BUSINESS NEWS 29/5

Foreign investors suddenly net buy more than VND5.7 trillion

BUSINESS NEWS 29/5

According to statistics by securities companies, along with strongly increased market liquidity, trading on Vietnam’s stock market was fairly vibrant with foreign investors unexpectedly net bought for more than VND5.7 trillion (US$243.54 million) in the past week.

Particularly, on the Ho Chi Minh City Stock Exchange (HOSE), foreign investors net sold for four trading sessions and only net bought in the trading session on May 21. However, they have net bought 34.35 million shares worth VND5.14 trillion ($219.61 million) whereas they net sold 21.17 million shares worth VND648.29 billion ($27.69 million) in the week before last week.

Meanwhile, on the Hanoi Stock Exchange, foreign investors net sold for three trading sessions and net bought for two trading sessions. In total, they net bought VND142 billion while they net sold VND318.16 billion in the week before last week.

On the UPCoM, foreign investors net bought 7.88 million shares worth VND428.48 billion whereas they net sold 1.87 million shares worth VND28.93 billion.

Thus, on three trading floors, foreign investors have bought 39.16 million shares worth up to VND5.71 trillion while they have sold nearly 38.9 million shares worth VND995.38 billion in the week before last week.

The reason for sudden net buying of foreign investors in the past week mainly came from put-through transaction of large-cap stock VIC on the HOSE. Particularly, on May 21, foreign investors net bought 50.76 million shares of VIC worth more than VND5.73 trillion.

Novatek to develop LNG project in Vietnam

On May 22, Novatek signed a memorandum of understanding with the Ninh Thuan People’s Committee to develop an integrated energy-generating project using LNG in Vietnam. The signing ceremony occurred in the framework of the visit of Prime Minister Nguyen Xuan Phuc to Russia.

According to Novatek, the energy-generating project will provide for the delivery of LNG, utilising existing infrastructure as well as developing new infrastructure, including the construction of an LNG regasification terminal and new gas-fired power plants within Vietnam.

The partners of the proposed project include Siemens AG, Total Gas & Power Business Services S.A.S, and Vietnam A&A Technology Investment Co., Ltd.

“The strong economic growth in Vietnam generates additional demand for energy, which can be sustainably met with the development of an integrated gas generation project. The building of gas-fired power generation increases the demand for us to provide competitively priced LNG supplies to the country. This project could be realized in a relatively short period of time with the support of the Ninh Thuan province,” said Leonid Mikhelson, chairman of the Novatek Management Board.

Along with Novatek, Ninh Thuan is also an attractive investment destination for Gulf Energy Development (Gulf) from Thailand. Notably, in March the group proposed investing $7.8 billion in the Ca Na LNG project in Ninh Thuan province for the second time, showing its determination to develop the project.

Gulf plans to develop an LNG warehouse and gas-fired power complex with the total capacity of 6,000MW in Ca Na commune, Thuan Nam district. The construction may be implemented under the build-operate-transfer (BOT) model.

According to Pham Van Hau, deputy chairman of the Ninh Thuan People’s Committee, Gulf is seeking approval for the planning of Ca Na power centre. Once the planning is approved, the province will issue criteria to select investors for the project and Gulf is one of the potential investors.

Danang seeks to attract Western tourists

Authorities and travel agencies of Danang City are seeking cooperation opportunities with local partners on Phu Quoc Island to attract more Westerners visiting the island to Danang, following the launch of an air link between Danang and Phu Quoc on May 24.

A fam trip delegation, including representatives of the municipal Department of Tourism and 20 travel firms, surveyed the tourism market on the island off Kien Giang Province.

Aside from boosting the socioeconomic growth of the island, the air route is expected to connect tourism activities between Danang and Phu Quoc as well as the Mekong Delta provinces. It is especially expected to help the city attract European, American and Australian tourists to the central city in the coming days.

There are 40 daily international flights in operation, carrying foreign tourists from China, the United Kingdom, Italy and Sweden to the island. Accordingly, travel firms will collaborate in designing tours for Western tourists to visit both Phu Quoc and Danang, as well as the central region in general.

Apart from the newly launched Danang-Phu Quoc route, local budget carrier Jetstar Pacific on May 25 opened the Danang-Thanh Hoa route and another route linking the central city with Vinh City on April 10.

The three new routes will be connected with a network of routes operated by Vietnam Airlines Group, Jetstar Group and the five-star carrier Emirates Airlines, carrying passengers to over 185 destinations in 18 countries and territories.

