BUSINESS NEWS 5/8

Enhancing competitiveness for agricultural products

BUSINESS NEWS 5/8

Exporting agricultural produce can bring in good profits, therefore, it is necessary to prioritise the domestic market, said Minister of Agriculture and Rural Development Nguyen Xuan Cuong.

In addition, Cuong added, fluctuations in the world market are becoming more difficult to predict, so the domestic market should be the priority. This is not only a goal but the driving force for the development of sustainable agriculture.

Vietnam's agricultural export market is increasingly influenced by many adverse factors. In response to difficulties, the Ministry of Agriculture and Rural Development (MARD) has actively promoted trade and consumption of domestic agricultural products, as well as studied and forecasted supply and demand to provide market information in a timely manner so that localities, businesses and people can adjust production suitably.

According to Nguyen Quoc Toan, Director of the MARD’s Agricultural Products Processing and Development Department, connecting production and consumption of agricultural products, especially high quality agricultural products, contributes to boosting the consumption of agricultural products in the country as well as solving output issues in increasingly difficult export conditions.

Developing agricultural production models towards linking businesses with farmers has helped farmers sell products for stable prices and low risk. Farmers are also invested by enterprises in agricultural seeds and materials for their production needs with low interest rates and more reliable quality.

Since then, farmers can assure production, implementation of technical measures and boldly invest in restructuring plants and animals, increasing productivity and output. In particular, it also motivates farmers to organise production according to the farm model, creating a large volume of commodity products, lowering production costs and increasing incomes.

For businesses, they are also proactive in the supply of agricultural products, quality control, stable prices and a clear commitment to quantity, quality, and time of product supply through affiliate contracts. Thus, businesses are assured to invest in cooperating with farmers for long-term business.

Until now, the form of cooperation and production linkage associated with the consumption of agricultural products by value chains has become popular. To make it easier to link businesses with farmers, many cooperatives have been established to bridge the gap.

By June 2019, the country had more than 15,500 agricultural cooperatives. The whole country has built and developed linking models with 1,254 chains, 1,452 products and 3,172 locations of controlled products under the chain of food safety.

In order to enhance information as well as to bring agricultural products directly to consumers, MARD also regularly organises fairs and exhibitions around the country; coordinates with associations to organise seminars to introduce, promote products and brands, solve difficulties for businesses, support knowledge and legal aid to build brands.

Thereby, it helps agricultural products of cooperatives to penetrate into the system of modern distribution channels, supermarkets, trade centres and supply a large number of domestic consumers.

KPMG heads Source Global Research survey on consulting quality

KPMG has been ranked number one in Financial Services Consulting in Source Global Research’s latest report, Perceptions of Consulting in Financial Services: Client Perception Program, which reflects the views of over 1,800 decision-makers globally.

A rise of eight points compared with 2018’s performance in the survey placed KPMG squarely at the top of the table and marked the biggest uptick in client opinion of individual firms in the period.

Every year, Source Global Research asks senior end-users of consulting firms to rate the quality of consulting firms’ work in 13 different financial services specialisms. KPMG came first in business strategy, financial management, risk management, regulatory-driven work, and robotics as well as working with legacy technologies and managing non-digital transformations. The firm also ranked in the top three for taking advantage of artificial intelligence, data and analytics, operational improvement, and sales and marketing consulting, including customer experience.

These findings suggest that KPMG’s focus on high-quality, innovative and technology-driven services and solutions - while continuing to provide consistent, excellent support in more traditional fields of work - is paying off.

“Last year, KPMG had strong scores in what might be deemed ‘traditional’ areas of strength for the firm: financial management, risk management, and regulatory-driven work,” the report noted. “It still scores highly in these areas this year, but it has closed the gap in services like sales and marketing, robotics, and transformation (both digital and non-digital). Last year, for example, 62 per cent of KPMG’s clients spoke positively about its digital work; this year that figure is up to 73 per cent.”

“Several years ago we set a new course,” said Mr. Jim Liddy, Chairman of KPMG Global Financial Services. “We knew that we needed to assert our capabilities and our talent in new areas - digital transformation, data and analytics, fintech, emerging technology - and that we had to win the kind of flagship engagements that would give us brand permission in these areas.”

“The Source report reinforces the conversations that I have with clients and partners. We are making good on the challenges we set for ourselves, and our clients recognize the value we bring. As always, this comes down to Trust and Growth - as trusted advisors in technology-driven transformation we will win the work that will help us to grow and invest in our business for years to come.”

Makino opens HCMC technical center

Machine tool and solutions provider Makino recently announced the official opening of the Makino Vietnam Technical Center in Ho Chi Minh City.

