BUSINESS NEWS HEADLINES MAY 4

Vietnam exports nearly 416 million face masks

BUSINESS NEWS HEADLINES MAY 4

Vietnam exported 415.7 million face masks worth 63.19 million USD from January 1 to April 19, according to the General Department of Customs.

Between April 1 and 19 there were 88.19 million face masks worth 344 million USD exported, including 51.3 million that were gifts and donations.

Japan was the biggest importer of made-in-Vietnam face masks in the period, with 32.7 million, followed by the Republic of Korea, Germany, and the US, with 17.1 million, 11.1 million, and 10.4 million, respectively.

In early April, Prime Minister Nguyen Xuan Phuc approved the export of medical face masks and protective clothing, as long as domestic demand, including reserves, is met first.

Such products can therefore only be exported to countries that have been hit hard by the COVID-19 pandemic.

The Ministry of Health's figures showed that there are some 68 companies producing medical face masks and protective clothing in Vietnam. Some garment companies are also investing in producing medical face masks, besides cloth face masks, such as the Garment 10 Corporation Joint Stock Company and TNG Investment and Trading Joint Stock Company.

The Vietnam Trade Office in the EU has warned that the mass production of medical face masks and protective clothing that do not follow technical standards will cause oversupply and damage if such products cannot be exported.

It added that in order for producers to export medical face masks and protective medical clothing to the EU, a CE marking is compulsory, which indicates that a product had been assessed by manufacturers and deemed to meet EU safety, health, and environmental protection requirements.

Tran Thanh Hai, Deputy Director of the Ministry of Industry and Trade’s Import-Export Department, urged face mask producers to pay attention to quality and safety requirements and obtain the necessary certificates for export.

HCM City’s CPI drops 1.58 percent in April

Ho Chi Minh City’s consumer price index (CPI) in April fell 1.58 percent from the previous month and 1.04 percent compared to December 2019, according to the city’s Statistics Office.

However, the April CPI rose 2.33 percent year on year, the office said.

The prices of four of the 11 groups of goods and services used to calculate the CPI saw month-on-month declines, with the strongest fall of 15.52 percent recorded in transport as a result of lower travel demand during the COVID-19-triggered social distancing period.

The prices of housing, electricity and water, fuel and building material, and were reduced by 1.22 percent, and entertainment and travel services by 0.26 percent, while that of garments, headgear and footwear decreased by 0.11 percent.

Meanwhile, four groups saw price increases, including the food and catering services (0.65 percent), equipment and home appliances (0.18 percent), telecommunication services (0.01 percent), and other goods and services (0.14 percent)./.

Only one third of manufacturers in Indonesia still operating

Factory activity has collapsed with only one third of manufacturing companies and workers operating at present due to COVID-19, Indonesian Coordinating Economic Minister Airlangga Hartarto has said.

Speaking at a recent online briefing, he said that only 15,000 manufacturing companies were still operating at present out of a total of 40,000 as usual.

Meanwhile, 4.7 million workers in the manufacturing sector are still working out of the usual 17 million in the sector, which contributes around 20 percent of the country’s gross domestic product, the minister added.

He voiced his hope that companies will be back in operation when the situation returns to normal.

Many businesses in Indonesia have temporarily shut down or are functioning at minimum capacity to comply with the government’s stay-at-home order to contain the fast-spreading pandemic.

The country's Purchasing Managers' Index (PMI) recorded a contraction to 45.3 from 51.9 between February and March, the steepest decline since the survey began in 2011.

Moreover, about 2.2 million people are out of work, according to Manpower Ministry data last updated on April 20.

The Indonesian government has launched tax incentives for the manufacturing industry, including individual income tax exemptions, import tax deferrals and corporate tax discounts.

Earlier in April, the government launched the pre-employment card programme, a mix of unemployment benefit and skill-training programme.

The government has also reduced employment insurance payments for companies that keep on their workers. Firms can get 90 percent reductions both for work accident and life insurance payments./.

Japan to help firms to move production bases to Southeast Asia

Japan will launch a subsidy programme to encourage domestic manufacturers to transfer their overseas production bases to Southeast Asia, as the coronavirus pandemic has greatly disrupted their supply chains heavily dependent on China.

The 23.5 billion yen (220 million USD) programme, incorporated into the government's emergency stimulus package to ease the economic fallout from the pandemic, will help firms diversify their supply chains by financially assisting the construction of production facilities as well as feasibility studies in ASEAN countries, Japan’s Kyodo news reported.

The initiative came after many automakers and other manufacturers suffered a shortage of parts produced in China after the new coronavirus outbreak started late last year in the central Chinese city of Wuhan.

In another effort to reinforce supply chains, the Japanese government will spend 220 billion yen to promote domestic output of items that are currently heavily imported from certain areas. Also included in the stimulus, the subsidies will financially support the relocation of Japanese firms' overseas production sites back home.