Grab expands financial service footprint in Vietnamese market

BUSINESS NEWS 29/5

Ride-hailing startup Grab has branched out into financial services by founding another subsidiary - Grab Financial Group Vietnam.

Grab has reported that a quarter of the population get familiar with its services, with 190,000 drivers partnering with the firm, following five years of its operation in Vietnam.

The Grab subsidiary looks to provide financial services with regard to consumer lending, e-payment, and insurance.

Grab has struck the local market by offering its partnering drivers installment payments for cellphones with preferential or even zero per cent interest rates which are allegedly against the rules set by the State Bank of Vietnam. The firm has managed to lend partnering drivers via its own platform not those connected to the banking system, thus leading to unfair competition with financial rivals.

Despite gaining no permission from the State Bank of Vietnam for a payment intermediary, Grab shook up the e-payment market by acquiring a 3.523 per cent stake in fintech company Moca, before legally launching its payment platform GrabPay by Moca. Acting as an e-wallet application, GrabPay by Moca enables Grab users to make payments for electricity and water bills, prepaid cellphone cards, shopping, and food.

In a drastic move, Grab reportedly suggested that the Vietnamese Government allow payments through e-wallets, even though they are not entitled to be connected to bank cards.

Grab made its debut in the Vietnamese market in 2014 with the initial launch of ride-hailing services dedicated to motorbikes and cars with up to nine seats. It has piloted its services in five major localities, including Hanoi, Ho Chi Minh city, Danang, Quang Ninh, and Khanh Hoa.

Grab has reported that a quarter of the population get familiar with its services, with 190,000 drivers partnering with the firm, following five years of its operation in Vietnam.

After ousting its closest rival Uber from the Southeast Asian market, Grab has spread its wings into other sectors such as logistics, food delivery, and hotel reservation, while eyeing a daring plan with GrabTV app.

Bamboo Airways put low-cost tickets on offer for golden week

Passengers will have the chance to enjoy a range of promotions with combo packages offering cheap air tickets and the use of golf and tourism services during a golden week between May 26 and June 2 to mark the opening of Bamboo Airways Tower at 265 Cau Giay street in Hanoi.

May 26 saw thousands of people lining up amid hot weather to purchase low-cost tickets and tourism combo packages at preferential prices at the recently-opened Bamboo Airways Tower in Cau Giay street.

During the opening day of promotions, passengers enjoyed the chance to receive one of 265 vouchers which could be registered to purchase air tickets at a starting price of VND265,000 between May 26 and May 28.

According to Bamboo Airways, in order to facilitate the travel of passengers, each passenger will be able to bring hand luggage weighing 7 kg and will be also be served with delicious drinks and food during their flight.

bamboo airways put low-cost tickets on offer for golden week hinh 1 In the coming days, promotional activities are expected to attract visitors with a range of discount packages.

Hanoi natives will have the opportunity to fly to Da Nang, Can Tho, and Pleiku at a price of only VND299,000 in addition to a number of combo packages on accommodation at FLC resorts at discount rates of up to 50 per cent.

bamboo airways put low-cost tickets on offer for golden week hinh 2 Notably, customers will be able to purchase business class tickets from Bamboo Airways on air routes from Hanoi to Nha Trang, HCM city, Phu Quoc, Da Nang, Quy Nhon, Dong Hoi, and Vinh, which will be sold between May 30 and June 1 at preferential prices.

Some 1,000 low-cost tickets, along with combo packages, were sold during the first day of the golden week.

Tra Vinh lures more than 188 million USD of investment in May

The Mekong Delta province of Tra Vinh issued investment licences to six domestically-funded and one foreign-invested project worth some 188 million USD in May.

So far this year, the province has lured 20 domestically-invested projects with combined capital of 5.83 trillion VND (250.69 million USD) and two foreign-invested ones valued at more than 100 million USD.

The province is hosting a total 319 projects, including 40 foreign-invested projects with total capital of 3.11 billion USD, along with 279 domestically-funded projects worth over 105.52 trillion VND (4.53 billion USD).

According to Chairman of the provincial People’s Committee Dong Van Lam, the improvement of the local investment environment has helped the province attract more investment.

The province has focused on administrative reform, while publicising priotitised projects for investment attraction, he said.

Along with applying national preferential policies, the province has also given investors support for ground clearance and technical infrastructure development, as well as assistance in production and business in industrial clusters, and labourer training.