Located at the Saigon High Tech Park on 4,700 sq m, the two-story technical center, built with investment of $2.6 million from Makino Asia, houses a showroom, training facility, parts center, and offices.

“Opening the Makino Vietnam Technical Center supports Makino’s strategy and our commitment to strengthening our support to customers, both before and after sales, and sharing our expertise with the precision engineering industry with turnkey solutions and technology knowledge transfer,” said Mr. Neo Eng Chong, CEO and President of Makino Asia.

The Center’s technical showroom boasts machines for high-speed milling and EDM applications, bringing technology closer to customers. It will also offer machine tool and part sales, local service, training and technology support, and the application of engineering services.

It is also equipped with training facilities where Makino’s sales and engineering specialists can offer interactive training to equip customers with the latest in-depth industrial knowledge and solutions to have a holistic approach.

“Makino’s pride is always on quality and service, to provide a holistic experience to all customers,” said Mr. Nguyen Thanh Hoa, Country Manager of Makino Vietnam. “The Makino Vietnam Technical Center serves to demonstrate the latest machining technology and solutions from Makino as well as from our technology partners. Customers will benefit from our one-stop solution for every size and industry.”

Makino Asia has a long history of introducing innovative solutions that boost productivity and profitability. It has since developed into a fully-integrated manufacturing company, incorporating research and development (R&D), engineering, production, and business administration under one roof. By integrating visionary digital technologies with premium performance machinery, Makino helps companies fundamentally transform.

Makino Asia produces the PS, Slim3n, F, and E series milling machines, the EDAF and EDNC series sinker electrical discharge machines, and the U and Uj series wire electrical discharge machines at its Singapore facility.

New Miniso stores first to stock Marvel products

The Vietnamese subsidiary of lifestyle and household item retailer Miniso last week announced the opening of three Marvel themed stores in Vietnam: Miniso Van Hanh Mall and Miniso Giga Mall in Ho Chi Minh City and Miniso BigC in Da Lat.

Cooperating with the globally-renowned Marvel brand, the retailer is introducing superheroes through a range of different products.

The idea is the beginning of having Marvel themed stores nationwide and serving customers who love these superhero characters.

“Not stopping its research on the market and fulfilling the tastes of Vietnamese shoppers, Miniso always looks to connect with international brands,” said Mr. Ted Lan, General Director of Miniso Vietnam.

“In Vietnam, in each area, we always bring products of the best quality and with the most creative designs so that customers always feel satisfied. These store openings were a big event for Miniso, upgrading its products and services to international standards while maintaining reasonable prices.”

“Marvel is the world’s top IP with a wide range of influence and great appeal among young people,” said Mr. Ye Guofu, global Co-founder and CEO of Miniso. “The Marvel Comic Universe is no longer fiction but is helping society have a positive outlook on real values. That’s why Miniso cooperated with Marvel, to bring these characters closer to the lives of fans.”

Through ongoing cooperation with world famous characters and brands, having previously worked with We Bare Bears, Pink Panther, Adventure Time, and others, Miniso looks to benefit from links with attractive brands. This is a smart way to boost sales, promote products, and sell customer favorites in-store, maintaining Miniso’s philosophy: simple, natural and high-quality life.

MINISO has over 3,500 stores in more than 75 countries and territories around the world, including the US, Australia, Canada, South Korea, Japan, China, Taiwan (China), Vietnam and elsewhere. It has more than 40 stores in Vietnam and is in the process of expanding to 200 stores around the country.

July PMI: Sharpest rise in manufacturing output for 8 months

The Vietnam Manufacturing Purchasing Managers’ Index (PMI) ticked up to 52.6 in July from 52.5 in June, signaling a further monthly improvement in business conditions; the 44th in as many months.

Vietnam’s manufacturing sector continued to perform well at the start of the third quarter of the year, recording further marked growth in new orders and production. The rate of job creation, however, softened.

Input prices also increased at a weaker pace in July, with muted cost pressures helping feed through to another monthly reduction in selling prices.

Manufacturing production rose sharply in the month, with the rate of expansion quickening for the third month running to its fastest since last November. Firms indicated that they were often able to follow production plans, with higher new orders also contributing to output growth.

“The latest PMI data for Vietnam point to ongoing success for Vietnamese manufacturers during July, with new business growth the fastest year-to-date,” said Mr. Andrew Harker, Associate Director at IHS Markit, which compiles the PMI. “This was despite the joint-weakest rise in exports for 44 months as the US-China trade dispute hampers global trade flows. If anything, firms are not currently able to expand output quickly enough, as evidenced by a second successive rise in backlogs of work. Should the PMI remain around the current level for the rest of the quarter, PMI-based estimates suggest that manufacturing output will be set for further double-digit year-on-year growth in the third quarter.”

