VIETNAM BUSINESS NEWS HEADLINES OCTOBER 22

Firms cautioned when exporting pepper to Myanmar

VIETNAM BUSINESS NEWS HEADLINES OCTOBER 22

The Ministry of Industry and Trade’s Agency of Foreign Trade has warned domestic enterprises to take caution when exporting pepper to Myanmar after a local company was added into the list of importers under close watch by the Myanmar Customs.

The company is named Ngwe Galon Min Co., Ltd and addressed at No.446/447, Konzedan street, Thein Gyi Zay (A) Yone, Pabedan Tsp, Yangon.

Under the Myanmar law, imports that fail to pass customs clearance within 60 days since arriving at a local port will be put up for auction and added to the public property.

According to the Vietnam Trade Office in Myanmar, the company refused to receive Vietnamese pepper due to their falling prices at the time of delivery.

The agency advised firms to actively grasp information about free trade agreements, especially those regarding tax incentives, quality requirements and rules of goods origin.

It also encouraged businesses to adopt modern technology to raise the rate of white pepper for export to 20 percent by 2020 and 50 percent by 2030.

Vietnam International Retailtech & Franchise Show set for October 31

The 11th version of the Vietnam International Retailtech & Franchise Show (VIETRF) 2019 is scheduled to take place at the Saigon Exhibition and Convention Centre in Ho Chi Minh City between October 31 and November 2.

Up to 280 global firms are anticipated to put their products on display during the three-day event, including those from China, the Republic of Korea (RoK), Singapore, Taiwan (China), Indonesia, and the Philippines.

The VIETRF is expected to host a wide range of activities, including an exhibition showcasing new products and services, and seminars discussing e-commerce, the retail industry and franchises.

During the exhibition, businesses will introduce their latest technological products, technology used in retail, retail store furnishings, retail services, and advancements made in using the internet in the retail sector.

The franchise area will be displaying an array of products and services divided into categories such as food and beverage, including fastfood, Vietnamese and international cuisine, cafes, and bars; beauty and health, including hair, make up, organic food, and health maintenance equipment; and retail and wholesale, including department stores, convenience stores, and street shops.

The highlight of the VIETRF will be the unveiling of the franchise model of convenience by GS25 from the RoK and Vietnam’s Trung Nguyen E Coffee.

As the nation’s only exhibition about franchise and retail, the VIETRF is jointly organised by Coex Vietnam, Retail & Franchise Asia, the Vietnam National Trade Fair, and Advertising Company.

Taiwanese investors still keen on Vietnam: experts

The influx of funding from Taiwanese investors into Vietnam will likely surge in the coming years as investors are seeking to tap opportunities in Vietnam.

Vietnam has long been an important destination among Taiwanese investors, with annual pledged capital accounting for one-third of the total funding that investors from Taiwan pumped into the ASEAN region, according to Kristy Tsun-Tzu Hsu, director of the Taiwan-ASEAN Studies Center.

During the ongoing global uncertainty, Vietnam will be preferred as an investment destination by Taiwanese firms, she said during a workshop, entitled “Investment in Vietnam in the era of integration: Looking into potentials and legal risks”, held on October 18 in HCMC.

She also shared investment strategies, in response to the on-going trade conflict, and pointed out new opportunities for Vietnam and Taiwan in economic and trade cooperation activities.

The trade tension has prompted many Taiwanese companies based in China to move their production to the ASEAN region, in which Vietnam is highly preferred. Accordingly, she underscored the importance of bolstering cooperation between Taiwanese and Vietnamese businesses in the near future.

Similarly, Vo Tri Thanh, head of the Institute for Brand and Competitiveness Strategy and an arbitrator from the Vietnam International Arbitration Center (VIAC), said Vietnam is attracting many foreign investors, including those from Taiwan, thanks to its investment incentives.

Free trade agreements signed between Vietnam and other countries and regions were expected to draw more foreign manufacturers to invest in the country. Vietnam could be seen as a business and investment hub, Thanh said.

The country also adopted many policies ensuring the stability of foreign investments, and encourages investments from responsible investors who leverage advanced technology in manufacturing and fulfill their commitment towards the local community and the environment, Thanh added.

Aside from opportunities, speakers at the event pointed out legal risks that foreign investors should identify, and make preparations before deciding to invest in the country.

Based upon his experience working with Taiwanese investors, Bui Van Thanh, director of New Sun Law Company and a VIAC arbitrator, said that foreign investors may face legal risks in complying with Vietnamese laws, signing contracts, or those related to lands and assets attached to land.

Thanh advised investors to make careful preparations and work out measures to prevent or minimize such risks, and avoid possible legal disputes that could result in a waste of time, effort and money.

Other lawyers and experts at the workshop shared viewpoints to help investors identify legal risks and resolve commercial disputes outside the courts via trade arbitration, so that they can feel secure investing in and expanding their businesses to Vietnam.

Spanish infrastructure firm ACCIONA opens office in Vietnam

ACCIONA, a Spanish company specializing in sustainable infrastructure and renewable energy solutions for nearly 100 years, has set up a subsidiary in HCMC.

