WB helps Vietnam reduce use of coal, mobilize funding for clean power

The World Bank has drawn out ways to support Vietnam in raising private finance for power generation and cut the use of coal in the future.

Ousmane Dione, country director of the World Bank in Vietnam, made the statement at the 2nd High Level Meeting of the Vietnam Energy Partnership Group (VEPG) on the sustainable energy future for Vietnam on November 26.

Vietnam has been a global success story in developing the power sector over the last few decades, Ousmane said. The success of the power sector has been a key contributor to Vietnam’s socio-economic development and the country’s high and sustained economic growth, excellent performance in terms of poverty reduction and well-being of its citizens.

The WB director highlighted two areas on the success story, one is on rural electrification and the other on power sector reform.

On rural electrification, Vietnam’s access rate increased from 14 percent in 1993 to over 99 percent in 2018. Over that 25-year period, more than 14 million households or 60 million people have been connected to the grid.

The financing requirements of the sector have been huge. Only since 2010, the sector invested about US$80 billion in generation, transmission and distribution and between now to 2030 another US$150 billion needs to be raised.

Electricity consumption remains comparatively low in international standards. For example, per capita electricity consumption is currently about 1,700-kilowatt hour a year - which is one third of China or one fifth of Australia. As the economy continues to grow strongly and as the Vietnamese become more affluent, electricity demand will continue to grow at about 8 percent per year for the next decade.

Electricity tariffs remain below full cost recovery levels and EVN does not receive direct subsidies from the government. He stressed that EVN and the sector have been highly effective and efficient using ODA funds.

On power sector reform, about a decade ago the government set out a clear roadmap for implementing competition and restructuring the sector. The motivation was to move from a vertically integrated monopolistic market structure to a fully competitive power market.

The Government needs to be complemented to continue to be fully committed to introduce a competitive power market. We are half way through implementation and by 2020 the wholesale electricity market will be fully operational. Experience with market liberalization have been positive to date contributing to a well-run power sector public utility EVN, which is technically and operationally sound, but also allowing private sector participation in generation.

Development partners have contributed to that success story.  International finance institutions and bilateral donors have provided technical assistance and financing over the last two decades to support the Government on the rural electrification agenda, upgrade and expand vital transmission and distribution networks, develop public and private power generation projects and support the electricity and gas sector reform and restructuring agenda.

The challenges the power sector needs to overcome over the next two decades are substantial to ensure it achieves its goals to provide sustainable, clean, affordable and reliable power supply to the people of Vietnam, the WB director noted.

One key question is how to meet future energy demand, while also complying with Government’s objectives to reduce greenhouse gas emissions and meet its climate change targets. That refers to the contentious issue on the role of coal in the future energy mix.

Another challenge is how to mobilize the large investment requirements, estimated at around US$8 billion annually to meet fast growing power demand. EVN and the public sector cannot raise those funds and private sector, both domestic and international, will need to play a more prominent role in power sector financing.  

To tackle those two key challenges, the World Bank’s strategic energy engagement in Vietnam centers around two initiatives, Ousmane Dione said.

First, on the Energy Transition, the bank supports the Government to identify and implement technically, financially and socially sound solutions to reduce the future use of coal, primarily for power generation.

While there are no quick fixes or a silver bullet to tackle the coal challenge, Ousmane said there are four central activities that need to be implemented in parallel by the Government to reduce coal update for power generation. They are scaling up renewables (especially wind and solar); promoting natural gas and LNG; increasing energy efficiency investments; and promoting regional power trade, especially with Laos and Southern China.

Second, the public sector and ODA financing will not be sufficient to meet the power sector’s huge investment requirements. Hence, under the Bank’s Maximizing Finance for Development (MFD) Initiative, the WB is supporting the Government to find and implement solutions to bring in more private and commercial financing for the energy sector.

This MFD initiative is particularly relevant in the context of Vietnam’s recent IDA graduation and sovereign borrowing constraints due to the Government’s debt ceiling policy.

Three key pillars need to be tackled to mobilize more private and commercial finance in the power sector:

i. Developing and launching a competitive independent power producer (IPP) program in power generation as part of developing Power Sector Development Plan 8 with a contractual framework that attracts both international and domestic investment at scale;

ii. Preparing electricity and gas SOEs to access commercial finance through credit ratings and non-sovereign bond issuance; and

iii. Supporting banking and capital market reforms to improve availability of local currency finance which is critical for both project and corporate finance for energy investment projects.

