BUSINESS NEWS 8/8

Seven-month trade surplus tops $1.8 billion

BUSINESS NEWS 8/8


Viet Nam posted a trade surplus of US$1.8 billion in the first seven months of the year, much lower than $2.6 billion trade surplus seen in the same period last year, the latest report from the General Statistics Office (GSO) revealed.

The positive figure was partly thanks to the export turnover of the domestic sector which expanded 12 per cent to $44 billion during the period, accounting for 30.3 per cent of total exports, higher than the growth rate of 5.6 per cent of the foreign-invested sector with $101.13 billion, GSO statisticians said.

Despite the encouraging export performance, the domestic sector still encountered a trade deficit of $16.8 billion while the foreign-invested sector recorded a trade surplus of $18.6 billion, they noted.

During the period, the country earned $145.13 billion from shipping goods abroad, a year on year surge of 7.5 per cent.

The growth in export value was mainly contributed to by 24 goods with a turnover of more than $1 billion. These staples accounted for 88.1 per cent of the nation’s total export revenue. Of them, telephones and spare parts were the largest earners with $27.3 billion, surging 3 per cent year-on-year and making up 19 per cent of total value. Electronics, computers and components came next with $18.6 billion, up 15 per cent while garment and textiles ranked third with $18.3 billion, up 11 per cent.

Other staples recording a significant export turnover were footwear ($10.4 billion, up 14 per cent); machinery, equipment and spare parts ($9.7 billion, up 7.2 per cent) and wood and wooden products ($5.7 billion, up 16 per cent).

Meanwhile, shipments of vegetables and fruits, coffee and rice experienced a fall compared to the same time last year with respective earnings of $2.3 billion; $1.8 billion and $1.7 billion.

According to GSO, the US was the largest importer of Vietnamese goods in the period with a turnover of $32.5 billion, 25 per cent higher than last year’s corresponding period. The EU and China came second and third with $24.3 billion and $20 billion, respectively.

From January to July, Viet Nam splashed out $143.34 billion on imports, up 8.3 per cent year on year. Of the sum, some $61 billion was contributed by the domestic sector, up 13 per cent and nearly $83 billion by the foreign-invested sector, growing 5.3 per cent.

There were 28 goods seeing import value of more than $1 billion, making up 85.8 per cent of total purchases from foreign countries, including computers and spare parts with $28.2 billion; machines and equipment ($21 billion); cloth ($7.8 billion) and automotive ($4.3 billion).

China remained Viet Nam's largest import market during the seven month period with turnover of $42 billion, a 17 per cent climb year-on-year. That resulted in a trade deficit of $22 billion Viet Nam had to face with the neighbouring market in the period, up 38 per cent year-on-year, GSO said.

South Korea claimed second place by exporting $26.6 billion worth of goods to Viet Nam, down 1 per cent year-on-year, followed by ASEAN with $18.8 billion, up 5 per cent.

Hoa Sen after-tax profit surges 94 per cent

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 Vi?t Nam or imports from markets other than Taiwan and South Korea for making products exported to the US.

OCB reports 106 per cent growth in revenue

The Orient Commercial Joint Stock Bank reported pre-tax profit of over VND1.1 trillion (US$47.2 million) in the first half on net revenues of VND1.7 trillion ($73 million).

The revenues were up 106 per cent year-on-year, with the lender saying revenues from services were up 77 per cent.

The revenues from its foreign exchange business rose by 50 per cent.

Its loans outstanding were VND67.5 trillion ($1.9 billion) and deposits were VND79 trillion ($3.4 million).

Total assets grew by 8.1 per cent from a year ago to VND108 trillion ($4.7 billion).

The bank attributed its performance in the first half to good management and digital banking services.

A spokesperson for the bank said in recent years, OCB has focused on risk management, expansion and preparations to develop retail banking, and the results were showing now.

Recently, its local and foreign currency counterparty risk ratings and counterparty risk assessment were upgraded to Ba3 by Moody's Investors Service, reflecting its improvement in terms of capital, assets and profitability.

