BUSINESS NEWS 19/5

Regulatory reforms hoped to push up road sector

BUSINESS NEWS 19/5

Road projects could move at a faster pace if the legal environment and public private partnership - related regulations are improved towards increasing guarantees for investors, an overseas research entity has predicted.

Some expressway projects are likely to face issues over land acquisition, which may delay project timelines or result in cost inflation, Fitch Solutions says. (Illustrative image)

Fitch Solutions, a macro research unit of Fitch Group, noted in a newly released outlook for Vietnam’s road sector that the country’s road network will continue to expand over the next decade. As for 2019, the road and bridge sector is projected to grow by 7.2 per cent in real terms whilst it could reach an annual average growth of 6.7 per cent during the 2020 - 28 period, driven by a large quantity of road projects in the pipeline.

The research unit quoted the Key Projects Database as saying there are currently a total of 137 road projects under the planning or construction phase, accounting for 60 per cent of all planned projects.

It takes a positive stance that most of these projects will be deployed progressively over the next few years as a surge in demand for road infrastructure is coupled with the nation’s sustained and robust economic growth which is forecast to average 6.5 per cent annually until 2028.

Increasing business activities throughout the country helped freights transported via roads to increase rapidly from 36,179mn ton-km in 2010 to 63,803mn ton-km in 2017. Similar observations have also been made with regard to the number of passengers on road.

Fitch Solutions believes that these positive trends will continue, thus escalating the need for continued investment in road infrastructure. Although the country has sketched out plans to expand the mainline rail network to cater to increased inter-city traffic, rail projects are often more costly and complex to implement, and also suffer from longer timelines. The proposed Hanoi-Ho Chi Minh City high speed railway project for example, if implemented, has a targeted completion date of 2040.

These factors point to a greater demand in road transportation in the short term, which underpins the view that the country’s road network will continue to expand over the next decade.

The growth of the road sector will mainly be backed by the construction of expressways. The Government plans to expand the current network by more than five times to 7,000 km by 2030, an upward revision from the 6,400 km target announced in 2016.

The scheme will cover the construction of new expressways linking the northern and southern regions, several ring routes that will circle existing urban centers to enhance connectivity with suburban areas, and the expansion of existing expressways by extending routes and increasing the number of lanes.

Some expressway projects are likely to face issues over land acquisition, which may delay project timelines or result in cost inflation. Meanwhile, as most expressway projects are likely procured via public private partnership (PPP), the pace of expanding the nation’s expressway network will depend on the level of private interest. It will pick up if the PPP framework along with legal and financial institutions is improved.

The inclusion of sovereign guarantees and the implementation of a robust legal framework will likely increase interest in PPPs and provide tailwinds to the road sector’s growth. Current PPP regulations do not have minimum return guarantees by the Government, which means that the burden of project-related financial risk leans towards private investors.

Given this, low investor interest in PPP projects often leads to longer implementation times, and in some cases, the cancellation of PPPs. Such scenario is exemplified by the Dau Giay - Phan Thiet expressway project in which many investors expressed big interest before withdrawing at a later date due to financial uncertainties.

Legal barriers have also deterred potential investors from the road sector, Fitch Solutions said, claiming the lack of a strong legal framework as a main cause of concerns over site clearance, price fixing, and concessions.

This is illustrated by the legal environment sub-component of the Fitch Solutions’s Infrastructure Risk-Reward Index, which sees Vietnam rank poorly amongst regional peers with a score of 31.1, much lower the regional average (51.6) and only above frontier markets such as Pakistan, Myanmar, and Bangladesh.

Out of 87 road projects under the pre-construction phase, 61 are earmarked as PPPs. The progress of these projects will pick up once the legal environment in the country improves, and proper reforms to current PPP regulations are made to include guarantees on return.

The more balanced risk profile of these projects will make them a more attractive investment proposition for private investors, the research unit assumes.

Sharing mechanism needed for fintech development

BUSINESS NEWS 19/5
At the seminar

A “regulatory sandbox” and a sharing mechanism are needed for the development of Viet Nam’s fintech industry, experts said at a seminar on Thursday.