The province has also launched the one-stop-shop mechanism, cutting the processing time by one half for 1,644 administrative procedures and by one third for 68 others, said Lam.

He said the province has made it possible to process 1,279 administrative procedures via post.

Lam revealed that Tra Vinh has announced 59 projects entitled to preferential policies in agriculture and industry.

Sony withdrawing from non-focus and defocused markets like Vietnam

Sony Corporation on May 21 held its Corporate Strategy Meeting for the fiscal year ending on March 31, 2020, aiming to reduce overall costs by 57 per cent for 2020 through non-focus and defocused regions, including Vietnam.

In addition to strengthening each of its individual businesses, Sony will pursue further synergy across them through co-operation between its content IP and Direct-to-Consumer (DTC) services, as well as technology, in order to continue its evolution as a “creative entertainment company with a solid foundation of technology.”

During the meeting in Tokyo, when talking about the transformation of its smartphone business, Sony revealed that they consider Japan, Europe, Taiwan, and Hong Kong the focus regions. In addition, the slides shared at the meeting showed that the corporation has withdrawn from certain regions such as India, Australia, Canada, South America, Africa, Middle East, and Southeast Asia, including Vietnam.

The regions listed above have been considered as non-focus and defocused regions.

Alongside providing details on a regional basis, Sony also talked about its aim to reduce operating costs by 50 per cent and overall costs by 57 per cent in the 2020 fiscal year compared to 2017.

This is aimed to help make the smartphone business profitable in the long run.

Last year, Sony sold 6.5 million phones globally, seizing 1 per cent market share, collecting $879 million, a deep loss compared to a year before.

A recent report of Nikkei claimed that Sony is set to cut its mobile division workforce by half by 2020. This could result in roughly 2,000 employees either losing their jobs or getting moved to a new business division at the company.

In addition, Sony closed down its smartphone plant in Beijing and shifted production to its plant in Thailand.

Vietnam's servicing pressure remains high despite public debt at three-year low

Vietnam’s public debt hit the lowest since 2015 at 58.4% of GDP as of the end of 2018, much lower than the ceiling of 65%, however, the government is not considering taking additional loans due to high repayment pressure, according to Deputy Prime Minister Vuong Dinh Hue.

With the country’s nominal GDP in 2018 at VND5,500 trillion (US$235 billion) and public debt at VND3,200 trillion (US$136.72 billion), the public debt per capita stood at VND32 million (US$1,367), down VND700,000 (US$29.91) from VND31.3 million (US$1,337) in 2017.

Government expenditures for both principal and interest payment accounted for 27.6% of the total budget revenue, but in 2018 the rate declined to 18.3%, Hue said at a discussing session at the National Assembly on May 22, but saying the pressure for repayment remains huge.

Moreover, public investment in the 2016 – 2020 period is not allowed to exceed the threshold of VND2,000 trillion (US$85.44 billion), and until now has not reached this ceiling, he said.

There remains room for the next government to use public fund for major infrastructure development projects, Hue said, but again reiterated the public-debt-to-GDP ratio of 58.4% is high.

A decline in the country’s public debt was thanks to the government’s tightened grip on guaranteeing debt, Hue continued.

In 2018, there was only a thermal power project receiving a government-guaranteed loan, while none has been recorded so far in 2019, Hue added.

According to Hue, foreign debt previously accounted for 60% of total public debt, with the remaining 40% being domestic debt, but foreign debt now only makes up 40% of the total, thus relieving pressure on the exchange rate.

Moreover, the average maturity period of foreign debt is seven years with low interest rates, compared to two- or three-year maturity period with high interest rates in years ago.

There have been foreign debts with maturity period of over 15 years in 2018, Hue revealed.

At the meeting, Minister of Finance Dinh Tien Dung said it is too early to say Vietnam’s public debt is at safe level, especially when the available fund could only cover the interest rate, not the principal amount.
More importantly, the efficiency of projects financed by public investment fund, including state budget, government bonds or ODA, remains questionable, Dung continued.

Dung suggested to reconsider loan policies, referring to the fact that the actual interest rate of foreign debt could raise to 6 – 7% from the original 2-3% per annum if taking into consideration the volatility of the exchange rate and devaluation of national currency.