The outlook for its long-term ratings remains stable, and overall liquidity is comfortable, with liquid resources representing 40 per cent of tangible banking assets at the end of 2018.

Enhancing competitiveness for agricultural products

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

Viet Nam's agricultural export market is increasingly influenced by many adverse factors. In response to difficulties, 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 Agricultural Products Processing and Development Department, under MARD, 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.

Dao Van Ho, director of the Trade Promotion Centre for Agriculture, said activities to connect agricultural products have created an exchange space for distribution enterprises and production units to cooperate and promote the consumption of agricultural products and specialties of localities, contributing to local economic development for regions and agricultural areas.

Vietnamese people use Vietnamese goods

Facing the increasingly demanding market for agricultural products, MARD has reviewed, developed and issued regulations and standards for management of agricultural materials, production and processing of agricultural, forestry and aquatic products and foodstuffs. The ministry also guided, inspected and controlled producers and processors of agricultural and food products to ensure they strictly comply with regulations on hygiene and food safety.

The campaign "Vietnamese people prioritise using Vietnamese goods" has contributed to promoting policies to support agricultural production, creating conditions for developing high quality agricultural, forestry and fishery products.

Enterprises are constantly improving and applying science and technology, renewing processes, promoting production links to create high quality products. From this campaign, Viet Nam has had many products winning over consumers and become the pride of Vietnamese people. In addition, it has promoted and enhanced the competitiveness of Vietnamese businesses and agricultural products.

In order for the campaign to be implemented more widely and effectively, MARD said that ministries and branches should continue to review and develop mechanisms and policies to create a legal framework to support enterprises in production and consumption of farm produce. Meanwhile, it is necessary to have measures to prevent smuggled goods into Viet Nam, creating conditions for Vietnamese products to compete in the domestic market as well as the international market.

Vietnam’s first sea sand cleansing plant inaugurated

Vietnam’s first sea sand cleansing plant was put into service on Phu Quoc Island, off Kien Giang province, on July 31.

The factory is considered one of the important solutions for effective use of currently available sea sand resources.

The plant uses Phan Thanh sand cleaning and sifting technique developed by Vo Tan Dung for rinsing sand. Dung authorized Viet Sand Cleaning and Sifting Company and Kim Thuy Lam Trading Service JSC to install the technology.

The technique uses water pressure to cut the structure of sea sand and remove salt and organic impurities, then filters it again to extract sand that could be used for building projects.

With a maximum capacity of 200 cubic meters per hour, the plant can make beach sand finer by washing and sifting it and separating the impurities. The final sand products can be used to make concrete and mortar for construction and to serve other industrial activities.

Earlier this year, the technology creator had set up a sand cleaning and sifting machine to pilot its operations with inspections from experts of the Institute of Concrete Technology at the Ministry of Construction. The test results showed that the sea sand taken from Phu Quoc after being processed by Phan Thanh technology met the standards for construction sand.

Vo Tan Dung expressed his hopes the sand cleaning technique will contribute to cooling down the construction sand fever that has been raging across Vietnam, leading to illegal sand mining in rivers and coastal areas.

At the same time, the factory contributes to promoting the advantages of using local raw materials, reducing the cost of sand and transporting sand in construction investment, thus improving the efficiency of using the project.

Therefore, the factory will initially solve the demand for construction sand for projects that are deployed on Phu Quoc island, saving on the cost of transporting river sand to the island, contributing positively to solving severe land erosion due to a shortage of sediments in the Mekong Delta.

Ben Tre seeks to boost exports of key farm produce

China has high demand for fruits but new measures are needed to encourage Vietnamese exporters to ship their fruits officially to China rather than through border trade, a recent seminar heard in Ben Tre province.

According to the provincial Department of Agricultural and Rural Development, the province has more than 28,000ha under fruits and grows over 300,000 tonnes of various fruits annually.

They not only meet domestic demand but are also exported to many countries, with some fruits like rambutan and xiem coconut even sold to demanding markets like the US, Australia, Canada and Europe.

