Farm produce businesses broaden horizons in export markets
The Ministry of Industry and Trade has continued to co-ordinate efforts with relevant ministries and associations to deploy a wide range of trade promotion activities aimed at boosting domestic farm produce market expansion.
The Vietnam Trade Promotion Agency (Vietrade), in collaboration with the Vietnam Food Association, plan to send trade promotion delegations to the US and Mexico in late July 2019 to gain insights into their markets with a total of 21 Vietnamese businesses set to participate.
According to representatives from Vietrade, the scheme is part of a host of activities which is designed to implement the government’s guidelines on expanding into the North American region and providing support to rice export businesses in gaining entry into major markets in order to avoid dependence on one location.
To ensure the efficiency of trade exchange, Vietrade has set out strict criteria for firms wishing to participate in trade promotion activities. This includes their export capacity, prestige, competent business performance over the previous two years, and achievements in exporting rice to the US and Mexico.
In September, more Vietnamese enterprises are due to attend Asia Fruit Logistica HongKong 2019, with the aim of helping farm produce processing businesses make inroads into new territories throughout Asia.
Farm produce is one of the nation’s strongest potential export items and currently enjoys a presence in 200 nations and territories worldwide.
Several key products of the country including rice, coffee, pepper, and cashew nuts, account for large market shares globally in their respective sectors.
Future of Vietnam footwear kicked up a notch
Vietnam’s footwear industry stands to benefit from the upcoming EU-Vietnam Free Trade Agreement (EVFTA), according to industry leaders.
Diep Thanh Kiet, vice chairman of the Vietnam Leather, Footwear and Handbag Association (LEFASO) is bullish about the outlook following the implementation of the agreement. A zero tariff rate will be applied to all made-in-Vietnam footwear products exported to Europe after seven years but around 37 per cent of leather and footwear products will have tariffs slashed to zero as soon as the EVFTA takes effect. He stressed that the EVFTA will become a major driver for Vietnam’s footwear companies in the coming years. In 2018, the EU market accounted for 29 per cent of the $16 billion footwear export turnover. It is forecast that Vietnam’s footwear export to the EU will exceed 12 per cent in the first year of the FTA implementation and increase by 10 per cent in the following years.
In addition, the EU has offered preferential treatment to a large number of commodities originating in Vietnam, under the Generalised System of Preferences (GSP). “This scheme, coupled with tariff reductions brought by the EVFTA, will help Vietnamese footwear become more competitive than Chinese products in the EU market,” he said, noting that footwear manufacturers are required to meet the standards set by the EU to enjoy preferential tariffs.
According to Bill Watson, managing director of Coats Phong Phu, after EU trade agreements with South Korea and Japan were put into place, Coats’ exports to the EU increased drastically.
Watson said that made-in-Vietnam brands have gained European customers’ trust. This, coupled with low cost base and improved infrastructure, will make Vietnam an ideal destination for foreign investors.
President of the Italy’s National Association of Manufacturers of Footwear, Leather Goods and Tanning Technologies (Assomac), Gabriella Marchioni Bocca, said that Vietnamese footwear makers should align their product quality and production processes with European standards.
She pointed out that Vietnam is now the world’s second-largest footwear exporter by volume, but is restricted by its use of mostly synthetic materials. Thus, she suggested Vietnamese footwear manufacturers upgrade their technology to climb the value chain and penetrate the global footwear industry.
According to the General Department of Vietnam Customs, exports of footwear from Vietnam to the EU reached around $1.98 billion in the first five months of 2019, accounting for 27.9 per cent of the total export turnover of the country.
LEFASO said that Vietnam’s leather and footwear industry has many advantages, thanks to competitive labour costs. Over the past few years, there has been a shift in footwear processing orders from China to Vietnam, to take advantage of labour advantages, as well as tap into the opportunities ahead of the FTAs.
In February, Changshin Vietnam Co. opened a footwear factory worth $100 million in Tan Phu Industrial Park in the southern province of Dong Nai. Covering an area of 14.3 hectares, this plant will manufacture over 27 million pairs of shoes each year once put into operation in 2020.