ACCIONA Vietnam’s presence is expected to encourage other Spanish businesses to invest in the country’s potential. The company is carrying out its business activities based upon its commitment to contribute to the economic and social development of the communities in which it operates.

Luis Castilla, CEO of the Infrastructure division of ACCIONA, pointed out the reason behind the company’s decision to open offices in Vietnam.

“Vietnam has made commitments to increase its renewable energy capacity, long-term sustainability, durability and effectiveness of its water services and sustainable infrastructure in the country. All of these objectives have led us to see Vietnam as a long-term market,” he said.

The relations between Vietnam and Spain have grown, as bilateral trade reached more than US$3 billion in 2018, according to Spanish Ambassador to Vietnam Maria Jesus Figa Lopez Palop.

The figure is deemed impressive because the two countries started with very little trade between them. This success comes from small and large Spanish companies, which have taken their first steps in Vietnam.

The presence of ACCIONA, one of the leading Spanish groups, promises to make major contributions to HCMC and Vietnam. This also indicates that the country’s infrastructure is poised to attract more foreign investment.

ACCIONA said it will work closely with its local partners to participate in infrastructure projects focused on the company’s strengths in building bridges, airports, shipping ports, hospitals, renewable energy plants and water purification plants.

It also aims to become a long-term partner in Vietnam, which seeks to develop sustainable infrastructure projects, with a focus on water supply and transportation infrastructure.

Founded in 1931, ACCIONA is present in more than 40 countries and is known for its investments in clean energy, pollution reduction, plastic consumption reduction and universal access to clean water.

Vietnam legislation: ready for integration?

More transparent legal documents would contribute to dealing with inconsistencies and overlapping regulations and consolidate investors’ faith.

This was put forth by experts and policymakers at the workshop themed “Vietnam legislation – ready for integration?” organised by the Vietnam Chamber of Commerce and Industry (VCCI) in Hanoi recently. The delegations at the conference provided an update on the current situation and offered their opinions about the regulatory system.

The conference is organised to evaluate Vietnam's new position attained through its active participation in international trade agreements which necessitate the reviewing and amendment of many legal documents.

This requires the quality of legal documents to be improved to make sure newly issued documents will not have to be amended after they are found unfeasible or contradictory to other documents. It will also have to be made sure that they do not create new legal barriers for businesses, or negatively affect economic development.

TheLaw on Promulgation of Legislative Documents provides clear regulations on transparency and consulting relevant stakeholders in the process of drafting legal documents. However, there are several legal documents drafted and issued in a way that is not in accordance with these tenets or without making a comprehensive assessment of socio-economic impacts.

According to Dau Anh Tuan, head of the legal department of the VCCI, reasonableness, consistency, feasibility, and transparency are vital to the quality of legal documents. In the upcoming time, new legislative solutions should remove non-transparent regulations, continue to reduce barriers to market entry, protect the freedom of businesses, fight against group interests and overlapping laws, enhance sincerity, and consult businesses and individuals.

In particular, the shortened drafting process should not be applied to influential laws such as tax laws to ensure that all relevant stakeholders groups are involved.

During the workshop, leading economic and policy experts assessed the stability of business legislation as well as the challenges to policymakers in the context of economic integration. The experts also highlighted the necessity of collecting the opinions of associations and businesses to assess the quality and feasibility of the current business legislation documents.

Sharing international experiences during the process of building legal documents, Mark Gillin, head of VBF's Tax and Customs Working Group, said that the most important thing is that policymakers need to determine specific targets when they build documents.

Besides, they need to determine the relevant objects affected by the law while simultaneously ensuring their involvementuntil the document is completed. Furthermore, they must have a deep understanding about the impacts of the policy on relevant parties in order to make sure the policy does not only serve one or a few groups while causing risk and damage to others.

“The relevant groups are not only enterprises in the industrial sector, but also enterprises specialising in supply chain and supporting industries. They need to be considered by policymakers for the best solution for parties,” Mark Gillin said.

An example about the impacts of tax regulation on both manufacturers and supporting enterprises, the survey implemented by the Central Institute for Economic Management (CIEM) showed that if the authorities apply a special consumption tax on soft drinks, it would impact customers, beverage manufacturers, and the relating 21 auxiliary industry sectors, as well as the GDP of the country.

In his closing remarks, Anh Tuan concluded that sincerity and transparency are essential during the drafting process of legal documents to ensure the participation and involvement of all citizens and businesses, the use of fast-track drafting process should be minimised. In addition, Tuan also emphasised the essentiality of conducting the socio-economic impact assessment of the new legal documents and policies before issuance to avoid any unexpected consequences.

The forum gathered different opinions and comments, notably the practical experiences from domestic and foreign associations and business communities. The legislative bodies will consider these comments during the drafting process in the future.

Vietnam sees strong e-commerce development

Vietnam is regarded as one of the fastest growing e-commerce markets in Southeast Asia, said Dang Hoang Hai, Director of the E-commerce and Digital Economy Agency (IDEA) under the Ministry of Industry and Trade at a workshop in Hanoi on October 18.