Vietnam’s banking sector tames bad debt ratio well below 3% target: C.bank

Vietnam’s banking sector cleared VND163.14 trillion (US$7 billion) in bad debts in 2018, pulling down the bad debt ratio to 2.02% and on track to meet the target below 3% by 2020 set by the State Bank of Vietnam (SBV), the country's banking regulator.

According to the SBV, a total of VND907.3 trillion (US$38.81 billion) of bad debts was cleaned up from 2012 to late March. Non-performing loans and other debts with risk of becoming bad debts accounted for 5.88% of total credit, significantly lower than the rate of 10.08% and 7.36% recorded at the end of 2016 and 2017, respectively.

The SBV in its report also suggested Resolution No.42, which came into effect last August providing special pilot treatment of bad debts at credit institutions, has been pivotal in restricting the bad debt ratio at below 3%.

The government-run National Financial Supervisory Commission (NFSC) cited reports from credit institutions showing a slight decrease in the bad debts ratio from 2.5% at the end of 2017 to 2.4% at the end of 2018. Provisions for credit losses increased by 30.1% during this period.

Most of the 17 exchange-listed banks in Vietnam posted bad debt ratio at 1 – 2%, some even managed the ratio at below 1%, including Asia Commercial Bank (ACB) with 0.73%, Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) with 0.97%, Military Bank (MB Bank) with 1.33%, Ho Chi Minh Development Bank (HDBank) with 1.45%, and Tien Phong Commercial Bank (TPBank) with 1.89%.

Additionally, a number of listed banks also recorded the highest growth in profit in the banking sector last year, such as Vietcombank, HDBank, and TPBank with over their profit growing more than 60%.

As of March 31, state-run Vietcombank posted bad debts at VND6.95 trillion (US$298.59 million), up VND700 billion against the beginning of the year and leading to an increase of bad debt ratio from 0.97% to 1.03%. Last year marked the first time Vietcombank took its bad debt ratio to below 1% since its privatization.

Meanwhile, the bad debt ratio at HDBank continued the declining trend, reaching 1.45% in the first quarter.

According to banking experts, the bad debt ratio of the banking sector tended to go up since the last third quarter, but the rate was still below the 3% target as of the first quarter.

In 2019, the SBV sets to control the bad debt ratio in the sector at below 2%, and the ratio of bad debts and potential loan losses at below 5%.

Vietnam bad debt bank aims to recoup US$2.14 billion NPLs in 2019

The central bank-run Vietnam Asset Management Company (VAMC), dubbed as bad debt bank, aims to recoup VND50 trillion (US$2.14 billion) in non-performing loans (NPLs) this year, according to the company’s latest business plan.

Additionally, VAMC expected to purchase NPLs worth VND20 trillion (US$856.84 billion) with special bonds and VND4.5 trillion (US$192.79 million) with cash at market value.

To have sufficient fund for NPLs acquisition at market value, VAMC has requested to be pumped an additional VND3 trillion (US$128.52 million) to raise its charter capital to VND5 trillion (US$214.21 million).

According to the plan, VAMC expects to continue working with related government agencies in perfecting the legal framework and cooperating with credit institutions in purchasing sour loans.

In 2018, VAMC bought in 761 debts from 13 credit institutions with special bonds worth VND29.81 trillion (US$1.27 billion) with book value of VND30.91 trillion (US$1.32 billion).

The company acquired 40 bad debts worth over VND2.8 trillion (US$120 million) with cash, equivalent to 80% of the year’s estimate.

As of the end of 2018, VAMC purchased a total of VND339 trillion (US$14.52 billion) in debts with special bonds for VND307 trillion (US$13.15 billion), while recouping VND119 trillion (US$5.1 billion) in bad debts from 2013 to the end of 2018.

Deputy Governor of the SBV Nguyen Kim Anh considered VAMC as the state's special instrument in clearing toxic debts, creating stability for the banking system over the last five years.

Vietnam’s T&T Group signs US$4.5-billion deals with Russia’s Zarubezhneft

Vietnam’s leading conglomerate T&T Group on May 22 signed a memorandum of understanding (MoU) with Russian state-run oil company Zarubezhneft on developing renewable energy and liquified natural gas (LNG) projects in Vietnam with total capacity of 4,000 megawatts (MW) worth US$4.5 billion.

The move is part of a broader agreement signed between Vietnam and Russia during the state visit of Prime Minister Nguyen Xuan Phuc to Russia, aiming to further enhance cooperation in fields of oil exploration, agriculture, education, finance and banking, and nuclear energy, among others.