Global footwear brands like Adidas, Nike, and Puma are increasingly turning to Vietnam for their manufacturing needs, due to its affordable labour costs and the FTAs. Adidas expects that Vietnam will produce more than half of its footwear by the end of 2019. Nike began investment in Vietnam over five years ago and now accounts for almost half of Vietnam’s total footwear exports. Meanwhile, Puma has 30 per cent of its products made in Vietnam.
Increasing investment from foreign brands, along with the forthcoming implementation of the EVFTA, will give a major boost to Vietnam’s footwear. As a result, LEFASO forecasts that this year’s export turnover for the sector will reach up to $22 billion.
Brighter digital prospects for textile-garment
Vietnam is beefing up textile and garment digitalisation co-operation with South Korea to improve production and make full benefit of the EU-Vietnam Free Trade Agreement.
As one of the biggest and most modern woven fabrics producers in Nam Dinh province over the years, Bao Minh Textile JSC has applied advanced technologies in designing and manufacturing many types of mid-range to high-end woven fabrics.
“Technologies have helped us reduce the number of direct workers and link data among production equipment,” Vu Thanh Cong, marketing director of Bao Minh Textile JSC, told VIR. “Thanks to automation, we can easily control operation of the whole factory, and quickly discover and handle troubles.”
Attending the fifth KITECH–VITAS Textile and Garment Seminar themed on better digital production in Hanoi last week, Cong was most interested in the application of 3D technology in design and making samples introduced by Clo Virtual from South Korea.
“Although 3D technology is not new, applying it in designing and creating virtual sample fabrics is still new. We can apply the virtual samples for different sizes of fabric thanks to easier adjustment,” Cong explained.
Meanwhile, according to Kim Kwang Il, representative of Clo Virtual, designers can use 3D technology to replace design work like measuring and choosing colours. “The 3D technology will significantly reduce the time for design and meet all requirements of size, colour, and style,” he said. “We wish to find partners here in Vietnam and we are willing to transfer this technology with the most active support.”
Having applied 3D technology in clothes patterns for five years, Ja Myung Ku, manager of general affairs at South Korean firm Kicox shared the effectiveness of the technology. “We can flexibly apply it to any model and any material with the same quality in the shortest time” she said.
Currently, Ku’s company has a factory in China and they wish to find a chance to open another one in Vietnam. “Vietnam is a good market where the younger generation is quite open to fashion from South Korea. Moreover, Vietnam has entered or just signed some important free trade agreements with which textiles and garments can benefit most,” Ku told VIR.
Referring to the EU-Vietnam Free Trade Agreement (EVFTA), Bluetex director Le Thanh Binh said “Although we haven’t exported yet, and at the moment we are using mostly materials imported from China, we are still interested in the signed EVFTA and getting to know more about the agreement.” According to Binh his company, a domestic sportwear distributor and manufacturer in Hanoi, can change strategy to make use of the FTA by seeking local materials.
According to Truong Van Cam, vice chairman and general secretary of the Vietnam Textile and Apparel Association, 3D printing technology allows the creation of products suitable to each user, satisfying their demand without creating waste for manufacturers. “The support of technology in general has created high productivity and then creates better income for employees, helping the textile industry break out and escape from labour-intensive traps with low incomes,” Cam said.
Speaking at the seminar, Eu Joong Kim, commercial counsellor at the South Korean Embassy in Vietnam, said that although the Vietnamese textile and garment industry has good foundations with many advantages, in the current technological development context simply relying on cheap labour costs is not enough, and that there must be new technology to support the competitiveness of businesses.
“If textile enterprises are not interested in Industry 4.0 and crafting plans to apply digital technology and automation in production and business, they are increasing their chances of being knocked out of the market,” Kim emphasised.
According to Kim, the newly-signed EVFTA will create great opportunities for the Vietnamese textile and apparel industry. “Vietnam has the advantage of the rules of origin under the EVFTA. Accordingly, products made from materials imported from South Korea also count as Vietnamese in origin when exported to the EU. That not only brings advantages for Vietnamese textiles and apparel, but also co-operation opportunities for South Korean textile enterprises,” Kim insisted.
