BUSINESS NEWS 15/8

Jan-Jul rice exports exceed 4 million tons

BUSINESS NEWS 15/8

With 651,000 tons of rice exported last month, Vietnam exported an estimated 4.01 million tons in the January-July period worth US$1.73 billion, up 2.1% in volume and down 14.3% in value year-on-year, ministry data showed.

The Vietnam News Agency quoted Minister of Agriculture and Rural Development Nguyen Xuan Cuong as saying that farm produce prices in world markets have dropped by 5%-15% this year. He added that the rice price has seen significant declines in various segments.

According to Cuong, short-term plans involve expanding to new markets and increasing exports to African and ASEAN countries to offset declines in the Chinese market. Rice production will also shift to varieties suiting these markets. Besides this, there will be attempts to lower production costs.

Over the long term, the ministry plans to use 500,000 hectares of paddy land for the production of seafood and fruit and to raise livestock based on the strengths of the localities to reduce the pressure of high rice volumes, Cuong remarked.

In the year’s first half, the Philippines accounted for a major share of Vietnam’s rice exports, at 33.7%. Rice importers with remarkable increases during the period were the Ivory Coast (up 67%), Hong Kong (up 60%) and Saudi Arabia (up 38%). The average export price in the six-month period was US$431 per ton, down 15% against the same period a year earlier.

Of the rice varieties exported, white rice made up 46.8% of total exports, followed by Jasmine rice and fragrant rice at 38.3%; glutinous rice, 8.4%; and Japonica and Japanese rice, 5.9%. Major importers of glutinous rice were China at 53% and the Philippines at 19.6%.

Kipinä partners with ILA Vietnam

Kipinä, the fastest growing Finnish international preschool brand and featuring an “Enhanced Finland” curriculum, will join forces with ILA Vietnam to open ten new Kipinä preschools throughout Vietnam over the next three years.

It already has schools in 14 countries and territories, mainly across the Middle East, North Africa, and Eastern Europe. The Vietnam roll-out brings Kipinä’s number of scheduled school openings to 42 and marks the beginning of a planned expansion throughout India, ASEAN countries, and China.

“Kipinä recognizes the difficulties inherent in opening schools in new markets,” said Mr. Kieran Galvin, Kipinä’s Managing Director. “It’s why we work with experts like ILA who have more than 20 years of experience in the sector. While a lot of preschool franchisors turn their attention to the potentially lucrative US market, at Kipinä we prefer to work with innovators and disrupters in countries where the benefits of good quality education can make an enormous impact.”

“Finnish early childhood education is not easily exportable,” said Mr. Du Tran, CEO of ILA. “Kipinä substantially adapts the framework to suit environments and teachers outside of Finland. Their approach to creating extensive resources and tools for teachers, combined with a practical approach to teacher training delivered online through Häme University, and in local workshops, means we can deliver the best approach to educating children while ensuring sustainability and investing in our teachers.”

ILA Vietnam is one of the leading providers of 21st century English language programs in Vietnam, with over 43 centers throughout the country employing more than 800 teachers and delivering programs to more than 30,000 students.

Kipinä uses an enhanced Finnish approach based on the Finnish National Core Curriculum for Early Childhood Education and Care, with extra elements added to make the program more suited to international environments. These include Focused Instruction Methodology, 21st Century Skills, and Executive Functioning Skills for children.

Kipinä’s Finnish university partner, the Häme University of Applied Sciences, will provide certified teacher training in Finnish Pedagogy through a special program for foreign teachers that it jointly developed with Kipinä.

Vietnam needs platform for information sharing on cyber attacks

“Cyber security has to be embedded in organizations’ development strategy. It is vital to have systematic cooperation, information sharing, and technical assistance, not only within a financial institution but also in the financial and banking sector and related organizations and with cyber security experts,” Mr. Tran Dinh Cuong, General Director of EY Vietnam, told the “Cyber Security and the Importance of a Threat Intelligence Sharing Platform” workshop on August 7 in Hanoi.