On this occasion, T&T Group officially launched its affiliate T&T Russia in a bid to expand the group’s business activities abroad and realize the target of becoming the top 50 companies in Asia.

Previously, T&T Group was granted a license to invest US$25 million in Russia.

T&T Russia would focus on investing in a variety projects in fields of renewable energy, hi-tech agriculture, environment, healthcare, logistics, bank and finance.

At the launching ceremony, T&T Russia also signed a number of MoUs with local partners, including the cooperation with Eurasia Business Union (EABU) to promote Vietnamese and Russian goods in each market.

Following the agreement, T&T would serve as EABU’s representative in Vietnam and Southeast Asia region.

Board Chairman and CEO of T&T Group Do Quang Hien said the potential in trade and investment cooperation between Vietnam and Russia remains huge, saying T&T expects to serve as bridge to facilitate stronger cooperation between enterprises from two countries.

Minister of Industry and Trade Tran Tuan Anh said Vietnamese enterprises play an essential role in promoting cooperation between Vietnam and Russia, and in this case, T&T.

 

To fulfill the target of taking the bilateral trade turnover between Vietnam and Russia to US$10 billion by 2020, the government expected more to follow T&T’s footstep.

Hanoi approves plan for online bidding in 2019

The Hanoi People’s Committee has issued document No.2037 to implement the online bidding process in 2019.

The move is to ensure publicity and transparency during the procurement process, which is in line with the government’s Resolution No.01, stipulating the rate of selecting contractors online in the form of competitive offers and open bidding of at least 50% of the number of bidding packages and 15% of the total value of the packages.

Following the document, Hanoi requested project owners to identify the number of bidding packages subject to online bidding in their respective procurement plans, which later must be submitted to competent authorities for approval.

The city’s Department of Planning and Investment is tasked with reporting the result of the process to the Hanoi People’s Committee in its semi-annual and annual reports.

The Vietnamese government expects the online tender process to help increase transparency and reduce administrative costs for the government through the simplification of administrative procedures.

Additionally, the process would save costs and time for both project owners and contractors, improve productivity and efficiency of the procurement process, and ultimately the public investment.

The Asian Development Bank (ADB) and the World Bank (WB) have decided to use the Vietnam National E-Procurement System (VNEPS) to implement online bidding for competitive bidding packages for construction and goods supply contracts for projects financed by these two organizations in Vietnam, starting from January 2019.

Alexander Fox, ADB’s principal procurement specialist, said the e-government procurement system would help Vietnam benefit from advantages in transparency, efficiency, increased competition, and therefore lower prices that have been witnessed in similar system in other countries.

The VNEPS, operated by the national e-procurement centre, was introduced on a trial basis for six years and officially put into operation nationwide in 2016.

Vietnamese people develop greater trust in local goods

Since its launch a decade ago, the “Vietnamese people prioritise Vietnamese goods” campaign has gained significant achievements. Local producers have improved their product quality and in return, Vietnamese people now have more trust in domestic goods. 

The “Vietnamese people prioritise Vietnamese goods” campaign has assisted Vietnamese firms in building their brand name and bringing their products closer to domestic consumers. Now, over 90 percent of domestic consumers use locally-made products on a daily basis, even those in far-flung areas.

Previous drawbacks of Vietnamese goods included limited brand identity and origin traceability. Since the campaign, enterprises have been encouraged to expand their distribution channels and improve technology to meet strict international standards.

Within the campaigns, many promotion programmes have been implemented nationwide as a bridge between domestic producers and consumers. Not only does the campaign focus on improving B2C and B2B relationships, but it also gives B2G relationships a boost by increasing the presence of local goods in public procurement.

Vietnamese firms move to foster apparel exports to Canada

In 2019, Vietnamese businesses are poised to promote textile and garment exports to the North American nation under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Total textile-garment demand in the CPTPP, which gathers 11 members with a combined population of 500 million, is estimated at 83 billion USD. In 2018, Vietnam’s textile-garment exports to CPTPP markets were 5.3 billion USD, a 6.3-percent market share.

Canada’s demand for textile-garment products is worth some 13-14 billion USD, 5 percent of which is provided by Vietnam.

Even in 2018, when the CPTPPP was yet to take effect, Vietnam’s textile-garment exports to Canada soared by 19.7 percent.

The CPTPP, which took effect in Vietnam on January 14, is expected to boost exports of Vietnamese textile and garment products to Canada when 42.9 percent of the shipments of these products to the market will enjoy an import tariff of zero percent in the first year the deal comes into force.