New business rose at a solid pace that was the fastest in 2019 so far amid improving customer demand. The rate of expansion in new export orders softened to the joint-weakest in 44 months, however, amid trade tensions between the US and China.

Solid increases in new work added to pressure on capacity at Vietnamese manufacturers. Backlogs rose for the second month running. Firms responded to greater output requirements by taking on additional staff for the third time in four months. That said, the rate of job creation was only slight and weaker than that seen in June.

The rate of input cost inflation softened for the third successive month in July, with some panelists citing China as a source of falling prices. The latest increase in input prices was only slight and the weakest since March.

Relatively soft cost pressures enabled manufacturers to maintain competitive pricing policies at the start of the third quarter, with selling prices reduced for the eighth month running. That said, the rate of decline was only marginal.

Expectations of higher new orders over the next 12 months resulted in continued optimism among manufacturers that production will expand over the coming year. Sentiment picked up from the previous month, with over half of all respondents optimistic regarding the 12-month outlook.

Confidence in the near-term outlook, alongside increases in current workloads, encouraged firms to expand their purchasing activity in July. Input buying rose sharply, and at a broadly similar pace to the previous month. Despite the strong increase in purchasing, pre-production inventories were broadly unchanged as inputs were used to support production. Meanwhile, stocks of finished goods increased slightly, ending a two-month sequence of depletion.

Finally, suppliers’ delivery times improved for the third month running in July, albeit only marginally and to the weakest extent in the current sequence of shortening lead times.

EuroCham opening eyes of investors

Ahead of the upcoming enforcement of the landmark EU-Vietnam Free Trade Agreement, European enterprises in Vietnam are seeking to venture further into the most appealing fields in order to bet on their growth potential.

A group of more than 20 business members of the European Chamber of Commerce in Vietnam (EuroCham) and Vietnamese partners arrived in the northern port city of Haiphong at Damen Song Cam Shipyard last week to begin the FDI Excursion Tour of the EuroCham.

Visitors were taken aback by sight of green and fresh space at the shipyard. Just outside the city centre, the yard is located on a 43-hectare plot of land alongside the Cam River, where a number of shiplifts are docked to wait for tests, or delivery to customers worldwide.

Officially opened just over five years ago, Damen Song Cam is a joint venture between Dutch-based Damen Shipyards Group (70 per cent) and Vietnamese partner Song Cam shipyard (30 per cent). It is able to deliver up to 40 workboats a year, with all of the products being for export.

“The facilities at Damen Song Cam have been designed to maximise quality and efficiency. The shipyard has plans for future investments to double capacity from the current 40 deliveries a year to 80,” said Joris Van Tienen, general director of Damen Song Cam.

The other famous EU-based brand in Haiphong is Deep C Industry Zones (IZs), which boasts shareholders in the Belgian government, the Haiphong People’s Committee, and Rent-A-Port. Established in 1997, the 541ha Deep C I has, next to the Dinh Vu Port system, attracted over 70 projects, while the 645ha Deep C II, which opened a year ago, is also now attracting much interest among investors.

To meet the growing demand among investors, Deep C III is being developed across 523ha, of which 385ha is land available for lease and the remainder as the port area.

“The project is located adjacent to Lach Huyen Deep Seaport,” said Bruno Jaspaert, general director of Deep C Industrial Zones. “We plan for a general cargo berth serving tenants of Deep C IZs, and the dedicated area for the logistics complex is 37ha in size, while the dedicated supplier park is for the automotive industry.”

As planned, Deep C III will be offered for lease by the end of 2019.

Haiphong is currently one of the most attractive destinations among EuroCham members in Vietnam, with Damen Song Cam and Deep C being among the successful names there.

Despite growth potential, total EU investment in Haiphong remains lower than expected, reaching $350.30 million by 2018, making up just 2 per cent of the city’s total foreign direct investment (FDI). The Netherlands took the lead among EU investors in the city, followed by Germany, France, the UK, Belgium, and Norway.

In addition to Haiphong, other fast-growing areas of the country besides Hanoi and Ho Chi Minh City – such as Ba Ria-Vung Tau, Long An, Binh Duong, and Dong Nai – are also on the FDI Excursion Tour’s list of destinations, reflecting the investment trend and strong interest among European businesses in the country. These localities are appealing to EuroCham members as they are the biggest magnets to FDI in Vietnam, and which are attracting powerful international groups.

Over the last few years EuroCham, which has over 1,000 members in Vietnam, has been organising regular tours and excursions both to promote these member companies, and to showcase the opportunities of investing in these areas.