The nation has witnessed strong development in e-commerce which will give businesses more chances to bolster exports. Additionally, a large population of more than 90 million with high numbers of young people and internet users is seen as a catalyst for the country’s e-commerce market to keep growing in the time to come.

According to IDEA, the growth rate of business-to-consumer (B2C) retail sales via e-commerce expanded by 30% in 2018. With such an incessant high growth rate since 2015, the Southeast Asian nation is hoping that the B2C retail e-commerce sales will hit the target of US$10 billion next year.

Hai highlighted the much improved legal framework on e-commerce and noted that with mushrooming e-commerce platforms and accompanied services, e-commerce is now seen as a useful tool for businesses to take full of opportunities to make breakthroughs in exports.
In her marks, Nguyen Thi Thu Trang, a specialist from IDEA underscored the rapid development of e-commerce transactions with nearly 40 million people shopping online in the country in 2018. Despite big revenue in this sector, it held only 4.2% of the total retail sales of goods and services last year.

There was an increase in transactions via mobile phones, Trang said, adding that roughly 92% percent of internet users have used mobile phones to access the internet, and 81% of the online shoppers have placed orders through mobile phones.

Only 44% of all businesses have used e-commerce, and 13% of them have used mobile apps.
Like e-commerce, exports have been playing an increasingly important role in the national economy. More than 32% of Vietnam’s small and medium sized enterprises have set up business relations with foreign partners via online channels.

Business-to-business e-commerce platforms will help local exporters to gain direct and fast access to their customers and markets worldwide, she noted.

Nearly 28,000 automobiles sold in September nationwide

According to the Vietnam Automobile Manufacturers Association, automobile consumption was at 27,767 units across the nation in September this year, an increase of 30 percent over the previous month.

Particularly, more than 20,900 passenger cars, an increase of 37 percent, 6,500 commercial cars, an increase of 10 percent, and more than 300 specialized vehicles, an increase of 10 percent, were sold. Of which, sales of domestically-assembled products reached 16,994 units, up 35 percent while that of imported completely-built-unit cars touched 10,773 units, up 21 percent.

In the first nine months of this year, the country’s total sales of automobiles exceeded 230,300 units, an increase of 18 percent over the same period last year. Of which, the number of passenger cars posted highest growth with nearly 169,000 units, up 30 percent; that of commercial cars was 57,523 units, down 3 percent; and that of specialized vehicles was 4,117 units, down 27 percent over the same period last year.

Universal Robots commits to Vietnamese market

US-owned Universal Robots (UR) – a pioneer and market leader in collaborative robots (cobots) – is keen on the Vietnamese market as the country has a growing demand for cobots as automation becomes increasingly important for businesses.

“Viet Nam continues to be a key market for UR as automation and robot demand rises,” Darrell Adams, head of Southeast Asia and Oceania at UR told Viet Nam News.

The automation and control market in Viet Nam is estimated to be worth US$184.5 million by 2021, Adams cited figures from the US research and consulting firm Frost and Sullivan as saying.

The country was also ranked the seventh largest robot market globally in 2017. Robot sales soared from about 1,600 units in 2016 to almost 8,300 units the following year, driven by the electrical and electronic industry, he said.

And related to growing automation demand, Viet Nam is attracting larger foreign direct investment. In the first five months of this year, FDI reached a four year high of US$16.74 billion.

Out of 19 sectors receiving capital, manufacturing and processing came out on top with $10.5 billion, or 72 per cent of total FDI. These industries are key adopters of cobots. This makes Viet Nam an exciting market for UR, he noted.

However, Adams said, Viet Nam has been slower to adopt cobots compared to its neighbours.

“With recent initiatives by the Government such as the “Made in Viet Nam 4.0 Programme” to prepare the country to be at the forefront of Industry 4.0, we foresee more businesses embracing automation and robotics,” he said, stressing the importance of greater awareness on cobot technology to encourage greater adoption.

He added UR has teamed up with partners to organise seminars and technical workshops to introduce manufacturers to cobots.

The company has also launched the UR Academy to offer free online modules and webinars on cobot programming skills to users, regardless of prior robotics background.

Since its debut in 2017, more than 73,000 users from over 130 countries have participated in the training courses. This is to assist the workforce in adapting to the new technology, he said.

“Since using the cobots, our productivity has increased two and three fold and product quality is now consistent. That has led to a rise in orders as much as 50 to 60 per cent and subsequently, an increase in workers’ income,” Pham Xuan Phi, Chief Executive Office of Vinacomin Motor Industry JSC (VMIC) – a subsidiary of Vinacomin Group – told the press during a trip to his company in Quang Ninh Province on Tuesday.

He said return on investment for such robotic investment is typically between six to eight years, but his company is expected to reach it within just one or two years.

“With the cobots, fewer workers are needed on the factory floor, allowing us to assign some to higher-level tasks, increasing worker satisfaction and reducing the risk of workplace accidents,” he said, adding that in the next few years, VMIC aims to add three to five UR cobots in order to automate more processes in their factories.

Apart from VMIC, Meiko Trading and Engineering Co, a PCB board manufacturer in Viet Nam, has also deployed cobots at its factory.