But Nguyen Van Buoi, the department’s deputy director, said China remains the main market and exports are mainly through border trade.

China has officially opened its market to eight fruits from Vietnam - mango, longan, banana, litchi, watermelon, rambutan, jackfruit and dragon fruit - while others are still exported through border trade, he said.

Vo Van Nam, head of the provincial Sub-Department of Crop Production and Plant Protection, said exports through border gates are highly disadvantageous to both businesses and farmers because usually prices are low, transportation costs are high and there are risks related to payment.

The province has more than 20 enterprises involved in processing and exporting agricultural products, mainly coconut and coconut-based products, green skin pomelo, rambutan and longan.

But they face a number of challenges like technical barriers in export markets and fierce competition from similar Thai products, he said.

Producers have not developed brand names for their products while their trade promotion is not very efficient, he added.

Ngo Tuong Vy, deputy director of Chanh Thu Fruit Import and Export Company based in Ben Tre, said boosting official exports to China requires coordinated efforts by ministries, agencies and localities.

China is no longer an "easy" market and has stricter requirements for farm produce imports, she said.

Her company is preparing actively to ensure its durian could compete with Thai products and be exported to China, she added.

Buoi from the Department of Agricultural and Rural Development said the province’s agricultural sector has developed specific plans to boost official exports to China.

Initially it would co-ordinate with localities to support co-operatives and co-operative groups to improve their efficiency and encourage and instruct farmers in growing fruits to VietGAP standards, he said.

It would then invite experts to apprise businesses and farmers about plant quarantine and food safety regulations in importing countries, he said.

The province has urged the Ministry of Agriculture and Rural Development to speed up negotiations with China to enable more Vietnamese fruits to enter the market officially.

Bamboo Airways eyes to be first Vietnamese carrier to fly directly to US

Bamboo Airways makes no secret of its ambition to become the first airline in Vietnam to operate direct flights to the United States, the airline’s Deputy Director General Truong Phuong Thanh said at a seminar on August 1.

“We have been very interested in launching Vietnam – US direct services from day one,” Thanh told the “Vietnam – US Direct Route: Ready for Taking Off” seminar held by FLC Group – the airline’s parent company – and the Vietnam Association on Aviation Science and Technology (VAAST) in Hanoi.

“Bamboo Airways will be the first in Vietnam to open Vietnam – US direct route,” he said, adding that he has full confidence that the new budget carrier can achieve this goal.

Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc highly spoke of the airline’s ambition, saying not only the US is Vietnam’s potential market but Vietnam is also a promising market the US wants to access.

According to Loc, demand for air freight transportation between the two countries is very large. Vietnam aims to become a global hub of new-generation FDI firms so many products must be transported by air, he explained.

Vietnam also has great potential for tourism; plus there are about 2 million Vietnamese expats living in the US, many of who fly home frequently to meet their families, the VCCI leader said.

Additionally, the US is home to many world-class universities and the number of Vietnamese students in the country has increased consistently over years, he added.

The global air transport market is thriving with the Asia-Pacific region regarded by the International Air Transportation Association (IATA) as the world’s fastest-growing market, expanding 6 – 7 percent annually, said VAAST President Tran Quang Chau.

Vietnam’s air transport growth even doubled that number, growing over 16 percent annually over the last decade, he noted.

In February, Vietnam received a Category 1 aviation safety rating from the US Department of Transportation’s Federal Aviation Administration (FAA).

With the CAT 1 status, Vietnamese carriers will be able to establish direct services to the US and carry the code of US carriers upon completion of the necessary remaining steps, including Vietnamese airports earning approval to comply with ICAO security standards and recommended practices from the US Transportation Security Administration, and Vietnamese airlines earning economic authority from the US Department of Transportation.

Statistics by the Civil Aviation Authority of Vietnam show that the number of passengers flying between Vietnam and the US grew 8 percent annually in average from 2010 – 2017 with more than 700,000 passengers in 2017.

Last year, about 107,000 Vietnamese people travelled to the US.