Vietnamese-South Korean trade relations have increased rapidly over the years. In 2018, Vietnam had a trade surplus of over $29 billion to South Korea. In the textile and apparel sector, South Korea is Vietnam’s largest investor with $4.7 billion, accounting for 25 per cent of the proportion of overseas investment in the industry.
Banks raise interest rates to serve capital demand by year’s end
About half of commercial banks, mainly small and medium ones, are listing deposit interest rates at a relatively high level of over 8% per year in a bid to raise capital to meet Basel II standards.
Commercial banks are facing pressure to meet requirements on reducing the ratio of short-term capital for medium- and long-term loans to 40% and on increasing Tier 2 capital to satisfy Basel II standards by next year.
SHB has announced they will apply a deposit rate up of to 8.2% per year for 9-month deposits instead of 6.9-7% per year. With this adjustment, SHB is currently one of the banks offering the highest deposit rates during this term.
SHB General Director Nguyen Van Le said that banks are boosting capital mobilisation, particularly long-term deposits to seize business opportunities in the remaining months of the year.
The highest deposit rate currently stands at 8.7% per year for online savings of 36-month term at Nam A Bank.
TPBank and VIB also offer a high rate of 8.6% per year for large deposits from VND100 billion (US$4.3 million)while VietCaptialBank offers the same rate for all types of deposits from 24 months. Current deposit rates at VPBankhave been increased by 0.4% per year compared to that in June.
Meanwhile, Vietnam’s largest banks including Vietcombank, VietinBank, BIDV and Agribank remainthe lowest deposit rates in the market at roughly 6.8-7% per year.
According to Dr.Nguyen Duc Do from the Academy of Finance, the current deposit interest rate is relatively stable but is on the rise because the State Bank reduces the ratio of using short-term capital for medium- and long-term loans. Therefore, commercial banks must mobilise long-term capital with higher rates to attract idlecash.
Vietnam faces challenges from trade conflict
Statistics on import-export and investment activities during the first few months of the year show that Vietnam did not see any positive effects from the US-China trade war as forecast by several US agencies and the press.
Vietnamese exports of wooden furniture products to the United States surged 35% in the first five months of 2019, but Vietnam did not see any positive effects from the US-China trade war – Photo: Minh Tam
Overall, Vietnam's exports to the United States are rising, but its shipments to other markets are facing huge obstacles.
Nguyen Thi Thu Trang, director of the WTO Center and Integration, under the Vietnam Chamber of Commerce and Industry, cited data released by the United States to note that the country saw its exports to the United States rising 36% in the first five months of the year.
According to Trang, Vietnam became the eighth largest source of U.S. imports, even though Vietnam’s market share stateside is a mere 2.5%. Also, Vietnam continues to be one of the five countries to have achieved a trade surplus with the United States.
However, on analyzing each export-product group, it is clear that the country’s exports saw only modest growth, although Vietnam is one of the countries previously forecast to achieve strong growth from the US-China trade dispute, she remarked at an event on ways to cope with the China-US trade war and the European Union-Vietnam Free Trade Agreement, held on July 18 in Ho Chi Minh City.
Local exports of mobile phones and phone parts to the United States surged a staggering 91%, the highest growth rate among the export-product groups. Therefore, Vietnam’s strong growth rate had little to do with the United States’ steep tariffs imposed on Chinese imports.
In fact, the United States did not slap high tariffs on Chinese phone imports, Trang said.
Apart from that, local wooden furniture exports to the United States rose 35% in the five-month period but dropped in other foreign markets. Meanwhile, the wooden furniture sector’s production growth rate and inventory index in the country remained modest, according to the General Statistics Office. Thus, the local economy gained little benefit with regard to this sector, Trang explained.
In addition, many Vietnamese export items to China saw a deep decline, which went against many forecasts that Vietnam would replace the United States in boosting exports to China.
Local exports to China during the year up to May slipped 1.4% year-on-year, while the year-ago period saw a 31% increase versus the 2017 figure, which demonstrates that Vietnamese goods did not replace the U.S. items on the Chinese market, she emphasized.
The head of the WTO Center added that Vietnamese products are facing fierce competition from Chinese goods and those of other countries. Once China’s exports to the United States were hindered, it would ship them to other countries and, as a result, compete directly with Vietnam.