“We stand ready to support the Government on the Energy Transition and Maximizing Finance for Development agenda and coordinate with the VEPG on key policy engagements,” the WB director for Vietnam stressed.

Vietnam-based edtech firm raises US$50m in funding

The move marked the biggest financing for an online education company in Southeast Asia.

Hanoi-based Topica Edtech Group, an education technology company in Southeast Asia with over 1,700 employees, announced that it has raised a US$50 million series D round led by Singaporean private equity firm Northstar Group, according to TechinAsia. 

The move marked the biggest financing for an online education company in Southeast Asia.

Topica said Northstar had a minority stake upon completion of the investment and has joined its board of directors, DealStreetAsia reported. 

The investment will support new product development across the region and increase the pace of enhancements in Topica’s technology and AI capabilities, the Vietnamese firm said in a statement. 

Topica’s existing investors include Openspace Ventures, Patamar Capital, CyberAgent Ventures, EduLab Group, and IDG Ventures.

The firm provides online English-speaking classes, a marketplace of over 2,000 short skill courses with video teaching materials, and a platform that enables 12 universities in the region to offer online degree programs.

Started in 2008 and headquartered in Hanoi, Topica also runs several programs that groom entrepreneurs.

The Northstar Group is managing more than US$2 billion in committed equity capital dedicated to investing in growth companies in Southeast Asia.

Northstar is currently preparing to launch its fifth fund and is targeting to raise more than $800 million for this vehicle. It is currently investing from Northstar Equity Partners IV. Its four funds have invested in over 30 companies across the banking, insurance, consumer/retail, manufacturing, coal and mining services, technology, telecom, and agribusiness sectors.

Nike and Levi's partner Song Hong Garment lists shares on stock market

With market capitalization of nearly VND2.15 trillion (US$92.98 million), Song Hong Garment has become Vietnam’s second largest garment company in terms of market capitalization.

Vietnam’s leading garment and bedding manufacturers Song Hong Garment, partner of famous fashion brands such as Nike and Levi, debuted 47.6 million shares on Ho Chi Minh City Stock Exchange last week. 

For a reference price of VND45,000 (US$1.95) per share in its first trading session, the company’s market capitalization stood at nearly VND2.15 trillion (US$92.98 million), becoming the second largest garment company in terms of market capitalization, behind Vietnam National Textile and Garment Group with VND6.3 trillion (US$272.56 million). 

Song Hong Garment has been no-longer a state-owned enterprise since 2004 with current charter capital of VND476 billion (US$20.58 million). 

The company’s core businesses included providing outsourced production for global brands Nike, Levi’s, Calvin Klein, Tommy Hilfiger, DKNY, Karl Lagerfeld, Hurley, Converse, among others, and bedding for domestic market. 

For exporting, Song Hong Garment operates under the Cut-Make-Trim (CMT) and free-on-board (FOB) systems. 

Bui Viet Quang, Song Hong Garment’s CEO, said the company maintains business relations with five to six strategic customers, including GAP, Mango, Zara, Columbia Sportswear, GIII, and Haddad Brands.

The company has the largest contract to date with Haddad Brands, manufacturer and distributor of Nike Brand, Levi’s, Jordan Brand, Hurley, which is worth US$29 million and accounted for over 20% of revenue in the first nine months of 2018. 

As of September, Song Hong Garment revenue reached VND3 trillion (US$129.78 million), and gross profit of VND580 billion (US$25.09 million). 

Song Hong Garment currently has four major shareholders, consisting of brokerage company FPT Securities with 13.61% stake and other three individuals with stakes of 21.63%, 10.92% and 7.7%. 

9.7 trillion VND collected from HNX share auctions in November

The Hanoi Stock Exchange (HNX) organised five auctions for divestment in November with total transaction value of more than 9.7 trillion VND (415 million USD).

The auctions were held for the Vietnam Construction And Import-Export Joint Stock Corporation (Vinaconex), the Hanoi Housing Development and Investment Joint Stock Company, the Water Transport Company under the Vietnam National Coal – Mineral Industries Holding Corporation Limited (Vinacomin), and the Viet Tri Paper Company.

About 376 million shares were put up for sale at the auctions, but up to 997 million shares were ordered, 2.65 times more than the offered amount.

As a result, all 376 million shares offered are sold for more than 9.7 trillion VND or 100 percent.