MARD boosts science and technology in agriculture

Science and technology is one of the key solutions in implementing agriculture restructuring. In the new context, science and technology research units need to innovate, because the changing mechanisms and policies are associated with the application of science and technology.

The statement was made by Le Quoc Doanh, Deputy Minister of Agriculture and Rural Development (MARD), at a conference held in Hanoi on August 1.

In order to meet that new requirement, Doanh said the Party Civil Affairs Committee of MARD had issued a resolution on continuing to promote science and technology innovation activities in agriculture and rural development in the context of economic integration and approaching the Fourth Industrial Revolution.

The resolution aims to create a new step in scientific and technological movements of the agricultural and rural development sector on the basis of renewing mechanisms and policies as well as orienting scientific research and technology transfer activities.

Since then, there will be fundamental and comprehensive innovation of science and technology activities of the ministry in some fields such as management, organisational structure and personnel, investment and financial management, property and land.

According to Nguyen Thi Thanh Thuy, Director of MARD’s Department of Science, Technology and Environment, recently, a number of new or advanced technologies have been applied effectively in production process. Scientific research institutes and schools have created new plant and animal varieties.

These institutes and schools have collaborated with businesses, cooperatives and localities or through agricultural extension models to quickly transfer scientific and technological advances to production. However, besides the achieved results, scientific and technological activities still face difficulties, Thuy added.

MARD will renovate the entire organisation from personnel, science and technology management, financial and asset management and budget management so that the investment for scientific and research topics are most effective.

In addition, the ministry will also strengthen the autonomy and self-responsibility of science and technology units so that units can implement research and transfer their research in coordination with enterprises, bringing science and technology into practical production faster.

Regarding the application of science and technology, MARD also considers enterprises as a centre to form a close link between scientists.

Via businesses, technology will be applied more widely in production and transferred more quickly to farmers and agricultural products can meet food safety criteria for the domestic market as well as for export market.

Foreign visitors to Vietnam up

Viet Nam welcomed nearly 9.8 million foreign visitors in the first seven months of this year, up 7.9 per cent compared with the same period last year.

The figures were recently released by the Vietnam National Administration of Tourism (VNAT), showing that although the number of visitors increased during the period, those from China and South Korea, two key markets of Viet Nam, decreased in recent months.

VNAT said the decrease was due to global trade tensions, tightened monetary policy and slower development of Asian economies. The regional countries had fierce competition to attract international tourists by strengthening policies such as product development, aviation connectivity promotion and creation of favourable conditions for visas.

“Meanwhile, some destinations in Viet Nam have become saturated (I mean no more interesting), leading to the dispersion of international arrivals from large source markets,” the VNAT said.

The tourism sector this year targets to welcome about 18 million foreign visitors and 85 million domestic tourists, making total revenue of about VND700 trillion (US$30.14 billion). If this number is achieved, Viet Nam will be one year ahead of the target of receiving 17-20 million international visitors by 2020, set by the Politburo’s Resolution 08-NQ/TW on developing tourism to become a spearhead economic sector of the country.

To turn the target into reality, many localities have issued solutions to promote tourism, including attraction of investment to tourism projects.

 

According to Vice Chairman of the northern mountainous province of Lang Son’s People’s Committee Duong Xuan Huyen, the provincial tourism sector focuses on building special tourism products based on local cultures in order to make it different to other localities.

“The tourism sector needs to promote the organisation of culture and tourism events, expos and investment promotion conferences and focus on preparations for local tourism programmes including through Viet Bac Heritage Sites, Van Quan Flower Festival, Chi Lang Custard-apple Festival and Bac Son Mandarin Festival,” Huyen said.

With such preparations, Huyen said Lang Son expected to welcome more than 2.9 million visitors this year, in which 435,000 would come from foreign countries, earning VND1 trillion.

Meanwhile, many households in the southern province of Ninh Thuan have this year invested in homestay models for visitors, who want to learn more about local culture and customs.