The workshop was co-organized by EY Consulting Vietnam and Anomali, a US-based cyber security company. Experts in attendance said they believed that an underestimating of the importance of cyber security has led to insufficient investment in human resources and technologies.

“Moreover, cyber security should aim at not only protecting the enterprise but also optimize the response with more advanced tools and strategies,” said Mr. Cuong.

“One organization’s detection can be another’s prevention,” Mr. Geoff Noble, Anomali’s Senior Vice President, told the gathering. “The best way is to build on trust and share experience. You can be part of a community like EY Vietnam to bring intelligence into the platform.”

Experts from EY and Anomali agreed that early detection and warning about cyber attacks play a major role in helping organizations effectively react to such threats before they damage businesses and their stakeholders.

Emphasizing the critical role of advanced notifications and warnings, Mr. Robert Trong Tran, Leader of Cyber Security Services at EY Consulting Vietnam, said he believes that a platform for malware information sharing and cyber attack signals analyzing (IoA) among enterprises is a prerequisite for effectively coping with intentional and complex hacking assaults.

The annual report from the European Union Agency for Cyber Security (ENISA) reveals that most intrusion cases have their roots in loopholes existing for at least one year prior. Thus, an anonymous sharing system collaborating with an Information Sharing and Analysis Center (ISAC) and Security Operations Center (SOC) would help organizations identify risks in advance and immediately react to potential threats before they can cause serious damage. More specifically, compared to obsolete approaches based on firewalls and regular filters, such a system would ensure greater resilience to cyber attacks.

Without a timely defense, a cyberspace intrusion can wreak havoc and cause immense losses to a business, not to mention the potential damage to prestige and reputation in future transactions, experts told the workshop. Organizations should always be on high alert and ready to fight cyber security intrusions to minimize possible financial and reputational risks.

“Any organization can be a potential target for hackers. We need to be on high alert and fully prepared for cyber threats”, said Mr. Robert.

According to the EY 2018-2019 Global Information Security Survey (GISS), more than half (55 per cent) of organizations do not make the protection of the organization an integral part of their strategy and execution plans. Only 8 per cent have information security functions that fully meet their needs. Resources are a key issue, with 30 per cent of organizations struggling with skills shortages.

Many enterprises have a better understanding of cyber security only after suffering major losses from hackers. Seventy-six per cent of respondents to the GISS said they upped their cyber security budgets after a serious breach. However, businesses seem reluctant to share details of intrusive signals for fear of reputational damage. Hackers may also continue to intrude more deeply into the system before updated protection is installed.

The frequency and scale of security breaches around the world show that too few organizations have implemented even basic security measures. However, organizations are spending more on cyber security, devoting increasing resources to fine-tune existing defenses and working harder to embed security-by-design to optimize security and support their growth.

Around 1,000 CEOs of travel enterprises to gather

A business matching for around 1,000 CEOs of travel enterprises nationwide will be held in Ho Chi Minh City on September 6, as part of activities marking the 15th Ho Chi Minh City International Travel Expo.

The event aims to create an opportunity for travel enterprises, particularly medium and small sized ones, to promote business links with a series of services.

The matching will contribute to promoting the image of various destinations to international friends.

A wide range of activities will be held on the occasion, including a tourism fair, tourism promotion programmes in the localities, a talkshow introducing technology 4.0 in tourism, and a farm trip for the leaders of enterprises to discover new destinations in the country.

The highlight of this year’s event will be a seminar connecting CEOs of businesses operating inoutbound tourism in Vietnam with foreign partners from Japan, the Republic of Korea, Chinese Taipei, Thailand, Australia, the US and Turkey.

Up to now, around 8-10 foreign partners have returned to Vietnam, which shows their interest in the outbound tourism market of Vietnam as the number of Vietnamese tourists travelling abroad has increased 9.5% per year.

Resolutely forcing shipping firms to bring ineligible scrap imports out of Vietnam

The General Department of Vietnam Customs (GDVC) is continuing to direct customs departments of cities and provinces to resolutely force shipping companies to transport the cargo backlogs causing environmental pollution out of Vietnamese territories.