In the last 11 months, the HNX held 36 auctions, including 25 for divestment, 10 initial public offerings (IPOs) and one for purchase rights.

Of over 1.98 billion shares offered, about 1 billion shares were sold for 20.8 trillion VND (890 million USD), reaching 54 percent.

Vietnam considered gateway for RoK to enter ASEAN: forum

Vietnam is seen as a gateway for businesses from the Republic of Korea (RoK) to enter the ASEAN market, said experts at a forum in Hanoi on December 3.

The forum on the RoK’s New Southern Policy and the importance of RoK-Vietnam relations was co-organised by the National Centre for Socio-economic Information and Forecasting (NCIF) and the Korean Institute for International Economic Policy (KIEP).

In his opening speech, Dr. Tran Hong Quang, NCIF Director, said over the past three decades, Vietnam-RoK relations have seen fine developments in all fields. At present, the RoK is one of the two largest foreign investors in Vietnam with accumulated capital of 57.6 billion USD by the end of 2017. Vietnam is also the fourth largest investment destination and the biggest aid recipient of the RoK.

The RoK is the second largest trade partner of Vietnam, with two way trade increasing 117 times since 1992, when the two nations set up their diplomatic ties, hitting 61.5 billion USD last year. 

The two countries have also seen positive collaboration in labour, culture and tourism.

By the end of 2017, the Vietnamese community in the RoK numbered 162,000, most of them are guest workers, those getting married to Koreans, and students. Meanwhile, around 150,000 Koreans, mostly businesspeople, are living in the Southeast Asian nation.

“Vietnam always attaches importance to and wishes to deepen the strategic cooperative partnership with the RoK, which gives high priority to collaboration with ASEAN, including Vietnam,” said Quang.

Dr. Lee Jae-young, President of KIEP, said the New Southern Policy aims to raise the RoK’s cooperation and diplomatic relations with ASEAN countries and India on par with those with the US, China, Japan and Russia.

Notably, in its economic relations with ASEAN – a focus of the policy, Vietnam plays a crucial role, accounting for more than half of cooperation in almost all fields such as trade, investment, official development assistance (ODA) and people-to-people exchange.

According to Prof. Park Bun-soon from the Korea University, Vietnam is an important destination for Korean companies. 

The RoK’s investment will continue to flow to Vietnam in the future, he said, noting that the country should encourage Korean investment in developing small- and medium-sized enterprises and support industries.

The RoK needs to increase ODA for Vietnam in order to transfer technologies of its multinational groups while Vietnam should create conditions for RoK investors to engage in merger and acquisition (M&A) market, he added.

At the forum, the NCIF and the KIEP signed a memorandum of understanding on cooperation in reality.

Dong Nai secures 1.76 billion USD in FDI

More than 1.76 billion USD in foreign direct investment (FDI) landed in the southern province of Dong Nai during January-November, surpassing the yearly target of 76 percent.

According to the provincial Department of Planning and Investment, the province licensed 109 new FDI projects worth 946 million USD, and allowed 94 others to invest an extra 821 million USD in the 11-month period.

Most of the province’s projects have been run by investors from the Republic of Korea (RoK), Japan, and China.

The Dong Nai Industrial Zone Management Board said that FDI capital was injected into supporting industry in the fields of electronics; garment, textiles and footwear; and the manufacturing of machinery products.

Notable projects include a 40-million USD project by RoK-based Hi Knit Co., Ltd.; a 60-million-USD project by Singapore-based KCC Vietnam Co., Ltd.; and a 45-million-USD project by RoK-based Samyang Vietnam Co.

The Department of Planning and Investment said that the province is now home to 1,861 FDI projects with a total registered capital of 33.63 billion USD. Among them, 1,379 projects worth 28.5 billion USD are operational, while the other 482 have had their licences withdrawn. 

Garment firms move to boost exports to Canada under CPTPP

Vietnamese textile and garment firms are being active in making full use of the opportunities created by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to boost exports to Canada once the deal takes effect in early 2019.

Both Vietnam and Canada are members of the CPTPP, which also gathers nine other countries. The agreement covers a market of about 500 million people and has a combined GDP of 10.1 trillion USD, or 13.5 percent of worldwide GDP.

Le Tien Truong, Director General of the Vietnam National Textile and Garment Group (Vinatex), said that although the CPTPP doesn’t include the US – who imports nearly 50 percent of Vietnam’s annual textile-garment exports – there remain many other markets with great potential, particularly Canada.