Regarding capital flow, foreign investment in Vietnam dropped by over 9% in recent months. The country only saw rising investment from Hong Kong and Taiwanese investors.
Also, data released by the Japan External Trade Organization revealed that Japanese firms are moving their businesses out of China, but the upcoming destination is definitely not Vietnam.
In general, Vietnam reaped no rewards from the trade war and is facing obstacles, Trang reiterated.
According to Can Van Luc, chief economist and director of the BIDV Training and Research Institute, the adverse effects of the US-China trade war on Vietnam are obvious. In the first half of the year, Vietnam’s exports to Europe decreased by 0.4% over the same period last year.
The country expected an export growth rate of 8%-10% this year, Luc said, adding that a growth rate of 14% in exports, as in 2018, seems impossible.
In the six-month period, the country reported a 27.4% increase in exports stateside, which put the country in an awkward position as Vietnam wants to reduce the trade surplus with the United States.
Meanwhile, imports from China to Vietnam, especially for computers and accessories, surged, raising suspicions of origin fraud. Vietnam also spent a significant amount on US imports, mainly for production materials.
The country has been included on the United States’ list of countries being monitored for possible currency manipulation, and the United States will reach its final conclusions on this issue in September.
Luc proposed the Government update information on and manage the exchange rates flexibly.
He also voiced concern over a potential hike in the prices of imports from the United States and China, which will spur domestic firms’ production costs. This would then lead to a hike in goods’ prices, putting pressure on inflation.
Addressing the event, Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association, said that many apparel firms are facing multiple obstacles due to the trade war. Exports from the local yarn sector, which typically generate US$3 billion in exports annually, including some US$2.4 billion earned from the Chinese market, have now come to a halt.
Since Chinese importers are offering extremely low prices for Vietnamese fiber, local firms have suspended trading with them. Besides this, the considerable gap in value-added tax between the two countries and China’s demand for a 15% discount have created more obstacles, Giang said.
PAN Group offers to buy over 7.7 million Bibica shares
Vietnamese agriculture and food company PAN Group Joint Stock Company (PAN) has just offered to buy more than 7.7 million shares of Bibica Corporation, one of the leading confectionery businesses in Viet Nam.
The shares are equivalent to 49.93 per cent of Bibica's outstanding voting shares. The expected bid price is VND68,500 per share.
If the deal is secured at this price, PAN Group is expected to spend about VND527 billion (US$22.6 million) to own the shares. This capital comes from equity and other legal capital of the company. PAN aims to increase its long-term ownership in Bibica through the deal.
On the stock market, Bibica shares (BBC) have stood at a low level in recent years. BBC closed last week at VND61,300 per share and increased to VND67,900 per share on Thursday after the news about PAN Group's offering.
Bibica's business results have seen progress in recent years. In 2018, Bibica’s revenue reached nearly VND1.4 trillion, an increase of 10.5 per cent compared to the previous year. Post-tax profit touched over VND110 billion, up 13.26 per cent year-on-year, exceeding 11.7 per cent of the profit target assigned for the whole year.
Bibica currently has two major shareholders. Lotte Confectionery owns 44.03 per cent of Bibica's charter capital, while PAN Food, a subsidiary of PAN Group, is holding 50.07 per cent.
PAN Food has officially invested in Bibica since 2015 and gradually increased ownership in Bibica. PAN Food plans to apply the 3F formula (Feed – Farm – Food) when investing in Bibica and participating in the food industry.
In Bibica, it is said that the Vietnamese board of directors are in conflict with the Korean investor, Lotte Confectionary, about the company's development strategy. Bibica CEO Truong Phu Chien had previously told the media that Bibica expected a comprehensive partnership with Lotte in terms of management expertise, technology and export support, but the Korean investor only wanted to make it a subsidiary.
At the beginning of 2019, in an interview with the media, the Bibica CEO said he was relieved as PAN Food finally had become a controlling shareholder of Bibica so a long-standing brand of Viet Nam will be preserved.
Regarding PAN Group's public bid to buy Bibica shares this time, there is a high possibility that Lotte Confectionary had accepted to divest capital from Bibica and PAN Group may acquire all the remaining shares of Bibica.