The programme will also target manufacturers of items essential for Japanese people to "lead a healthy life" amid the outbreak, including face masks and alcohol sanitizers. They can receive subsidies when they newly open factories or boost their existing output capacity in Japan./.

Habeco sustaines losses in first quarter from Decree 100 and COVID-19

Similar to Sabeco, Habeco has reported dark business results in the first quarter of this year due to the double impacts of Decree No.100/2019/ND-CP and the COVID-19 outbreak.

Habeco has published its consolida.ted financial report for the first quarter of this year. Accordingly, its net revenue was VND744 billion ($32.35 million), signifying a decrease of 51 per cent on-year. In addition, it reported loss of VND98.33 billion ($4.28 million) on-year.

Meanwhile, sales expenditures saw a light decrease of 3 per cent to VND185 billion ($8 million) while management costs increased by 4 per cent to VND81 billion ($3.5 million).

As of the first quarter of this year, the total assets were VND6.82 trillion ($296.5 million), down 12 per cent year-to-date. The value of unsold products hiked by 17.5 per cent to VND751 billion ($32.65 million).

Regarding Sabeco – Vietnam’s largest brewer – Bao Viet Securities (BVSC) believes that 2020 will be a challenging year for the company and has drawn up several scenarios for business in 2020, most of which suggest that revenue will decrease.

In a positive scenario of a 5 per cent increase in beer consumption, Sabeco can achieve a revenue of VND40 trillion ($1.74 billion) and profit of VND5.7 trillion ($247.83 million). In the worst-case scenario of a 20 per cent fall in beer consumption, Sabeco may post a revenue of VND31 trillion ($1.35 billion) and profit of VND4 trillion ($173.9 million), which is the lowest growth in the past three years.

According to BVSC, the two main sources of headwind this year will be Decree No.100/2019/ND-CP and the COVID-19 outbreak that slow down beer and alcohol consumption in Vietnam.

The latest report about the brewery industry by SSI Research also changed its view from neutral in 2020 to negative in the short term when predicting the impact of Decree 100 and the coronavirus outbreak.

“When the decree took effect, we warned that beer consumption would decrease considerably. With the coronavirus spread, consumers tend to spend less time on meetings, which will also cause adverse effects to the brewery industry, at least in the first quarter,” the report reads.

Vinh Phuc announces land-use project

The northern province of Vinh Phuc has issued official information on a land-use investment project on developing new urban areas in Tu Trung and Vinh Tuong townships of Vinh Tuong district.

According to Vinh Phuc People’s Committee, the project is aimed at developing new-style, modern urban areas with synchronous social and technical infrastructure systems to meet local demand for housing and for commercial, cultural, and educational services, as well as sports.

The project covers an area of 29.0208 hectares for a population of 5,000 people and six major types of land as follows:

Residential land will cover a total of 125,517 square metres. Of this, 66,891sq.m have been allocated for semi-detached houses, 24,557sq.m for residential land for commercial use, 24,062sq.m for villas, and 10,042sq.m for mixed residential land.

16,681sq.m will be used for public land. 14,652.6sq.m of this will be dedicated to developing educational facilities, 1,410.7sq.m will be used for cultural facilities, and 618sq.m for medical establishments. Commercial land will cover1,384sq.m.

Land area for green trees, water surface, sports and physical fitness facilities will total 24,744sq.m. Of note, the land area reserved for green trees and flower gardens is 13,361sq.m, including 2,798sq.m for isolated green land and 2,829sq.m for sports and physical fitness facilities, while the water surface will be 5,755.5sq.m.

Land for technical infrastructure will take up a total area of 1,234sq.m.

120,646sq.m of land will be used to develop internal transport infrastructure. Of this, internal roads will account for a total of 107,830sq.m while parking lots will cover 12,816sq.m.

The investment scale of the construction includes technical infrastructure, including levelling the ground, constructing internal roads, clean water supply, rain and wastewater drainage systems, electricity supply and lighting systems, telecommunications networks, and green areas.

In addition, the investor is required to develop social infrastructure such as schools, health and cultural facilities, and five-storey shopping malls.

Furthermore, they will be required to co-operate with housing units to develop two 10-storey mixed-use housing facilities with one basement for parking, two six-floor mixed-use buildings with one basement, a cluster of low-rise houses including 579 semi-detached units for housing only, 218 semi-detached units for residential and commercial use, and 77 villas. The project investor will be responsible for building houses as prescribed in the investment certificate granted by Vinh Phuc People’s Committee.

The preliminary costs of the project are estimated at VND1.668 trillion ($72.5 million), which included an estimated VND68.5 billion ($2.98 million) for ground clearance and VND1.6 trillion ($69.57 million) for other items.

The investment capital will come from the investor’s equity and other legal sources. The capital could be mobilised from commercial banks and secondary investors in compliance with the current laws on real estate business and housing.

The project is scheduled to be completed in 60 months from the date the investor is approved by the provincial authorities.