By the end of June 2019, more than 500 containers, declared on manifest as ineligible scrap imports, have been shipped out of the Vietnamese territories, including 289 containers of scrap plastics, 106 containers of scrap paper, 98 containers of scrap metal and 10 containers of other scrap materials.

As of June 28, over 12,270 scrap containers were being stored at seaports nationwide, with 14 held for 30-90 days and 4,808 present for below 30 days.

For shipments of scrap currently stored at seaports, the importing firms are still continuing to receive goods and perform customs import formalities in accordance with the law.

According to the GDVC, based on the provisions of Clause 6, Article 58 of the Law on Customs regulating the handling of goods in stock and the Prime Minister’s directions in Directive No. 27/CT-TTg dated September 17, 2018, the agency is continuing to direct customs departments of provinces and cities to force shipping lines to move the cargo backlogs causing environmental pollution out of Vietnam’s territories.

In an effort to effectively control scrap imports, the GDVC has issued a dispatch requesting units to strictly implement Directive No. 27/CT-TTg and the Ministry of Finance’s (MOF) guiding documents. In its Dispatch No. 2188/TCHQ-GSQL dated April 16, 2019, the GDVC directed customs departments of cities and provinces to strengthen the management and prevention of the imports of waste and scrap which is not eligible for imports solutions, while instructing the manifest declaration and supplementation on the names of consignees concerning scrap imports.

The GDVC has submitted for the MOF’s approval of the contents of a draft decision of the PM on the coordination regulations in controlling scrap imports between the MOF, the Ministry of Natural Resources and Environment, the Ministry of Transport, the Ministry of Public Security, the Ministry of Defence and the People’s Committees of cities and provinces with seaports, border gates and land border.

Work to be commenced on 14 important transport projects

Fourteen important and urgent transport projects that were approved by the National Assembly in 2018 will be commenced from September this year.

The Ministry of Transport said that the 14 projects have a total investment capital of VND15 trillion (US$645 million) sourced from the State budget.

Of the total projects, there are four railway projects with a total investment capital of VND7 trillion (US$301 million) and 10 road projects with a total investment of VND8 trillion (US$344 million).

The project to upgrade a road linking national highway 4C with national highway 4D in the Northern mountainous region will be implemented first, during September.

The project on upgrading the road surface of the Quan Lo – Phung Hiep route running through the four provinces of Hau Giang, Soc Trang, Bac Lieu, and Ca Mau is scheduled to begin in the fourth quarter of 2019.

Minister of Transport Nguyen Van The asked investors and project management units to quickly complete procedures and accelerate following steps to complete the 10 road projects in 2020. Meanwhile, four railway projects are expected to be completed before June 30, 2021.

National interests at stake

More than ever, the huge threat is looming large over the country’s foreign trade. The rising falsification of certificates of origin (CO), the inefficient oversight by relevant State agencies, and the blind greed of many local enterprises combined are placing the economy in huge danger. The vision is scary, further so in the face of the U.S.-China trade war.

These days have seen top leaders and competent State agencies grapple with new worries that are surfacing in ripple waves. As covered in local media, the Government and relevant ministries are calling for greater efforts to deal with the problem with fake COs that has put Vietnam’s commodities on the watch lists of many major trade partners in the world.

The problem has turned striking of late when the U.S. Department of Commerce announced a decision to temporarily impose a crippling tariff of 456% on two steel products from Vietnam, having ascertained that such items originated in Taiwan and South Korea. Meanwhile, other major trade partners, including the European Union, have also cast doubt on the origins of commodities imported from Vietnam.

The overall picture of fake COs is far more fearsome, though.

Many types of commodities imported into Vietnam have been found to be pre-tagged with the “Made-in-Vietnam” label, meant to cheat consumers, says Nguoi Lao Dong. Some examples include a shipment of 1,600 pairs of shoes imported from China by Hieu Nghia Import-Export Company which were carrying the “Made-in-Vietnam” label, or a shipment of loudspeakers also imported from China by Tran Vuong Company, also attached with the “Made-in-Vietnam” label, says the paper, citing a senior official at a conference last month by the General Department of Vietnam Customs.