Construction firm Coteccons prepares for revenue and profit to fall
The construction conglomerate Coteccons Construction Joint Stock Company (Coteccons) expects its year revenue to fall 5 per cent year-on-year to VND27 trillion (US$1.2 billion) this year.
The company expects profit to decrease by 14 per cent against 2018, at VND1.3 trillion.
In the second quarter of 2019, Coteccons's net revenue hit VND5.8 trillion, down 30 per cent over the same period last year. Cost of goods sold accounted for nearly 97 per cent in net revenue so the company recorded only nearly VND184 billion in gross profit, down 67 per cent compared to 2018.
In the period, revenue from financial activities reached nearly VND72 billion, with a major part from bank deposits.
After deducting expenses, post-tax profit in Q2 only touched VND124 billion, down by 71 per cent year-on-year. This is the lowest quarterly profit that Coteccons has recorded since the first quarter of 2015.
In the first six months of 2019, net revenue of Coteccons was estimated at VND10 trillion, down by 20 per cent year-on-year. Post-tax profit stood at VND312.6 billion, down by more than half compared to that recorded in the first half of 2018.
As of the end of June this year, Coteccons's total assets totalled more than VND15.5 trillion, down VND1.2 trillion compared to the beginning of the year, mainly due to a reduction of short-term receivables.
Total liabilities reached nearly VND7.6 trillion, down by VND1.3 trillion compared to the beginning of the year. Equity touched VND8 billion.
Recently, KIM Viet Nam Growth Equity Fund has purchased 260,000 shares of Coteccons, thereby raising the ownership of the Korean fund group in Coteccons from 7.68 per cent to 8.02 per cent. VOF Investment Limited Fund, managed by Vinapital, has also bought an additional 50,000 shares to increase its holding to 7 per cent.
Coteccons shares closed Thursday down 1.33 per cent to end at VND111,000 each.
FLC announces new real estate brand
FLC Group on Wednesday announced the establishment of its real estate brand FLCHomes with four main products including Beach & Golf Resort, Residences, Retail & Office and Green Eco.
FLC said it established FLCHomes Real Estate Investment and Development Company in March with key leaders who were from the group’s marketing department with an aim to create an ecosystem of property products.
Accordingly, the FLC Beach & Golf Resort would be its key product thanks to its investment ability in building big seaside resort and golf projects nationwide.
Its FLC Residences would include modern and synchronous urban areas such as FLC Tropical City Halong. The product was expected to be promoted in big cities in Viet Nam such as Sa Dec, Bac Giang, Thai Binh, Hai Phong, Soc Trang and Kontum this year.
FLC Retail & Office would offer office for lease and trade centres, especially new products such as hometel and officetel.
FLC Green Eco would be a special product of FLCHomes with strict requirements in terms of design and construction as well as high effectiveness in using energy and materials, reducing impacts on the environment.
The group said the building of a brand specialising in property would help FLC become more active in developing resources inherited from its parent company.
This would also help them gradually upgrade and standardise the quality of its products and services following local and international standards.
Foreign currency lending abolished – impact on enterprises
Enterprises can borrow money in Vietnamese dong (VND) and then purchase foreign currency for payment when they need the capital to import input materials, say commercial banks.
According to Circular 42/2018 issued by the State Bank of Viet Nam (SBV), short-term foreign currency loans to exporters who need to import goods and services in order to implement goods production and trading plans serving domestic needs were stopped on April 1, 2019.
Commercial banks will have to stop lending foreign currency to enterprises in the medium and long term to pay for importing goods and services from October 1, 2019.
Chairman of the Vietnam Animal Feed Association Le Ba Lich said, every year, enterprises working in the animal feed industry often spend about US$4 billion on corn, soybean and wheat imports.
Currently, if commercial banks lend US dollars (USD) with interest rates of 2.8-4.7 per year (in the short term) enterprises find it relatively “easy to breathe”. However, if they have to borrow in VND with 7-9 per cent interest per year to buy USD for import orders, it will increase financial costs, Lich said.