The shopping malls will be part of the mixed-use housing blocks and the shopping streets in Vinh Tuong and Tu Trung townships. Further details are available in Decision No.509/QD-UBND issued by Vinh Phuc People's Committee on March 13, 2020.

The land allocated for the project is now mainly used for rice and subsidiary crop cultivation, agricultural irrigation canals, and internal roads.

The investor to be approved by the provincial authorities must meet the preliminary requirements in terms of financial power and experience. The investor has to mobilise at least 15 per cent or VND250.3 billion ($10.88 million) of the total investment capital while its average minimum net asset value must not be lower than its equity of at least VND250.3 billion ($10.88 million) during the past five years. The selected investor is likely toarrange loan capital worth VND1.4 trillion ($60.87 million).

Additionally, the investor must have past experience in implementing similar projects with the total investment equivalent to at least 50 per cent of the total capital of this project. The minimum equity of the investor is the sum required for the project investor. Investors are required to have deployed similar projects in the past five years, with the projects including primary items such as technical infrastructure, rain and wastewater drainage systems, and electricity supply.

Investors also cannot have had the investment certificate of a similar urban area and housing project revoked by competent agencies due to infringements of regulations or delayed progress.

Involvement in similar urban area and housing projects includes participation as an equity contributor.

Besides, the selected investor must meet other regulations on bidding, real estate business, and the development of urban area and housing.

Eligible investors can apply for bidding and implementing the project within 30 days of the issuance of project-related information.

They can register for bidding and implementing the project on the Vietnam National E-Procurement System (VNEPS). In case the Ministry of Planning and Investment has yet to issue the relevant guidance, eligible investors can submit their dossiers and register at Vinh Phuc province's Department of Planning and Investment.

To register, eligible investors must submit a registration form, documents related to legal status, documents proving technical and financial competence, and other relevant documents.

Vietnam on front foot in trade return

Gradual recovery from some of Vietnam’s key trade partners are plugging gaps in the disrupted global supply chain and helping the Southeast Asian nation take advantage of new opportunities arising despite the challenging times.

After nearly four months of border closures as a result of the COVID-19 pandemic, in the last few days tens of thousands of containers of cargo have been cleared to move between Vietnam and China, where many major industrial companies have resumed production.

Nguyen Xuan Duong, chairman of large textile and clothing firm Hung Yen Garment Corporation, said that as the virus has been brought under control in China, import and export activities are no longer restricted. Currently, 50-60 per cent of the corporation’s materials is imported from China. “The eased trade will help us import materials more favourably, and this also provides opportunities for Vietnam to boost exports to China in the near future,” Duong said.

Sharing the positive news about supply chains and raw materials, state-run giant Vinatex started to ramp up production in the second half of March and April to make up for lost time. “As a result, garment enterprises expect to recover the 5.3 per cent decrease in export turnover from the first two months of the year,” said a Vinatex representative.

Vietnam’s trade is largely dependent on China, which purchased 15.75 per cent of the former’s total goods value last year, as well as being responsible for 29.7 per cent of Vietnam’s import value.

However, Tran Thanh Hai, deputy director of the Import-Export Department under the Ministry of Industry and Trade, pointed out that Vietnam-Chinese borders are suffering from lack of labour for loading and unloading goods, while trucks have to endure strict quarantine procedures. Still, the speed of clearance in recent days has improved compared to last month.

Major markets like South Korea and Japan have also seen improvements in the virus situation, with their economies mounting recoveries in March as a result. Over the first three months of this year, Vietnam’s exports to the Chinese market still rose 11.5 per cent on-year, while those to Japan climbed 3.5 per cent on-year.

According to the General Department of Customs, from the beginning of the year to mid-April, Vietnam’s export turnover hit $71.6 billion, of which foreign-invested enterprises held $47.9 billion. At the same time, the country recorded 12 export products with the export value of more than $1 billion.

The export turnover of goods to South Korea reached $1.76 billion in March, up 12.27 per cent on-month, bringing the total export turnover in the first quarter of 2020 from this market to $4.7 billion.

Moreover, Vietnam’s exports to Singapore are also climbing strongly. The latest figures from Enterprise Singapore show that Singapore’s imports from Vietnam in February rose 49 per cent on-month and 102.78 per cent on-year. Tran Thu Quynh, Vietnam Trade Counselor in Singapore, ascribed the situation to the city-state urgently trying to diversify its supply of raw materials in the context of interrupted supply from China. Singapore considers Vietnam a key market to help it offset the shortage of goods, especially agricultural products and seafood.

In March, this trade agency arranged more than 20 export orders from Vietnam, estimated at around 500 tonnes of goods.

Enterprises in Vietnam are also raising exports to India to reduce the risk of dependence on any single market.

Meanwhile, the International Labour Organization director in Vietnam, Chang-Hee Lee said that the Vietnamese economy is going to struggle in the next quarter due to a lack of tourists and a falling demand for Vietnamese goods in export markets, as most trade partner countries remain under lockdown.