According to Nguyen Thanh Binh, acting discipline lead at the economics and finance department of RMIT University, the existing legal framework is unclear and does not cover the development and penetration of new technological products in Viet Nam.

The Government needed to develop a regulatory sandbox – a space where new financial technology products are developed and tested – to reassure customers, Binh told reporters.

A regulatory sandbox would help Vietnamese fintech companies and start-up businesses hasten their development, he said.

The fintech sector has a lot of potential to change the country's banking-finance industry, according to Binh.

Fintech companies will introduce new technological finance instruments that help customers secure loans, pay debts and carry out transactions.

With a population of nearly 100 million, most of whom are young and technologically savvy, Viet Nam is a worthwhile market for fintech companies.

Another problem for the Vietnamese fintech sector was the lack of co-operation between commercial banks, Nguyen The Hien, sales director at the HCM City-based telecommunications firm VHT, told Viet Nam News.

The problem among banks was that they do not share the customer data with application developers, he said.

“Customers are not allowed to connect their different bank accounts to one application, so they have to use different applications for different bank accounts,” Hien said.

As telecommunication has become more important to connect banks and customers, commercial banks should work together to allow customers use different bank accounts in the same application, he said.

“But that would raise concerns about data security and there needs to be stricter rules for this issue,” he warned.

In addition, Vietnamese fintech firms should be allowed to take part in a sandbox where they can develop and test their ideas, he said.

“As technology changes rapidly, the sandbox will help local tech firms operate more easily and the Government improve its control over new technologies,” said Hien.

“Any tech firms that are incapable of producing and testing their own technologies will be removed from the sandbox, so it would improve the Government’s supervision over the Vietnamese technology industry,” Hien said.

The seminar was organised by the Israeli Export Institute and the Israeli Ministry of Economy and Industry’s Foreign Trade Administration.

Vietnamese firms strive to increase apparel exports to Canada

Vietnamese textile and garment exports to Trans-Pacific Partnership (CPTPP) markets have failed to match the country's stature as the world’s second largest apparel exporter.

General Director of the Viet Nam National Textile and Garment Group (Vinatex) Le Tien Truong delivered this statement during a workshop held in the Canadian city of Montreal on Thursday.

The event was organised as part of a trip by officials of Vinatex and its five member companies to Canada to promote their textile and garment exports to the nation. It also attracted representatives of 35 Canadian enterprises.

According to Truong, total textile-garment demand in member nations of the CPTPP, which gathered 11 members with a combined population of 500 million, was estimated at US$83 billion annually. In 2018, Viet Nam’s textile-garment exports to CPTPP markets were $5.3 billion, making up 6.3 per cent of the market.

Canada’s demand for textile-garment products was worth some $13-14 billion each year, only 5 per cent of which was provided by Viet Nam, Truong said, adding that there was room for Vietnamese exporters to accelerate their exports to Canada, especially as both countries had ratified the CPTPP.

He said all businesses had the opportunity to enjoy a better tariff policy if they satisfy rules of origin. Therefore, Vinatex has organised trade promotion activities in 2018 and 2019 to meet with Canadian importers.

At the workshop, David Ostroff, President of David O International, agreed there remained huge co-operation potential for the two countries thanks to Viet Nam's competitive prices and its organised and effective businesses.

Notably, Canada could access the Vietnamese market with a tariff rate of zero per cent, especially important with the Canadian dollar weak internationally. This was the right time for Viet Nam to enter the Canadian market, he said.

The CPTPP, which took effect in Viet Nam on January 14, was expected to boost exports of Vietnamese textile and garment products to Canada as 42.9 per cent of the shipments of these products to the market would enjoy an import tariff of zero per cent in the first year the deal comes into force. 

Fund for development of SMEs to be established

BUSINESS NEWS 19/5

The Fund for Development of Small and Medium-sized Enterprises (SMEs) will be established and start operation in July, according to a recently-issued decree.

The fund has minimum charter capital of VND2 trillion from the State budget set aside for development investment.