The Ninh Thuan Culture, Sports and Tourism Department said there are 50 tangible and intangible cultural and historical relics in the province, including 12 national-level monuments. The province is also a culturally diverse land area of ??ethnic groups, with traditional festivals such as the Kite Festival, the rain festival of Cham people; rice seedlings transplantation ceremony of Raglai ethnic minority people – all make a difference for Ninh Thuan.

According to VNAT, Viet Nam will continue focusing on promotion of tourism in key markets including South Korea, China and ASEAN.

The sector will proactively promote advertising for the major international sporting events held in Viet Nam, including F1 Racing, and ASEAN Year 2020 in Viet Nam.

RoK shares innovation experience with VN

Digital transformation is a vital step for businesses to stay afloat in the Industry 4.0 era.

The statement was made by Nguyen Dinh Cung, director of the Central Institute for Economic Management (CIEM) at a workshop on Thursday in Ha Noi, themed “R&D, innovation and economic growth – Korean experiences and lessons for Viet Nam”.

Participating experts focused their discussion on topics such as the Viet Nam–Republic of Korea (RoK) co-operation in research and development amid the Fourth Industrial Revolution, as well as the innovation economy, and the RoK’s ICT policy.

“Industry 4.0, information technology and digital transformation create enormous opportunities and challenges for Viet Nam. However, we must take advantage of new opportunities, actively apply technology and build a proactive business environment to overcome challenges,” Cung said.

“The growth model transformation of enterprises, especially small- and medium-sized enterprises, is imperative in the promotion of economic growth,” he said.

Talking about the innovation economy and the RoK’s policy on ICT development, Park Seung Chang, chairman of the Korea IT Ethics Leaders' Association (KITELA), said his country has maintained its first place in the 2019 Bloomberg Innovation Index, followed by Germany.

Although, the gap between RoK and its rivals has been gradually narrowed, the country has maintained the top position in the Bloomberg Index for many years. This index evaluates and ranks economies using data such as expense on research and development (R&D) and the concentration on high-tech companies, Park Seung Chang said.

“In Korea, big corporations like Samsung and Hyundai have high ratings in the areas of creative and innovative activities, higher education and value-added manufacturing,” said Park Seung Chang.

According to him, last year, the RoK issued a five-year plan for 2019-23 to boost artificial intelligence development, as well as ensure the human resources for the work, and investment in infrastructure for the growth of small- and medium-sized enterprises.

Chang-whan Ma, Executive Vice Chairman of the Korea Industrial Technology Association (KOITA), said Korea had rich experience in fostering industries and improving national competitiveness through R&D, focusing on the provision of support for R&D and industrial cultivation on the government level.

“KOITA is a pivotal organisation voluntarily created by corporations aiming at seeking collective industrial advancement in Korea. We have been entrusted by the Ministry of Science and ICT to operate the corporate R&D centre accreditation system since 1991 and have supported the establishment and cultivation of R&D centres affiliated with domestic corporations,” he said.

“We perform corporate R&D support projects across the areas of funding, workforce and patents in association with the Ministry of Science and ICT, Ministry of Trade, Industry and Energy, and Ministry of SMEs and Start-ups.”

According to Chang-whan Ma, the number of corporate R&D centres soared from 1,000 in 1991 to 20,000 in 2009 and skyrocketed to 40,399 in 2019.

Amid changes in the global economy, Viet Nam should develop high value added industries and boost its own capacity for improved production quality, he said.

“Viet Nam needs to secure and adapt new technologies, achieve innovation for manufacturing and reinforce R&D competence of companies,” he said.

“The Government needs to build policies that push the advancement of high-value-added industries, using them as a growth engine,” he said.

Ben Tre seeks to boost exports of key farm produce

China has high demand for fruits but new measures are needed to encourage Vietnamese exporters to export their fruits officially to China rather than through border trade, a seminar heard in Ben Tre Province on Wednesday.

According to the Ben Tre Department of Agricultural and Rural Development, the province has more than 28,000ha under fruits and grows over 300,000 tonnes of various fruits annually.

