth quarter of 2018.

Thang said that due to budgetary restrictions, project implementation under either the PPP (Public-Private Partnership) or the BOT (Build Operate Transfer) format is the only way to mobilise capital. BOT was also proposed by the venture consultant DEEP-Korean Railroad Research Institute when researching and making the pre-feasibility study for the project.

The first phase will build a complete four-lane highway with a 27m cross-section, design velocity of 120km per hour for the section with high traffic volume (Ho Chi Minh City – Trang Bang); the rest phase will build four-lane expressway with the 17m cross-section and design velocity of 80 km per hour.

However, due to the huge total investment of the Ho Chi Minh City-Moc Bai Expressway project, to ensure financial feasibility and based on the Korean consultant’s research, PMU2 requested the MoT to apply a mixed investment form including PPP, ODA capital (Official Development Assistance), and the state budget.

Specifically, the PPP investment capital is proposed at VND5.43 trillion ($236.09 million), with VND5.043 trillion ($219.26 million) – including VND2.177 trillion ($94.65 million) from the state budget for land clearance and project management expenses, and VND2,866 trillion ($124,61 million) ODA capital for construction and consultancy.

With this capital structure, the project payback period may be 17 years and six months, with the internal rate of return of 15.7 per cent, if the government allows the project to apply the same financial mechanism as the North-South Expressway (the investor’s rate of return was 11.7 per cent, while the starting fee was VND1,500 ($0.65) per PCU per km and the interest rate on loans for construction was 7.72 per cent per year). “These financial indicators would make sure that the project can attract foreign and domestic investors,” Thang said.

PMU2 claims that the biggest risk in the project is delayed land clearance, as the total area of the project is 342ha, which may increase when the project owner finishes the feasibility study and technical designs.

“If localities fail to hand over at least 80 per cent of the land before the commencement date and the rest within six months or one year, in accordance with international practices, the competent state agency may be penalised by the investor according to the contract,” Mai The Vinh, expert from the Centre for Transportation Public-Private Partnership Policy at George Mason University, assessed.

In the face of increasing traffic pressures, the Ho Chi Minh City-Moc Bai Expressway needs to be quickly implemented. However, choosing the most suitable investment format as well as anticipating the risks and solutions is also a prerequisite to make the project efficient and attract investors.

The main steps of Ho Chi Minh City-Moc Bai expressway

Making, appraising, and approving the pre-feasibility study: 2018-2019

Making, appraising, and approving the feasibility study: 2019-2020

Technical design, land clearance: 2021-2022

Selection of investors and signing contracts: 2021

Contractor selection: 2022

Construction and completion: 2022-2025

Operation and exploitation: until the third quarter of 2025.

HCM City inks deals with Emirates to woo UAE tourists

The Tourism Department of HCM City, particularly its Tourism Promotion Center, has established a partnership with Emirates Airline, based in the United Arab Emirates, to promote local tourism and attract more tourists to the city and vice versa.

The signing ceremony took place at a conference on promoting trade, investment and tourism in HCMC, held in Dubai, on the occasion of the municipal chairman Nguyen Thanh Phong’s visit to the United Arab Emirates from October 22 to 25.

Under the agreement, the UAE-based carrier and HCM City, Vietnam’s tourism hub, will team up to organize a slew of marketing events, roadshows and tourism exchange activities to attract more tourists from the United Arab Emirates to visit the city and vice versa, according to the municipal tourism department.

Badr Abbas, senior vice president at the Far East Commercial Operations of Emirates, in a media release said that the carrier wants to work with local tourism and trade agencies to introduce HCM City as a tourist destination and a commercial center in the region as well as in the world.

The airline currently operates direct daily flights to HCM City and Hanoi. Regarding HCM City, it has transported more than 1.25 million passengers to and from the city since its expansion to this city six years ago, he said, adding that Dubai is among the top five destinations of visitors from HCM City.

At the conference, the carrier also signed a memorandum of understanding with the city in the field of commerce. In particular, Emirates SkyCargo, the freight division of Emirates Airline, will collaborate with the HCM City Tourism Promotion Center to bolster commercial activities across the two locations.

Last year, Emirates SkyCargo transported nearly 50,000 tons of import-export commodities of Vietnam, rising 21% year-on-year.

Besides this, during the given period, the volume of Vietnamese fruit and vegetable products, comprising rambutan, mango and litchi, which were shipped to Dubai by Emirates SkyCargo, increased five times versus the year-ago period.

