Vietnamnet.vn
Podcast
US-Vietnam Business Summit defines future of economic relations
Deputy Prime Minister Trinh Dinh Dung addresses the summit
The 2018 US-Vietnam Business Summit was jointly held in Hanoi on September 10 by the Vietnam Chamber of Commerce and Industry (VCCI) and the American Chamber of Commerce in Vietnam (AMCHAM).
Addressing the event, themed “Defining the Future of Bilateral Economic Relations,” Deputy Prime Minister Trinh Dinh Dung said that Vietnam always highly values investment projects of US investors, especially those in renewable, green and sustainable energy, oil and gas, infrastructure, finance-banking, education-training, tourism, agriculture, high technology, along with other traditional areas such as agriculture and aquaculture.
The Deputy PM noted that the governments and businesses of both countries have faced new challenges and they need to give assessments and new solutions, thus helping to maintain the growth trend of bilateral economic relations.
The governments and businesses should seek new opportunities and orientations, while promoting startup spirit and renovation in business in a bid to foster bilateral economic, trade, and investment ties and the whole Vietnam-US relations in general, he said.
Over the past years, economic, trade and investment cooperation has become an important foundation and motivation for the Vietnam-US relationship.
The US has become one of the biggest trade partners of Vietnam, with two-way trade reaching 54 billion USD in 2017 from only 7.8 billion USD in 2005. In the first half of 2018, import-export revenue between the two nations was estimated at 27.4 billion USD.
In term of investment, as of June 2018, the US had 877 valid projects in Vietnam with total capital of 9.37 billion USD, ranking 10th out of 128 countries and territories investing in Vietnam.
Leaders of US firms, including many prestigious enterprises in the world, lauded the investment and business environment of Vietnam and expressed their hope to run long-term business in the country.
Currently, Vietnam mostly exports aquatic products, cashew nuts, garments and footwear to the US while importing high-technology products from the country. Particularly, many contracts and agreements to buy aircraft and aircraft engines are being negotiated between businesses of the two countries.
Alongside, nearly 30,000 Vietnamese students are studying in the US, the highest number among ASEAN countries and the sixth biggest among countries having students in the US.
The Deputy PM expressed his belief that this will be a high-quality workforce to contribute to Vietnam’s economic development and a motivation for trade and investment ties between the two countries.
Meanwhile, VCCI President Vu Tien Loc highlighted the Vietnamese Government’s efforts in boosting reform and integration by reducing business conditions and specific examinations, restructuring the economy, improve infrastructure, reinforcing the foundation of the financial system, enhancing the quality of human resources, and promoting renovation, thereby opening up opportunities for US investors.
The US-Vietnam Business Summit, held one day before the World Economic Forum on ASEAN 2018 that focuses on the “ASEAN 4.0: Entrepreneurship and the Fourth Industrial Revolution,” paid great attention to the formation of digital partnerships between business communities of the two nations, showing the common interest of both countries in economic degitalisation and innovative economic promotion, said Loc.
Digital connections between the two economies is an important solution to strengthening and enhancing the efficiency of cooperation between the two business communities, he said, affirming that Vietnam hopes the US business community will share their experiences and skills in developing the digital economy.
Loc also called for support of both Vietnamese and US Governments to businesses in cooperation promotion and technology transfer.
Forum to promote ASEAN as dynamic, innovative bloc
The World Economic Forum on ASEAN (WEF ASEAN), scheduled to open in Hanoi on September 11, is expected to further consolidate the unity of and promote ASEAN as a bloc of dynamic development and innovation in the context of Industry 4.0.
The WEF ASEAN, which will last through September 13, takes the theme “ASEAN 4.0: Entrepreneurship and the Fourth Industrial Revolution”.
It is a major forum attracting leaders of many regional countries, international organisations and the world’s leading businesses, and serves as a platform for government leaders and entrepreneurs in ASEAN and the region to discuss and share their visions, ideas and policy directions for important issues of the region.
As the host and co-chair of the WEF ASEAN, Vietnam has included many issues that it and other ASEAN nations are interested in in the event’s agenda such as innovative start-ups, infrastructure and smart cities, employment in Industry 4.0, human resources development, and hi-tech agriculture.
With nearly 60 discussions, the forum is also considered a festival of the grouping’s member states when it reserves a space for promoting images of ASEAN countries, conveying the message about a common house of the ASEAN Community with diverse cultures, diverse peoples, strong solidarity, a shared vision and a shared identity.
This is the third time the WEF has chosen Vietnam as the venue for a regional WEF, showing the strong development of the partnership between Vietnam and WEF, as well as between the country and the international business community. Vietnam used to host the WEF on East Asia in 2010 and the WEF on the Mekong Region in 2016.