With 37,000 robots installed worldwide over the past 12 years, UR now makes up 58 per cent of the global market share for cobots – robots designed to work side-by-side and safely with people.

Masan MEATLife targets $1 billion sales for branded meat products

Masan MEATLife, a subsidiary of Masan Group, has set itself an ambitious medium-term revenue target from branded chilled meat products of US$1 billion and for it to account for 50 per cent of total revenues.

Masan Group Join Stock Company (MSN) has changed the name of its subsidiary, Masan Nutri-Science, to Masan MEATLife Joint Stock Company.

Masan MEATLife introduced the officially certified branded chilled meat MEATDeli at the end of last year using European processing technology and standards.

MEATDeli products have been bought so far by more than 800,000 customers.

With its launch in HCM City on September 27 MEATDeli has more than 270 stores and agents in the city and Ha Noi, and is also sold at supermarket chains such as VinMart, CoopMart and CoopXtra.

After setting up the first branded chilled meat processing complex in the northern province of Ha Nam, Masan MEATLife plans to set up a second in the southern province of Long An in the first half of 2020.

According to a Nielsen survey, 97 per cent of consumers are satisfied with MEATDeli pork, and called it “delicious.”

It is the only branded chilled meat product in Viet Nam that meets the Global Standard for Food Safety established by the British Retailer Consortium.

The product also adopts a strict quarantine control system under the guidance of the Ministry of Agriculture and Rural Development and Ministry of Health’s Food Safety Department.

Masan MEATLife shares

MEATLife’s shares will list in the stock market in 2019.

Masan Group (MSN) also targets getting all its subsidiaries listed by 2023 to maximise its shareholders’ benefits.

MSN has sold 1.8 million Masan MEATLife (MML) shares to investors for VND135 billion (US$5.82 million) but retains nearly 80 per cent of the company’s shares.

The investors include Viet Capital Securities, HCM City Securities and MB Securities. This is a strategic step in enabling the meat business to list on the Unlisted Public Company Market (UpCoM) by the end of this year.

In addition to promoting transparency for shareholders, the UpCoM listing will also facilitate an initial public offering on the HCM City bourse in 2022-23.

Yew Kean Lai, a director of Masan MEATLife and a major shareholder, has completed the sale of nearly 17.8 million shares. He is also set to resign from the board of directors.

Masan MEATlife is seeking the opinion of shareholders in writing about Masan Vision Co., Ltd. buying 17 per cent of the total voting shares of the company without making a public bid.

It also consulted shareholders about issuing 9.99 per cent of the total outstanding shares of the company at a price of over VND90,000 per share.

According to Masan Group, the listing of its subsidiary is aimed at increasing the group’s strategic flexibility and better communicating its track record to the public.

MEATLife is Viet Nam’s largest local feed-farm-food (3F) platform with an integrated supply chain to ensure traceable and hygienic branded chilled meat products at affordable prices.

Starting out as the country’s leading animal feed company with BioZeem, a leading brand, Masan MEATLife has shifted its focus to the branded chilled meat business as consumer goods.

With its motto “MEATLife for a better life”, Masan MEATLife is committed to bringing fresh, safe and reasonably priced meat products to millions of families, fulfilling its mission to improve the quality of nutrition for a better life.

Haxaco in talks with South Korean firm to offload half of shares

Hang Xanh Motors Service Joint Stock Company (Haxaco) is in talks to reach a share purchasing deal with The Class Hyosung.

In a non-binding offer sent to Haxaco, The Class Hyosung – a member of the South Korean conglomerate Hyosung Group – asked to buy more than 51 per cent of the Vietnamese firm.

The bidding price of The Class Hyosung was reported at VND45,500 (US$1.95) per share.

The South Korean firm must make a public offer as regulated to guarantee the rights and benefits of all shareholders, Haxaco said in a filing to the Ho Chi Minh Stock Exchange (HoSE).

Haxaco has set the asking price at a minimum of VND50,000 per share. The Vietnamese firm is listing 36.7 million shares on HoSE as HAX.

Its shares surged 6.9 per cent on October 17 to end at VND21,750 per share – which is a 56.5 per cent discount from the company’s asking price.

The company shares have soared nearly 23 per cent in the last four trading days and as much as 50 per cent since the beginning of the year.

The HCM City-based auto dealer has also set up a special unit, made up of five key members to handle negotiations with The Class Hyosung.

The unit includes two deputy general directors, the chief finance officer and an accountant. The unit has to look for a securities firm for consultancy and has to assure the rights and benefits of all shareholders, Haxaco said in the filing.

The negotiation must be reported to the board of directors and the deal will be discussed at any shareholders’ meeting until the next annual shareholders’ meeting in 2020, the company said.

Haxaco is planning to lift the foreign ownership limit to 100 per cent from current 44 per cent so that the firm can attract more foreign capital.

In the first six months of 2019, Haxaco earned VND2.37 trillion ($101.9 million) of net revenue, up 9.4 per cent year on year. But its pre-tax profit fell 16.8 per cent yearly to VND38.75 billion in the period due to increased competition in the Vietnamese automobile market.

The company has not released its third-quarter earnings report yet.