AccorHotels targets 19 more hotels in Vietnam

The world’s leading operator of hospitability facilities AccorHotels targets to add 19 more hotels in Vietnam in the next two years, the group said at a recent press conference in HCM City.

AccorHotels currently has 28 properties across the country, 12 of which are in the luxury and upscale segment. The group plans to add 19 more hotels to its portfolio within the next two years following the acquisition of Fairmont, Raffles, Swissôtel, and most recently, Mövenpick.

“In the past few decades, Vietnam has become one of the top travel destinations in the world, attracting travelers to its lush mountains, bustling cities and golden sand beaches.

Despite rapid modernization in Vietnam’s urban centers of Hanoi and HCM City, the numerous ancient landmarks and colonial structures are rich in indigenous architecture and reflect centuries-old mercantile influences,” Patrick Basset, chief operating officer, Upper Southeast & Northeast Asia and the Maldives, said at a press conference in HCM City on October 26.

AccorHotels is celebrating the 20th anniversary of the opening of Sofitel Saigon Plaza, its first luxury brand in HCM City.

“Over the last 20 years, Sofitel Saigon Plaza has established itself as an iconic hotel that blends the French art of living with the modern colonial structures and ancient citadels of the city. A luxurious urban retreat, the hotel is located in a quiet enclave just steps from the excitement of the metropolis,” said Olivier Revy, general manager of the Sofitel Saigon Plaza.

Besides Sofitel, AccorHotels is operating some other luxury brands in Vietnam like Pullman, MGallery, Novotel, and Ibis.

Foreign firms shift to Vietnam due to US-China trade war

Yokowo and Zhejiang Hailide New Material’s plan to relocate their factories from China to Vietnam shows that Vietnam will be one of the leading destinations for investors operating in China due to the impact of the US-China trade war.

According to newswire Nikkei.com, Yokowo, which exports 70 per cent of its goods made in China, plans to accelerate its manufacturing operations to Vietnam. It will complete the relocation of production of US-bound components by the end of this year instead of the mid-2020s as previously planned.

Yokowo, which is known as a famous Japanese trademark producing, assembling, and processing communication equipment used in cars, opened the factory in Vietnam in the end of March 2012 in Dong Van Industrial Park, Ha Nam province.

In 2017, the company inaugurated the third phase of the factory with the total investment capital of VND10 billion ($428,262).

Along with Yokowo, Zhejiang Hailide New Material, a Chinese polyester producer, plans to spend $155 million on building its first overseas plant in Vietnam, planning to bring it online by mid-2020. The company expects 20 per cent of the plant's sales to be generated from exports to the US.

Yokowo and Zhejiang Hailide New Material are two outstanding examples of the wave of investors relocating facilities from China to other countries, including Vietnam, due to the impact of the US-China trade war.

Increasing trade frictions between the US and China will likely prompt more South Korean and Japanese firms to come to Vietnam instead of China, to produce and export to the US.

Nguyen Duc Tiep, a representative of the Quang Ninh Investment Promotion Centre, told VIR that many Japanese firms have been operating in China, however, they want to expand their investment markets to shun risks caused by rising production costs in China and the US-China trade war, which is making it hard for Japanese firms to export products to the US from China.

Exports exceed US$200 billion in 10 months

Vietnam’s exports rose by 14.2% to US$200.27 billion in the first 10 months of this year, of which the domestic sector made up US$56.82 billion (up 16.8%) and the foreign direct investment (FDI) sector, including crude oil, accounted for US$143.45 billion (up 13.2%).

The results were attributed to increasing export values of telephones and components (up 10.6% to US$40.7 billion), garment (up 17.1% to US$25.2 billion) and electronics, computers and components (up 15.2% to US$24.3 billion), according to the General Statistics Office of Vietnam.

Meanwhile, agricultural and fishery products also obtained quite a high export growth. Seafood exports were up 5.9% to US$7.2 billion, fruit and vegetables, up 14.4% to US$3.3 billion, coffee, up 1.1% to US$3 billion, and rice, up 16.1% to US$2.6 billion.

The US was the largest importer of Vietnamese products in the period with an import value of US$39 billion, up 12.8% against the same period last year.

Stock prices plummet, Vicostone plans to buy 3.2 million treasury shares

Vicostone Joint Stock Company (VCS) plans to buy back 3.2 million shares, equivalent to 2 per cent of its chartered capital to serve short-term and long-term restructuring plans.