This time’s event is also a chance for the country to foster cooperation with partners and attract attention and investment from the world’s leading enterprises. It will help the country access novel ideas and grasp development trends in the region and the world, especially amidst Industry 4.0, to serve the building and implementation of socio-economic development plans and business strategies of local businesses.
The hosting of the WEF ASEAN also reflects the Vietnamese Party and State’s policy of actively integrating into the world and responsibly contributing to common development and integration issues in the region. It is also set to help intensify the cooperation between Vietnam and the WEF in the time to come.
The WEF, established in 1971, is a non-profit foundation headquartered in Geneva, Switzerland. The forum engages the foremost political, business and other leaders of society to shape global, regional and industry agendas.
Meanwhile, the Association of Southeast Asian Nations (ASEAN) was founded in 1967. It groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. –VNA
Measures to attract domestic and foreign resources for innovative startups in Vietnam were discussed at a conference held in Hanoi on September 10.
The event was jointly organised by the Vietnam Centre for Science and Technology Communication and the National Agency for Technology Entrepreneurship and Commercialisation Development under the Ministry of Science and Technology (MoST).
Experts suggested building a database system which would connect the national innovative startup portal with those of other organisations, cities, ministries, and branches to provide essential information for businesses and the startup community.
Besides this, a network exclusively for innovative startups should be set up, with the involvement of investors, funds, a consulting network, and experts, among others, they stressed.
Providing information on the activities of project 844 towards supporting the national innovative startup ecosystem through 2025, project office director Pham Dung Nam said that it has joined hands with localities nationwide to organise events connecting the regional startup ecosystem.
During 2017-2018, the MoST, in collaboration with relevant ministries and sectors, has created favourable mechanisms for the development of the innovative startup ecosystem, he noticed, saying that the move has boosted startup activities in the relevant countries.
Meanwhile, Pham Hong Quat, Head of the National Agency for Technology Entrepreneurship and Commercialisation Development, laid stress on the importance of attracting international resources for Vietnamese startups and innovation works.
Techfest, one of the largest startup events in the country, is organised annually by the MoST to create connections for domestic and foreign takeholders in the startup ecosystem, he higlighted.
Quat also said that the event has drawn the attention of the international startup community and various foreign investors. More than 30 percent of total transactions at the event were made by foreigners.
Techfest 2018 is scheduled from November 29 to December 1, he added.
Vietnam Railways reports 20% falls in profit in Jan - Jun
The railway sector is under fierce competition from road and air transport.
State-run Vietnam Railways (VNR) saw its after-tax profit decrease by 20.4% year-on-year to VND108.6 billion (US$4.63 million) in the first six months of 2018, the firm has said in a financial statement.
This was despite an increase of 8.3% year-on-year in revenue to VND1.27 trillion (US$54.12 million) during the period.
The railway sector is under fierce competition from road and air transports, resulting in a decline of 10.6% year-on-year in passenger to 4.5 million and 1.9 billion passengers-kilometers, down 4.5% in the January - June period.
Cargo carriage in the period reached 2.9 million tons, up 4.1% year-on-year, and 1.9 billion tons - kilometers, up 13.5% year-on-year.
In the April - June period, VNR's revenue reached VND643.9 billion (US$27.44 million), up 12.3% year-on-year. However, due to an increase of 18.3% in cost of goods sold compared to the same period of last year, VNR's gross profit margin decreased by 26%.
Although the company's financial, sale and administrative expenses declined in the second quarter and income from financial activities increased by VND7.7 billion (US$328,197), VNR's after-tax profit declined to VND38.2 billion (US$1.62 million), down 17.5% year-on-year.
As of June 30, VNR's total asset value reached VND15.48 trillion (US$659.6 million), of which, long-term assets accounted for 86.4% at VND10.83 trillion (US$461.48 million) of the total.
Additionally, VNR's payables stood at VND726.3 billion (US$30.95 million).
In 2018, VNR sets consolidated revenue target of VND8.59 trillion (US$366.13 million) and after-tax profit of VND158 billion (US$6.73 million).
The national train carrier expected to contribute VND374 billion (US$15.93 million) to the state budget.
The Vietnamese railway industry witnessed declining popularity. In 2016, the train passenger volume dropped by 17% compared to 2015 to 9.8 million, while during the first six months of 2017, it had 5 million passengers, down 2.9% compared to the corresponding period last year, according to Vietnam Railway Corporation's statistics.
The firm expressed interest in developing tourism in the city, especially through the Paradise Golf Resort and Bau Trung residential area.
South Korean real estate firm Korea Infrastructure Management plans to invest US$3.2 billion in a resort complex project in the southern province of Ba Ria - Vung Tau, the provincial website reported.
In a meeting with local authority, a representative of the South Korean firm expressed interest in developing tourism in the city through a number of projects, especially the Paradise Golf Resort and Bau Trung residential area for the said amount of investment capital.