Canada imports approximately 13.3 billion USD worth of textiles and apparel each year, but of this quantity, Vietnamese exports are still modest, valued at about 550 million USD annually.

Vietnam has yet to sign a free trade agreement with Canada, so the CPTPP will help open up chances for it to accelerate textile-garment shipments to the North American market in the coming years, Truong noted.

To grasp opportunities, Vinatex has actively sought and provided information for Canadian partners, he said, adding that it recently sent a delegation of businesses – including Hanoi Textile & Garment Joint Stock Corporation (Hanosimex), Hoa Tho Textile-Garment Joint Stock Corporation, Duc Giang Corporation, and Phong Phu International Joint Stock Company– to explore the potential of cooperation with Canadian importers.

Phong Phu International JSC said that through its direct meetings with Canadian businesses, it has learnt more about customer demand in this market, enabling it to plan more specifically towards set targets.

It has succeeded in implementing the ODM (original design manufacturer) production model. By applying advanced technologies, the company now only needs one to 1.5 days to create new product models, instead of the previous period of two months. The time needed to bring a new product to the market has also been reduced from eight weeks to two weeks.

Meanwhile, Hanosimex introduced 40 knitting products and cotton towels to Canadian partners. It highlighted the capacity of meeting the “yarn forward” rule of origin in its products. 

It learnt from the requirements of Canadian businesses that the products must be able to supply, the company noted, adding that Canadian retailers and importers have shown their interest in textile and garments from Vietnam.

Hanosimex said that in order to optimise the advantages generated by the CPTPP, it will step up capitalising on material supply sources to satisfy the “yarn forward” rule of origin under this deal. It will also seek more suppliers in Vietnam or other CPTPP members to diversify products, and build flexible production models to meet orders with different requirements.

Hoa Tho Textile-Garment JSC also met directly with the Canadian firms it is partnering with to enhance connectivity and discuss cooperation plans for next year. 

The enterprise said it will also make use of material supply sources in a way that meets the “yarn forward” rule of origin under the CPTPP to ensure product quality, competitive prices, and good services. Flexible production models will also be applied to meet partners’ requirements. 

Over 10.2 trillion VND raised from G-bond auctions in November

The State Treasury of Vietnam raised more than 10.2 trillion VND (438.6 million USD) from government bonds (G-bonds) in November’s 14 auctions at the Hanoi Stock Exchange (HNX), up 23 percent from October. 

The rate of successful bids was at 52.1 percent due to increases in yield rates for five-year, seven-year, and 10-year bonds. In particular, the annual interest rate of 10-year bonds was between 5 and 5.2 percent, and for 15-year bonds between 5.25 and 5.3 percent.

In the secondary market, more than 515 million G-bonds were traded at a value of over 56.9 trillion VND (2.44 billion USD) in November, up 2.15 percent against the previous month.

Meanwhile, trading volume through repurchase agreements (repos) reached more than 753 units worth 74.7 trillion VND (3.21 billion USD), representing a monthly decrease of 16.3 percent in value. 

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

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

Manufacturing sector’s output rises at near-record pace in November

Vietnam’s Manufacturing Purchasing Managers’ Index (PMI) rose from 53.9 points the previous month to reach 56.5 points in November, according to the latest survey from Nikkei’s IHS Markit, released on December 3.

Manufacturing business conditions during November improved to one of the greatest heights in the near eight-year survey history.

The consumer goods sector was the strongest performer of the three broad sectors covered in the latest survey period; witnessing the fastest rises in output, new orders, and employment. 

New orders increased sharply in November, with the rate of expansion quickening for a second month in a row. Strong growth of new orders encouraged manufacturers to increase production. Moreover, the rate of output growth quickened to the fastest since March 2011.

Output also looks set to increase further over the coming year as strong demand has boosted manufacturers’ confidence. Sentiment jumped from that seen in October and was the highest since February 2016.

Firms responded to greater workloads by taking on extra staff, and at a rapid rate. In fact, the pace of job creation was the fastest in the survey’s history, surpassing the previous record seen in June. 

Manufacturers increased their stocks of both inputs and finished goods at record rates as firms responded well to new bigger orders and prepared for likely further rises in sales in coming months. The accumulation of pre-production inventories was helped by a marked acceleration in the rate of purchasing activity growth. 