The transaction is expected to be executed via order-matching or negotiation.

Vicostone’s shares, traded on the Hà Nội Stock Exchange under the code VCS, were traded at around VNĐ70,700 (US$3.02) per share on Tuesday. At this price, Vicostone will spend about VNĐ236 billion to buy these shares.

VCS shares have fallen sharply by 35 per cent since the beginning of the year, from VNĐ113,400 per share to around VNĐ70,000 per share at present.

On September 9, 2014, Vicostone bought back nearly 10.6 million shares. Almost two years later, on May 26, 2016, the company completed the allocation of all these treasury shares to existing shareholders.

At present, Vicostone does not own any treasury shares.

Vicostone, located in Bắc Phú Cát Industrial Zone in Hà Nội’s Thạch Thất district, has an annual growth rate of over 50 per cent and currently exports to more than 30 countries, including the US, Italy, China and South Africa. 

Grab and Taxi Mekong promote GrabTaxi in Bac Lieu     

Ride-hailing app is working with Taxi Mekong to offer GrabTaxi services in Bac Lieu Province.

Jerry Lim, director of Grab Viet Nam, said the company wished to co-operate with domestic taxi companies to improve operational efficiency and customer convenience by promoting the use of technology in transportation.

Taxi Mekong has been operating in the Cuu Long (Mekong River) Delta for four years and has over 400 cars.

GrabTaxi and Taxi Mekong plan to expand GrabTaxi services to more southwestern provinces.

GrabTaxi will not interfere with fees, operations or driver management of taxi companies. The fare advertised when booking a GrabTaxi is only a reference fee, and customers will pay the fee on the meter after the ride. 

Lina Network launches Supply Chain application     

The Lina Network recently launched its Supply Chain application which uses blockchain technology.

With blockchain, the entire manufacturing process, from production to distribution, will be completely transparent, increasing product competitiveness.

Lina Supply Chain belongs to the blockchain ecosystem which includes a variety of enterprises and users, enabling the tracking of the origin and manufacturing process of any product from the raw material stage to finished and packaged products and delivered to consumers.

"When applying blockchain technology in Lina Supply Chain, customers can access the full source of the products anywhere," said Vu Truong Ca, chairman of the management board of Lina Network, at the launch ceremony held in HCM City late last week.

Specific characteristics of sectors such as agriculture, animal and poultry husbandry and aquaculture need supply chain technology, Ca said.

According to statistics from leading experts in supply chain management, enterprises which use supply chain technology see revenues increase by between 10 and 30 per cent.

For consumers, the supply chain helps them easily trace the source of products when they are circulated on the market. Thus, users can easily recognise genuine goods from counterfeit ones.

"The application of blockchain technology in the supply chain will help reduce or eliminate fraud, reduce transportation costs and lag in activities related to documents and find solutions quicker when incidents occurr," said Vu Thach Tam, technical director of Lina Network.

“In addition, the State will easily manage the production process, thereby improving the image of national products,” he added. 

Masan net profit up 90.2 per cent in first 9 months     

Masan Group Corporation’s core net profit after tax post-minority interest (NPAT Post - MI) was worth VND2.307 trillion (US$98.88 million) in the first nine months of the year, up 90.2 per cent from the same period last year, its results released on Monday show.

Its core NPAT Post-MI margin increased to 8.7 per cent in the January-September period from 4.4 per cent during the same period last year.

Core profit excludes net one-time gains (non-core) of VND1.472 trillion primarily from the “deemed disposal” of the company’s interest in Techcombank as a result of the lender’s recent equity issuances at a price higher than the company’s carrying value.

During this period the group’s combined earnings before interest, taxes, depreciation and amortisation (EBITDA) from its subsidiaries went up by 24 per cent year-on-year to VND7.718 trillion from VND6.241 trillion in the same period last year, mainly driven by SG&A (selling, general & administrative expense) rationalisation and operational efficiencies.

Masan Group posted net revenues of VND26.63 trillion in the period, down 3 per cent year-on-year, mainly due to the impact of the pig price crisis on Masan Nutri-Science’s topline. Excluding MNS, consolidated net revenues would have grown by 29 per cent in the first nine months.

Of the group’s subsidiaries, Masan Consumer Holdings continued to be the growth engine for Masan during the first half of 2018, backed by strong revenue growth in core consumption products and new growth drivers in seasonings, beverages, processed meat and beer.