“The seriousness of the ongoing global crisis is that it impacts both supply and demand. Under widespread lockdown, supply is severely affected, as many factories’ operations are suspended,” said Lee. “Demand falls as consumers in the US and Europe are ordered to stay at home. A problem is that Vietnam relies heavily on global trade. Therefore, we can assume that the impacts of shrinking global trade would be felt much more strongly and deeply in Vietnam for both enterprises and workers.”

Lee added that on the contrary, the outbreak has proven to be a major driver of economic growth for Vietnam’s development success story. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the EU-Vietnam Free Trade Agreement will also offer a chance for faster recovery.

Nguyen Trung Anh, deputy general director of PAN Farm, said that this difficult period was “a test of the market”, and that enterprises should take several steps. They should improve capital management capacity, avoid relying too much on debt and especially capacity to manage risks of business interruption and emergencies, as well as review strategies to diversify the product market.

In the event that the virus can be contained in the second quarter of 2020, the country’s export turnover is projected to decrease by 20 per cent, while import turnover will likely decrease by 16 per cent.

Price of pork climbs despite government urging

Following commitments made by livestock companies in response to government pressure, the price of live pigs and pork not only failed to decrease, it even rose.

According to the latest report of the Ministry of Industry and Trade, live pigs are sold for VND80,000-90,000 ($3.50-3.90) per kilogramme while pork costs between VND145,000-165,000 ($6.30-7.20) per kilogramme.

Meanwhile, at the beginning of the month, prices were only VND73,000-78,000 ($3.20-3.40) per kilogramme for live pigs and VND130,000-150,000 ($5.65-6.50) per kilogramme for pork. These adjustments were made to comply with the government's requirements for livestock companies.

At a recent meeting, authorities offered two reasons behind prices rising again. The first one is the slow speed of re-populating herds. According to the Ministry of Agriculture and Rural Development, the total pig population is similar to what it was in 2019. Accordingly, 900,000 tonnes of live pigs will be taken to the market in the second quarter of this year, and the figure will reach 1 million tonnes in the third quarter and 1.1 million tonnes in the fourth quarter. Thus, in the second quarter, supply will be able to meet the demand.

The second reason includes discrepancies in pricing. Notably, the expenditures for intermediate stages in the production chain are very high, making up 70-90 per cent of the price, while these expenses were VND23,000-28,000 ($1-1.20) per kilogramme before the African Swine Fever epidemic broke out.

Reacting to this discrepancy, the prime minister asked the Ministry of Agriculture and Rural Development, the Ministry of Finance, and the Ministry of Public Security to implement solutions to stabilise prices.

The prime minister also required punishments to actors in the intermediate stages of the production chain if they engage in price manipulation.

In addition, the prime minister asked to increase pork imports to balance supply and demand in the market. Furthermore, the PM asked the MoIT to carefully study the proposal toadd pork to the list of goods subject to price stabilisation,to clarify the impact of this policy, and build an implementation scheme.

PVOil reports loss of VND538 billion ($23.4 million) in first quarter

With the price of oil hitting rock bottom for the past 11 years and COVID-19 disrupting transport, PVOil reported a loss of nearly VND538 billion ($23.4 million) in this year’s first quarter.

PetroVietnam Oil Corporation (UPCoM: OIL) has just published its financial report for the first quarter of 2020. Accordingly, its net revenue reached VND17.684 trillion ($768.87 million), up 4 per cent on-year. However, sales expenses made up 99.7 per cent of its revenue, leading to the profit dropping by 89 per cent on-year to VND64 billion ($2.78 million). The revenue includes VND103 billion ($4.48 million) from financial activities, up 17 per cent on-year.

In addition to the financial cost of VND67 billion ($2.9 million), sales and management expenses were VND430 billion ($18.7 million) and VND186 billion ($8 million), respectively. Moreover, with the VND15 billion ($652,170) losses in joint venture performance, the net deficit of PVOil in the quarter amounted to VND537.7 billion ($23.38 million). Of this, the parent company contributed a loss of VND423 billion ($18.4 million).

Explaining the downturn, the firm said that the rampant fluctuation of global oil prices in the first quarter decreased the amount of local gasoline by 11 per cent, while retail output also fell by 6 per cent. During this time, the government adjusted the retail price six times, bringing current prices at the lowest level since April 2009. Accordingly, Brent crude in the global market plunged by 78 per cent, while local gasoline prices were cut from VND10,000 (44 US cents) to VND9,000 (39 US cents) per litre.

Moreover, the COVID-19 deadlock has hit petroleum distributors badly, including PVOil. In 2020, the firm forecasts a decline of 35 per cent in revenue to VND52.2 trillion ($2.27 billion) based on market predictions in late 2019 with the estimated oil price of $60 per barrel. However, due to the pandemic since late January, Brent crude has dropped to $20 per barrel, down 70 per cent against the end of last year. Consequently, output also fell by 20 per cent on-year and may fall further.