Tran Huu Linh, head of the General Department of Market Surveillance, recalled at the conference how authorities had intercepted several carriages of a train transporting building materials, with numerous items labeled as Vietnamese-made products though they are sourced from China, according to Tien Phong.

In a recent announcement, customs authorities said Tan Thanh Customs Office in Lang Son Province in collaboration with other enforcement forces had stormed into a warehouse and found 280 batches of household utensils tagged as Made-in-Thailand products though such items originated in China, Tuoi Tre reports.

Copycats are not only meant to cheat local consumers, but also to gain easy access to other international markets, as Vietnam has signed numerous free trade agreements (FTA) with other countries. Linh related in Tien Phong how U.S. authorities have lately uncovered batches of fish sauce, tea and coffee disguised as Vietnamese items.

Nguyen Van Can, head of the General Department of Vietnam Customs, stresses on the news site Vietnamnet.vn that authorities have found numerous cases of imported products labeled as Vietnam-made items to enjoy lower tariffs when shipped to other markets like the U.S. and the EU.

“Enterprises declared that products are locally manufactured. However, we found out that they did not manufacture such items, but imported all from other countries,” Can is quoted by the news site.

Even worse, according to Can, certain grassroots authorities have colluded with traders to falsify documents. “Traders said they purchased products from farms or farmers, with invoices certified by commune authorities. Our checks showed such declarations were false,” he furthers on Vietnamnet.vn.

Meanwhile, the suspicion among major markets over Vietnam’s commodities is growing.

Last year, foreign countries sent up to 110 letters to the Vietnam Chamber of Commerce and Industry asking it to verify the authenticity of 187 COs issued for local traders, with the EU market accounting for 90%, according to Bao Cong Thuong. Foreign buyers doubted that such COs issued by the chamber may have been falsified.

Abnormal developments in Vietnam’s exports are also cause for suspicion.

Whenever Chinese products are slapped high tariffs, exports of such commodities from Vietnam tend to rise, according to the Vietnam News Agency. For example, the European Commission early this year imposed anti-dumping and anti-subsidy tariffs on China-made electric bicycles shipped to the block. Instantly, exports of electric bicycles from Vietnam to the EU have risen sharply. Similarly, after the U.S. late last year slapped anti-dumping tariffs on aluminum products from China, shipments of aluminum from China to Vietnam have also surged, says the news agency.

As such, the number of trade defense cases initiated by foreign markets against Vietnamese commodities is on the rise, which may disrupt exports of various types of commodities.

Nestor Sherby, an expert with the Global Alliance for Trade Facilitation, warns in Bao Cong Thuong that up to 90% of the fake COs being dealt with by this organization relates to China-made products but disguised as Thailand- or Vietnam-made items which will then find the path wider into the U.S. market.

State agencies have also sought to enhance their oversight, especially over those commodities whose exports rose staggeringly.

The Ministry of Industry and Trade has named eight groups of commodities wherein the falsification of COs may have been more rampant, given the steep rise in exports, according to Dau Tu. These commodities span several major industries like wood processing, apparel, footwear, aluminum, computer, iron and steel, plastics and electric bicycles.

While Vietnam’s overall exports have inched up mildly, shipments of 24 groups of commodities to the U.S. recorded year-on-year growth of over 34.5% in the first quarter this year, Tien Phong reports, citing the Ministry of Industry and Trade.

In Bao Cong Thuong, Nestor Sherby of the Global Alliance for Trade Facilitation calls for Vietnamese traders to improve transparency in the traceability of their products to avoid sanctions. If Vietnamese goods are blacklisted stateside, such items will also be shunned in other markets, he notes.

Faced with the danger to local exports, the Prime Minister has recently issued a scheme to tighten control over COs. The scheme sets out measures to closely supervise the trade flow between Vietnam and other major trade partners to have early warnings on any abnormal surge in shipments which may result in trade defense or anti-dumping measures against Vietnamese goods, according to Vneconomy.