After receiving approval from the city, the real estate firm will conduct pre- and feasibility study of the project, stated the representative.
Nguyen Thanh Long, vice chairman of the provincial People's Committee, acknowledged the proposal from Korea Infrastructure Management, suggesting the firm to contact the city's Planning and Investment Department for further details.
Covering an area of 220 hectares, Paradise Golf Resort would consist of a golf course with a 27-hole layout, shopping malls, exhibition center, five-star hotels, office buildings and other facilities to attract long-term travelers.
Under the master plan, the resort is connected with the Bau Trung residential area through transport infrastructure and public area.
For investors to be qualified to invest in the project, Ba Ria - Vung Tau requested investment capital of at least US$1 billion, in which investors must have sufficient financial capabilities not less than 15% of the total investment of the project.
In 2017, the province had 69 new projects, including 29 from foreign investors with investment capital of US$1.5 billion, and 40 of local investors with VND29 trillion (US$1.24 billion).
In recent years, Ba Ria - Vung Tau has stepped up efforts in attracting investments in priority fields, including industry, seaport, logistics, tourism and high-tech agriculture.
Integrating renewable energy into national grid still challenging
The generating of renewable energy is expected to soar in the future, but Vietnam’s capacity to integrate this source of energy into the national power grid is still limited, heard attendees at a conference on renewable energy integration on September 7.
The conference, entitled “Renewable Energy Integration: Challenges and Technology,” co-organized by the Ministry of Industry and Trade (MOIT) and ABB Vietnam, seeks to encourage discussions regarding the worldwide movement to develop renewable power and the challenges of integrating this source of energy into nations’ power grids.
Addressing the conference, Nguyen Van Thanh, deputy head of the Electricity and Renewable Energy Department under the ministry, remarked that the rapid development of power plants is posing great challenges to transmission networks.
MOIT is working on the 8th grid development plan, as the country is in the process of switching over to renewable power generation, while keeping power generation costs unchanged. MOIT is in need of feedback from experienced experts, enterprises, and organizations in the fields of integrating renewable energy and balancing the power system before the issuance of a new National Power Development Plan in the future, Thanh added.
According to the adjusted National Power Development Planning VII, or Power Planning VII, renewable power projects need support. In particular, the total designed capacity of solar power generation must amount to 850MW in 2020 and 4,000MW by 2025. Meanwhile, the total capacity of solar and wind power set for 2030 are 12,000MW and 6,000MW, respectively.
However, Vietnam is still learning, when it comes to the operations of combining solar and wind power. Also, renewable power projects are often located far from electric load centers, resulting in costly and difficult loading.
Nguyen Minh Quang, who works at the MOIT’s National Load Dispatch Center, said that blockages in power grids are currently the most challenging problem for the power load system, apart from power quality and backup volume.
Quang analyzed data from Electrical Circuit Diagram VII, noting that Vietnam may witness a higher economic growth rate than other developing countries, which will push up the demand for electricity. Therefore, renewable energy will play a vital role in catering to the demand in the future, while the volume of liquified natural gas, fossil fuel, and hydropower energy is limited.
In addition, the southern central region is home to the nation’s renewable energy, but power grid conditions there are not prepared to adopt this kind of energy.
It takes three years, on average, to build a power grid project, while a solar power project needs only one year to be put in place. As a result, electric grid development cannot catch up with the proliferation of solar and wind power projects, said Quang.
Brian Hull, general director of ABB Vietnam, noted that Vietnam should apply advanced technology to cope with challenges in its power system. Simultaneously, the country should upgrade electric load and controlling systems, to ensure it can promptly tackle potential incidents.
The head of ABB Vietnam expected that technology applications would help the country overcome existing hurdles, and the power sector would be able to balance its multiple sources of energy for power generation.
2019 overspending estimated at VND222 trillion
Budget overspending for next year is projected to be nearly VND222 trillion, or 3.6% of the gross domestic product (GDP), according to a report just released by the Ministry of Planning and Investment.
As shown in the socioeconomic development report, which sought the comments of ministries and agencies before being presented to the Prime Minister, the total budget revenue is estimated to be more than VND1,410 trillion next year, up 7% against this year.
Meanwhile, total spending next year is expected to pick up by 7.2% to over VND1,630 trillion.
According to the report, budget collections during this year’s January-August period amounted to VND871.8 trillion. As for the whole year, the total figure is projected at VND1,360 trillion, up some 3% against the initial estimate and 5.5% against 2017.
Budget spending was VND873.5 trillion in the January-August period and VND1,560 trillion toward the year-end, marking a 6.9% rise against last year.
This will result in an estimated overspending amount of VND204 trillion, equivalent to 3.67% of the GDP and lower than the ratio allowed by the National Assembly (3.7%).