Higher raw material prices resulted in a further increase in input costs in November, and one that was the most marked in three months. Rising cost burdens led manufacturers to increase their selling prices, the first time in three months. 

A number of panellists mentioned that material shortages had contributed to higher prices for inputs, with supply issues leading some firms to report longer delivery times for inputs. Other manufacturers reported that their suppliers had been well prepared and reduced waiting times. Overall, vendor delivery times were broadly unchanged.

Andrew Harker, Associate Director at IHS Markit, said that the Vietnamese manufacturing sector continued to defy recent signs of slowing demand elsewhere in the global economy during November, seeing a strong and accelerated increase in new orders and a near-record rise in output. Moreover, firms seem confident that the good news will continue, prompting them to build inventories and take on staff at the sharpest rates seen in the near eight-year survey history so far.

Business forum to promote sustainable economic development

The Vietnam Business Forum (VBF) 2018 will focus on measures to practically and effectively support enterprises towards promoting economic development in a rapid and sustainable manner in connection with environmental protection, according to Vu Tien Loc, co-chair of the forum.

Loc, who is Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), informed the media of this news ahead of the event at a press conference in Hanoi on December 2.

VBF serves as a dialogue mechanism between the Government of Vietnam and the national and international business communities to improve business conditions necessary to foster the development of private enterprises, facilitate investment environment, and contribute to Vietnam’s sustainable economic growth.

The forum will discuss and collect opinions of business communities, review feedback from relevant agencies, as well as present forecasts for the economy and enterprise operations in 2019. 

According to Loc, Vietnam’s economy has recorded positive results, especially in terms of exports, foreign investment attraction, and business development. However, it is also concerned that enterprises need to be aware of preparing for further integration into the international economy. 

Vietnam's accession to the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP) and the Vietnam-EU Free Trade Agreement not only brings opportunities and favoruable conditions for the local business community but also poses many challenges and pressure from market expansion and compliance with integration commitments.

The VCCI recommends that the Government step up reform, abolish unreasonable business conditions, and accelerate the restructuring of state-owned enterprises and encourage investment in the form of public-private cooperation, Loc said. 

Vietnam needs to prepare well to position itself in the global value chain in connection with a number of urgent requirements, such as improving the quality of human resources, investing for technology, and reforming economic institutions.

Vice Chairman of the European Chamber of Commerce in Vietnam (EurcoCham) Tomaso Andreatta, who is also co-chair of the VBF, said that global trade is changing rapidly, requiring businesses to change to adapt to and promote development. 

Vietnam should aim for a rapid yet sustainable growth in connection with environmental protection with lower costs, he said. 

Vietnamese businesses need to overcome restrictions to increase competitiveness, promote creativity, and catch up on business trends in order to survive and contribute more to the economy, he said. 

Dutch firm helps Binh Phuoc promote sustainable peppercorn production

Vice Chairman of the Binh Phuoc province People’s Committee Huynh Anh Minh had a working session with representatives from Nedspice Vietnam, a spice processing firm of the Netherlands, on enhancing cooperation in trade promotion and the sustainable production of the locality’s pepper products. 

Jan Gihuis, senior manager of the Netherlands’ Sustainable Trade Initiative organisation, said Nedspice has built many sustainable production models in Binh Phuoc.

He added that the firm plans to expand more models like this in the locality and hopes that it will continue to receive the support of local authorities in the field. 

At the meeting, representatives from Nedspice Vietnam pledged to buy over 10,000 tonnes of pepper cultivated in the southern province of Binh Phuoc, accounting for one third of the locality’s total pepper production in the locality. 

Statistics show that about 1,500 households in Binh Phuoc are joining projects implemented by Nedspice, and about 60 sustainable production clubs are applying cultivation techniques provided by Nedspice on an area of over 2,100ha of peppercorn. 

Local famers involved in European-standard pepper cultivation models will earn an extra 5,000 VND per kilogram of pepper they produce and be able to enjoy many other incentives. 

Minh praised Nedspice’s capacity in supporting local farmers in promoting pepper production and consumption. 

He expressed the hope that Nedspice will continue to maintain its application of sustainable cultivation techniques in the locality, towards building a geographical indication for local pepper products. 

Pepper is one of the key crops of Binh Phuoc, however the pepper sector is facing many difficulties due to price fluctuations and the effects of disease and climate change. 

The local authorities have encouraged local farmers to enhance the production chain link and expand organic production models to create high-quality products meeting the market demands, especially for exports. 