250 delegates attend int’l career development conference in HCMC

As many as 250 delegates from 22 countries attended an international career development conference in HCMC to share and discuss the best practices in navigating career development in the age of Fourth Industrial Revolution.

The conference was held in three days, from May 22 to 24, at RMIT Vietnam’s Saigon South campus by the Asia Pacific Career Development Association (APCDA), a renowned forum for sharing career development ideas and practices in the Asia Pacific region.

Since its inaugural conference in 2013, APCDA has aimed to promote collaboration among career practitioners throughout the Asia Pacific region, inspire existing and potential career practitioners to deliver theory-based and research-driven career development services, promote research in the field of career development, and advocate for workforce policies and practices that foster inclusion and access to decent work for all. It now has 22 country/region directors and 188 active members.

APCDA President Carla Siojo noted that the Fourth Industrial Revolution is here, and there is much to be done. She hoped that the conference would enrich lives and co-create a better world through meaningful career development practice.

Felicity Brown, manager of career consulting and development at RMIT Vietnam’s Careers and Industry Relations unit, said that the university was proud to bring the seventh annual APCDA conference to Vietnam.

“Bringing this year’s conference to Vietnam made it easier for local schools, universities and companies interested in career development to access a wealth of best practice across Asia-Pacific,” she said.

The presentations at the APCDA conference covered the spectrum of career planning, development or job placement in school, university and private practice settings as well as labor market, workforce and international issues.

Delegates also had a chance to hear Dean of Education and Professor of Educational Psychology at the Chinese University of Hong Kong, Dr Alvin Leung, talk about the Career and Life Adventure Planning (CLAP) program.

CLAP is a comprehensive career development program in Hong Kong aiming to equip youth with the career development competencies to pursue their aspirations in a fast-changing society where talents and success in education and careers are narrowly defined within limited pathways of achievement.

The keynote address by Tran Anh Tuan, deputy director of the Institute of International Economics Training and Research, gave the participants insights about Vietnam's career landscape in the age of Fourth Industrial Revolution. Tuan spoke about the layoffs and labor shortages, specifically for workers with high-level and high-demand skills, that Vietnam has experienced in recent years.

“The shortages result from the choice of majors. Some majors are highly valued, although they do not fill the needs of society. At the same time, the system of forecasting human resource needs, labor market information, and vocational training activities are not synchronous and do not effectively link the demand for vocational training, the availability of vocational training, and demand for workers,” he said.

Tuan also forecast the high demand in some groups of occupations including information technology, bio technology, automation, management, finance, logistics, tourism and hospitality, and the creative industry.

Jeju Air recruits Vietnamese flight attendants

Vietnamese flight attendants on May 22 started working on flights operated by South Korean carrier Jeju Air. They were recruited by Jeju Air to serve the rising number of Vietnamese passengers to South Korea.

This marks the first time the airline has recruited foreign flight attendants, most of whom are Vietnamese, to meet the high demand for travel to South Korea among the local people.

The airline in a press release noted that 10 Vietnamese flight attendants had been recruited. They had participated in a two-month training course on customer service, flight procedures, aviation safety and the correct use of first aid kits and emergency equipment before taking the job.

As of April this year, some 150 foreign staff members worked for the airline.

Jeju Air currently operates 49 weekly flights from Incheon and four other South Korean cities, including Gimhae, Daegu and Muan, to the Vietnamese cities of HCMC, Hanoi and Danang.

At an event to present its business plan in Vietnam in late 2018, a Jeju Airline representative said the number of seats offered on Jeju Air flights linking the two countries had skyrocketed to 720,000 in October last year from 150,000 seats in 2015.

UCS announces expansion scheme in Vietnam

UCS, the parent firm of Dcorp R-Keeper Vietnam, has announced a plan to develop a research and development (R&D) center and expand its business scale in the country, having operated in the food and beverage (F&B) management technology sector for over 10 years.

Speaking at a press briefing today, May 22, a leader of Dcorp R-Keeper Vietnam said that the firm will expand business with scale and manpower surging three times compared to currently. Notably, the firm will begin providing technology solutions for the hospitality and retail sectors, payment technologies and IT system management services.

Ajay Kondal, global sales director of UCS, did not reveal the specific capital it will invest in the expansion in Vietnam but affirmed that Vietnam is a highly potential market. This is why UCS has chosen Vietnam to open its first R&D center in Southeast Asia.