Minister of Industry and Trade Tran Tuan Anh has recently urged the establishment of a special task force to combine with other ministries and agencies to improve the efficiency of investigations into and oversight of trade fraud, according to Tuoi Tre. The ministry also calls on business associations and enterprises to report on any suspicious cases of trade fraud, since such cases will expose Vietnam to sanctions and other punitive measures in other countries against Vietnam.

Colluding with foreign firms to falsify CO dossiers may give certain enterprises quick bucks, but it will wreak havoc on local industries in the long term. As such collusion can be likened to “penny wise but pound foolish,” the Ministry of Industry and Trade has urged local businesses to be aware that national interests could be infringed upon if the collusion between local firms and foreign fraudsters are not stonewalled.

CBU automobile imports hit record high

The country imported up to 75,430 completely-built-up (CBU) cars of all types worth US$1.7 billion in the first half of the year, up 511.5% in volume and 411.2% in value year-on-year, the record highs for CBU automobile imports over the past few years, the local media reported.

Speaking at a meeting on August 7, Phan Van Chinh, head of the Import and Export Department at the Ministry of Industry and Trade, said the figure for automobile imports was nearly equivalent to that seen in 2018.

Vietnam’s automobile imports averaged 12,570 units per month during the six-month period, equal to all imports in the last five months of 2018.

Chinh attributed the upsurge in CBU car imports to excise tax cuts for certain automobile lines of small engine capacity. Besides this, automobile imports from ASEAN countries enjoy zero-percent tariffs, which has resulted in ASEAN car imports strongly increasing.

Addressing the meeting, a representative of the ministry pointed out that automobile importers and manufacturers have met requirements, especially on vehicle type approval certificates, based on the Government’s Decree 116 on automobile manufacture, assembly, import, maintenance and warranty services, leading to the rise in the automobile imports.

The representative, however, noted that the automobile import spike has hurt local automobile manufacturing and assembly.

The Heavy Industry Department at the ministry proposed adopting support policies as soon as possible to speed up major projects involving the manufacture and assembly of automobiles, apart from calling for investment from multinational firms for large-scale projects.

 

Regarding automobile import and export activities in the coming months, Minister of Industry and Trade Tran Tuan Anh told the Import and Export Department to collaborate with the Trade Remedies Authority to review and list groups of products at risk of getting involved in trade disputes, to work out suitable solutions.

Capital disbursement for expressway project not finalized

Vietnam Joint Stock Commercial Bank of Industry and Trade (VietinBank) has pledged funding for the Trung Luong-My Thuan expressway project, but issues over when the lending contract will be inked and capital disbursement have yet to be resolved.

The major expressway project in the Mekong Delta region has had its investment requirements raised to VND12.668 trillion, including equity from the investor, budget allocation and credit.

However, the investor has typically found it difficult to access bank loans. The government of Tien Giang Province, BOT Trung Luong-My Thuan Joint Stock Company (JSC) and VietinBank met on August 7 to address the problem.

Tran Van Tan, a member of VietinBank’s board of directors, told the assembled leaders and officials that the bank had earlier invited banks to co-fund the project and had signed a credit contract with BOT Trung Luong-My Thuan last year. He added that VietinBank had pledged roughly half of the project’s total investment.

As reported, one of the firms in the project’s consortium, Yen Khanh Company, later became entangled in legal proceedings, so the investor had to be replaced.

The financial plan of the project has been adjusted, increasing the investment amount from VND9.668 trillion to VND12.668 trillion, and issues concerning State assistance have been resolved.

As a result, credit institutions have agreed to reassess the project, Tan said.

The funding plan of the lender based on the contract signed in 2018 is slightly different from the plan of the investor.

In particular, the planned funding included VND3.8 trillion from the investor’s equity, at 30% of the investment amount. The remaining 70%, amounting to VND8.868 trillion, came from bank loans and State spending, or 17.2% (VND2.186 trillion) and over 52% (VND6.682 trillion), respectively.

According to Tan, for the project to be effective, equity and other capital sources of the investor could not make up less than 30%, which is not a new rule as it was already introduced in the 2018 contract.

Due to the investment increase, Tan said the BOT Trung Luong-My Thuan JSC should ensure the provision of the 30% proportion committed by VietinBank at a meeting on July 30 and approved by the prime minister. The higher the investor’s equity is, the higher the project’s effectiveness will be, he added.