For instance, the tours in the northern region have brought a number of visitors to EuroCham member companies such as Deep C Industrial Zones, logistics provider DB Schenker, garment producer Van Laack, and Damen Song Cam shipyard.

In the south, EuroCham also organised industrial excursions to showcase the huge improvements in Vietnam’s logistics infrastructure and in modern IZs. Ports involved have included Tan Cang Hiep Phuoc, Tan Cang Cai Mep-Thi Vai, and industrial parks like Long Hau, Hiep Phuoc, and Phu My 3.

“These excursions have been very successful, and we hope to continue organising more in the future to highlight the advantages of investing in Vietnam as it continues to improve both its infrastructure and business environment,” said EuroCham chairman Nicolas Audier. “In making these improvements, Vietnam is becoming ever more integrated into global supply chains and, in the process, becoming an increasingly attractive trade and investment destination for European companies.”

Today, the EU is the fifth-largest foreign investor in Vietnam with almost $24 billion invested in over 2,000 projects in the country. Indeed, European investors are present in 52 out of 63 cities and provinces, with the majority of investment being in manufacturing ($8.4 billion), electricity ($5 billion), and real estate ($2.6 billion). Last year, Europeans invested over $1 billion in Vietnam

“This will grow even further once the EU-Vietnam Free Trade ­Agreement and Investment Protection Agreement are ratified and enter into force, following the official ­signing in Hanoi last month,” Audier said.

The future of manufacturing through smart factories

The largest international machine tools and metal technology exhibition in ­Southeast Asia will this year shine a ­spotlight on smart factories.

Themed “Rising with Innovations”, METALEX Vietnam 2019 will take place on October 10-12 at the Saigon Exhibition & Convention Center in Ho Chi Minh City. The expo will showcase innovative machine tools, precision engineering, and metalworking technologies with an emphasis on the smart factory concept.

According to the latest report from Global Market Insights, Inc., the smart factory market is anticipated to rise from $75 billion in 2018 to over $155 billion by 2025. The concept plays a vital role in the future of manufacturing and metalworking owing to the growing demand for industrial solutions which optimise output and save on both labour and operational costs.

Vu Trong Tai, general manager of Reed Tradex Vietnam said, “Those factories that are digitally advanced and have connected facilities will sharpen the manufacturing performance in a host of operations. Several technologies, namely the Internet of Things, AI, Big Data, and analytics in the smart factory market, can operate autonomously and correct by itself.”

Various planning and management software can detect probable errors and alert managers to eliminate losses, and there is a high demand for these solutions, said Tai.

“In addition, government initiatives and policies in the European and Asian countries to promote the utilisation of intelligent factory techniques are also major factors attributing to smart factory expansion. Due to the popularity of cost-efficient and automated benefits, the industry is witnessing a high demand from areas like manufacturing, metalworking, automotives, and processing,” Tai added.

Commenting on the smart factory trend in Vietnam, Huynh Phong Phu, local business manager of Robotics and Discrete Automation at ABB Vietnam, said that large-scale global manufacturers have flocked to Vietnam, such as Samsung, LG, Toyota, Honda, Canon, and Brother, with some of these production facilities in the heart of the worldwide supply chain.

Meanwhile, Vietnamese manufacturers and assemblers have also developed to a large scale and complied with global production regulations and standards. These conditions have promoted the development of ­auxiliary manufacturing enterprises, thereby raising product requirements and productivity.

According to Phu, ABB has recently installed and commissioned over a thousand robots in sectors like automotives, electronics, animal feed, food and beverages, chemicals, metal, and brick fabrication in order to drive efficiency and quality.

ABB will be opening their second robotics centre later this year in Ho Chi Minh City to enable faster nationwide responses, support its customers, and to meet the manufacturing goals of today and tomorrow.

At METALEX Vietnam this year, ABB will show a fully automated production demo, in which the robots are synchronously controlled by ABB’s Ability Connected Services, a sophisticated suite of digital services.

Being delivered via ABB’s ­MyRobot, a single, intuitive interface, ABB Ability Connected Services make actionable data available anywhere and at any time to enhance robots’ uptime and optimise the performance of their systems.

Customers will also experience the concept of future smart manufacturing, which ensures quality, productivity, price, stability, and safety. In addition, ABB will also simulate a metal process from workpieces, welding, product bearing, and finishing.

This year, over 500 brands from 25 countries will gather at METALEX Vietnam. WELDING Vietnam 2019, the only international exhibition specialising in welding and cutting materials, equipment, and technologies in Vietnam, will also be co-located with the METALEX event. This show promises to be an all-in-one platform for both Vietnamese and overseas ­industrialists to discover the most up-to-date technologies and solutions within the welding industry.