MCH posted net revenues of VND11.907 trillion in the first nine months, a year-on-year increase of 33.3 per cent.

MCH is expected to achieve EBITDA of nearly VND4 billion in the 2018 fiscal year, up nearly 50 per cent from 2017.

As for MNS, lower pig prices in the first five months of 2018 coupled with a longer-than-expected delay pickup in commercial feed demand resulted in MNS achieving net revenue of VNĐ10.035 trillion in the first nine months, down 31.2 per cent year-on-year.

However, pig prices have held up at around VND50,000 per kilogramme since there is a structural supply deficit in Viet Nam currently. With swine flu issues emerging in China coupled with a spike in year-end demand due to the 2019 Tet holiday, prices are expected to stay strong over the near term.

Subject to a recovery in the pig feed market, MNS’s net revenue is expected to be down 20-30 per cent this year. However, the management expects a stronger recovery in 2019 if pig prices continue to hold up at around current levels.

Despite lower tungsten head grades resulting in 14.1 per cent reduction in tungsten equivalent units production, Masan Resources (MSR) recorded an EBITDA margin of 50.4 per cent, representing a 32 basis points increase over the same period in 2017.

MSR has already delivered $30 million in free cash flow during the first nine months, and is expected to deliver 30 per cent growth in free cash flow for 2018.

Techcombank, in which Masan is a sole shareholder, reported a profit before tax of VND7.77 trillion in the first nine months, a year-on-year increase of 61 per cent.

Its total operating income was VND13.29 trillion, an year-on- year increase of 25 per cent. In addition, the bank continues to diversify its revenue base, in line with its strategic direction.

Masan’s chairman and CEO Dr. Nguyen Dang Quang, said: “We continue to execute our medium-term growth plans. Masan Consumer’s premiumisation and beverage strategy is showing sustainable traction positioning us to grow 2-3x Viet Nam’s FMCG retail sales growth rate over the next few years. Masan Resources’ acquisition of the high-tech tungsten chemical plant is a strategic step to generate strong cash flows across commodity cycles.

“We aim to double the plant’s capacity to further consolidate ex-China tungsten market share. Techcombank’s customer and technology-centric business model has made it the fastest growing and most profitable bank. This trend will continue as the bank prioritises fee income and services over interest income.

“However, not all has gone according to our plan. Masan Nutri-Science is still feeling pain from the pig price crisis. The feed market has since been recovering, but our strategic bet is on meat not feed.

“We have started selling pig livestock with great results, but this will cease in 2019 as we begin to fully process our pig supply into branded meat products for consumers. We look forward to closing the year on a strong note and crystallising our foundation to deliver double digit top and bottom line growth for 2019 and beyond.”

Masan plans to trim interest expenses by approximately VND1 trillion a year starting in the fourth quarter. Gross debt to EBITDA is expected to decrease to 2.5x by 2018 year-end as a result of the planned paydown of over VND11 trillion in debt in the fourth quarter.

The company’s deleveraging is part of its effort to achieve a credit rating that is on par with Viet Nam’s long-term sovereign credit rating of BB- within the next 12 months.

Central Highlands province strives to lure more investors

The Central Highlands province of Gia Lai has worked hard to improve its investment environment and competitiveness in a bid to attract more domestic and foreign investors.

Gia Lai has implemented a socio-economic development cooperation programme with Ho Chi Minh City to optimise their potential and support legal corridors for a healthier investment environment for common growth.

After 15 years of cooperation, 26 enterprises of Ho Chi Minh City have invested in 27 projects worth over 6.3 trillion VND (269.6 million USD) in Gia Lai, while Gia Lai businesses have run 22 projects in Ho Chi Minh City with total investment of 30 trillion VND (1.28 billion USD).

Alongside, Gia Lai is hosting four foreign-invested projects and many other projects funded by investors both in and outside the province.

As part of its efforts to support enterprises, Gia Lai has made its administrative procedures more open and transparent through the launching of a public administrative centre.

In 2017, Gia Lai leaped three positions in the provincial competitiveness index (PCI) compared to 2016, ranking 43rd out of 63 provinces and cities nationwide, and 3rd in the Central Highlands region.

Nguyen Truong Hung, director of the ACOM Gia Lai coffee processing factory under the Atlantic Vietnam Company - one of the four foreign-invested projects in Gia Lai with an investment of 2 million USD and export revenue of over 50 million USD, said that after six years of operation, the plant has enjoyed many preferential policies, including land rent exemption in 10 years and tax reduction.