They not only meet domestic demand but are also exported to many countries, with some fruits like rambutan and xiem coconut even sold to demanding markets like the US, Australia, Canada and Europe.

But Nguyen Van Buoi, the department’s deputy director, said China remains the main market and exports are mainly through border trade.

China has officially opened its market to eight fruits from Viet Nam -- mango, longan, banana, litchi, watermelon, rambutan, jackfruit and dragon fruit -- while others are still exported through border trade, he said.

Vo Van Nam, director of the provincial Department of Crop Production and Plant Protection, said exports through border gates are highly disadvantageous to both businesses and farmers because usually prices are low, transportation costs are high and there are risks related to payment.

The province has more than 20 enterprises involved in processing and exporting agricultural products, mainly coconut and coconut-based products, green skin pomelo, rambutan and longan.

But they face a number of challenges like technical barriers in export markets and fierce competition from similar Thai products, he said.

Producers have not developed brand names for their products while their trade promotion is not very efficient, he added.

Ngo Tuong Vy, deputy director of Chanh Thu Fruit Import and Export Company based in Ben Tre, said boosting official exports to China requires co-ordinated efforts by ministries, agencies and localities.

China is no longer an "easy" market and has stricter requirements for farm produce imports, she said.

Her company is preparing actively to ensure its durian could compete with Thai products and be exported to China, she added.

Buoi from the Department of Agricultural and Rural Development said the province’s agricultural sector has developed specific plans to boost official exports to China.

Initially it would co-ordinate with localities to support co-operatives and co-operative groups to improve their efficiency and encourage and instruct farmers in growing fruits to VietGAP standards, he said.

It would then invite experts to apprise businesses and farmers about plant quarantine and food safety regulations in importing countries, he said.

The province has urged the Ministry of Agriculture and Rural Development to speed up negotiations with China to enable more Vietnamese fruits to enter the market officially.

Credit institutions expect improvemed business results

Most domestic and foreign banks in Viet Nam expect to perform better in the third quarter of 2019 than they did in the same period last year, according to the State Bank of Viet Nam's June survey released this week.

Under the business sentiment survey conducted in June, which covered all domestic and foreign banks in the country, many banks also expect an upward trend in their business for the whole of 2019.

According to the survey, 85.4 per cent of banks expect an improved third quarter.

A total of 88.5 per cent hoped their performance would continue to get better this year, of which 27.4 per cent anticipated ‘significant improvement’.

For the second quarter, 76 per cent of banks reported their business performance improved against the previous quarter.

A total 98 per cent of banks said their liquidity in terms of both the Vietnamese dong and foreign currencies remained good and the positive trend would continue for the rest of the year.

A majority of the institutions expect interest rates for both deposits and loans would remain stable in the quarter and the entire 2019.

They expect a growth rate of 4.1 per cent and 13.47 per cent for capital mobilisation in the third quarter and the whole of 2019, respectively, while forecasting a credit growth rate at 4.13 per cent for the third quarter and 14.33 per cent for 2019.

Notably, the survey showed the resolution of non-performing loans (NPL) at banks has shown positive signs, with 27.4 per cent of banks reporting their NPL ratio declined in Q2 and 26.9 per cent expected a drop in Q3. The rate is higher than 24.3 per cent and 23.4 per cent in the previous survey conducted in March this year.

Banks also said the business environment had improved in the second quarter and more improvement was expected for the entire year.

The survey shows a total of 9.5 per cent forecast overall risks of all client groups will remain stable in 2019, 16.8 per cent said the risks are likely to decrease while 13.7 per cent were concerned risks would increase.

Novaland reports 88 per cent revenue growth in H1

Property developer Novaland Group has reported an 88 per cent year-on-year jump in net revenues in the first half of the year.

In a report on its business results, the company said revenues had been worth nearly VND8.1 trillion (US$348.3 million).

Gross profit was VND2.2 trillion, a 53 per cent jump.

In the first six months NVL handed over 2,936 units, a year-on-year increase of 185 per cent and 50 per cent of its full-year target.