Tasks of the fund include lending and funding for SMEs as well as support for promotion of ability in SMEs.

Interest rate of the fund’s loan is equal to 80 per cent of the lowest rate of commercial loans.

Each project or plan of production and business can borrow up to 80 per cent of the total investment. The total amount of loan one SME will be able to acquire must not exceed 15 per cent of the fund’s actual charter capital.

The loan terms have a maximum length of seven years.

The fund's operating capital is also mobilised from other sources.

The fund will operate as a one-member limited liability company with 100 per cent of charter capital owned by the State, with the Ministry of Planning and Investment as the representative of State capital at the fund. — VNS

Vietnamese firms urged to embrace digital transformation

Vietnamese firms should embrace digital transformation to stay afloat in the Industry 4.0 era, delegates said at a seminar in HCM City on Friday.

Digital transformation is the application of digital technologies to change business models and create new business opportunities, and to increase revenue and value.

It can also change operation and leadership methods, working processes and corporate culture.

Hồ Tú Bảo, scientific director at the John von Neumann Institute of the Việt Nam National University of HCM City, said that firms that do not transform their business models to suit the digital era would lag behind.

In contrast, those taking initial steps to capitalise on the trend would gain a competitive advantage.

“Digital transformation is inevitable. When we cannot avoid it, it is important to understand it and map out suitable business plans,” he added.

Digital transformation was the core of the Fourth Industrial Revolution, he said.

Phạm Huy Hoàng, director of VNPT Information Technology Company’s VNPT-IT region 2, said his company had transformed its digital infrastructure and services and was now providing digital solutions for large corporations and enterprises in Việt Nam.

It is also enhancing cooperation with domestic and foreign partners to promote digital technology application.

Phan Thành Nhơn, director of the Business Studies and Assistance Centre, said that enterprises should not wait until they develop more strongly to apply digital technology, particularly in the context of the Fourth Industrial Revolution globally and a highly competitive business environment.

Digital transformation is costly but businesses can choose technologies that are suited to their demands and budgets and build their own database.

“Enterprises should map out investment roadmaps for their digital technology depending on their situation and scale, because if they do not do so, they will find it hard to grow,” he said.

Digital transformation brings many benefits such as cutting operating costs; reaching more customers in a shorter time; and making faster, more accurate decisions thanks to timely reporting systems, thereby enhancing the operational efficiency and competitiveness of organisations and businesses, according to delegates.

Bảo said that digital transformation enabled businesses to change the way of interacting with customers, creates new value for customers, and helps businesses exploit customer networks.

Databases are an intangible asset of businesses, and can be used as a basis to create breakthrough innovations that bring new experiences to customers.

Bảo also described six steps in digital transformation: awareness and changing mindset about digital transformation; defining the roadmap; building digital capacity (human resources and infrastructure); identifying key technology; changing operation models; and adjusting the organisation from small to large.

Nhơn said the seminar was among a number of activities being held to help local businesses raise awareness about digital transformation.

Korean Dentium debuts factory in Đà Nẵng

The Korean Dentium company, a high-quality implant producer, has introduced its first ICT Vina Factory in the central city’s Hi-Tech Park after four months of construction.

The deputy head of the Đà Nẵng Hi-Tech Park managing board, Phạm Trường Sơn, said the project, which was granted an investment licence last year, was built on 2ha with total investment of US$20 million.

He said the factory, which was inaugurated last week, was designed for total capacity of 11.7 million implant products, CT scanners, and computer aided design (CAD) and computer aided manufacture (CAM) scanners used in healthcare services.

It is the first hi-tech equipment offered by a Korean investor at the park.

According to the Đà Nẵng Investment and Planning Department, the city has attracted a total of 679 foreign direct investment projects worth $2.9 billion and 322 domestic projects worth $4.2 billion since early this year.

The 1,100ha Hi-Tech Park, located near Liên Chiểu Port and logistics centre, the North-South Expressway and the railway system as well as hi-tech industrial zones, has 15 investment projects worth $390 million.