A representative of HSBC's corporate department said that as they can no longer borrow in USD, import-export enterprises will generally have to borrow in local currency. However, for export enterprises with foreign currency revenues, they can sell foreign currency for VND to help reduce borrowing costs.
Particularly for enterprises without foreign currency revenue, because the VND/USD exchange rate increases by 1-2 per cent each year, the cost of VND loans won’t increase much compared to USD loans. Moreover, the current interest rate for VND loans at many commercial banks is quite low (6-8 per cent per year for short term), the representative added.
The forex market is also convenient and many banks are still applying solutions to support payments for importers by deferred payment letters of credit. Therefore, stopping lending in foreign currency will not affect the revenue and profit of enterprises.
According to the analysis of financial experts, the gradual narrowing of the demand for foreign currency loans by the SBV is necessary and consistent with the Government's anti-dollarisation roadmap. Since then, gradually shifting the relationship of borrowing foreign currencies to buying and selling relations, ending the foreign currency lending will minimise the distortion in the foreign exchange market when a series of free trade agreements are implemented.
Saigon office rents rise despite new supply
Saigon office rents are rising across all categories despite new supply as demand remains high.
A new report by real estate firm Jones Lang LaSalle (JLL) shows that Grade A rents in the second quarter increased 4.8 percent year-on-year. Grade B rents also rose 7.5 percent, while that of Grade C rents went up 8.5 percent.
The rents have gone up despite the market getting new supply of 42,700 square meters from seven buildings, bringing the total office space area to 2.23 million square meters. But the rise in supply has mostly occurred in non-central business districts.
In the central business districts, supply has remained restricted with no new Grade A and B supply recorded in seven consecutive quarters, the report said. The occupancy rate in the whole market is now at 96-97 percent, showing that demand was strong.
The report also noted that in the second half of the year, the market is expected to receive a wave of new completions which may result in a decrease in overall occupancy rate.
JLL forecast an enriched new supply coming on stream in the next three years, which will put some pressure on the performance of the existing supply.
An earlier report by real estate firm Colliers International Vietnam confirmed the trend. In the first quarter, HCMC had an average occupancy rate of 95 percent in premium office with no new building coming online.
But the low supply situation is set to improve with five new high-quality office buildings set to open this year in HCMC with 150,000 square meters of leasable area, it said.
Vietjet Air to operate Hanoi-New Delhi route
The Civil Aviation Administration of Vietnam (CAAV) has granted approval to the low-cost carrier Vietjet Air to conduct flights between the capital city of Hanoi and India’s New Delhi.
The approval was made based on the Agreement on Air Transport between the Vietnamese and Indian Governments.
Currently, Vietjet operates around 400 flights daily, carrying more than 80 million passengers to date, with 119 routes covering destinations across Vietnam and international destinations such as Japan, Hong Kong, Singapore, the Republic of Korea, Taiwan, mainland China, Thailand, Myanmar, Malaysia, Indonesia and Cambodia.
Being known for its core-values of "Safety - Happiness – Affordable Price - Punctuality", Vietjet has won more than 30 domestic awards and international prizes, making it one of the leading airlines in the region. It has also pioneered to introduce a series of amazing promotions and exciting entertainment activities together with leading service quality to bring the best flying experiences to its passengers.
Vietjet is the first airline in Vietnam to operate as a new-age airline offering flexible, cost-saving ticket fares and diversified services to meet customers’ demands. It provides not only transport services but also uses the latest e-commerce technologies to offer various products and services for consumers. Vietjet is a fully-fledged member of International Air Transport Association (IATA) with the IATA Operational Safety Audit (IOSA) certificate.
Vietjet was named “Best Ultra Low-Cost Airline 2018 - 2019” and awarded the highest ranking for safety with 7 stars in 2018 and 2019 by the world’s only safety and product rating website AirlineRatings.com. The airline has also been listed as one of the world's 50 best airlines for healthy financing and operations by Airfinance Journal in 2018.
Japanese apparel maker to build new plant in Vietnam
Japanese apparel maker Matsuoka Corp. will build a new plant in the central region of Vietnam, as part of a medium-term business strategy to lessen its reliance on China.