The company attributed the excellent results to projects like The Sun Avenue, Sunrise Riverside, Richstar, Saigon Royal, Newton Residence, and Orchard Parkview.

An NVL spokesman said the company is well on course to achieve its targets for the upcoming quarters.

As of June the company’s assets were valued at VND74.8 trillion and owners’ capital was worth nearly VND22.2 trillion, 7 per cent and 9 per cent higher than at the end of last year.

Cash and cash-equivalents at the end of June were VND7.3 trillion.

Novaland, which used to focus on housing projects in HCM City, is now one of the leading real-estate developers in Viet Nam.

From 2019, it entered the hospitality sector aiming to become a leading conglomerate with interests in real estate, finance, tourism, and infrastructure.

To achieve the goal, land and financial resources are two essential factors, and Novaland said it is well prepared in both cases.

Prestige is cited as another factor helping the company fulfil the goal.

A bond issue of $390 million last year underlined the company’s global prestige.

In the domestic market, it has won the trust of customers by completing projects and handing over units to buyers in a timely manner and high selling rate at most of the projects In terms of land parcels, the company has around 4,270ha which owned and researching to develop in future, ensuring it has enough for development for the next 10-20 years.

It said it would use the lands to develop three key products: housing areas in HCM City, hospitality projects in tourist places and satellite urban areas in HCM City’s neighbouring provinces.

This year, Novaland plans to bring into the market 6,500 units, 44 per cent higher than last year. Of them, 4,200 will be housing and 2,300 will be hospitality products.

Investment will also be made in the finance sector, it said.

By the end of June Novaland had launched many projects including Aqua City in Dong Nai, the first eco-urban area in the province.

The other projects to have attracted interest are NovaWorld Phan Thiet in the south-central province of Binh Thuan and NovaWorld Ho Tram in the southern province of Ba Ria-Vung Tau.

The two hospitality projects, NovaWorld Ho Tram and NovaWorld Phan Thiet, have heated up the country’s hospitality market since each is a complex comprising.

Elsewhere, the company’s share, NVL, has been once again included in the Viet Nam Sustainable Index (VNSI), a cap-weighted, free float-adjusted index consisting of listed companies with the highest sustainability scores announced every year in July.

The company is also in the VN30, a list of the top 30 shares on the Vietnamese stock exchange in terms of market capitalisation.

Novaland has also been named among the top 50 efficient companies in Viet Nam, top two property developers by Vietnam Report, and Best Developer by Dot Property Awards 2019.

The awards are a testimony to the company’s prestige and pioneering position on the stock exchange.

Hoang Anh Gia Lai and agricultural arm report losses in H1

Hoang Anh Gia Lai JSC (HAGL) and its arm Hoang Anh Gia Lai Agricultural JSC (HAGL Agrico) reported poor business results in the second quarter and first half of 2019.

Hoang Anh Gia Lai reported revenues of just VND513 billion (US$22 million) in the second quarter, equivalent to a quarter of its figure in the same period of last year. Its gross profit declined by six times to VND155 billion.

Despite its efforts in reducing interest and selling expenses, management costs increased twice. The company incurred a loss after tax of nearly VND713 billion in the second quarter.

Ending June, total revenues of the company reached VND923 billion ($39.6 million), down 68 per cent year-on-year, while its six-month loss was VND691 billion ($30.6 million), a bad result compared to a profit of more than one hundred billion dong in the first half of last year.

The company has no income from cows, real estate, chili and leasing services. In 2019’s first half, fruit sales halved to VND607 billion, while sales from rubber latex increased sharply from VND55 billion last year to VND119 billion.

It has more than 47,100ha of rubber, of which 21,789ha in Cambodia, 20,361ha in Laos and 4,972ha in Viet Nam. The company is operating a rubber latex processing factory with a capacity of 25,000 tonnes per year in Laos.

By end-June, Hoang Anh Gia Lai has total assets worth VND49.2 trillion and debts worth about VND34.2 trillion. The company is borrowing VND2.5 trillion from its owner Doan Nguyen Duc.