It was designed as a hub for green and hi-tech investors from Japan, Thailand, the Republic of Korea, Singapore and the US.

KOICA to double ODA for six ASEAN countries

The Korea International Cooperation Agency (KOICA) is planning to double official development assistance (ODA) for six members of the Association of Southeast Asian Nations (ASEAN) by 2023.

Accordingly, KOICA will increase the combined ODA for Laos, Myanmar, Vietnam, Cambodia, Indonesia, and the Philippines to 180.4 billion won (151 million USD) by 2023 from 87 billion won this year.

This plan is in line with the Republic of Korea (RoK)'s "New Southern Policy". It also matches KOICA's vision for the implementation of its ODA programmes for the countries, which include providing support for education, rural and urban development, information and communications technologies, and transportation.

"KOICA will contribute to achieving the Sustainable Development Goals in ASEAN countries by increasing the scale of ODA in ASEAN countries by 20 percent annually and advancing the integration, effectiveness, and efficiency of ODA through the collaboration with internal and external partners," the agency said in its vision statement.

Workshop views PPP as a long-term boost to agricultural development

Importance should be placed on perfecting mechanisms and policies aimed to enhance links among domestic firms and coordination between stakeholders in fostering public-private partnership (PPP) in Vietnam, said delegates at a workshop held in Hanoi on May 17.

During the event themed “Partnership for Sustainable Agriculture in Vietnam (PSAV) General Meeting and PPP dialogue”, delegates pointed out an array of shortcomings in local agricultural development, including the uniform restructuring of the agriculture sector, underdeveloped processing, low labour productivity, economic inefficiency, and high consumption volatility.

These inadequacies are considered as headwinds that hinder businesses from investing in the development of value chains.

According to the PSAV, Vietnam needs to sketch out a long-term blueprint that adds importance to raising commitments by public and private sectors to their investment in agricultural projects.

Workshop participants reckoned PPP as a long-term approach to attracting additional investment to the agricultural sector.

They suggested that additional focus should be put on increasing agricultural production towards creating value chains and investment in deeply processed products, as well as improving the competitiveness and safety of agro products.

Marion Martinez from the PSAV, who is also CEO of the fertiliser production and trade firm Yara Vietnam, said that focus should be put on building linkages between farmers and businesses in order to jointly create value chains, based on the evaluation of models under the PSAV.

She urged the need to help farmers access quality agricultural inputs at reasonable prices and loans that are geared towards sustainable development.

Le Quoc Doanh, Deputy Minister of Agriculture and Rural Development, pointed out the challenges facing the agricultural sector, including small-scale production and fragmented fields.

As the majority of agricultural exports are raw products, the added value of such items and the income of farmers fall short of expectations. Furthermore, climate change is another threat to agricultural development.

Doanh called for greater attempts into the research and application of new technologies in agricultural production with a hope of heightening the added value of farm produce and seeking for sustainable development.

He also underscored the leading role of enterprises in rearranging agricultural production and building value chains as well.

After nine years of operation in Vietnam, the PSAV has successfully run seven PPP working groups dedicated to developing commodity industries and it has recently set up another group for livestock industry.

Workshop views PPP as a long-term boost to agricultural development

BUSINESS NEWS 19/5

Importance should be placed on perfecting mechanisms and policies aimed to enhance links among domestic firms and coordination between stakeholders in fostering public-private partnership (PPP) in Vietnam, said delegates at a workshop held in Hanoi on May 17.

During the event themed “Partnership for Sustainable Agriculture in Vietnam (PSAV) General Meeting and PPP dialogue”, delegates pointed out an array of shortcomings in local agricultural development, including the uniform restructuring of the agriculture sector, underdeveloped processing, low labour productivity, economic inefficiency, and high consumption volatility.

These inadequacies are considered as headwinds that hinder businesses from investing in the development of value chains.

According to the PSAV, Vietnam needs to sketch out a long-term blueprint that adds importance to raising commitments by public and private sectors to their investment in agricultural projects.

Workshop participants reckoned PPP as a long-term approach to attracting additional investment to the agricultural sector.