Binh Phuoc has over 17,700ha of pepper, with annual average yield of 30,000 tonnes, including 1000 tonnes for export.

CPTPP: challenges and opportunities for Vietnam’s livestock sector

Due to the poor competitiveness of livestock products, Vietnam’s breeding industry will be significantly impacted by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), according to experts.

Pork, beef and milk are the products set to be the most influenced by the trade deal. 

According to former head of the Department of Animal Husbandry under the Ministry of Agriculture and Rural Development (MARD) Hoang Thanh Van, although many efforts have been made to improve quality, Vietnamese livestock products still have to struggle to compete with imported products. 

When the CPTPP takes effect, beef and milk products from Australia and New Zealand, and pork and chicken from Canada are forecast to enter Vietnam market in large volume. This could change consumption trends in Vietnam, causing an effect on the domestic livestock sector. 

Another barrier to Vietnam’s livestock sector is that production still depends on imported materials, especially those for producing animal feed and breeding animals.

Vietnam imports breeding cows from Australia and swans from France,wheat from Russia, Australia and Canada, and corn from Argentine and Brazil. 

The MARD said the import value of animal feed and materials reached 3.2 billion USD in the first 10 months of 2018, up 17.4 percent against the same period last year. Meanwhile, export value of livestock products reached only 455 million USD. 

The CPTPP also includes strict regulations on disease-safe lifestock areas. The most demanding markets such as Japan, Chile and Singapore are applying strict technical barriers for imported livestock products.

Vietnam has only 50 areas (at the district level) and 1,092 livestock production units with disease safety certificates, below the country’s target. 

However, experts said the CPTPP would also bring opportunities to the sector. 

It will help enhance the management capacity of domestic firms, thus improving competitiveness for their products. 

Vietnam will become more attractive to foreign investors, especially those operating in the livestock industry. Many domestic and foreign firms are seeking to invest in the field. 

Experts said the sector insiders should pay attention to developing products not subject to high competition, while building long-term strategies for the sector. 

They suggested the expansion of linked chain breeding models to enhance connections among enterprises, farms and cooperatives to make origin tracing easy and to encourage enterprises to apply high technologies in the industry. 

Firms have been advised to seek more markets for livestock products.

Vietnam currently exports processed chicken to Japan, frozen pork to Malaysia and salted duck eggs and quail eggs to Singapore and Australia. However, the turnover of these products is limited.

Saigon Co.op launches three new supermarkets

The Saigon Union of Trading Cooperatives (Saigon Co.op), owner of Co.opmart supermarket chain, opened three new supermarkets in the provinces of Binh Thuan, Long An, and Daklak between November 29 and December 1, raising its total supermarkets to 105 locations throughout the country.

The three supermarkets are Co.opmart Phan Ri Cua, located on Ly Thuong Kiet Street, Phan Ri Cua Town, Tuy Phong District in the south-central province of Binh Thuan; Co.opmart Can Giuoc in My Loc Commune, Can Giuoc District in Long An; and Co.opmart Buon Ho in An Binh Ward, Buon Ho town in the Central Highlands province of Daklak.

The new supermarkets are equipped with modern facilities, at a cost of VND265 billion. Additionally, more than 30,000 products, ranging from fresh foods, processed foods and household utensils to clothing and fashion items, will be put on sale in the three outlets, with locally-made products exceeding 90%.

Also, the newly-launched Co.opmarts are expected to contribute to the Saigon Co.op’s retailing and commercial activities, and offer entertainment and relevant services to local people.

Apart from that, Saigon Co.op will boost the production of local specialties in the provinces to promote consumption at its Co.opmart supermarket chain nationwide.

To celebrate the launches, the three Co.opmarts have run a number of promotional programs for customers, such as offering discounts of up to 50% for daily use products, providing gifts to customers shopping at the stores, and organizing lucky draws with many valuable prizes, such as Honda SH Mode 2018 motorbikes, Samsung fridges, and TVs.

Vinasun and Grab seek reconciliation in lawsuit

HCMC-based taxi operator Vinasun and ride-hailing firm Grab Vietnam have chosen to seek a reconciliation during their trial, reported the Vietnam News Agency.

Vinasun has accused Grab Vietnam of unfair business practices, and seeks compensation of VND41.2 billion (US$1.7 million) due to the losses it claimed to suffer.

According to the jury, the reconciliation is a positive sign. As per prevailing regulations, the judge could not proceed with the reconciliation because the trial is underway.