Business community anxious of COVID-19 impacts on prospects

Despite the positive results Vietnam has shown in disease containment, allowing it to start easing social distancing measures, the COVID-19 pandemic has raised concerns about the business environment and prospects among many businesses and industries.

According a survey by CBRE Vietnam in April 2020, 70 per cent of its 180 occupier clients anticipate the business environment to deteriorate in the second quarter of 2020 due to the impact of the COVID-19 outbreak, which has weighed heavily on business sentiment in Vietnam.

 

43 per cent of respondents anticipated a revenue contraction between 10 to 30 per cent in 2020, while 61 per cent have not been offered relief measures from their landlords. Additionally, 27 per cent of respondents expected landlords to be more accommodative as their businesses have been severely disrupted by COVID-19.

A broader survey, which reviewed occupiers’ opinions in the Asia-Pacific region, found that the retail industry was significantly impacted by the disease, with many stores suspending their expansion plans.

Such delays in rental decisions will have a lasting impact in the following months. However, 24 per cent of participants in the region still expected revenue growth in 2020, with the IT industry being the most optimistic.

According to Thanh Pham, associate director of CBRE Vietnam, there will be many new trends on business continuity planning that occupiers will focus on in the coming time.

“Companies are now more aware of the importance of evaluating and developing effective office use/allocation strategies. The application of technology will be a leading factor in various industries, including the technology industry. More than half of occupiers in the finance and banking sector are considering splitting up their teams across multiple buildings,” Thanh said.

Media closes in on tech giant cash

With journalism being one of the areas damaged by the pandemic lockdown with newsagents and other stores remaining closed worldwide, news agencies are increasingly pestering Facebook and Google for payments.

Australia will become the first country to impose a legal regime including financial penalties for digital platforms that profit from content produced by news media. The federal government instructed the country’s competition watchdog to develop a mandatory code of conduct for digital giants to adhere to.

The move comes as the media industry reels from tumbling advertising revenue, which was already in decline before the coronavirus outbreak collapsed the market.

Last week, New Zealand’s media companies implored its government to redirect advertising from the likes of Facebook and Google to provide cash relief, while special tax status and different ownership models should be considered as longer-term solutions.

Tech firms have put journalism on edge for years. In Australia, the number of reporters and news sites since 2014 has dropped 20 per cent as digital advertising revenue was conquered by the titans.

Indeed, the global journalism industry has been suffering the same dilemma. In France, antitrust authorities have also ordered Google to negotiate with publishers to pay for the news content shown in search results. Thanks to using the contents of entertainment and news articles for years, Facebook and Google have earned billions of US dollars in annual advertising revenue globally.

With such a great extensive user network, the platforms have become the only effective promotion tools for content creators across the globe. Nevertheless, their earnings did not live up to expectations because major advertising revenue for the contents goes to the wallets of the tech titans.

Despite papers being largely responsible for the success of the platforms, Facebook and Google are still averse to sharing revenues to the press or other content creators, as proposed by the EU commission in 2016. It is nearly one year since the EU approved a new copyright law that required firms to cut licensing deals with creators so they are paid when people share their contents from 2021 onwards. However, the platforms have yet to show any signs of co-operation with the EU to actually carries out the law.

Indeed, previously in Germany, Axel Springer SE – the owner of German newspaper Die Welt and the tabloid Bild – requested that Google pay fees for quoting content from its newspapers. However, Google decided to simply stop quoting the newspapers. Similarly, Spain passed an intellectual property law outlining copyright fees payable to newspapers after sharing their articles. As a result, Google halted its news business in the country.

Under the pressure of the pandemic, damage to news agencies across the world is growing more serious. According to the newswire HuffPost, nearly 33,000 employees in the sector have lost their jobs or had wages cut in recent months. Small-scaled agencies were closed due to having no ability to survive during the health crisis. Even the New Media Alliance called on the US congress to approve a financial support package in order to avert mass dismissals.

Moreover, the UK-based research company Enders Analysis forecasts the downturn of 50 per cent in advertising revenue of presses in Britain this year. Total damage at newspaper offices will hit more than $810 million.

In Vietnam, hardships during the pandemic have hampered local papers. According to the Vietnam Journalists Association, many local news agencies saw a plunge of 40-50 per cent in earnings of distribution and adverts. On April 7, the association filed a document to the prime minister with the hopes of receiving support from the government.

As COVID-19 continues to cast a shadow across the globe, Google recently announced a journalism emergency relief fund aiming to partially ease some burdens for news agencies during the health crisis. Yet The Guardian compared the act to “throwing a few planks of wood to those in the middle of a tsunami”, especially as along with Facebook, Google has caused global journalism to remain stuck in the mud for years.

To help the sector overcome the challenges, many governments agree that tech firms have to work with press agencies to reach a common voice about payment for journalistic contents. Meanwhile in Vietnam, materialising this is a great burden for local policymakers, in addition to charging full taxes from the tech platforms.