They suggested that additional focus should be put on increasing agricultural production towards creating value chains and investment in deeply processed products, as well as improving the competitiveness and safety of agro products.

Marion Martinez from the PSAV, who is also CEO of the fertiliser production and trade firm Yara Vietnam, said that focus should be put on building linkages between farmers and businesses in order to jointly create value chains, based on the evaluation of models under the PSAV.

She urged the need to help farmers access quality agricultural inputs at reasonable prices and loans that are geared towards sustainable development.

Le Quoc Doanh, Deputy Minister of Agriculture and Rural Development, pointed out the challenges facing the agricultural sector, including small-scale production and fragmented fields.

As the majority of agricultural exports are raw products, the added value of such items and the income of farmers fall short of expectations. Furthermore, climate change is another threat to agricultural development.

Doanh called for greater attempts into the research and application of new technologies in agricultural production with a hope of heightening the added value of farm produce and seeking for sustainable development.

He also underscored the leading role of enterprises in rearranging agricultural production and building value chains as well.

 

After nine years of operation in Vietnam, the PSAV has successfully run seven PPP working groups dedicated to developing commodity industries and it has recently set up another group for livestock industry.

Aquatic exports suffer from Chinese yuan depreciation

BUSINESS NEWS 19/5

Aquatic exports to China are facing numerous difficulties in bouncing back and could only reach the highest turnover similar to 2018, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

Aquatic exports to China posted an annual drop of 5 per cent to US$239 million during the first quarter of 2019.

VASEP deemed yuan depreciation as one of the main causes for the slowdown export of aquatic products to the Chinese market.

Vietnam dong has appreciated against the Chinese yuan due to the Asian country’s increasing depreciation in response to the US-China trade war, thus pushing up the price of aquatic exports.

Aside from China’s tight border trade policy, aquatic exports are also faced with increasingly fierce competition from the similar products imported from India and Ecuador into China as these products, particularly shrimp, have the advantage of cheaper prices.

China emerges as a huge potential market for Vietnamese aquatic products, with its annual export turnover reaching more than US$1 billion.

Vietnam’s aquatic exports to China dropped by 5 per cent to US$1.2 billion in 2018 after recording a 50 per cent surge to record US$1.3 billion in the previous year. The downward trend remained during the first quarter of 2019 as the figure continued an annual drop of 5 per cent to US$239 million.

The country now has more than 150 businesses exporting aquatic products to China. Of which, 45 firms are dedicated to providing tra and basa fish categories while 50 specialize in shrimp products.

The sluggish export of aquatic products by many firms is hampering the country’s total export turnover of such items.

The ongoing trade war has made an adverse influence on China’s aquatic product trade, hence causing chaos in supply and demand. An upward trend has persisted for China’s import of cheap Indian shrimp products rather than similar items from Vietnam, thus leading to consecutive plunges in the Southeast Asian country’s shrimp exports since 2018.

Bến Tre expands two-stage industrial shrimp farming

More and more farmers in the Cửu Long (Mekong) Delta province of Bến Tre are breeding brackish water shrimp based on the two-stage industrial farming model since it reduces disease risk and offers higher yields.

White-legged shrimp are raised in two stages in ponds whose beds are covered with plastic sheets and surfaces with anti-sunshine nets. The ponds are also equipped with fans and pumps to generate oxygen for the water.

In the first stage, juvenile shrimp are bred in a smaller pond for about three to four weeks before being transferred to the main pond for intensive breeding in the second stage.

Đặng Văn Bảy of Thạnh Phú District’s Thạnh Hải Commune, who raises white-legged shrimp, has switched from traditional farming methods to the two-stage industrial farming model since 2015.

His output has quadrupled, he said.

Farmers adopting the model build a 1,500 sq.m main pond, a smaller one for the fry, a pond for filtering wastewater, and a covered anaerobic pond to generate biogas from solid waste generated from shrimp breeding.

This model treats waste thoroughly, protecting the environment and mitigating disease outbreaks.