Fruit producer HAGL Agrico to boost capital by 25 pct

HAGL Agrico plans to convert bonds into shares and raise its charter capital by 25 percent to VND11.08 trillion ($477.93 million).

On August 9, the company, formally Hoang Anh Gia Lai Agrico, will convert 221,700 bonds to 221.7 million shares, equivalent to one bond per 1,000 shares, it said in a statement. Its current charter capital is VND8.87 trillion ($382.6 million).
Automaker Truong Hai Auto Corporation (THACO), which owns 13.12 percent of HAGL Agrico, holds 99.99 percent of the bonds. The rest belongs to 14 individuals.

HAGL Agrico’s HNG share was traded at VND17,850 (77 cents) on Tuesday, down 5 percent from this year’s peak on July 15.

In June last year, HAGL Agrico offered 221,710 bonds to shareholders, each convertible into 1,000 shares, but a mere 22 were bought. THACO picked up the remaining 221,688 bonds for VND2.2 trillion ($97.7 million), which carried a coupon rate of zero percent.

HAGL Agrico has been facing financial difficulties since early 2018. It reported revenues of VND1.66 trillion ($71.59 million) in 2018 and losses of VND171.75 billion ($7.41 million) against profits of VND9.16 billion ($395,000) the previous year.

THACO, a leading car and commercial vehicle maker in Vietnam, has been seeking to increase its ownership in Agrico in recent months and has stepped in several times to rescue HAGL Agrico from financial difficulties.

It has so far injected around VND22 trillion ($949 million) in the form of equity and loans, helping Agrico restructure itself.

Agrico has been growing fruits since 2016. Last year, passion fruit, bananas and dragon fruit, along with chili, fetched the company VND1.4 trillion ($60.37 million), or around 84 percent of its revenue. Its main markets are China and Thailand.

Chances of profit from property stocks still ahead

Despite certain difficulties facing the property market, there remain numerous opportunities for investors to earn money from real estate stocks, according to insiders.

At a seminar in Ho Chi Minh City on July 30, Chairman of the HCM City Real Estate Association Le Hoang Chau said it is not a rosy picture in the property market. Since March 7, 2017, when the Prime Minister requested the projects using State-owned land to be reviewed, the market has faced considerable challenges and difficulties.

In 2017, the real estate market grew 4.07 percent from the previous year but began to decline in 2018.

In the first seven months of 2019, the whole market shrank 34 percent in size, including a 29-percent fall in the project number and a 34-percent decrease in the apartment supply. The supply dropped 44 percent in the high-end segment and 34 percent in the pocket-sized segment. Meanwhile, there weren’t any low-end property projects opened for sale in the second quarter.

Between January and July, the Construction Department of HCM City submitted only three new projects to the municipal People’s Committee for consideration, down over 80 percent. State budget revenue from real estate also nosedived more than 60 percent, Chau noted.

He said every cloud has its own silver lining, elaborating that more positive signs will appear in the city’s property market from now to the end of this year, including the implementation of projects in the eastern and southern areas.

Lai Duc Duong, head of the real estate analysis division at the Rong Viet Securities Corporation, said property companies posted relatively good profits last year. In 2019, most of them have recorded lower profit growth while those with faster growth are small-cap firms.

 

Regarding real estate stocks, short-term investment chances currently focus on businesses with good performance so far this year. In the long term, investors should pay attention to companies with big land reserves, he said, adding that there are five to six firms with very big land reserves for business purposes in the time ahead.

Meanwhile, Director of the KIS Vietnam Securities Corporation Truong Hien Phuong suggested investors pay attention to the companies with flexible switch to developing segments and stable growth. They should also choose appropriate points of time to buy property stocks since the time of purchase is can ensure 50 percent of investors’ success.

Vietnamese co-working spaces receives top prize

Four Vietnamese co-working spaces have been honoured by being named the winners of the Co-worker Members’ Choice Awards 2019 for Asian cities.

The domestic winners include an eSpace Co-working hotspot in Hanoi, Spiced in Ho Chi Minh City, Hub Hoi An in Hoi An City, and the Danang Coworking Space in the central city of Danang.

First launched in 2018, the Co-worker Members’ Choice Awards serve as the only global co-working industry award that recognizes the top co-working spaces of each city, based on feedback from thousands of co-working spaces from around the world.

Vietravel explores $30 million bond issuance for aviation projects

Local tour operator Vietravel is collecting shareholder opinions on its plan to issue non-convertible bonds worth VND700 billion (US$30 million) to provide supplementary capital for the establishment of Vietravel Airlines.

The bonds have a term of two years with a maximum interest rate of 11 per cent per year.

The firm also asked shareholders to cancel the plan to issue 80,000 non-convertible bonds with a face value of VND1 million, approved at the annual general meeting in April. Under this plan, the bonds would have a term of 30 months and were expected to be released in the third quarter of this year.