Hung expressed his hope that with the support from the province, the firm will expand its business in the coming time.

So far this year, Gia Lai has attracted 11 projects with total investment of 500 billion VND (21.4 million USD), raising the total projects accommodated by the province so far to 80. Of the total projects, 46 have become operational with total export revenue of nearly 220 million USD.

Pham Van Binh, head of the Gia Lai Economic Zone Management Board, said that the province has focused on reforming its administrative procedures towards one-stop-shop services. 

Meanwhile, investors will receive specific guidelines during their investment process and assistance in removing obstacles.

Binh said that Gia Lai is currently building a project to construct the Southern Pleiku Industrial Park, which is scheduled to be approved by the Prime Minister in November, giving more spaces to host investors.

Construction firm Vinaconex sees revenue and profit down

The Việt Nam Construction and Import-Export Joint Stock Corporation (Vinaconex) saw both revenue and post-tax profit down in the third quarter this year, by 8.7 per cent and 29 per cent, respectively.

The company earned VNĐ2.2 trillion (US$95 million) in revenue and VNĐ185.4 billion in post-tax profit in the reviewed period.

The drop in profit, partly due to the decline in revenue, was also caused by a slump in financial income, which decreased by 56 per cent to reach VNĐ54.45 billion. The joint ventures operation only brought in about VNĐ10.5 billion for Vinaconex, down VNĐ37 billion compared with the same period last year.

In the first nine months this year, Vinaconex recorded VNĐ368 billion in post-tax profit, down 40 per cent compared to the same period of 2017, in which, post-tax profit of parent company reached VNĐ274.3 billion. Earnings per share (EPS) for nine months reached VNĐ621.

At the end of Q3, total assets of Vinaconex reached VNĐ20.17 trillion, in which inventories accounted for VNĐ3.39 trillion, short-term receivables were nearly VNĐ4 trillion, down about VNĐ250 billion compared to the beginning of the year.

Vinaconex’s debt stood at more than VNĐ4 trillion, equivalent to 25 per cent of its capital structure.

Vietnam’s mega airport project to get site clearance funding soon

The parliament has heard that site clearance funding for the Long Thanh International Airport could be disbursed very soon.

Transport Minister Nguyen Van The informed the ongoing National Assembly (NA) session Monday that the government is likely to approve the site clearance plan for the Long Thanh airport project in the southern province of Dong Nai next month.

Immediately after the approval, Dong Nai would be able to access site clearance funding, he said.

In the first phase, VND23 trillion (US$987 million) will be disbursed for the site clearance, The said.

He said the ministry had signed contracts in June with five contractors, three Japanese and two Vietnamese, after an international bidding process.

“The five contractors are speeding up their work to finish the feasibility study for the first phase of the project and are expected to finish it in July next year,” he said.

The Long Thanh International Airport, to be built in three phases over three decades, is set to become Vietnam’s largest airport.

The first part is scheduled for completion in 2025, when the new airport will be able to handle 25 million passengers a year. The next two phases will run from 2030 to 2035 and from 2040 to 2050.

Investment in the first phase is estimated at VND114 trillion (US$4.87 billion), sourced from the state budget, government bonds and private equity.

Experts have previously warned that the construction cost of the airport could double every five years.

At an NA session last week, NA deputy Duong Trung Quoc representing Dong Nai Province expressed concerns over signs of delay in the construction of Long Thanh.

“Funding for the project is ready, but the people are still waiting for it to be deployed,” Quoc said, adding that the project’s feasibility report has not been approved after the NA discussed it in May.

The longer a project is delayed, the more complicated and difficult it will become in terms of budgeting, Quoc said.

CNN Travel has recently listed the upcoming Long Thanh International Airport among the world’s 16 most exciting airport projects.

Lying 40 kilometers east of Ho Chi Minh City, the airport is expected to take up the overflow from the largest existing airport in the country, the Tan Son Nhat International Airport.

Tan Son Nhat now receives 32 million passengers a year, far beyond its designed capacity of 25 million.

“With a growing number of visitors to the country, and the national carrier, Vietnam Airlines, growing its operations, the government has brought forward construction of a new airport to be known as Long Thanh International,” a CNN Travel report said.

Once completed, Long Thanh, expected to cover 5,000 hectares (12,400 acres), would replace Tan Son Nhat as the largest airport in Vietnam.

The new airport would have an annual capacity of 100 million passengers and five million tons of cargo.