However, the court is allowed to mediate the dispute during the preparation for the trial, and as a result, the judge could choose to do so.

The representatives of the two companies then proposed temporarily suspending the trial so they could seek a reconciliation measure.

Having taken their request into account, the jury decided to suspend the trial. The period of suspension will not exceed one month, and a date to resume the trial is to be announced.

Earlier, a Vinasun representative testified in court that nearly 2,800 of its taxis had been sitting idle from 2016 to June last year. Grab was supposedly the sole cause of its losses, as the ride-hailing firm has taken over 71% of the local market.

Since 2014, Grab has also launched a series of promotional programs for customers and has issued points to its drivers to promote its transport service. Its activities, therefore, constitute a transport service, rather than a technology supplier, the representative claimed.

Vinasun also mentioned the decline in its market capitalization, as many investors lost confidence in the firm.

Meanwhile, Grab’s lawyer said the court had earlier assigned Cuu Long Valuation and Inspection Company to determine the losses suffered by Vinasun, but Cuu Long had hired another firm to perform the task, resulting in its statistics and calculation methods being deemed as unreliable.

Cuu Long determined Vinasun’s losses based on its shrinking market capitalization and expenses incurred from idle cars. Grab noted that the decline of Vinasun’s market capitalization, which is the total value of all outstanding shares owned by its shareholders, cannot be an indicator of the damages incurred.

The calculation of the decline was based upon the difference between Vinasun’s book value and market capitalization on June 30, 2017, and not over the entire review period. The market capitalization of a company’s stock fluctuates continuously each day, influenced by various macro- and micro-economic factors, including the quality of the stock market and investors’ expectations.

Grab representatives said that it was unfair to be considered at fault for the volatile market conditions that all listed companies, including Vinasun, experience over time.

Cuu Long’s report assumed that the ride-hailing business was the sole cause of Vinasun taxis lying idle. According to Grab, this assumption was unreasonable, as the assessment did not take into account many other factors, such as old cars waiting for repair, maintenance or replacement; drivers taking personal leave; and the impact of Vinasun changing its business model to car franchising, where instead of hiring drivers as employees, they franchise vehicles to them.

Power prices may rise next year: ERAV

Electricity prices will likely rise next year due to increasing power generation costs triggered by price hikes in coal, fuel, and water environment taxes, officials from the Electricity Regulatory Authority of Vietnam (ERAV), under the Ministry of Industry and Trade, said at a meeting held on November 30 in Hanoi, Nguoi Lao Dong newspaper reported.

Specifically, Vietnam National Coal and Mineral Industries Group (TKV) is seeking to raise coal prices sold to coal-fired plants by 5%, placing much pressure on the Vietnam Electricity Group (EVN) to consider hiking power prices.

Addressing the meeting to announce EVN’s power generation costs and business performance in 2017, Nguyen Anh Tuan, head of ERAV, said the ministry and EVN are seeking to determine the impacts of the proposed power price hikes on residents, economic growth, consumer prices, and especially cement and steel industries that consume  large volumes of power.

Based on their assessment, the ministry will send a report to the Government and the Steering Committee for Price Management to map out a plan of power price hikes for next year.

As such, EVN will adjust power prices if power generation costs rise by 3-5%, while the ministry takes charge of the price adjustment if the generation costs increase by 5-10%. The prime minister will decide the price hike rates if the costs exceed 10%, Tuan said.

Regarding the coal shortage faced by coal-fired power plants, typically with the Quang Ninh thermal power plant, the ministry has ordered TKV and Dong Bac Corporation to adopt appropriate solutions to ensure sufficient coal supplies for the power industry, in addition to considering importing coal from foreign countries.

Also, a number of thermal power plants, including Vinh Tan 1, Thai Binh 1 and Thang Long, have come into operation, resulting in a rapidly rising demand for coal, said Dinh Quang Tri, EVN deputy general director.

Accordingly, EVN will need 54 tons of coal as planned, but TKV and Dong Bac Corporation can supply only 46 tons, said Tri. As a result, EVN and the coal suppliers agreed, following discussions, to import the remaining eight tons of coal, with EVN’s subsidiaries buying four tons and TKV importing the remainder.

The eight tons of coal will then be resold to EVN, Tri said.

Tuan noted that thermal power plant operators will sign long-term contracts for purchasing coal with TKV and Dong Bac Corporation, to actively control the production of power.