Matsuoka will establish a wholly-owned subsidiary, Annam Matsuoka Garment Co., possibly in August to build and operate the new plant in the north-central province of Nghe An.
The new plant is Matsuoka's fourth plant in Vietnam after one each in the northern provinces of Phu Tho and Bac Giang and the southern province of Binh Duong.
Matsuoka spokesman Michihiro Fukagawa told NNA/Kyodo news said the corporation hopes to begin operations in Nghe An at an early date.
China accounted for about 60 percent, Bangladesh 25 percent and Vietnam 10 percent of the Hiroshima prefecture-based company's overseas sales in the fiscal year through March this year.
The firm's medium-term business plan calls for reducing its reliance on China to around 50 percent by March 2021 by shifting its focus to Vietnam from China, where production costs are on the rise, Fukagawa said.
Matsuoka sees Vietnam as a key production base for casual apparel bound for Japan and China, the spokesman said, adding the firm's Bangladesh arm manufactures inner wear and working wear.
Concerted measures needed to ensure energy security
Vietnam needs to take concerted measures to ensure national energy security, experts said at a conference on the role of the oil and gas sector in ensuring energy security held in Hanoi on July 18.
According to the Vietnam Petroleum Institute (VPI), the country’s energy demand will grow by 5.1 percent a year in the 2016-2025 period and 4.2 percent for 2026-2035.
Deputy head of the VPI Nguyen Hong Minh and Chairman of the Vietnam Oil and Gas Group’s Member Council Tran Sy Thanh stressed the need for a clear financial mechanism for oil and gas exploration and exploitation activities.
Along with measures to boost energy saving, increasing national reserves is extremely important, participants in the conference emphasised.
It is also necessary to step up the exploration of energy sources, improve domestic production of secondary energies, expand the use of alternative and renewable energies, and build a regional energy security cooperation mechanism, they stated.
Former Trade Minister Truong Dinh Tuyen affirmed that energy security has huge impact on food and finance security.
Therefore, the Petroleum Law should be revised as soon as possible to facilitate the development of the sector, he suggested.
Participants also scrutinized the need to ensure the national energy security on the basis of studying chances and challenges of the oil and gas sector in Vietnam, and proposed solutions for the work in the time to come, especially in the current trend of developing renewable energy.
State Audit asked to enhance operational effectiveness
Politburo member and permanent member of the Party Central Committee’s Secretariat Tran Quoc Vuong had a working session with the State Audit of Vietnam (SAV) in Hanoi on July 18 to review its recent performance and issues on use and management of public property.
Vuong spoke highly of the SAV’s achievements over recent years, and hailed the authority for its constant operation reforms and application of more international audit standards.
It has strived to improve the effectiveness of State budget collection and expenditure as well as the use of public property, and helped recover a large amount of financial losses to the State budget, he said.
Vuong moved on to note that the SAV is an independent agency which operates under a special mechanism, so its reports must be accurate and effective, contributing to uncovering corruption and wastfulness and building a strong and clean Communist Party.
To provide prompt and valuable reports that contribute to the better use and management of the public property, the official urged the SAV to further enhance the operational effectiveness, develop a team of professional and prudent personnel with work ethic and play a more active role in preventing wastefulness.
Deputy Auditor General Nguyen Quang Thanh reported that the SAV proposed close to 92.5 trillion VND (3.98 billion USD) in fines last year, the highest in the agency’s 25-year history. Additionally, it has prosposed to make amendments to, replace and cancel 160 legal documents; transfered five cases on suspicion of criminal offence to investigators; and provided 146 documents to competent state agencies for investigation, inspection and supervision.
In the first half of this year, the SAV proposed more than 37.5 trillion VND in fines, up 65 percent from a year earlier, helping to add over 19.1 trillion VND to the State budget. It also transfered two cases on suspicion of criminal offence to the police.
Ministry works to perfect draft laws on investment, enterprises
The Ministry of Planning and Investment (MPI) is accelerating the compilation of a draft law on investment in the public-private partnership format and another to amend and supplement the Law on Investment and the Law on Enterprises.
These are two important draft laws which are more difficult than the Law on Public Investment since they will feature many new points and cover both the State and private sectors.