Tan also proposed that the lending term be shorter than the project’s capital recovery duration of 14 years, eight months and 12 days. Besides this, debt repayments should prioritize the needs of the lender.

Dao Minh Tu, deputy governor of the central bank, noted that the central bank will support the funding of the project if the commercial bank is short of capital.

Tu requested the lender and BOT Trung Luong-My Thuan JSC to work together in a way that eliminates the 30% requirement as a lending prerequisite.

Phase one of the Trung Luong-My Thuan expressway is funded under the build-operate-transfer format. The 51-kilometer expressway will be 17 meters wide in the first phase and 32.25 meters wide in the second phase.

Appropriate compensation to be provided for affected residents in hi-tech park: official

The HCMC government is striving to adopt the best compensation policy for affected residents at the 913-hectare Saigon Hi-Tech Park project in District 9, stated the city’s vice chairman, Vo Van Hoan, at a press briefing on Tuesday.

Hoan noted that the municipal leaders are committed to accelerating the execution of the policy for affected households and removing obstacles arising during the process.

He advised the households to accept plots of land for resettlement rather than money.

Monetary compensation does not exceed the ceiling of the set compensation price level. By contrast, land plots, where the value is calculated based on the resettlement prices, are more beneficial since their market value is much higher, he said.

He added that the prices of land plots in the district currently stay high.

If the affected households opt for the second option, the city government has pledged to hand over land prior to the end of this year. The households will be able to build houses right after the upcoming Lunar New Year, or Tet holiday.

The plots of land for compensation are located alongside Le Van Viet Street, in the Khang Dien Residential Area in Phuoc Long B Ward and in the Long Binh-Long Thanh My Resettlement Area.

To make room for the high-tech park project, a total of 3,113 households were forced to relocate. Land handover is almost complete as only 35 households have yet to relinquish their land plots with a combined area of some six hectares.

Put into operation in 2002, the Saigon Hi-Tech Park has become a popular investment destination, covering a wide variety of fields, such as microelectronics, information technology, telecommunications, precision engineering, automation, biotechnology and nanotechnology.

The park has so far attracted 154 foreign-invested projects worth nearly US$7.3 billion, 80 of which are already in operation.

Investors eye land when buying SOE shares: expert

Many strategic investors have bought into State-owned enterprises (SOEs) because of land which those SOEs have, instead of their brands or business sectors, said economic expert Ngo Tri Long.

This is why it is essential to thoroughly review strategic investors taking part in equitization or divestment activities at SOEs, Long said.

By checking investors’ development histories and business models, government agencies can determine whether they will work with SOEs over the long term and protect domestic brands, the former director of the Ministry of Finance's Price Market Research Institute was quoted by Nguoi Lao Dong newspaper as saying at a forum on the restructuring of SOEs, held on August 8.

One of the top goals of SOE equitization is to ensure as many benefits as possible for the Government and not to cause losses for the State budget, and the participation of foreign investors in the equitization of SOEs will bring advantages for the State, not only drawbacks, as many people fear, he said.

Many have said that SOEs will likely lose their brands when they undergo equitization with foreign investors, he added.

He cited Vietnam Feature Film Studio as an example of a typical failure in selecting a local investor for equitization, noting that many shortcomings were reported in this equitization process when the 60-year-old studio was handed over to Waterway Transport Joint Stock Corporation, which had no experience in movie production.

Expanding international market, Vietjet reports significant growth in first half

Despite the aviation market volatility, local new age carrier Vietjet Air recorded considerable growth in the first half of the year, largely owing to the fast expansion of the carrier's international market.

In the first six months of 2019, Vietjet generated over VND20.1 trillion (US$864.6 million) in air transport revenue and nearly VND1.6 trillion in air transport profit before tax, up 22% and 16% year-on-year, respectively.

Consolidated results included aircraft trading, consolidated revenue reached VND26,301 billion, up 24% and profit before tax was VND2,398 billion, up 11% year on year.