Nguyễn Hoàng Nhũ, who has a 5ha shrimp farm in Ba Tri District’s Bảo Thạnh Commune, said the breeding of juveniles in the smaller pond reduces disease risks as their immunity is weak at this stage.

The model requires a large investment, and he himself had recently spent VNĐ1.7 billion (US$727,800) on a new 1.7ha farm, he said.

The province has more than 620ha under this model, twice the area a year ago, according to the province’s Fishery Sub-department.

Shrimp breeders who adopt the model get a yield of 70 – 80 tonnes per hectare per crop and an income of VNĐ700-800 million ($29,950-34,220), it said.

Shrimp farming is one of the province’s key economic sectors, and farmers raise shrimp using various models.

The province is reviewing and expanding its effective shrimp farming models, especially the two-stage industrial farming model, according to its People’s Committee.

Nguyễn Hữu Lập, vice chairman of the People’s Committee, said there are plans to expand the shrimp area under the two-stage industrial farming model to 1,200ha next year.

The province is encouraging farmers to breed shrimp using clean and organic models, he said.

Farmers mostly raise black tiger shrimp and white-legged shrimp.

In the first quarter they farmed black tiger shrimp on nearly 22,000ha and white-legged shrimp on 1,500ha, the province Department of Agriculture and Rural Development said.

The province plans that 10 per cent of its intensive shrimp farming areas will adopt good agricultural practice (GAP) standards next year.

It has many policies to support shrimp farming, investment in infrastructure, and development and adoption of advanced farming techniques.

Petrol prices drop for the first time since March

BUSINESS NEWS 19/5

Petrol retail prices were reduced at 3pm on Friday, the ministries of industry and trade and finance jointly announced.

The prices of RON 95-III fell by VNĐ592 per litre to VNĐ21,599 (US$0.92) and E5 RON 92 by VNĐ200 to VNĐ20,488.

Diesel is VNĐ81 cheaper at VNĐ17,614 and kerosene, VNĐ203 lower at VNĐ16,422.

The ministries also decided to reduce the use of subsidies from the petrol price stabilisation fund as the balance at petrol firms was negative.

Subsidies for E5 RON 92 was reduced by VNĐ457 and that for RON 95 zero per litre, respectively. For diesel, kerosene and mazut, the subsidies remained unchanged.

According to the ministries, in the fortnight before May 17 global prices fell.

The price of RON 92, which is used to produce biofuel E5, averaged $75.58 per barrel while RON 95 was at $77.39, down $5.86 and $4.89 respectively.

This was the first retail price cut after three consecutive rises totalling VNĐ3,500 per litre. On the last occasion on May 2, the prices of E5 RON 92 and RON 95 increased by nearly VNĐ1,000 per litre.

The Government recently instructed ministries and local administrations to take proactive measures to contain inflation at 3.3-3.9 per cent this year.

It instructed the two ministries to respond appropriately if fuel prices surge and threaten to affect the inflation target.

Shark catfish exports to US, China fall

Exports of Mekong Delta shark catfish to the US and China, two of the biggest buyers of the products, have dropped compared to the figure last year.

According to seafood exporters in the Mekong Delta, shark catfish exports have been erratic, and the demand in big markets such as China and the US has fallen.

Exports to mainland China and Hong Kong in March were worth US$39.5 million, 12.9 per cent lower than last year, while exports to the US saw a 44 per cent drop.

Doãn Tới, general director of the Nam Việt Corporation (which specialises in exporting seafood), told Sài Gòn Giải Phóng (Saigon Liberated) newspaper that shark catfish exports were worth around $1 billion to China and the US last year.

Despite the high figure, both markets can be volatile due to changing policies and tariffs, so more export destinations are preferable to only one or two markets, he said.

Tới said that exporters should focus on the EU as the number of shark catfish exports has risen after a period of low exports.

Around $72 million worth of fish were exported in February and March, 42 per cent higher than last year.

Exports to ASEAN in the first quarter of the year also increased by 18 per cent, while Japan’s imports of the product were also rising, making the country among the top 10 importers this year.