Early this month, the company registered to sell more than 513 million shares of HAGL Agrico during July 12 and August 10 for financial restructuring. If the transaction goes through, its ownership in the agricultural arm will decrease to 51.04 per cent from current 58 per cent.

In the meantime, HAGL Agrico posted losses after tax of VND631 billion in the second quarter, while revenues dropped 66 per cent to VND440 billion. In the first six months, its revenue reached VND779.5 billion ($33.5 million), less than half of the same period last year.

The company saw a net loss of VND737.5 billion.

It is currently borrowing VND2.9 trillion from its parent company and a short-term loan of VND1.26 trillion from Truong Hai Auto (Thaco).

Vinamilk records ever highest net revenue of $629mn in Q2

Vietnam Dairy Products Joint Stock Company (Vinamilk) reported a year-on-year net revenue jump of 6.55 per cent to VND14.6 trillion (US$629 million) for the second quarter of this year, recording the highest level in history since its establishment in 1976.

Along with the high growth rate of revenue, the after-tax profit of Q2 alone reached more than VND2.9 trillion, up 8.4 per cent year-on-year.

In the first half of the year, Vinamilk, listed as VNM, achieved VND27.8 trillion in revenue, an increase of nearly VND2 trillion, or 7.61 per cent, over the same period last year. The earning per share (EPS) reached VND2,953.

Vinamilk is one of the Top 10 on Return on Equity (ROE) according to the Nikkei ranking. This financial indicator represents the business efficiency of a business. In 2018, Vinamilk's ROE reached 40.7 per cent, which has stabilised over many consecutive years.

In June this year, Vinamilk was the only representative of Asia invited to share the success in developing organic trends at the Global Milk Conference 2019 in Lisbon, Portugal.

Vinamilk said that the investment in international standard dairy farms had put Vinamilk on the world milk map with the highest number of Global G.A.P. certified dairy farms in Asia.

The company Vinamilk is building a complex of organic dairy farms in Laos, with a super-large scale of up to 24,000 cows in phase 1, on a farming area of 5,000ha. It is expected to be 100,000 cows in phase 2, on an area of ??20,000ha, with total investment of up to US$500 million.

The investment strategy for domestic and foreign dairy farms is expected to help Vinamilk reach the target of top 30 largest dairy companies in the world as well as leading the region in nutrition trends, especially organic products.

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. 

HCM City, US company cooperate in boosting online payment

Vice Chairman of Ho Chi Minh City’s People’s Committee Ngo Minh Chau hosted Regional President for Asia Pacific of the US-based VISA company Chris Clark on August 7, during which they discussed cooperation in building an online payment system for Vietnam’s largest city.

Chau affirmed that during the process of building the city into a smart urban area and an economic, financial, scientific and technological hub of the region, it hopes to and is willing to expand collaboration with international partners, including VISA.

Bilateral cooperation in the transport sector will contribute to addressing challenges facing the city, especially in development urban transport, he stated.

He added that VISA’s proposal of collaborating in building an online payment system is in line with his city’s demand, so the city will coordinate closely with the company in this field to make it become a pioneer in applying online payment in Vietnam.

He also stressed that ensuring safety to avoid any possible risks is an important factor to consolidate locals’ confidence and encourage them to get involved in the new payment method.

Clark stated that VISA has signed a cooperation agreement with the Vietnamese Ministry of Transport on the use of smart tickets for the city’s bus system. He expressed his hope that the application will be expanded to metro routes and other public transport systems in the city.

Underlining the importance of developing the online payment method in the modern economy, he affirmed that VISA hopes to bring to the city the most advanced technologies in non-cash financial payments so as to help boost the city’s economic development.

He told the host that his company plans to study the implementation of a programme dedicated to start-up businesses to promote online payment in small- and medium-sized enterprises in Vietnam in general and in Ho Chi Minh City in particular.

 
 
 
 
 
Leave your comment on an article

OR QUICK LOGIN