Nguyen Quoc Ky, General Director of Vietravel, revealed the plan to establish Vietravel Airlines for the first time at a conference in early April.

In mid-February, the company established Viet Nam Travel Aviation Co Ltd with initial charter capital of VND300 billion, based in the central province of Thua Thien Hue. Charter capital was later lifted to VND700 billion.

According to the website of the Thua Thien – Hue People's Committee, on June 11, Vietravel Airlines submitted an investment plan for the project to the provincial authorities.

Vietravel Airlines has a total investment of about VND1 trillion and will provide domestic and international air transport services. It is expected that after beginning official operations early next year, the airline will receive 20 aircraft and carry 5 million passengers annually.

Vice Chairman of Thua Thien Hue People's Committee Nguyen Van Phuong has committed to support Vietravel and instructed related agencies to create favourable administrative conditions to help the company stay on schedule.

Rubber group sees both revenue and profit rise

The Viet Nam Rubber Industry Group JSC (GVR) reported revenue and post-tax profit of VND7.6 trillion (US$325 million) and VND1 trillion in the first half of this year, up 8.5 per cent and 15.7 per cent year-on-year, respectively.

The figures represent 31.4 per cent of the revenue target and 25.5 per cent of the profit target for this year.

In the second quarter alone, the group earned VND4.2 trillion in revenue and VND744 billion in post-tax profit.

The group has total assets of VND76 trillion and more than VND12.5 trillion of liabilities.

Currently, GVR manages 407,800 hectares of rubber area. The company has 106 subsidiaries and 20 joint venture companies with total investment value of more than VND37.2 trillion.

In rubber latex processing, GVR accounts for more than 35 per cent of Viet Nam's production.

GVR has advantages in developing material plantation and wood processing. The company has 13 factories processing wood products such as medium-density fibreboard (MDF), plywood, refined wood, rubber, of which plywood accounts for 60 per cent of the market supply, MDF accounts for 50 per cent.

Each year, the group can supply nearly one million square metres of artificial wood with high quality products.

Additionally, GVR manages 12 industrial parks with total area of ​​6,000 hectares. Commercial land for lease accounts for nearly 4,400 hectares.

The group will continue to invest in infrastructure of existing industrial zones such as Nam Tan Uyen, Rach Bap and Tan Binh in the southern province of Binh Duong. It will also develop residential areas and service areas for industrial parks.

HDBank reports record profit

The HCM City Development Joint Stock Commercial Bank, or HDBank, has reported a record pre-tax profit of VND2.211 trillion (US$95.36 million) for the first half of the year.

Its consolidated net interest margin, which rose to 4.4 per cent, was the highest in the banking sector.

Total consolidated revenues were worth VND5.17 trillion, of which net interest earnings accounted for VND4.35 trillion, a year-on-year increase of 17 per cent.

Income from services was VND286 billion, up 27 per cent.

Operating expenses and risk provisioning were tightly controlled at VND2.43 trillion and VND532 billion in line with plans.

As of June 30 the bad debts ratio for the parent bank was only 1 per cent. Consolidated bad debts, including at the consumer finance subsidiary, fell from 1.5 per cent at the beginning of the year to 1.4 per cent, its lowest rate so far.

The bank’s total assets are worth VND210.29 trillion ($9.08 billion).

It has deposits of VND184.78 trillion ($7.97 billion) and total outstanding loans of VND144.28 trillion ($6.2 billion), an increase of 15.3 per cent.

Retail banking and financing small and medium-sized enterprises (SMEs) continued to be key growth drivers.

In the second half of the year the lender will adopt risk management methods based on Basel II standards and continue to focus on its retail, SME and consumer banking strategies.

HDBank is one of the leading joint stock banks in providing ‘green’ credit, especially to renewable energy projects. In the first half it lent nearly VND6 trillion to finance commercial solar power and rooftop solar power.

The lender’s community activities include giving scholarships to poor students, gifting health insurance cards to thousands of near-poor people and funding cataract surgeries for thousands of disadvantaged people.

The ninth annual HDBank Cup International Open Chess this year attracted a record number of foreign players.

The bank also sponsors the National Futsal Championship and Cup.

Hoa Sen after-tax profit surges 94 per cent

Hoa Sen has announced a 97 per cent growth in Q3 profit. Photo Courtesy Hoa Sen Group

Steel maker Hoa Sen Group has reported a 94 per cent jump year-on-year in third quarter profit after tax to VND161 billion (US$6.9 million).

Its third quarter for the fiscal year 2018-19 lasts from April 1 to June 30 2019.