According to the report, the structure of budget spending has been improved, with increasing focus on investment and development expenditures, rising from 25% last year to 26.8% this year, and a reduction in regular expenditures, from 62% in 2017 to an estimated 61% this year.
Fighting fake news in the era of global trade
According to the Vietnam Association of Seafood Exporters and Producers (VASEP), many newspapers in Romania have reported inaccurate information about Vietnamese tra fish, and even recommended Romanian consumers boycott this product. Romania is a small export market for Vietnam’s tra fish, whose total export turnover last year was nearly US$1.8 billion. However, this incident is serious.
First, as Romania is a member country of the European Union (EU), any negative information there will adversely affect Vietnam’s exporters doing business in the bloc. Second, this is not the first time “fake news” about our seafood has appeared in Europe. Last year, Europe’s largest retailer, Carrefour, announced it would stop selling Vietnamese tra fish at its supermarket chains in several countries such as Spain and Belgium, after a documentary film defaming Vietnamese seafood was aired.
Europe is a hard-to-please market. To overcome the erected technical barriers, Vietnamese seafood in general and tra fish in particular must comply with strict inspection procedures and high quality standards on food hygiene, labor and environment. In response to the smear about Vietnamese tra fish, independent agencies have spoken out to protect this product.
However, in the era of fake news and post-truth, words of defense seem to have little meaning. People prefer negative and questionable information, instead of paying attention to numbers or mistake corrections. Quite a few media studies have pointed out that readers are more interested in and sharing more negative pieces of news than positive ones. A daily newspaper in Russia once tried to feature “good news days,” during which only positive news were reported. As a result, the number of readers on those days dropped to 66%. Given how fast news are spread on the social network, the destruction of fake news is even more terrible.
This is a brand-new battlefield for Vietnam’s trade sector—the country has just been an official WTO member for nearly 12 years. Still, for other countries, “fake news” that falsely accuse their products are not something new. Even so, there is one thing noteworthy: Do we notice and wonder why negative rumors are often related to products from developing nations such as Vietnam, China or African countries, instead of those from developed economies?
Explanations abound, and they may be helpful for us when we begin to face this threat which is growing in both level and scale.
First, it is about confidence. Developed nations have a long tradition of mutual trade, sharing the same standards, so little doubt could be cast about the quality of each other’s products. Crises such as the French infectious eggs (2017), infant formula (2017-2018), or even mad cow disease (1980s) all broke out unexpectedly, following an official investigation instead of rumors on a social forum.
As our trade records with developed markets are not long enough, we first need to establish and meet the technical standards they impose. This is what our agriculture-forestry-fisheries sector has been doing, but it seems the level of common awareness needed has not been shared. That the EU and Japan have constantly warned against shipments of seafood excessively contaminated by antibiotics in recent years is a typical example. In global trade, consumers care more about the national brand than a specific enterprise. Therefore, just because of a few “bad guys,” the whole industry may suffer a great deal of defamation.
The second issue is transparency. Products from non-Western countries are always considered exotic and intriguing, but at the same time, there are concerns about their quality and impact on the environment. To eradicate the skepticism of consumers in developed nations, the only way is to make the processes of manufacturing, packaging and preservation transparent. When shopping in some supermarkets in Europe, I notice the products from developing countries displayed on the shelf often have QR codes or product codes, which allow customers to directly access all relevant information—from the location of production and relevant technical standards, to the pictures of the production chain where such products come from. In addition, it is possible to take the initiative to carry out activities to promote our products in a smart way. Marou, a chocolate product of Vietnam, is now well known worldwide, and sold in prime locations for a very high price, partly thanks to the interesting documentaries and articles featured on some major global newspapers. This is a very good approach that Vietnamese firms may consider.
It should be noted that in dealing with “fake news” about the nation’s products, “prevention” is much better than “curing.” The reason is, when negative news surfaces, we will more or less incur damages, either directly through sales or indirectly through the loss of consumer confidence. The State plays an important role in controlling and encouraging enterprises to meet high technical standards for export, while positively creating opportunities for Vietnamese goods to be more widely identified via trade promotion activities. In that sense, such a role of Vietnamese embassies and diplomatic representatives overseas is of prime importance, along with the responsibility to review information about our products in the media of other countries.
However, when being directly engaged in disputes and complaints regarding “fake news” about commodities, the active role should be taken by enterprises and their representatives—business associations. There are two main reasons. First, the WTO mechanism deals only with disputes involving the solutions of government or public authorities, not businesses, independent or media organizations. Second, for that reason, the State’s involvement in such disputes gives a bad impression of its role—especially when our country has not yet been recognized by major markets as a full market economy.
This, of course, must be accompanied by the strengthening of business associations, so they can protect their members’ interests in international markets. Among the local associations, few are capable of doing so at present.