The airline operated more than 68,800 flights, transporting 13.5 million passengers. Vietjet maintained its leading position in the domestic market with a market share of 44% in the period.

In the six-month period, Vietjet continued expanding its flight network. Besides three routes from the Mekong Delta city of Can Tho, the air carrier launched nine international routes to destinations in Japan, Hong Kong, Indonesia and China.

The airline’s revenue-passenger-kilometers (RPK) stood at 16.3 billion, up 22% year-on-year. In addition, its load factor reached 88%, technical reliability 99.64%, and 81.5% on-time performance.

The international market played an important role in the air carrier’s growth thanks to ancillary revenue and low fuel cost. In the first half of the year, the number of passengers on international routes grew 35% to some four million.

The proportion of revenue from the airline’s international flights surpassed that of domestic flights, reaching 54% of the total air transport revenue.

In the first six months, Vietjet’s equity reached over VND15.6 trillion, surging 32% over the same period last year. It decided to pay a 2018 dividend for shareholders at 55%, higher than the planned 50% approved at the shareholder meeting last year.

In the first half of 2019, Vietjet also introduced a new version of Vietjet Air apps which integrated Vietjet SkyClub membership program with many incentives.

The carrier has plans to launch its ecommerce platform and e-wallet services in the next two years and enhance the cooperation with local banks and hotels.

In addition, Vietjet Aviation Academy located at Saigon Hi-Tech Park in HCMC is a modern training facility with equipment and programs meeting standards of the European Union Aviation Safety Agency (EASA). The academy organized 250 courses for more than 5,600 pilots, flight attendants, engineers and aviation staff in the first six months.

The cockpit simulator at Vietjet Aviation Academy was put into operation in November last year and has been used by over 2,800 trainers and trainees for some 3,200 hours. Vietjet’s flight simulator complex has obtained the ATO level 2 certificate from the EASA.

Especially, Vietjet is one of the few foreign enterprises and the only Vietnamese firm to become a member of the Japan Business Federation, which consists of leading Japanese and global firms.

With positive business results, regional and worldwide flight network expansion plan, together with the ability to manage costs and operation quality, Vietjet expected to maintain its leading position in terms of the domestic air passenger number and expansion of international routes.

Vietjet also has plans to invest more in infrastructure, technical services, ground services and aviation staff training to improve the effectiveness of its air services.

Low-cost air transport has been a trend and is considered the future of the global aviation market as the growth rate of low-cost air carriers have exceeded that of traditional ones.Vietnam is not an exception as Vietjet and Jetstar Pacific have accounted for nearly 58% of the local market.

S.Korean firms urged to invest in hi-tech sector

HCMC has called on South Korean firms to invest in various fields, especially hi-tech transfers, in Vietnam as a way of executing a national program on the effective use of energy, heard attendees at a workshop on August 7.

The city has attracted 30% of the country’s total foreign-invested projects. South Korea was the third biggest foreign investor in the city, with 1,700 projects worth US$5.1 billion in total.

Speaking at the workshop, a representative of the HCMC Investment and Trade Promotion Center (ITPC) introduced to South Korean businesses several technology and hi-tech projects in need of investment.

Apart from this, some projects in the infrastructure, traffic infrastructure, education and tourism sectors were also presented for investment by the city.

Tran Viet Ha, head of the Investment Management Department of the HCMC Export Processing and Industrial Zones Authority, said that the city is home to 17 operational processing zones and industrial parks that cover a combined area of 4,129 hectares of land. The figures will be raised to 20 zones and parks covering some 5,240 hectares by 2020.

The existing zones and parks have already attracted over 1,600 projects, with total registered capital of US$10.6 billion, of which 61 are being funded by South Korean investors.

Tan Thuan Processing Zone and Hiep Phuoc, Tan Phu Trung and Dong Nam Industrial Parks, among others, are available for projects developed by foreign investors, especially those from the South Korean province of Gyeonggi, Ha said.

Responding to South Korean firms’ concerns over manpower with experience in the areas of technology, input materials and business license applications, ITPC Deputy Director Cao Thi Phi Van pointed out that the city has a population of 13 million people, turning out 150,000 graduates a year. Some companies, including Intel and Samsung, had previously cooperated with the city to train human resources, so manpower is not a major problem.