Operating profit was up 127 per cent at VND208 billion ($8.9 million).

But net revenues slumped by 30 per cent to VND7.2 trillion ($310 million).

The gross profit margin for the quarter was up to 13.4 per cent from 9.99 per cent in the same period last year.

The company said the steel industry has been facing many challenges in the last two years due to the trade war between the US and China and intense competition in the domestic market from cheap low-quality imports.

The property market slump has also been a challenge, it said.

But the company effected a timely restructure and focused on developing markets and products that fetched high profits, it said, adding that it cut operational and marketing costs.

It managed to cut management costs by 50 per cent thanks to installing the enterprise resource planning (ERP), which helps connect the company with its 10 factories, 55 offices and 526 retail outlets.

HSG is also focusing on exploring new export markets and improving quality to meet the demands of buyers.

It ships its products to many markets including Australia, Mexico, Canada and the US.

The company has a 34 per cent share of the domestic steel sheet market and 18 per cent of the steel pipe market.

In the 2017-18 fiscal year its exports rose 27 per cent to $538 million.

Earlier, the company had said it would not be affected by the US Department of Commerce’s preliminary ruling on the circumvention inquiries it made into Vietnamese cold-rolled steel and corrosion-resistant steel exports since it used materials from Việt Nam or imports from markets other than Taiwan and South Korea for making products exported to the US.

Workshop on open-ended mutual funds seeks to educate young investors

The open-ended mutual fund market has developed rapidly in recent years, with quarterly growth averaging 17.6 per cent since 2016, a workshop on investors and open-ended funds heard in HCM City on Wednesday.

Open-ended funds are ideal for investors who do not have knowledge or expertise in securities and can instead benefit from the experience and expertise of fund managers.

Bui Ngoc Luan of VinaCapital Fund Management JCS said globally open-ended funds account for more than 60 per cent of total securities trading.

Thai Thi Hong, a training expert at VCFM, said 26 such mutual funds have been issued in the country since 2013.

“In the last four years, the assets under management by open-ended mutual funds have grown by 70 per cent a year,” she added.

It is likely to grow even faster rate in the coming years, she said.

The overall market is currently worth VND17.5 trillion (US$754.2 million) while a single fund in the US and elsewhere could manage assets of billions of dollars.

Luan said: “An investor who invests in an open-ended mutual fund needs to understand their risk appetite and which kind of fund is suitable for their investment needs at each stage.”

Tran Tuan Anh, deputy head of the State Security Commission’s HCM City office, said the country has an adequate regulatory framework to manage open-ended funds.

Organised by VinaCapital Fund Management JSC, a member of the VinaCapital Group, and the State Securities Commission, the workshop was aimed at helping young people, new graduates, retail investors get a clearer perspective on personal financial planning, acquire basic investment skills and learn about a relatively low-risk asset class.

It was open to the public and attendees only had to register in advance.

Nguyen Thi Thai Thuan, general director of VinaCapital Fund Management, said: "The goal of VCFM is to create investment opportunities for all Vietnamese to increase their assets in a legitimate way and with the least risk.”

Hoa Phat invests nearly 43 trillion VND in Dung Quat project

In the first half of 2019, Hoa Phat Group poured nearly 9.17 trillion VND (393.35 million USD) into Dung Quat iron and steel production complex, raising total investment in the project to approximately 42.92 trillion VND.

The group’s chairman Tran Dinh Long said that total initial investment for the project is 40 trillion VND of medium-term loans for fixed assets and 12 trillion VND for short-term activities.

During the investment process, Hoa Phat applied some new technological achievements, increased investment in environmental protection and purchased European equipment to raise capacity, therefore, its spending on fixed assets increased to 50 trillion VND and for working capital of 15 trillion VND.

From January to June, Hoa Phat recorded more than 30.06 trillion VND of revenue, a year-on-year increase of 10 percent.

However, the parent company’s after-tax profit decreased by 13 percent to nearly 3.84 trillion VND, fulfilling 58 percent of the year's target.

According to information from a recent analyst meeting, the price of iron ore is at 125 USD per tonne, up 80 percent compared to the beginning of the year. The main reason is due to problems at ore mines in Brazil, causing supply to narrow. This affected the business results of Hoa Phat Group.

However, Long said the company has already purchased raw materials at the old price, recorded on a monthly average, thus limiting the impact of the price increase in the first half of the year.

He said that in the second half of 2019, the situation may be difficult when real estate project procedures are delayed.

Chances for Malaysia firms to pour capital into Vietnam’s infrastructure

Maxfield Brown, a representative of Dezan Shira & Associates, has said it is time for foreign investors to pour capital into infrastructure in Vietnam.