Grab trials GrabFood in Hanoi
Grab launched a trial food delivery service through its GrabFood platform in selected areas of Hanoi on September 5 after a four-month trial in Ho Chi Minh City.
The service will initially be piloted in four districts: Hoan Kiem, Dong Da, Cau Giay, and Hai Ba Trung. GrabFood is Grab’s next key development and aims at becoming the first super-app for daily life in Vietnam in particular and Southeast Asia in general through an open platform strategy, bringing to local people ride-hailing services, food delivery, freight forwarding, non-cash payments, and other financial services, all on a Grab app.
GrabFood was implemented in Ho Chi Minh City in May and after nearly four months has proven to be a revenue driver for its partners by bringing their restaurants online, thereby reaching more customers and receiving more orders. Driver partners can increase their income through the food service, in addition to regular transport services. Customers can order their favorite food and enjoy the convenience of having it delivered quickly.
Starting out four years ago, the Grab app has provided an ecosystem through technological innovation that meets the most important needs of everyday life and includes GrabTaxi, GrabCar, GrabBike, GrabExpress, and now GrabFood, through a network of more than 135,000 driver partners around the country.
Grab recently unveiled its smart city vision to empower a future of seamless mobility, on-demand food delivery, logistics, cashless payments, and financial services for the people of Southeast Asia - all within one mobile app.
“GrabFood is the next major step in our move to meet the essential daily needs of consumers,” Mr. Jerry Lim, Country Head of Grab Vietnam, said when launching GrabFood in Ho Chi Minh City. “Food delivery is a natural extension of our transport offerings. Each day, millions of people in Southeast Asia rely on ride-hailing services to take them from place to place, while our food delivery services save them the hassle of travelling around congested cities. With our acquisition of UberEats’ operations and the expansion of GrabFood across the region, we are working with local merchants and driver partners to deliver the best from Vietnam’s kitchens to the doorsteps of millions.”
The ride-hailing giant also acquired a stake in Vietnamese mobile payment startup Moca, from Access Venture Capital, in a move that is seen to further strengthen the former’s grip in the digital payments sector in the region, DealstreetAsia reported on September 5.
Vietnamese IT corporation FPT announced on September 6 a series of activities celebrating its 30th anniversary and FPT TechDay 2018, to be held on September 12 at the JW Marriott Hotel Hanoi.
The event is expected to see more than 1,000 in attendance from ministries and departments and 100 strategic partners and clients. The FPT Technology Exhibition and FPT TechDay 2018 will be held on the same day, with the theme “FPT 30-year trailblazing pioneer - FPT TechDay 2018”, representing FPT’s technology pathway from the past to the present and into the future.
FPT TechDay is an annual technology event held by the corporation since 2013, during which it has attracted thousands of participants.
A key event in the 30th anniversary celebrations, FPT TechDay 2018 will re-enact the development of the IT backbone of Vietnam’s IT industry, from taking its first steps on the world technology map to becoming a global corporation that advances the future of technology and wisdom beyond all limits.
Together with annual activities such as updating new technology trends, connecting experts and tech lovers, and introducing advanced technology products from FPT and its partners, FPT TechDay 2018 will also provide the opportunity for attendees to experience Industry 4.0 products and services, visit a virtual reality space, and admire the latest technologies in the FPT ecosystem.
The virtual reality space is also a first in Vietnam, with a gate opening to the future world of 5.0, while the appearance of virtual assistants at the event is a first in the technology world. A futuristic world with displays and demonstrations of the most advanced technologies and addresses from leading tech experts in Vietnam and around the world on the hottest topics will also feature at the event.
FPT TechDay 2018 is expected to welcome more than 1,000 CEOs, directors, and tech experts, and over 2,000 visitors.
Crescent Mall in Ho Chi Minh City will official welcome Vietnam’s third H&M Vietnam store on September 8.
After entering the country in 2017, H&M Vietnam has opened stores in both Hanoi and Ho Chi Minh City, achieving record-breaking sales with each successive opening.
Crescent Mall offers approximately 45,000 sq m of retail space and delivers an international-standard shopping complex amid the tranquility of a lakeside environment.
The fourth quarter of 2019 will see the opening of a further 11,200 sq m of retail space in a new phase as well as a 25-story office tower. This will provide Crescent Mall with further momentum as one of Vietnam’s leading shopping malls.
With professional asset management from Savills Vietnam, Crescent Mall provides international-standard facilities for numerous high-profile tenants and was selected by Savills Vietnam as the new location for the latest H&M store in Ho Chi Minh City.