They are significant to economic restructuring and mobilisation of investment capital from the whole economy, especially from the domestic private sector and other countries, Minister Nguyen Chi Dung said at a meeting of his ministry in Hanoi on July 18.
The work on the draft laws is being accelerated so that they can be submitted for discussion at the National Assembly’s eighth session, slated for this October, he said, noting that the MPI hopes to receive close coordination from other ministries, central agencies and localities to perfect these drafts.
At the meeting, Dung said another focal task of the ministry for the rest of 2019 is harnessing every resource and working closely with relevant parties to build and amend the Government’s decrees guiding the enforcement of laws so that decrees will be issued in tandem with law implementation.
In the first half of 2019, Vietnam’s economy maintained the growth trend since 2018 and obtained achievements in all spheres, from economy, politics, society and environment to defence, security and diplomacy.
To meet the targets set for the whole year, the MPI will push ahead with reforms and efforts to make breakthroughs, the official added.
Apple to trial wireless earphone production in Vietnam
Apple will soon start trial production of its AirPods wireless earphones in Vietnam as it cuts China reliance.
Chinese company GoerTek, one of Apple's key manufacturers, would begin testing the manufacturing processes for the newest generation of AirPods at its audio factory in northern Vietnam, Nikkei Asian Review quoted two sources with knowledge of the plan as saying.
This will be the first time it produced outside China since its introduction in 2016. Apple has written to components suppliers, asking them to support Goertek's efforts though initially volumes will be very small.
"Suppliers are requested to keep the pricing unchanged for the trial production stage, but this can be reviewed once volumes are increased," one of the sources with direct knowledge of the communication said.
"The initial output will be limited, but it is easy to increase capacity once all the manufacturing procedures are running smoothly."
GoerTek in October last year asked all suppliers involved in its AirPods production to ship all necessary materials to Vietnam. Taiwanese iPhone assembler Foxconn, another major Apple supplier, has leased space in an industrial park in northern Vietnam.
Indovina Bank, Cathay Holdings, Finaxar partner to finance SMEs
Finaxar Vietnam, Indovina Bank and Cathay Financial Holdings have announced a partnership to improve access to financing for small and medium enterprises (SMEs) in Vietnam.
The partnership will provide working capital for SMEs that are growing fast in the region. SMEs comprise 96-98 percent of enterprises operating in Vietnam, but up to 60 percent are still unable to access credit to fuel their growth.
“In our experience, small businesses in Vietnam face random demand fluctuations which require them to possess some form of capital flexibility. This is where the Finaxar Credit Line (FCL) comes in. FCL is part of Finaxar’s reinvention of traditional business financing to accommodate and support the growth of SMEs in the 21st century,” said Finaxar co-founder Vihang Patel.
FCL is a first-in-region, completely online, automated credit financing solution specifically tailored for Vietnam’s SMEs.
Business owners can now access funds of up to 500 million VND (US$22,000) through FCL easily online. In contrast to traditional financing, FCL uses a simple model, charging a single percentage fee upfront on the loan amount, with no hidden or processing charges. In-principle credit approval can be granted within 30 minutes of an online application.
“Our mission is to bring a full suite of innovative products into the market to reinvent how business finance for small businesses is done and to address the pain point of access to financing for SMEs,” said Finaxar’s co-founder Dr. Sian Wee Tan.
Specifically designed to work around such difficulties in accessing credit, FCL does not require business owners to provide any collateral and gives business owners flexibility in their repayment schedules. FCL allows owners to grow their businesses in various ways, including procuring inventory and boosting general business expansion.
“We care about Vietnam’s people and how SMEs are being financed for business growth,” said Marcus Lopez, Executive Vice President and Head of Digital, Data and Technology at Cathay Financial Holdings, investor to both IVB and Finaxar.
“With 214 offshore office worldwide as well as intensive footprints in Asia-Pacific markets, we are open to all possibilities to collaborate creating even more exciting business benefits to this region,” said Lopez.
Finaxar, headquartered in Singapore and operating in Vietnam and Hong Kong, is a technology company that provides innovative, data-driven financing solutions tailored to SMEs in Southeast Asia.