In his view, foreign direct investment in modern transportation infrastructure will help improve Vietnam’s competitiveness.

Chairman of Confexhub Group Datuk Abdul Aziz S.A Kadir also saw opportunities when the Vietnamese government is striving to attract domestic and foreign investment in transportation and infrastructure projects, saying that Vietnam not only needs capital but also specialised technical knowledge, thus offering good chances for foreign investors, including those from Malaysia.

According to him, conventional funding sources, such as the State budget and official development assistance from bilateral and multilateral donors, and government bonds, could only cover about half of the demand.

Investors at home and abroad are expected to be involved in infrastructure development through public-private partnership model, he said.

Deputy Director of Ho Chi Minh City’s Investment and Trade Promotion Centre Cao Thi Phi Van said among 210 local projects calling for investment, many of them are in infrastructure that caught interest of Malaysian investors.

Ho Chi Minh City always welcomes foreign investors, including those from Malaysia, to invest in trade, technology, culture, tourism, environment and infrastructure, she said, adding that the city is particularly interested in transportation infrastructure projects, including six metro lines that are pitching to capital, apart from industrial park and logistics infrastructure.

Tran Ngoc Chinh, Chairman of the Vietnam Urban Planning and Development Association, said Vietnam’s road and railway infrastructure remain poor so that more expressways need to be built in the future.

Commercial bank SHB’s pre-tax profit surges 57 percent in Q2

The Sai Gon-Hanoi Commercial Joint Stock Bank (SHB) enjoyed 817 billion VND (35.2 million USD) in pre-tax profit in the second quarter of the year, up 57 percent year-on-year, the bank has reported.

According to a financial report by the bank, the major lender enjoyed robust business activities during April-June, with net interest income standing at more than 1.74 trillion VND, growing 60 percent against the same period last year. Particularly, profits from services reached nearly 200 billion USD, or four times higher than Q2 in 2018.

As of June 30, the bank had 341.9 trillion VND in total asset, up 5.5 percent from the outset of the year and accounting for 91.6 percent of the yearly plan. Some 270.4 trillion VND in capital was mobilised from individuals and organisations, expanding 11.1 percent.

In the first six months of the year, the SHB gained 1.56 trillion in pre-tax profit, rising 52.7 percent year-on-year, and completing 51 percent of the yearly plan.

A representative from the bank said it is striving to strictly handle bad debts, comply with regulations on debt classification, and improve capacity to hedge against risks.

By the end of last month, the SHB had a charter capital of more than 12 trillion VND, and the figure will rise to 17.57 trillion VND this year. The bank targets over 3 trillion VND in pre-tax profit for the whole year, increasing 46.5 percent from 2018.

Ben Tre festival promotes coconut industry

The 5th Coconut Festival will be held in the Mekong Delta province of Ben Tre from November 14-20, heard a press conference held by the provincial People’s Committee in Hanoi on July 31.

According to Vice Chairman of the provincial People’s Committee Nguyen Huu Lap, the festival aims to honour local coconut and coconut-based products while popularising the local staple among domestic and foreign tourists.

A wide range of activities are scheduled during the festival, including coconut cuisine festival, exhibition of coconut products, conference on coconut value chain, and a culture-art-tourism week which features a string of events like art performances, tour operation and folk games.

They are expected to help Ben Tre province promote its advantage in exports of coconut products, and raise public awareness of the local coconut culture and potential of the local fruit.

Besides, the festival will contribute to attracting investment for coconut value chain and tourism development, he added.

Ben Tre province accounts for half of the country’s coconut plantation land, and 80 percent of the Mekong Delta’s coconut cultivation areas. The locality earns average 200 million USD from coconut exports each year, 25 percent of which is contributed by with processed products.

The coconut industry has been a culture of the locality, which plays an important role in local socio-economic development.

Vietnam eyes 10 tech unicorns by 2030

Vietnam wants to have five billion-dollar tech firms by 2025 and 10 by 2030 as part of its plans for the Industry 4.0 adoption.

According to a recent plan of the Ministry of Planning and Investment, the country wanted at least 20 percent of firms to adopt the Industry 4.0 by 2025 and 40 percent by 2030. Investment in research and development needs to account for at least 2 percent of the country’s GDP by 2030.
Vietnam needs to rank at least 30th in the Global Innovation Index, it said. The country now ranks 42nd.

Areas that need to be prioritized in technology transformation were public administration, utilities, healthcare, education, manufacturing, agriculture, logistics, trade, information technology, and finance and banking.

The country is among the countries least prepared for the fourth industrial revolution, according to a World Economic Forum report released last year. It ranks low in terms of education, human resources, innovation, and technology, all crucial factors in the revolution, it said.

 
 
 
 
 
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