Ms. Tu Thi Hong An, Associate Director of Commercial Leasing at Savills HCMC, said that having been active in the city’s retail property market for over 20 years, Savills was very pleased to provide advice on the transaction. “Crescent Mall is fortunate to be in an area where expansion is still possible,” she said. “Compared to other areas in the city, District 7 has been planned and zoned well by developers Phu My Hung. We hope H&M will be very happy in this new location.”
According to Ms. Joanne S. Gasgonia, General Manager of Crescent Mall, it has been successful in understanding shoppers. “We have gone beyond the usual demographic targeting and not only tried to understand and predict what the market thinks but most importantly what the market feels,” she said. “It is all about brand trust, brand love, and brand affinity.”
A report from Savills noted that, retail turnover in Vietnam last year was $129 billion, increasing 11 per cent year-on-year to a level quite high in the ASEAN region.
Its retail market has enormous potential. In 2018-2021 it is expected to grow steadily with rising demand for leisure (10 per cent per year), modern groceries (9 per cent per year), and apparel (6 per cent per year). Revenue from fashion, personal services, F&B, and entertainment such as gyms, fitness centers and cinemas will all rapidly increase over the years to come.
Vietnam International Commercial Joint Stock Bank, also known as VIB, has been named the leading SME Trade Bank by the Asian Development Bank (ADB), thanks to its $276 million trade financing during the year ending on June 30, 2018.
At the TFP Awards and Partners Dinner which was held on September 4 in the framework of the first day of Global Trade Review's annual conference in Singapore, VIB received one of the prestigious awards recognising leading partner banks in ADB's Trade Finance Programme (TFP).
Based on transactions supported by TFP during the year ending on June 30, 2018, VIB was the leading bank in SME trade financing. The Vietnamese bank was also awarded the title by ADB in 2015 and 2017.
VIB is one of 10 banks selected by ADB to join TFP since 2009, aiming to provide companies with the financial support they need to engage in import and export activities and improve their productivity and competence in the market.
With the purpose of providing trade finance support, TFP works with more than 240 partner banks. In 2017, the programme supported $4.48 billion worth of transactions and 2,822 small and medium-sized enterprises.
The growing confidence of the business community in Vietnam has led to upbeat development of the economy in this year’s first eight months, with industrial production hitting an eight-year high, serving as a major impetus for economic growth.
During his working visit to South Korea’s Samsung Display Vietnam (SDV) facility in the northern province of Bac Ninh two weeks ago, Minister of Planning and Investment Nguyen Chi Dung was told that in the first half of this year, SDV’s export turnover hit $3.7 billion and revenue totalled $6.6 billion. Since its establishment in late 2014, the manufacturer, which produces OLED screens for phones, tablets, and watches, has disbursed $6.3 billion out of its total committed $6.5 billion. The remaining $200 million will be disbursed in the third quarter, much earlier than the company’s initially scheduled target of 2022.
“Samsung Display Vietnam has made a great contribution to the development of Bac Ninh in particular and of Vietnam in general,” Minister Dung said.
The General Statistics Office (GSO) last week reported that in the first eight months of this year, thanks to boosted production of the business community including large-scale manufacturers like Samsung and Formosa in Vietnam, the index of industrial production (IIP) climbed to the highest eight-month level since 2011, at a growth of 11.2 per cent on-year. Breaking down this 11.2 per cent rise, the manufacturing and processing sector, which accounts for nearly 80 per cent of Vietnam’s industrial growth, saw the highest eight-month growth rate at 13.3 per cent, contributing to 10.2 per cent of IIP growth. Meanwhile, production and distribution of electricity grew by 10.4 per cent, far higher than the 8.6 per cent rise in the same period last year.
“The 11.2 per cent IIP rise is very significant, reflecting major growth in industrial production,” said Mai Tien Dung, Minister and Chairman of the Government Office. “Never have we seen such strong growth in IIP as we are doing now. Production of almost all products in the economy has also soared, and the business community’s confidence is growing strongly.”
For example, showing the business community’s growing confidence, last week, a joint venture between Wagan, GHN Group, Masters Depot, and Vietnam’s Tin Thanh Group met with the operator of Dung Quat Oil Refinery in the south-central province of Quang Ngai, in hopes of engaging in the second-phase expansion of the project. As scheduled, the expansion will be completed in 2021, with the refinery’s capacity to be increased by 30 per cent, with an output of 8.5 million tonnes of EURO-standard products per year. In the first eight months of this year, the refinery produced over 4.71 million tonnes of oil, with revenue of over VND73.9 trillion ($3.27 billion).
According to the GSO, since the beginning of the year, many industrial products have witnessed very high growth, including petrol and oil (up 50 per cent on-year), steel (up 37.6 per cent, largely owing to Formosa, which helped the central province of Ha Tinh’s IIP top the country at 121.4 per cent), mobile phones and their spare parts (up 36.6 per cent, mostly thanks to Samsung), alumina (up 25.2 per cent), and liquified petroleum gas (up 24.9 per cent).
