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 on October 17. 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 among top five visitor markets to Pack Print International 2019
More than 19,000 visitors from 62 countries, with international visitors making up 30 per cent, visited Pack Print International 2019.
These numbers are far from the organiser board’s expectations for the 7th edition of Pack Print International held at BITEC, Bangkok, Thailand last month. The top five visitor markets registered from abroad were India, Singapore, Malaysia, China, and Vietnam.
“Vietnam is an emerging market in Southeast Asia which has huge potential and strongly focuses on printing. So it’s easy to understand why Vietnam is among the top five visitor markets,” Sabine Geldermann, director of drupa & Global Head Print Technologies, Messe Düsseldorf GmbH, told VIR.
Similar upward trend were seen on the exhibitors’ front, where an almost 10 per cent increase in participation was recorded. This brought to the bustling show floor future-ready innovations and solutions by 325 companies and brands from 30 countries, including some of the best local players as well as national pavilions from Germany, China, Thailand, Singapore, and Taiwan.
“Many of the latest print applications were displayed at PPI. Offset still has a significant position in the industry. On the other side, digital printing is also increasing,” Sabine said.
This year there were numerous first-time product launches by global brands at the exhibition. First up was the worldwide launch of the offset press Speedmaster CX 75 by Heidelberg and Masterwork.
A German-made machine for commercial, label, and packaging printing packed with optimisations in the feeder, delivery, and colour configuration, the multi-talent press was sold by day two of the exhibition along with all the machines that were on show at Heidelberg’s booth.
Next was Canon’s Southeast Asia premiere of its Océ Colorado 1650, a 64-inch production graphics printer featuring two innovations in the form of new flexible ink and Océ FLX finish technology. Three units were sold by the end of the first day of the exhibition, with many more potentials in the pipeline.
In enhancing the capabilities of its print technology, HP opted to present its end-to-end web-to-print solutions at the exhibition. Some of these highlights included the debut of the HP Indigo 7000 sheet-fed digital offset colour press to the Thai market and the inaugural HP Digital Print Pavilion featuring real-life customer testimonials, case studies, and the diverse applications of HP’s Indigo technology.
This optimistic sentiment and economic confidence in the domestic and regional markets was also echoed by Gernot Ringling, managing director of Messe Düsseldorf Asia, “Sales and business promotion activities remain at the heart of a trade exhibition and we are delighted that many successful business dealings and collaborations were formed right on the spot at Pack Print International 2019.”
Proving its relevance and appeal as the region’s premier sourcing event for machine distributors, packaging and printing service providers, licensing manufacturers, and finished goods producers, the exhibition also received growing interest from international visiting delegations from the Korea Packaging Association, Myanmar Paper & Pulp Association, Myanmar Printers and Publishers Association, and several others from Japan, the Philippines, Sri Lanka, and Vietnam, as well as more than 40 local printing and packaging visiting groups from leading FMCG companies.
ViettelPay co-operates with Singaporean healthcare app
Representatives of Doctor Anywhere Việt Nam Joint Stock Company (Doctor Anywhere) and Viettel Digital Services Corporation, ViettelPay management unit, signed a strategic co-operation agreement on Monday.
"ViettelPay customers will soon be able to participate in online medical consultation through Doctor Anywhere as well as use other services such as purchasing medicine and registering for health packages," said Đỗ Mạnh Dũng, deputy general director of Viettel Digital Services Corporation.
"With a coverage of nearly 200,000 ViettelPay transaction points nationwide, people living in remote areas also have the ability to access and experience healthcare services on the phone platform. Doctor Anywhere is taking steps to create a better online healthcare experience for all customers, giving customers more options to access Doctor Anywhere services more conveniently," said Nguyễn Thành Phan, director of Doctor Anywhere Việt Nam.
It is expected that users will be able to start to experience the health counselling service of Doctor Anywhere right from the ViettelPay application at the beginning of next year and choose payment solutions through ViettelPay on the Doctor Anywhere application.
Doctor Anywhere, founded in 2016, is a digital healthcare company with its headquarters located in Singapore. With an extensive network of experienced healthcare providers and doctors, the Doctor Anywhere digital platform allows users to manage their health easily and effectively through the application.