Discussing the issue with VIR, Nguyen Thanh Ha, chairman of law firm SB Law, said that as the digital economy is gathering speed, local lawmakers are under increasing pressure to issue policies on supervising content on social networks. “Violations of the Law on Intellectual Property have been rampant on the internet and social media. The local regulations are not strict enough to deter violations,” Ha said.

Accordingly, social awareness on intellectual property for intangible products is still limited, resulting in local policymakers being some distance from developing regulations related to these kinds of goods. It is a big gap that tech platforms like Facebook and Google take advantage of to earn huge income in many countries, including Vietnam. As a result, their acts of using news contents to earn advertising revenue avoid local government punishment.

Masan revenues surge in Q1, retail arm marches towards breakeven

Masan Group Corporation (HOSE: MSN) has reported consolidated net revenues of VNĐ17.632 trillion (US$753.08 million) in the first quarter of financial year 2020, a year-on-year increase of 116.1 per cent.

This was primarily due high double-digit growth at Masan Consumer Holdings (MCH) and consolidation of VinCommerce the company acquired recently.

Masan reported its first quarter results on April 29.

Of its subsidiaries, MCH achieved net revenue growth rate of 22.4 per cent and earnings before interest, taxes, depreciation, and amortisation (EBITDA) growth of 5.3 per cent.

This was driven by 59.7 per cent growth in convenience foods and 300 per cent growth in processed meats and 75 per cent growth in sales through modern distribution channels.

Profitability grew less than the topline since the company invested significantly on innovation and strategic marketing campaigns to maintain similar growth rates for the remainder of the year.

VinCommerce (VCM) delivered revenue growth of 40.3 per cent over the same period last year to VNĐ 8.709 trillion ($372.6 million).

Its growth was driven by strong double-digit same store sales growth in Hà Nội, tier 1 and tier 2 cities and a ramp-up of 27 VinMart supermarkets and 1,192 VinMart+ minimarkets opened in 2019.

Masan MEATLife’s meat business continued to surge, with net revenues rising by nearly 85 per cent quarter-on-quarter to VNĐ453 billion ($19.4 million) in Q1.

But MML’s consolidated net revenues grew by only 6.4 per cent as pig feed is still impacted by the smaller pig population as farmers in many places have stopped breeding the animals due to the threat of African swine fever.

The integrated meat business (feed, farm, and meat) achieved breakeven EBITDA in Q1. MML will focus on developing a productive and sustainable supply chain to deliver sustainable profits as volume scales up over the next 18 months.

Masan Resources experienced a 10.4 per cent decline in net revenues as mineral prices remained low due to the COVID-19 pandemic.

But it expects earnings and cash generation to rise from Q2 onwards due to realisation of current copper inventory and synergies from impending closure of the acquisition of H.C. Starck’s global tungsten business.

MSN’s cash earnings, or cash net profit after tax post-minority interest (NPAT Post-MI), are expected to accelerate in the second half of 2020 with VCM’s profitability forecast to further improve and MCH realising returns on strategic investments made in the first quarter.

Nguyễn Đăng Quang, Masan’s chairman, said: “To be frank, I did not expect the transformation of VinCommerce to happen this soon. We have cut EBITDA losses by half and still delivered strong topline growth. Many will say that this is a short-term boost from COVID-19, but to me this is the start of a structural shift to modern trade.

“I believe COVID-19 has accelerated the modernisation of Việt Nam’s grocery sector and the rate of change will be unimaginable. Our transformation will also accelerate as we operate nation-wide and are also committed to work with the general trade retailers to help them modernise.”

Full-year outlook

Masan expects double-digit growth in consolidated net revenue for 2020, with profitability to catch up in the second half of the year. As a majority of MSN’s businesses are focused on basic needs and consumer staples, the company does not expect to be materially impacted by COVID-19.

Among its subsidiaries, MCH is forecast to deliver over 15 per cent revenue growth and double-digit profit growth in 2020. To ensure the growth, it will continue to focus on premiumisation and margin improvement in granules to the levels of its overall seasonings portfolio.

As for convenience foods and processed meat, MCH will focus on premiumisation of its existing portfolio coupled with making the transition to a full-meal solution provider.

The management expects consumers to increasingly switch to ready-to-eat packaged products from dining out post-COVID-19.

In the beverages segment, it will round out its energy drinks portfolio and gain market share with breakthrough innovations and products.

In the home and personal care (HPC) segment, it has successfully integrated NET Detergent Joint Stock Company (NETCO) and leveraged MCH’s points of sale to increase availability of NETCO’s brands and products nation-wide as a first step. The second step will be to enter other attractive sub-categories in the HPC segment, which will most likely occur in the second half of the year.

In MML’s meat business and VINECO, VCM’s fresh vegetables and fruit production arm, it is focused on building the leading safe and fresh produce platform in Việt Nam.

Hanoi licenses 235 new FDI projects from January-April

Hanoi licensed 235 new foreign-invested projects with a total registered capital of VD324 million in the first four months of 2020.