According to Viet Dragon Securities Corporation (VDSC), Viet Nam’s automobile market will continue rising in 2019 as the market demand remains high and the number of high-income consumers is increasing.

VDSC projects total sales volume of Haxaco will gain 15 per cent year on year to 2,700 units in 2019.

Haxaco has been the official dealer of Mercedes-Benz automobiles for the German car manufacturer Daimler AG since 2004.

Phu Nhuan Jewellery sees profit up 17 per cent in Q3

Phu Nhuan Jewellery Company (PNJ), the largest jewellery retailer in Viet Nam, recorded VND208 billion in after-tax profit in the third quarter, up 17 per cent year-on-year.

The company reported net revenue of VND3.9 trillion in the period, up 25 per cent against last year.

Financial expenses in the third quarter rose 78 per cent year-on-year, mainly due to increasing loan interest.

Selling expenses also climbed 27 per cent to VND340.8 billion, administrative expenses rose 22 per cent to VND113.7 billion.

PNJ attributed the surge in expenses to the company’s development strategy for the gold and watch retail systems.

In the first nine months this year, PNJ recorded net revenue of VND11.7 trillion, up 11 per cent. Post-tax profit was VND806 billion, up by 16 per cent year-on-year.

Earnings per share (EPS) in nine months reached VND3,619.

PNJ has completed 68 per cent of the profit target for 2019.

At the end of the third quarter, total assets of PNJ reached VND7.6 trillion, of which inventory value reached nearly VND6 trillion, an increase of nearly VND1 trillion compared to the beginning of the year.

 

Derivatives pick up in October but signal slowdown in short term

The Vietnamese derivatives market has picked up over the last three weeks, with total trading volume nearly reaching the total figure recorded in September.

As of October 18, a total of nearly 1.04 million futures contracts had been transferred on the derivatives market, which is under the management of the Ha Noi Stock Exchange (HNX).

Total trading value since the beginning of October has reached nearly VND95.7 billion (US$4.1 million).

The figures almost match the numbers hit in September, which were 1.13 million futures contracts and VND102.2 billion in trading value.

Both trading volume and value on the derivatives market slipped between July and September before picking up in the last three weeks.

Data on the HNX shows that trading volume fell from nearly 2.3 million contracts in July to 1.7 million in August and 1.13 million in September.

During the same time, trading value went down from VND202.36 billion to VND149 billion and VND102.2 billion.

According to HCM City Securities Corp (HSC), fluctuations on the derivatives market had matched the volatility of the common stock market.

Market movements had been complied by the unpredictability of global stocks markets, and weighed down by trade wars and worries about the global economic recession.

After picking up this month, trading showed signs of halting as only 49,621 contracts were traded on October 18, worth VND4.57 trillion.

That was the lowest figure recorded this week.

Four VN30 futures ended October 18 in negative territory. The VN30F1911 futures, which matures in November 2019, fell 2.9 points to 921.40 points.

VN30F1912, VN30F2003 and VN30F2006, which mature in December 2019, March 2020 and June 2020, lost between 1.5 points and five points to finish the week at 919.20-920.60 points.

The underlying index – the large-cap VN30-Index – inched up only 0.03 point to finish at 919.13 points.

The data suggested VN-30 futures would not make big jumps in the short term, HSC said.

The large-cap VN30-Index had stayed around 920 points this week with declining liquidity, which was below the 20-day average, proving buyers were being cautious about their decisions at the moment, VNDirect Securities Corp (VNDS) said in its daily report.

If trading remained modest, the VN30-Index would move narrowly, making the futures unattractive to investors and suggesting they stay out of the market to wait for clearer signals, VNDS said.

HCM City to keep pork prices steady despite supply slump

The management of the HCM City market stabilisation programme for essential goods has decided not to increase pork prices though market prices continue to rise.

In the first 10 days of this month, pork prices on the farm increased by a third to VND60,000 (US$ 2.66) per kilogramme.

Businesses participating in the price stabilisation program such as food company Vissan Joint Stock Company are under pressure, but its deputy general director, Nguyen Dang Phu, has promised the company would continue to supply at the same price.

He said that the price of meat would increase further when the supply of pigs decreases due to the African swine fever epidemic since farmers do not dare breed more of them, he added.

To ensure supply and demand of pork do not go out of kilter, the city Department of Industry and Trade plans to promote the use of frozen pork.

It has also called on enterprises to proactively stimulate demand for other meats through promotions and price cuts and increasing the supply of other meats such as poultry.

It will closely monitor changes on supply and demand of meats and prices, especially of pork, and other developments in the market.

The city’s market stabilisation programme for essential goods seeks to ensure social benefits by meeting demand, especially from low-income consumers.

Since being instituted in 2002, the annual programme has sought to stabilise the prices of essential goods during festival seasons, when there is a spike in demand.

Schools need to focus on entrepreneurship: official

Entrepreneurship has been ignored by schools and young people in Viet Nam for too long, Deputy Minister of Science and Technology Bui The Duy has said.

Speaking during a discussion panel at the Viet Nam Business Summit 2019 on Wednesday, Duy said the Vietnamese start-up community, which numbers about 3,000 firms, is still far behind the world in terms of development.