Standard Chartered Bank expects that industrial manufacturing and construction are likely to remain “the fastest-growing sectors” in Vietnam, and this will help the economy grow at a high rate – 7 per cent in 2018, higher than its previous forecast of 6.8 per cent, “with all domestic engines firing together”.
“We are positive on Vietnam’s growth in the medium term based on strong manufacturing activity, as foreign direct investment (FDI) inflows to manufacturing remain strong. We believe that Vietnam will remain one of the fastest-growing economies in Asia in 2018,” said Chidu Narayanan, economist for Asia at Standard Chartered Bank.
According to the bank, FDI inflows are set to remain high in 2018, led by manufacturing, which makes up close to 50 per cent of the inflows.
The GSO also said that in the first eight months, FDI disbursement totalled $11.25 billion, up 9.2 per cent on-year.
Besides, Vietnam also saw nearly 87,500 enterprises newly established, registered at $38.87 billion, up 2.4 per cent in the number of enterprises and 6.9 per cent in capital, on-year.
In addition, operational companies increased their capital by $74.3 billion. Thus, the total new capital inserted into the economy in the first eight months of 2018 hit $113.17 billion.
Medical firms aim for global market
In light of new and disruptive digital healthcare solutions, a number of Vietnamese medical device manufacturers are banking on high technology in order to go international and achieve higher profits amid stiffening competition in the local market.
1,220 companies gathered in Singapore for Medical Fair Asia and Medical Manufacturing Asia 2018, the region’s leading medical exhibitions
Last week, some Vietnamese medical technology companies joined 1,220 exhibitors from 62 countries worldwide in Singapore to showcase innovations and technology at Medical Fair Asia and Medical Manufacturing Asia 2018 – the region’s leading medical exhibitions.
As some of the Vietnamese pioneers in technology innovations, Biology and Medical Device Technology Factory Co., Ltd. (Bimedtech), Medical Devices and Biomaterial Plant JSC (MEDEP), USM Healthcare Medical Devices Factory JSC, and Hong Ky Co., Ltd. joined the exhibitions, seeking higher profits internationally.
“Unlike previous years, when we were just a guest at these fairs, now we are here for the first time as a manufacturing exhibitor to promote our innovative products, which will be available on the market by the end of 2018,” Duong Ngoc Cuong, COO of Bimedtech, told VIR.
Founded in 2014, Bimedtech previously focused only on medical devices. The great impact of digital transformation prompted Cuong to focus on technological innovation by developing a high-tech factory in Saigon Hi-tech Park (SHTP) and make biochips based on microarray technology for the diagnosis of genetic disorders and infectious diseases. Equipped with non-contacting printing technology, the first phase of the factory began operations in the second quarter of 2018, making Bimedtech the first company in Southeast Asia to produce biochips. The second phase will be developed at a later date.
“Partnering with American, German and Spanish technology companies, we plan to partake in many similar international exhibitions to market our products. Many customers from South Korea, India, Germany, and the Philippines have shown interest in our biochips,” he added.
MEDEP, established in 2015 and the first intraocular lens (IOL) producer in Vietnam in the form of a 100 per cent technology transfer from the US, is also seeking business opportunities globally. Boasting a factory in SHTP equipped with some of the world’s most advanced technology, the company aims to release its first products in 2019 to serve the domestic and international markets.
“Currently, all IOLs in Vietnam are imported, while the number of people with cataracts is increasing significantly. Joining international exhibitions is a way for us to promote sales, with Asian and European markets being our targets,” said Cao Thi Van Diem, vice managing director of MEDEP.
USM is another company to join the race. USM established the first high-tech medical device factory in Vietnam, and has a biomedical technology research and development facility and healthcare factory in SHTP, producing high-tech medical devices, with the key products being cardiovascular devices and medical disposables. The company previously attended similar exhibitions in Indonesia, Myanmar, and Thailand in 2017. This July, it partook in another in the US and is preparing for an upcoming event in Germany in November.
“We export our products to Malaysia, Myanmar, Cambodia, and Indonesia. Southeast Asia, with a population of 600 million but a very limited production capacity when it comes to these products, is the first target. South Africa and Angola will be the next destinations,” said Vo Xuan Boi Lam, president of USM.
The moves reflect the strong belief in imminent global success held by Bimedtech, MEDEP, USM, and others, driven by increasing regional and global medical technology demands.
“The market opportunities in Asia for global healthcare investors and service operators are undeniable, buoyed by growing needs for quality geriatric care. The exhibitions provide an opportunity for companies to introduce their newest technologies and products,” said Gernot Ringling, managing director of Messe Dusseldorf Asia – one of the world’s leading trade fair organisers.