During the period, foreign investors pledged an additional US$365 million to 35 existing projects in the city, while their capital contributions and share purchases reached US$293 million.

Hanoi’s export revenue fell by 4.7% year-on-year, hitting US$4.329 billion, of which domestic and foreign-invested sectors reported respective decreases of 4.6% and 4.7%. Some commodity groups with a sharp plunge in export turnover included petroleum, down 49.1%; phones and components, down 33.7%; agricultural products, down 17.4%; and computers, electronics and components, down 13.1%.

However, a number of commodity groups reported increased revenue compared to the same period in 2019, namely wood and wooden products, up 19.9%; ceramics, up 17.7%; means of transport and spare parts, up 12.3%; leather and footwear, up 8.8%; and other goods (including essential goods and medical equipment serving COVID-19 prevention and control), up 23%.

Hanoi’s index of industrial production (IIP) in April fell 14.7% compared to the previous month and decreased 4.3% year-on-year. From this, the manufacturing industry slipped 15.8% compared to March and 5.5% over the same period last year, and the mining sector reported respective declines of 4.9% and 13.3%. The electricity and gas production and distribution industry decreased 3.3% month on month but saw an 11% growth year-on-year.

Nonetheless, in terms of the January-April period, Hanoi’s IIP grew 2.3% against the same period in 2019.

SSI revenues rise by 38.8 percent in Q1

SSI Securities Corporation’s first quarter revenues were up 38.8 percent year-on-year to 975.75 billion VND (41.43 million USD), the corporation reported.

But profit before tax decreased sharply to only 15 billion VND.

SSI said the market fell by over 31 percent due to the impact of the Covid-19 pandemic, making Vietnam among the global markets with the sharpest drop.

Many of the 50 biggest stocks fell by an average of 30 percent, which has affected SSI’s investment portfolio which is now worth 3.4 trillionVND.

In that context, SSI has enhanced financial services and tweaked its portfolio by switching to bonds, and launched new products to offer more investment opportunities to customers.

Revenues from capital investment trading and financial services rose by 32 percent to 297 billion VND (12.6 million USD) and income from investment was worth 355.8 billion VND (15.1 million USD).

Revenues from securities services fell by 11 percent to 287.4 billion VND (12.2 million USD).

The company remained the top brokerage house with a 11.65 percent market share in the first quarter of the year./.

Singapore, Japan pledge to maintain supply chains

Singapore and Japan issued a joint statement on May 1 agreeing to deepen bilateral economic cooperation to secure supply chains for essential goods and strengthen economic resilience amidst the COVID-19 pandemic.

The statement was issued after online talks between Singapore’s Minister for Trade and Industry Chan Chun Sing and Japan’s Minister of Economy, Trade and Industry Hiroshi Kajiyama.

The two sides are committed to keep markets open and work with like-minded partners to ensure the continued flow of trade across borders without imposing export restrictions on essential goods, including agricultural food products and medical supplies.

They pledged to step up bilateral cooperation to facilitate businesses' operations in the digital economy.

The two ministers also affirmed the importance of signing the Regional Comprehensive Economic Partnership (RCEP) in 2020, which will allow businesses to benefit from the enhanced integration of regional trade networks.

Also on May 1, Minister Chan Chun Sing and his counterparts from Canada, Australia, the Republic of Korea, and New Zealand issued ministerial-level joint statements on action plans to boost supply chains in face of COVID-19./.

China reopens Pu Zhai Border Gate earlier than scheduled

The Ministry of Industry and Trade announced on May 1 that the Chinese authorities had reopened the Pu Zhai Border Gate which is linked with Vietnam's Tan Thanh Border Gate for trade earlier than scheduled.

The scheduled reopening day is May 6. The activities at the border gates have been resumed to normal from 8 am to 11 am and from 12 pm to 5 pm on weekdays starting from May 1. The activities on the weekends and holidays have also been resumed.

This is the result of negotiations between the heads of the Ministry of Industry and Trade of Vietnam and the General Administration of Customs of China. Both parties agreed to resume border activities in order to deal with the jammed cargo trucks in Lang Son Province.

The Ministry of Industry and Trade has worked closely with the Vietnamese Embassy in China, Vietnam Consulate General in Nanning and the Chinese Embassy in Vietnam to carry out the negotiation and resume border activities.

Previously, Chinese authorities tightened monitoring and control measures at their border gates in order to deal with the Covid-19 pandemic. As a result, the clearance process for cargo trucks, especially agricultural products, has slowed down in April.

Reopening the border gate could help firms recover from the impacts of Covid-19.

Haul of items surpass US$1 bln export value mark over 4 months

While the novel coronavirus has exerted a negative impact on the world economy, Vietnam has maintained a trade surplus over four months, with 15 items enjoying export turnover of over US$1 billion each, making up 80% of total export value, according to the Ministry of Industry and Trade.