As for materials, Vietnam is currently collaborating with multiple enterprises from the United States and European countries to manufacture various products specifically for certain projects, Van said, adding that apart from materials available in the country, other materials can be imported to meet the standards of these projects.

ITPC will help explain license applications to South Korean firms and will help them complete any associated procedures, she said.

Jeon Kyung Pyo, chairman of the Federation of Associations for the Gyeonggi Small and Medium-Sized Enterprises, said that Vietnam boasts great potential and many business opportunities for investors, adding that he expected authorities to create more favorable conditions for South Korean firms to do business in HCMC.

“The visit of the delegation of South Korean firms was aimed at exploring processing zones and industrial parks in the city and seeking energy-saving, hi-tech and ecofriendly projects for investment,” Pyo remarked.

Hotel-booking site RedDoorz expands business to Vietnam

Singaporean hotel-booking site operator RedDoorz has made business expansion in the local market after four years of operating in Singapore, Indonesia and the Philippines.

The budget hotel-booking platform is connected with 1,200 hotels in the four countries and the number of customers is on the rise as the site offers reasonable services for thrifty independent travelers.

According to RedDoorz, Vietnam shows great promise for development. Some 85 million local tourists spend almost 23% of their travel budget on accommodations and 18 million foreign tourists spend 33% of their budget. In addition, the local hotel market is forecast to grow by 13.2% this year, with total revenues reaching over US$500 million.

Rishabh Singhi, chief operating officer at RedDoorz, noted that the firm has connected with over 100 hotels in Vietnam’s six cities of HCMC, Hanoi, Danang, Nha Trang, Vung Tau and Dalat and is set to increase the figure even further by the end of the year.

Property owners who partner with RedDoorz will receive some 80% of the revenue channelled through the hotel-booking site. Meanwhile, RedDoorz has committed to ensuring a minimum revenue amount for its partners. RedDoorz will fund hotel partners that fail to reach the pledged minimum turnover.

Rooms booked on the RedDoorz platform in Vietnam will be priced from VND249,000 each per night. Customers can pay with e-wallets including Payoo, MoMo and Zalopay when they make a booking.

Solo travel conference slated for next month in HCMC

A conference on solo travel is scheduled to take place in HCMC on September 6, aiming to give participants insights into this travel trend and methods to penetrate the potentially emerging market.

The Tourism Promotion Center, under the HCMC Department of Tourism, and local tourism consultancy Outbox Consulting are working together to organize the conference, called “Solo Traveler Day,” which will include a seminar, a workshop and a talk show running concurrently with the 15th International Travel Expo HCMC.

HCMC is on the list of the top 10 favorite destinations of the solo travel community, according to a 2018 survey by online accommodation reservations provider Agoda and UK-based market research company YouGov.

The emergence of tourism platforms that specialize in providing services for the solo travel market, such as Klook and KKday, in Vietnam over the past few years has shown obvious signs of the growth of solo travel.

Klook, a travel activities and services booking platform, with a total of investment up to US$300 million, revealed that the number of solo travelers on its platform in Asia alone rose from 31% to 38% in 2018.

With a better understanding of local destinations, Vietnamese enterprises will have many advantages in optimizing products that meet tourist personalization and localization demand, which are among the most important requirements of the solo tourist market.

However, to be able to exploit the market with profoundly specific requirements, Vietnamese enterprises will also have to face many challenges due to the heavy competition from international enterprises.

One major challenge is the ability of domestic enterprises, who are accustomed to traditional products with little to no change, to tailor different products for various customers.

Subsequently, communication and brand management on online platforms with customers who seem to be extremely critical when assessing suppliers for their trips will also be a major challenge for local companies.

“Solo Traveler Day” will be held at the Saigon Exhibition and Convention Center in District 7. It is expected to bring together more than 500 guests from companies associated with the tourism industry to provide networking opportunities, exchange ideas and discuss the opportunities and challenges involved in the solo travel trend.

 
 
 
 
 
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