While local companies are preparing to expand globally, the Vietnamese medical market has become more appealing to foreign pharmaceutical and medical equipment companies, heating up competition in the local market.
At the recent Vietnam Medi-Pharm Expo in Ho Chi Minh City, hundreds of foreign companies, including Philosys and Neusoft Medical Systems, prepared to seek partners to increase product distribution to the market.
At present, locally made medical devices make up a small part of the market, while 90 per cent of the medical equipment available in local hospitals comes from foreign countries like Japan, Germany, the US, China, and Singapore, accounting for more than 50 per cent of the total import value of the medical industry, according to the Ministry of Health. In 2017, the country spent more than $1.1 billion on imported medical equipment, up from $950 million in 2016.
In addition to famous brands such as German leading healthcare product maker B.Braun, Sanofi, and Nirpo, which are expanding rapidly in the country, many newcomers are also making appearances. For instance, South Korea’s Celtrion Group is currently seeking opportunities to invest an estimated $800 million in a factory in the southern province of Binh Duong.
According to Forbes, Asia’s healthcare industry is expected to grow by 11.1 per cent by the end of 2018. In tandem, the medical technology market in Asia will grow at a compound annual growth rate of 8 per cent, overtaking the European Union as the second-largest market globally by 2020.
The Ho Chi Minh City Medical Equipment Association predicted that Vietnam’s medical equipment market would enjoy a growth rate of 18-20 per cent in the 2016-2020 period.
Ninh Thuan offers strong incentives to tourism investors
The government of Ninh Thuan Province has pledged to continue improving the investment environment and offering incentives to investors to develop the tourism sector in the province.
Speaking at a tourism promotion conference held in HCMC on September 7, Ninh Thuan Chairman Luu Xuan Vinh said that investors will be offered the greatest incentives upon investing in the central coastal province of Ninh Thuan. In addition, investors will be entitled to exemptions and reductions in corporate taxes, import taxes and land use fees to carry out tourism projects.
Also, the province will encourage investors and enterprises to invest in tourism development in the province by simplifying policies and investment procedures to make it easier to carry out investments and develop cooperation.
The province’s general plan for its socioeconomic development through 2020, which has been approved by the Prime Minister, calls for Ninh Thuan Province to develop the economy under a green and clean model, prioritizing investment in renewable energy, high-end wellness tourism, hi-tech agriculture and the agro-fishery product processing sector.
To fulfill the aims and develop the tourism sector, the province will focus on attracting investment in Northern, Southern and Central Phan Rang-Thap Cham City to build hotel systems, a commercial center and recreation complexes.
The province also encourages investors to build luxury resorts along the beach and diversify tourism products, as well as beach sports and farming-tourism services, to lure domestic and international visitors.
Speaking at the conference, some investors said that due to the high volume of tourists arriving in Nha Trang and Phan Thiet cities nearby, Ninh Thuan Province, offering natural landscapes and local cultures, is considered a new tourist attraction.
Ninh Thuan Province has over 105 kilometers of coastline and enjoys a variety of scenery, including Ninh Chu-Binh Son, Ca Na and Binh Tien beaches, Vinh Hy Bay, Hang Rai (otter cave), Nui Chua National Park, Nam Cuong Sand Dune and Mui Dinh Sand Dune.
Ninh Thuan Province, however, still faces difficulties in attracting investors. As of 2017, the province had only 325 projects licensed by the provincial government, with a total registered investment capital of VND115 trillion. These projects covered tourism, energy, seafood, farm produce and the mineral processing sectors.
Of the 325 projects, 48 were focused on the tourism sector, with a total area of 1,800 hectares and investment capital of VND15.3 trillion.
The chairman of the province said, at the conference, that the Government issued Decree 115/NQ-CP on mechanisms and specific policies at the end of August which supports Ninh Thuan Province in socioeconomic growth and manufacturing stability during the 2018-2023 period.
State collects VND8.5b from Petimex’s IPO
State-run Dong Thap Petroleum Trading Import Export Co., Ltd, (Petimex) sold some 798,000 shares, worth some VND8.5 billion, in its first initial public offering (IPO), which fell below its expectations, at the Hochiminh Stock Exchange on September 7.
The IPO offered more than 48.04 million shares, equal to a 35.4% stake in the oil trader, with the reserve price set at VND10,600 per share. At this share price, the Dong Thap-based company was expected to fetch VND509 billion (US$21.8 million).
However, the number of shares sold, at an average price of VND10,700 per share, accounted for a mere 0.59% of the company’s charter capital. As many as 61 individual investors participated in the auction.
Le Thanh Man, general director of Petimex, told the Saigon Times that with the completion of the first IPO, Petimex will propose the People’s Committee of Dong Thap Province, its State capital ownership representative, allow the company to further divest its stake through auctions and put-through transactions.
.svg){kind=icon}