ViettelPay was launched in June last year. ViettelPay currently has six million customers and is expected to increase to 30 million by 2020.
State budget revenue to meet five-year target: MoF
Collection of the State budget between 2016 and 2020 is expected to meet the target of 6.8 quadrillion VND (nearly 293 billion USD), the Ministry of Finance (MoF) reported on October 21.
Noting a positive shift in the structure of budget revenue and expenditure, the ministry said the percentage of revenue from domestic sources has increased from 68 percent in the 2011 – 2015 period to 80.5 percent in 2016 – 2018, and 82 percent in 2019. The rate is forecast to reach 83.6 percent in 2020.
Meanwhile, collection from crude oil and import-export activities has fallen from 30 percent in 2011 – 2015 to 19 percent in 2016 – 2018, and 17.7 percent this year. It is forecast to decline further to 16.1 percent in 2020.
Regarding expenditure, the percentage of estimated budget spending on investment for development has been growing, and is expected to reach 27 – 28 percent between 2016 and 2020, higher than the targeted 25 – 26 percent. State budget spending on development investment is estimated at 2.15 quadrillion VND during the period, 2 quadrillion VND higher than planned.
The proportion of regular spending has decreased gradually, from 61.8 percent in 2018 to 61.2 percent in 2019, and hopefully 60.5 percent in 2020, while the target is under 64 percent.
Budget overspending estimates have also been falling, expected to account for 3.44 percent of GDP in 2020. The rate is likely to stay around 3.6 – 3.7 percent in the 2016 – 2020 period, according to the MoF.
The ministry also highlighted some improvements in public and government debt-related statistics, forecasting that by the end of 2020, public debt will account for around 54.3 percent of GDP, with Government debt at 48.5 percent.
Besides, the country’s foreign debt is predicted to rise from 44.8 percent in 2016 to 45.5 percent of the GDP in 2020, compared to the cap of 50 percent, mostly due to growth in outstanding foreign loans borrowed and repaid by businesses, data showed./.
Binh Duong: More Japanese capital flows into industrial projects
Japanese investors are pouring more capital into the southern province of Binh Duong to tap into local potential in electronic component manufacturing, automobile assembly and production, and supporting industries.
Hideyuki Okada, head of the Japanese Business Association in Ho Chi Minh City, said Japanese investment into Vietnam has been soaring for the past many years. More and more Japanese firms are making new investments and expanding existing projects in the country amid the relocation of their production facilities from China to Southeast Asia.
According to him, the abundant workforce, political stability and the large consumption market are factors attracting Japanese investors to Vietnam, the focus of attention from Japanese firms to ASEAN at present.
He took Binh Duong as an example, noting that Japan now tops the 64 countries and territories investing here with 304 projects worth 5.65 billion USD, accounting for 16.2 percent of the total FDI capital in the province.
Most of Japanese investors here operate in electronic component manufacturing, automobile assembly and production, and supporting industries. Many of them have also invested in infrastructure, urban development, and trade in services.
The Sharp Manufacturing Vietnam Co. Ltd recently invested in a factory worth 135 million USD in the Vietnam – Singapore II-A Industrial Park. Work on the project, which will produce air purifiers, liquid-crystal displays and electronic devices, is scheduled to begin next year.
On October 10, Panasonic Life Solutions Vietnam started the construction of its second factory in Binh Duong. The project, invested with over 45 million USD, will manufacture ceiling fans and air ventilators.
Additionally, Nitto Denko Vietnam Co. Ltd has also poured 186.2 million USD in an integrated circuit production project in the province.
Hideyuki Okada said more Japanese manufacturers in supporting industries will come to invest in Binh Duong. Therefore, his country’s investment capital here is likely to continue growing in the time ahead.
That also requests the southern industrial hub of Vietnam to develop new industrial parks or expand existing ones to meet businesses’ production demand, he added.
At the recent dialogue with Japanese businesses, Chairman of the provincial People’s Committee Tran Thanh Liem said Binh Duong will harness resources to perfect socio-economic infrastructure, expand industrial parks, ready land for investment projects, promote human resources training, build more housing for workers, and better supply labourers for investors./.