The center will help Dcorp R-Keeper Vietnam better serve business demand in the local market, Kondal said at the event.

Earlier, Dcorp R-Keeper Vietnam has gained success in consulting and providing technology solutions for leading F&B brands such as Red Sun, Vingroup, QSR Vietnam, Golden Gate, NISO and King Coffee. The enterprise is making a drastic change by reaching out to the hospitality and retail sectors, targeting customers like restaurants, hotels, cinemas, casinos, fitness centers, family and kid entertainment areas.

James Duong Nguyen, general director of Dcorp R-Keeper Vietnam, said the new segments have big potential in the country. The firm has obtained annual growth rates of around 50% over the past years.

UCS is a multinational group with over 250 branches worldwide.

Deputy PM orders audit of EVN

BUSINESS NEWS 29/5

Deputy Prime Minister Vuong Dinh Hue has ordered the State Audit Office of Vietnam (SAV) to audit the 2019 financial report and electricity price management plan of Vietnam Electricity Group (EVN).

At a group discussion at the National Assembly’s (NA’s) seventh sitting last week, Deputy PM Hue said that EVN is annually subject to audits by both independent audit agencies and the SAV, the local media reported.

In 2017, the prime minister decided to establish a council to verify adjustments of the electricity price. The council includes representatives of the ministries of Industry and Trade; Finance; and Labor, Invalids and Social Affairs as well as representatives of the NA Economic Committee, the Government Office, the Vietnam Electrical Engineering Association and the Vietnam Standard and Consumers Association. The verification results were publicized, Hue said.

This year, the council will continue the task and announce its findings to the public.

After receiving local consumers’ complaints regarding the electricity price hike, the Ministry of Industry and Trade established three inspection teams to review the electricity bill calculation and the payment of such electricity bills; the teams will report their findings to the prime minister next month.

The prime minister also asked the Government Inspectorate to continue looking into EVN’s power price calculation, Hue said.

Regarding the power consumption ladder policy, Hue pointed out that up to 71.5% of households use less than 200 kilowatt hours of electricity per month and the prices for these rungs of the ladder remain low.

However, the Government will continue consulting with consumers and experts to adjust the prices for each ladder rung, the deputy prime minister added.

He confirmed that all countries apply the power consumption ladder policy.

At the discussion, deputy Tran Hoang Ngan from HCMC, also a member of the prime minister’s Economic Advisory Group, criticized the current electricity consumption ladder, noting that power consumption is divided into three rungs for progressive power tariffs in Japan and South Korea and five rungs in Indonesia and Malaysia. Meanwhile, Vietnam has six rungs.

In addition, the volume of power consumption for the first two levels is low, while the electricity demand among local consumers has increased.

He proposed merging the first two levels and the next two levels.

Meanwhile, deputy Le Thu Ha from Lao Cai Province said the retail electricity price did not rise by 8.36%, as previously announced by EVN.

Instead, households using more than 400 kilowatts of electricity per month will have to pay VND2,927 for each kilowatt hour consumed, up by 15% over the previous price, not 8.37% as reported by EVN.

The third rung bears a price of VND2,014, 10% higher than the previous price for the level, rather than 8.4% as calculated by EVN.

Thus, the electricity price was hiked by 10%-15%, not 8.33%-8.4%.

She agreed with Ngan that the volume of power consumption assigned to each rung is no longer suitable.

Meanwhile, deputy Mai Si Dien from Thanh Hoa Province proposed the NA assign the NA Standing Committee to supervise the development and adjustment of the retail electricity price range and issue a resolution to assign the Government to manage the electricity price.

VinTech Fund to provide significant support for startups

The VinTech Fund will spend VDN150 billion sponsoring 15 technology and science research projects in Vietnam this year.

Speaking at a seminar to launch a program on supporting tech and science startups in Hanoi City on May 22, Truong Ly Hoang Phi, chief executive officer of VinTech City under VinGroup, noted that the program was aimed at responding to the prime minister’s Make-in-Vietnam message and contributing to creating more scientific and technological products locally.

As such, the program is expected to help the country expand the startup community and assist these startups to gain ground.

The VinTech Fund was established to financially support startups that can turn out valuable scientific products.

Projects that meet the criteria on technology, commercial viability, feasibility and priority status will receive financial backing from the VinTech Fund.