Phones and components recorded the highest level of export turnover with US$16.2 billion, a 1.1% rise on-year, while electronics, computers and components posted a surge of 28.6% to US$12.4 billion.

A number of products that have export turnover of between US$1-10 billion made up the country’s key export products, including textiles, machinery, transport means and spare parts, seafood, steel, fiber, plastics, vegetables, footwear, along with timber and wooden products.

The total export turnover throughout the four-month period is estimated to stand at US$82.94 billion, an annual increase of 4.7%.

The United States remained Vietnam’s largest export market throughout the reviewed period with a turnover of US$20.3 billion, up 13.4% on-year, followed by China with US$13.1 billion, a rise of 26.7% in comparison to the same period last year.

Elsewhere, import turnover is estimated to have increased by 2.1% on-year to US$79.89 billion, with the country’s trade surplus expected to reach a figure of US$3 billion.

Pharmacity chain reports $11.5 million in net loss in 2019

Rapidly extending the sales network of Pharmacity has burned most of the company's investment capital, resulting in a loss of VND265 billion ($11.5 million) in 2019.

Pharmacity has just reported on the use of capital which was mobilised through bonds in 2019. The chain has already spent 80 per cent, equivalent to VND121 billion ($5.2 million) of the total VND150 billion ($6.5 million) mobilised by bonds for opening new stores and their working capital.

Last year, Pharmacity reported VND265 billion ($11.5 million) in net losses, which aligns with the plan set forth. The revenue of the company is not revealed in the report, however, a representative of the chain said in early 2020 that revenue in 2019 rose by 129 per cent on-year to around VND487 billion ($21.2 million).

In parallel with extending its network, Pharmacity has been repeatedly mobilising capital. In early-2020, the chain raised VND730 billion ($31.8 million) in a Series C funding round, the biggest funding ever in the firm's history.

Particularly in 2020, Pharmacity plans to open 350 new stores and hit the target of 1,000 stores across the nation by the end of November 2021, while its revenue is expected to increase by 230 per cent.

Chris Blank, founder and CEO of Pharmacity, said that the company's inventories were not enough to cover market demand, which obstructed expansion plans. This issue Pharmacity overcame by entering into a collaboration with DH Logistic Property Vietnam Co., Ltd., a logistics facility developed by Japan's Daiwa House Group, to launch a delivery hub in Loc An Industrial Zone (Dong Nai province).

This facility allows Pharmacity to open one new store each day from this April onwards.

Online business training channel launched

An online training channel on YouTube livestream platform, part of the Vietnam Digital 4.0 programme, has debuted in an effort to help small and medium-sized enterprises (SMEs) grasp online business skills and draw customers during and after the COVID-19 pandemic.

During the first pilot phase, nearly 50 training sessions were held with 50-150 trainees, which were livestreamed on YouTube and Google’s Hangouts Meet app.

Launched in June 2018 under the auspices of the Ministry of Industry and Trade in collaboration with the Ho Chi Minh City chapter of Vietnam Chamber of Commerce and Industry, the Vietnam Women’s Union and other partners nationwide, the programme will continue building a series of free training conferences, equipping businesses with skills to develop e-commerce in digital era.

Minister of Industry and Trade Tran Tuan Anh said the programme is expected to train 500,000 SMEs in digital transformation.

Fahasa estimates 90 per cent drop in profit due to COVID-19

After closing a successful 2019 with great expenses for expansion, the Fahasa boat is rocked by the COVID-19 pandemic and the company is forced to revise its business targets for this year.

Ho Chi Minh City Book Distribution JSC (Fahasa), thanks to accelerating investment in its online shopping site and expanding its scale, reported a fruitful past year. However, 2020, with the pressure of COVID-19, is forecast to be a lot more difficult for the firm. That is also the reason why it estimates a plunge of 90 per cent in this year’s profit.

Fahasa runs 112 book stores worth VND1.036 trillion ($45 million) across the country. In 2019, the company reported VND3.707 trillion ($161.17 million) in revenue, up 17 per cent on-year, exceeding the annual target by 6 per cent. Its profit also reached VND30.5 billion ($1.33 million), up 8 per cent on-year, exceeding the target by 2 per cent.

The firm last year poured a great amount of capital into expansion, including rejuvenating the image and design of its book stores. Moreover, each establishment is now about 1,000-2,500 square metres large with a separate area for reading books and relaxing.

Fahasa even broke into overseas markets by launching the Kyobo book store at Seoul (South Korea) in November 2019.

Nevertheless, the pandemic has forced the firm to take several measures to cope with the challenges, including downgrading its business target for this year. Accordingly, Fahasa foresees the revenue of VND2.6 trillion ($113 million), down nearly 30 per cent on-year. Moreover, the profit is expected to reach VND3 billion ($130,430), down about 90 per cent on-year.

Fahasa’s audited report showed that it holds VND260 billion ($11.3 million) in cash and bank deposits, equaling 25 per cent of its total assets. Its inventory is valued at VND651 billion ($28.3 million).

 
 

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