Foreign markets are demanding tougher technical specifications to ensure food safety and quality, such as China restricting cross-border imports of agricultural products and seafood, according to the Agriculture, Forestry and Aquaculture Product Quality Management Department.

In addition, the EU restricts imports from Việt Nam if banned substances are detected in Vietnamese shipments.

Quality standards, improved linkages between farmers and businesses, use of materials for other processed products, and more promotions are all needed, according to experts.

An Giang and Đồng Tháp provinces are two of the Mekong Delta’s leaders in shark catfish farming, processing and exporting.

According to An Giang People’s Committee, its farming areas for fish amount to 1,300-1,400 hectares, with output of 380,000-400,000 tonnes.

The industry targets exports of around $2.4 billion this year.

Vietjet joins 2019 Taipei Tourism Expo, offering ticket promotion

Vietjet is offering 200,000 promotional tickets at zero dong from now until next Monday to mark its participation in the 2019 Taipei Tourism Expo in Taiwan.

The discounted tickets, available only at www.vietjetair.com, are for all routes between Việt Nam and Taiwan: HCM City/Hà Nội – Kaohsiung/ Taipei/ Taichung and HCM City – Tainan.

The travel period is from June 1 to December 31.

At the Vietjet booth at this year’s expo, visitors will have the chance to enjoy exciting performances and a special cosplay parade as part of its summer campaign called “Love Connection – Show Your Summer Version”.

They can also take part in other fun activities and take selfies with the airline’s cabin crew members.

Vietjet operates eight routes connecting Việt Nam and Thailand with Taiwan.

One of the largest tourism events in Taiwan, TTE is expected to attract tens of thousands of visitors and 500 local and international brands promoting tourism, travel and air transport.

Taiwan is one of the top five markets in Asia for Vietnamese tourism. Some 280,000 Taiwanese have travelled so far this year, up 25 per cent year-on-year, figures from the National Administration of Tourism show.

OCB pioneers use of Software Defined Networking

The Orient Commercial Bank (OCB) on Thursday announced that it become one of the first banks in Việt Nam to apply software defined networking (SDN), a new technology standard expected to be widely used in the near future.

OCB is co-operating with Dell EMC Vietnam to run the solution, which is part of the bank’s campaign to strengthen investment in technology and offer better services to customers.

SDN is the first step in the bank's Software Defined Everything campaign which aims to create a modern, safe and flexible operation system, according to OCB.

Launched in 2010, SDN technology is an approach to network management that enables dynamic, programmatically efficient network configuration in order to improve network performance and monitoring, making it more like cloud computing than traditional network management.

SDN will help companies, especially ones operating in the financial sector, have more effective operations and cut costs.

Thanks to its advantages, SDN is now being used by many companies.

Dư Xuân Vũ, IT director of OCB, said: “OCB sees that applying modern technology is an indispensable trend in the future. As part of the development roadmap beginning this year, the bank will continue to invest in digital technology to design more products and services developed with modern technology.”

“Applying SDN will help our bank cut costs and ensure high security. This is part of OCB's commitment to our customers in bringing them a better service,” he said.

OCB was established in 1996. After 23 years of operation, the bank has designed many solutions targeting different customer segments. By 2020, OCB plans to become one of the best banks in Việt Nam supporting the retail sector as well as small and medium-sized enterprises.

The bank is one of the first banks in Việt Nam to have met all the standards of Basel II, and it has successfully applied OCB OMNI.

As of end of the first quarter of the year, the bank’s profit after tax was VNĐ536 billion, representing 135 per cent of the bank's plan.

Conference discusses Vietnam’s development priorities

BUSINESS NEWS 19/5

A conference was held in Hanoi on May 16 to gather recommendations on development priorities for Vietnam in the 2021-2030 period.

The event was part of activities to help build the multidimensional country reviews (MDCR) by Vietnam and the Organisation for Economic Co-operation and Development (OECD), looking to offer consultation to the Government towards building the socio-economic development strategy for 2030.

Speaking at the event, Assistant to the Vietnamese Minister of Foreign Affairs Nguyen Van Thao said that Vietnam highly values its close coordination with the OECD in building the MDRC.