He said small companies should focus on absorbing technologies and applications from global players as a firm foundation of future development.

“We should not be so optimistic about Viet Nam’s start-up fairy tales because all rapidly-growing companies operate upon the build-up of inventions and applications,” Duy said.

“Vietnamese firms have been copying the world and we have hardly had anything of our own. We have not had any intellectual properties being registered.”

Start-up businesses require an ecosystem, which is developed based on a strong financial sector and market-leading companies with help from research institutions and schools, he said.

“Local firms are only able to buy technologies but unable to master them. So they have to buy new technologies to keep business operation up to date.

“If we cannot master existing technologies, we cannot develop new ones.”

Viet Nam cannot keep benefiting from a low-cost workforce and cheap resources, or its economy will never escape the middle-income trap, he said.

Technological advancement is key to economic development, he stressed.

According to Deputy Prime Minister Vu Duc Dam, Viet Nam has become the second home to many international corporations – who have helped boost the Vietnamese economy by bringing in new technologies and production methods.

Businesses and Government agencies must pay attention to the development of infrastructure and the finance-banking system. In addition, students must be more creative.

Viet Nam has made strong efforts to nurture sectors that benefit from Industry 4.0 and embed information and communications in all areas, which is proven by the high number of both internet and smartphone users and a fast-growing telecommunications sector in the country.

Phan Minh Tan, chairman of Simple Tech Investment JSC, said technologies help companies transform business models, increase productivity, improve corporate governance, optimise the working system and expand operations.

But technologies also put Vietnamese enterprises under pressure to change. If a business does not fully understand technologies, it will waste resources, Tan said.

In the last two decades, the world has made great achievements in science and technology, offering vast opportunities and changes for businesses, Luong Thanh Van, chairman of the Vietnam-Australia Seafood JSC, said.

According to PwC’s Industry 4.0 Viet Nam Survey 2018, companies in Viet Nam anticipate the fast-approaching Industry 4.0 will bring significant benefits, such as higher efficiency of operations as well as improved access to customers brought by digitisation and automation. The same positive sentiment was conveyed by most industry leaders at the summit.

“Adopting new technologies is important, but more than that, business leaders need to think of digital transformation as an integral part of the overall development strategy of their business,” Vo Tan Long, Technology Consulting Partner of PwC Consulting Vietnam, said at a panel discussion focusing on the impacts of scientific and technological innovations.

Dinh Thi Quynh Van, General Director of PwC Vietnam, stressed a holistic approach to transforming for the digital age.

She said a successful business strategy for the digital age should be able to empower the workforce to own the digital transformation journey.

In a new study PwC conducted among more than 22,000 workers across 11 countries, 61 per cent of respondents were positive about the impact of technology on their day-to-day work, but only a third said they are given many opportunities to develop digital skills outside their normal duties.

“Upskilling the current workforce is key. It is about giving each existing employee the opportunities to gain the knowledge, tools, and abilities they need to use more advanced and ever-changing technologies in the workplace,” Van said. “Given the right context, people can be highly adaptable, and the ability of organisations to make use of that adaptability will be critical.”

US agricultural exporters on mission to seek trade opportunities in Viet Nam

More than 40 US exporters and trade associations are visiting Viet Nam from Tuesday to Friday to seek agricultural export opportunities in “one of the fastest-growing regions in the world”, a US official said.

Ted McKinney, undersecretary for trade and foreign agricultural affairs at the US Department of Agriculture, is leading the agricultural trade mission in HCM City.

McKinney said that US firms were very keen on enhancing opportunities available in Asia. About 80 industry and government representatives, including the US Soybean Export Council and US Grains Council, are part of the mission.

McKinney will meet with Vietnamese government officials and businesses to foster agricultural trade between the two countries. At the same time, US companies will have business to business (B2B) meetings with local firms to explore opportunities in Viet Nam.

“The size of this trade mission speaks to the phenomenal potential that exists for US exports in Viet Nam and surrounding countries,” he said. “Since the US normalised relations with Viet Nam in 1995, our agricultural exports have grown exponentially, reaching a record US$4 billion last year."

Viet Nam is one of the US’s fastest-growing markets, according to McKinney.

Major US exports include computers and electronics, cotton, machinery, fruit and nuts, soybeans and grains.

Agricultural trade between the two countries has reached $8.6 billion last year, a rise of about 25 per cent over 2017.

The US exported $4.2 billion worth of farm produce and food to Viet Nam last year, up 50 per cent from 2017, making Viet Nam the US’s seventh-largest agricultural export market, according to McKinney.

In addition, both countries have made joint efforts to gradually lift technical barriers to trade and make their markets more open, widening access for US agricultural products to Viet Nam.

The potential for further trade between the two countries is high because of Viet Nam’s growing middle class and strong and stable GDP growth, he noted.

The trade mission also includes buyer delegations from Thailand and Myanmar.

The heads of six departments of agriculture from the US states of Montana, New Mexico, North Dakota, South Dakota, Texas and Wyoming are also part of the US delegation.