The fund will prioritize research projects by 54 universities and institutes in Vietnam. It has encouraged scientists, inventors, startups and tech experts locally and globally to cooperate with Vietnam-based universities.

The fund will organize a seminar at Hutech University in HCMC on May 24 to introduce the support program and issue instructions on the program. The VinTech Fund will accept applications for sponsorship until June 15.

HCM City firms with tax arrears subject to investigation

The HCMC Social Insurance has sent the case files on 10 firms that evaded or delayed social and healthcare insurance payments to the HCMC Police Department for investigation.

As of April this year, 763 firms in HCMC were over six months late in paying their social and healthcare insurance, totaling more than VND981 billion (US$42 million), according to the insurance agency.

Among these firms, Saigon Posts and Telecommunications Service Joint-Stock Corporation (SPT) in District 1 is the largest debtor, at roughly VND30 billion.

Following closely were Nam Phuong Co. in the outlying district of Cu Chi, at nearly VND29 billion in arrears, and Vietnam Petro Shipping JSC, known as Falcon Shipping, in District 3, at over VND15 billion.

Five other major companies had social insurance arrears totaling over VND10 billion each.

The agency claimed that District 1 has the most firms with social insurance arrears, and 104 of them owed the highest amount of over VND130 billion. The districts of Tan Binh and Binh Tan are ranked second and third, with respective late payment sums of VND63 billion and VND62 billion.

In an attempt to handle the long-delayed payments, which will adversely affect the lives of the relevant employees, Pham Van Men, director of the HCMC Social Insurance, told the local media that the agency had submitted the case files to the municipal police for investigation.

The 10 firms under investigation include Hoang Quan Consulting, Trading and Service Real Estate Corporation (Phu Nhuan District), Thuong Thang Production Shoes JSC (Binh Chanh), Industry Construction Corporation (District 1), Hung Dung Steel Co., Ltd (Hoc Mon) and Dinh Phong Manufacturing and Trading Co., Ltd (Binh Tan District).

The rest are Ha Nam Investment and Production Co., Ltd; Luc Giac Construction Trading Investment Co., Ltd (both in Binh Thanh); Thai Son Investment Construction and Housing Business JSC (District 10); BYS JSC (Tan Binh); and Mien Dong Investment and Construction Corporation (Thu Duc).

The agency inspected these firms in 2018 and even imposed fines for administrative violations. However, the firms have yet to make amends. “This forced us to ask the police to launch an investigation and handle them in line with the law,” Men said.

Quang Ninh’s Van Don airport welcomes first international flight

The Van Don International Airport in the northern Quang Ninh province – Vietnam’s first private airport – welcomed its first international flight on May 27 morning.

The charter flight, conducted by Donghai Airlines, departed from Bao’an airport in China’s Shenzhen city at 11:05 pm on May 26 and arrived in Van Don airport at 1:30 am on May 27. It departed Van Don on the return leg to the Chinese city at 3:00 am the same day.

Speaking at a ceremony to welcome the flight, Director of Van Don International Airport Pham Ngoc Sau said that the airport will create the best conditions for the operation of Donghai Airlines, and make efforts to promote Quang Ninh’s tourist attractions, such as Van Don and Ha Long Bay, to Shenzhen and the entire Chinese market.

The launch of the Van Don-Shenzhen air route marks the first step in the airport’s strategy to approach the international market, Sau stated, adding that in June, Van Don will see the open of more international routes such as the Van Don-Taiwan route operated by Bamboo Airways and the Van Don-Incheon (the Republic of Korea) route by Vietnam Airlines.

For the Chinese market, there will be air routes connecting Van Don with Hainan, Nanning, and Guangzhou in the time to come, he added.

The Van Don International Airport was officially put into operation in December 2018. Since the beginning of this year, the airport has served 664 flights with over 90,000 passengers on board.

It has become the first Vietnamese airport listed among the top five airports with the highest points for quality services in the first quarter of the year, according to a survey by the Airport Performance Measurement Programme.

The presence of the airport is expected to help Quang Ninh achieve its target of welcoming 15-16 million tourists, including 7 million foreigners, by 2020 and 30 million arrivals, including 15 million foreigners, by 2030.

Construction on Van Don International Airport started in 2015 on 288 ha in Doan Ket commune, Van Don district. It is the first airport in Vietnam to operate under the build-operate-transfer (BOT) model.

The airport is expected to have an annual capacity of 2-2.5 million passengers by 2020, which will increase to 5 million by 2030.

 
 
 
 
 
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