According to Thao, the Vietnamese economy is entering a new development period that presents both opportunities and challenges.

Noting that Vietnam is facing many difficulties in national development, he stressed the need to analyse international experience and models to serve as references in building development strategies and policies.

He said that the MDCR will be built in three phases. The first phase will focus on overall evaluation, while the second phase will seek intensive evaluations and policy consultations and recommendations, and the third will give ideas on action measures.

He expressed his hope that participants at the conference will thoroughly discuss barriers hindering the development of Vietnam and point out the roots of the problems.

Meanwhile, Director of the OECD Development Centre Mario Pezzni said that in order to make a multidimensional evaluation of Vietnam, it is necessary to have a range of views on different sectors to ensure socio-economic development and benefits for local people.

He said that the final target of the OECD is not only economic growth, but also improvement in social welfare and happiness for all people. To this end, the OECD will continue supporting Vietnam in mapping out socio-economic plans.

Pezzini stressed the need for countries to learn from each other, adding that the OECD also wishes to explore Vietnam’s experience in overcoming challenges, thus inspiring other developing and even developed countries.

At the event, participants heard information on some of the major barriers against Vietnam’s sustainable development, while giving their opinions on Vietnam’s draft MDCR.

Opportunities, challenges to water sector in the spotlight

The Fourth Industrial Revolution has greatly impacted businesses operating in the water sector, offering them both opportunities and challenges, heard a conference in Hue city, the central province of Thua Thien-Hue, on May 16.

Delegates at the conference, themed “Water 4.0: Opportunities and Challenges,” agreed technological innovation has led to higher productivity and more prosperity, but created greater pressures due to the transfer of human resources.

Labourers in factories amid the Fourth Industrial Revolution will get new jobs with different requirements, they said, pointing out other challenges regarding facilities, equipment and management mechanisms.

Given this, the water sector has attracted human resources or transferred technological advances.

According to Phan Thien Dinh, Vice Chairman of the People’s Committee of Thua Thien-Hue province, clean water supply is an important target in local development.

The province has paid attention to upgrading the water supply system so that more and more people can access clean water, he said, adding that 87 percent of the local population are using clean water.

Delegates agreed that to reach the target of developing the water sector sustainably, more heed must be paid to investment in smart equipment, thus improving productivity and business efficiency and ensuing water security amidst climate change and regional and international integration.

Within the framework of the conference, there was an exhibition displaying products of the water sector.

RoK's food delivery firm acquires Vietnammm

The Republic of Korea (RoK)'s food delivery service Baemin has entered Vietnam, acquiring local firm Vietnammm.

Vietnammm’s Facebook fanpage changed to Baemin Vietnam starting early this week. Vietnammm has said it would continue to operate alongside Baemin Vietnam until further notice.

Woowa Brothers, the RoK's firm that owns Korean delivery platform Baedal Minjok and its subsidiary Baemin, acquired Vietnammm in February.

Woowa Brothers raised $320 million in 2018 and became a South Korean unicorn startup with a valuation of $2.6 billion. The company said it would use the new capital to expand into foreign markets including Vietnam.

Founded in February 2011, Vietnammm is one of the pioneering players in Vietnam’s food delivery sector.

Backed by Netherlands’ Takeaway.com, the startup acquired Foodpanda’s Vietnam operations in 2015.

New player Beamin will face strong competition from local and foreign firms in Vietnam’s crowded delivery market.

The market heated up with the entrance of GrabFood in June last year. As of January, Grab said its service has seen the number of orders surged 25 times.

Go-Viet, an affiliate of Indonesia’s Go-Jek, and local firm Now are holding regular promotions to gain greater market shares.

The potential of food delivery service remains strong, observers say. A recent survey of 600 food delivery app users showed that 99 percent of them ordered food online 2-3 times a month, according to local market research firm GCOMM.

Vietnam’s food delivery market was worth about $33 million last year and is expected to top $38 million next year, according to market research firm Euromonitor.

 
 
 
 
 
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