Vietnamese SOEs must reform and invest in technology

State-owned enterprises (SOEs) must strive to reform and become innovation centres in today's modern economy, said Prime Minister Nguyen Xuan Phuc at a conference discussing measures to improve Viet Nam's SOEs' management and performance on Wednesday in Ha Noi.

The Prime Minister stressed the importance of Viet Nam's SOEs to the economy, saying the growth of SOEs remains a priority in the county's economic strategy and is crucial in solving numerous socio-economic development issues.

Against a backdrop of fierce competition and trade liberalisation in an increasingly complex global market, Vietnamese SOEs, now more than ever, must carry out reforms to improve management capacity, while investing in human resources and technologies to stay competitive.

"Old tricks can no longer work [in today's economic climate]," the PM told delegations of Viet Nam's SOEs at the conference, saying SOEs must break away from passive mindsets and outdated practises.

"SOEs must be the front runners in the industrial revolution race," he urged the country's SOEs to invest more in research and development, technological innovation, adding they must also start building an ecosystem of supporting small-and-medium sized businesses.

On the Government's side, the PM said Government agencies will grant more autonomy to SOEs to minimise unnecessary bureaucracy, building towards a performance-based remuneration system.

Greater autonomy, however, will come with greater responsibility and accountability. Mechanisms will also be put in place to supervise and monitor SOEs' activities, said the PM.

Speaking on SOEs' performance, the PM said it still left much to be desired, especially on the issue of equitisation, a term for the conversion of SoEs to joint-stock companies or corporations. During the entire 2016-19 period, only 36 SOEs were equitised or 28 per cent of the targeted figure.

Real estate, intellectual properties and other asset valuations have been identified as some of the major roadblocks for SOEs' equitisation.

Some SOEs whose equitisation processes were finalised are still yet to meet the country's listing regulations and were slow to restructure as economic experts voiced concerns over their particularly poor management capacity and failure to attract talent.

Hesitancy to change, conflicts of interest, unwillingness to part with privileges, corruption and the involvement of interest groups have all hindered the equitisation process, a key task for the Government in building Viet Nam's modern market economy.

"Vietnamese SOEs and the country's entire political apparatus are to continue the fight against corruption led by the Party and the State," the PM said.

After the conference the Ministry of Planning and Investment, the Ministry of Finance, the State Bank of Viet Nam and other Government agencies will immediately start working on new regulations and guidelines, which aim to help SoEs improve economic performance and management.

Viet Nam National Innovation Centre urged to complete

Viet Nam is under pressure to keep up with Thailand after they opened the largest high-tech centre in Southeast Asia.

Viet Nam has just approved building the Viet Nam National Innovation Centre (NIC), but the country needs to build and promote it to keep up with their neighbours.

Prime Minister Nguyen Xuan Phuc requested the ministries of planning and investment, science and technology and industry and trade to study the high-tech centre in Thailand.

True Digital Park is invested by Charoen Pokphand (CP) Group, with an area of ​​more than 200,000 square metres.

With the support of the Thai Government, True Digital Park has attracted 4,500 technology employees so far and a second phase of the project is in the pipeline which will open in two years.

The Viet Nam National Innovation Centre will be built following a decision signed at the beginning of this month by Prime Minister Nguyen Xuan Phuc.

The centre, covering about 23ha in Hoa Lac Hi-tech Park, will be a public non-business unit under the management of the Planning and Investment Ministry.

It is being established to support and develop the national start-ups and innovation ecosystems, contributing to the growth models based on science and technology.

If the plan goes well, it will not be until the end of this year that construction of NIC can begin with opening planned for the end of next year.

Many experts said if Viet Nam wanted to catch up with the fourth industrial revolution, the country needed to build the NIC quickly.

Prime Minister Nguyen Xuan Phuc emphasised the goal of making NIC become the cradle of startups.

Previously, there were many opinions concerning competitive pressure from other centres around the world, especially in the region such as Singapore or South Korea.

A newly-opened centre in Thailand will make the race to attract investors and businesses in the field of technology become more intense.

Minister of Planning and Investment Nguyen Chi Dung said although NIC was the national innovation centre, the investment would come from the private sector also.

Similarly, the management and operation of the NIC would be assigned to the private sector to ensure efficiency. Therefore, the "contribution" of the business community and investors both at home and abroad were very important, he said.

Recently, South Korean SK Group announced non-refundable aid for the Ministry of Planning and Investment to develop the National Innovation Centre (NIC).

The total capital needed in infrastructure is estimated at more than $70 million. The rest will be sought from domestic and foreign investors.

"A lot of businesses are interested in the building of NIC," said Minister Nguyen Chi Dung.

The minister also visited Singapore and Germany to call for investment for NIC in the past time.

However, building infrastructure is not all. It is important to call on large corporations, technology enterprises as well as creative start-up community to invest and set up offices at NIC.

In order to do this, the Ministry of Planning and Investment has proposed many institutions and policies to attract not only investors but also talents.

Conference discusses measures to boost HCM City’s dwindling exports

HCM City’s exports are still growing, but slowing down, and so it needs to take measures to boost them if it wants to retain its position as the country’s economic hub, a conference heard.

Speaking at the conference on the city’s investment and export situation, Nguyen Thanh Phong, chairman of its People’s Committee, said export growth has fallen below 10 per cent a year in the last 10 years.

Nguyen Ngoc Hoa, deputy director of the city Department of Industry and Trade, said the city’s exports as a ratio of the country’s has gradually decreased from 50 per cent in 2000 to just 16 per cent last year when it was around US$38 billion.

China is still the city’s largest market, followed by the US, Japan, Hong Kong, South Korea, Germany, the Netherlands, India, Taiwan, and Malaysia, he said. But exports to the EU account for a very low rate, not commensurate with the potential, he said.

Exports are increasingly dependent on foreign businesses. In 2005 Vietnamese companies accounted for 55 per cent of the city’s exports but last year foreign firms accounted for 51.1 per cent.

Many items with high export turnover such as electronics products, textiles and footwear are mainly produced and exported by FDI firms.

Dr Dinh Cong Khai, director of the Institute of Public Policy, said: “The city's exports have been losing their competitive advantage, and its ability to diversify its export products and markets remains low.

"Its export has still focused on quantity growth, and there is no export development strategy based on its comparative advantages.”

The most obvious outcome is that its export growth rate tends to be lower than that of other localities like Bac Ninh, leading to a decrease in the proportion of its exports to the country’s, he said.

“However, we have not properly assessed the causes constraining export growth based on the competitiveness of industries and their value chains.”

Besides, the city has not identified industries and products with high export growth potential and their competitive advantages based on scientific analyses, he said.

It is necessary to evaluate the competitiveness of export products and industries to identify which ones the city should support for boosting exports, he added.

Delegates said in the short term the city has to continue exporting product groups that fetch large revenues such as electronics, textiles, footwear, agriculture - fisheries, rubber, chemicals, and furniture, but must actively prepare the foundations for upgrading industry and restructuring exports in the long term.

Talking about export orientation for the next decade, Hoa said the city would focus on quality and move towards export support services, enhancing the exports of intangible goods and services such as software and digital content and improving value addition.

The city would work to improve the competitiveness of industries with high export growth potential and help enterprises diversify their export markets, especially those that have free trade agreements with Viet Nam, and develop their human resources, he said.

It would also further improve administrative services and have policies to create a sound environment for businesses to boost exports, he added.

Do Ha Nam, general director of Intimex Group JS Company, said the city should further improve its logistics and transport infrastructure to facilitate exports.

Phi Anh Tuan, deputy chairman of the HCM City Computer Association, said the city needs to have policies to support universities in training human resources who could handle new technologies in future and help businesses adopt technologies to transform their operations.

Tran Vinh Tuyen, deputy chairman of the city People’s Committee, said with the current global economic situation and industry 4.0, competitive advantages of an industry 10 years ago would no longer be valid.

To enable the city's exports to develop in a sustainable manner, he said it needs to enhance linkages with other neighbouring provinces and cities, especially in terms of transportation, and human resource.

South African businesses seek partnership in Vietnam

Valentine Naidoo, a representative of South Africa’s Department of Trade and Industry, speaks at the Vietnam-South Africa business conference in Ho Chi Minh City on October 21

Vietnam is one of the promising strategic markets for South African businesses, heard the Vietnam-South Africa business conference in Ho Chi Minh City on October 21.

Valentine Naidoo from South Africa’s Department of Trade and Industry said Vietnam has been considered a major and important trade partner of South Africa.

South African firms see Vietnam as a promising market with trade and investment cooperation potential, she said, adding that Vietnam is also a gateway for South African goods to access Southeast Asian countries.

Jacobus Rreinier Grove from Rukou Beverages said that both South Africa and Vietnam are strong in agricultural production, but with different product structure, thus both sides can collaborate to promote trade and giving more choices to consumers.

Regarding the area of processing, South Africa is strong in producing products from natural and safe materials which is suitable to the healthy consumption trend, he held

Meanwhile, Deshan Naidoo, Director of Factocode Microfinish, a company specialising in producing automobile spare parts, said that Vietnam has a growing production industry with rising demand for support industry products.

Therefore, many South African firms hope to partner with Vietnamese businesses in support industry to serve production and distribution. With their experience, South African businesses can support their Vietnamese peers in technology transfer and personnel training, he stated.

According to Bui Thi Thanh An, Vice Director of the Trade Promotion Agency under the Ministry of Industry and Trade, South Africa is now the biggest trade partner of Vietnam in Africa with two-way trade reaching over 1.1 billion USD in 2018, including Vietnam’s export revenue of over 724 million USD.

Major export products of Vietnam in South Africa include telephone, agricultural products, coffee, and spices. Meanwhile, Vietnam mostly imported wood and steel products from South Africa with value of about 368 million USD.

An said that there is room for both countries to increase two-way trade revenue and business and investment collaboration activities to match their potential.

She said that the Ministry of Industry and Trade of Vietnam and the Department of Trade and Industry of South Africa have implemented a number of activities for businesses of both sides to meet directly and seek stronger partnership, thus expanding the market for each other’s products./.

 
 
 
 
 
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