Refinery upbeat about business results amid oil price fluctuations
The Binh Son Refining and Petrochemical Joint Stock Company (BSR) has enjoyed sound business results from the outset of the year, although its profit margin was affected by fluctuations in global oil prices.
According to the firm’s latest financial report, in the third quarter, it earned over 22.98 trillion VND (989.5 million USD) in revenue, and 753 billion VND in gross profit while the gross profit margin rose to 3.28 percent as compared to the 2.61 percent recorded in the first half of the year.
The firm gained more than 73.85 trillion VND in revenue, and 1.34 trillion VND in profit before tax during January-September.
A representative from the BSR described this as a positive result although the firm did not complete its profit target of 3.1 trillion VND set from the beginning of the year.
Low and varying oil and gas crack spread posed tough challenges for BSR’s business. However, thanks to the firm’s efforts to improve operation efficiency, it produced more than 5.17 million tonnes of various products, and production costs as of the end of August were cut 6.1 percent as compared to the same time last year.
Global oil prices are expected to stabilise in the coming time, therefore the BSR feels confident about its profit in Q4.
Besides, the Government last month decided import tax on crude oil would be slashed to zero percent from the current 5 percent from November 1. The BSR will get indirect benefit from the decision as a zero tax rate will allow the firm to diversify the sources of crude oil used as input for production, the BSR representative said./.
Top CEOs to discuss the future of HR
The 2019 Vietnam HR Awards Forum to be held in HCM City next month will bring together CEOs to discuss strategic human capital insights for the future, shedding light on the collaboration between business strategy and people management.
Hosted by Talentnet Corporation and the Lao dong va Xa hoi (Labour and Social Affairs) newspaper, the forum will include some prominent speakers like Andy Han Suk Jung, CEO of SonKim Land; Dam Bich Thuy, founding president of Fulbright University Vietnam; Ganesan Ampalavanar, managing director of Nestle Vietnam; Huong Pham, general director of Fushan Technology Vietnam; and Melissa Nguyen, country head of customer solutions, Google Vietnam and Thailand.
Participants will have the opportunity to hear first-hand what top CEOs are doing to future-proof their workforce, unleash the power of human potential and drive business success with a people-matter approach.
The event’s prime focus will also be on the challenges confronting C-suite management, how leaders need to adapt to the fast-changing business landscape and CEOs’ biggest priorities to sustain business growth in an era of constant change.
Some of the topics that will be discussed are C-vision board: The new rulebook for people development; The biggest challenge of going digital: Our workforce; High-tech and high-touch in leadership; and The forward-thinking approach to human capital strategy.
According to the organisers, the shifting expectations of the current and future workforces are quickly reshaping how organisations operate, and business leaders, HR practitioners and even CEOs are now required to lead workforce changes within the business.
The 2019 Vietnam HR Awards Forum will be held on November 21 at GEM Centre in District 1.
KDC on course to hit profit target
Food producer KIDO Group has achieved 75 per cent of its full-year profit target, and is on course to reach it.
Its pre-tax profit of VND266 billion (US$11.5 million) in the first nine months is double that of the comparable period last year, KDC said, attributing its growth to the chilled foods segment.
Third quarter profit was over VND72.7 billion ($3.1 million), a 95 per cent rise year-on-year.
Net revenue for the quarter was VND1.85 trillion ($80 million), a 4 per cent decline due to falling global cooking oil prices.
The quarter saw revenue growth of 24 per cent in the ice cream segment.
KDC’s subsidiary, Kido Foods, posted net revenue growth of 12 per cent in the third quarter as it launched new products like water melon ice cream.
Its pre-tax profit of the quarter was VND180 billion ($7.7 million), a 238 per cent increase year-on-year.
But other subsidiaries saw revenue declines during the quarter.
Vietnam Vegetable Oils Industry Corporation (Vocarimex) reported a 53 per cent fall to VND517 billion ($22.3 million).
Tuong An Vegetable Oil Joint Stock Company (TAC) said it was down by 9.6 per cent to VND1 trillion.
But revenues from premier products rose by 13 per cent.
Profit before tax was over VND41.3 billion ($1.8 million), up 73.8 per cent.
TAC said to meet the demand during the Lunar New Year early next year, it would continue to increase production of some of its premier gift products.
The distribution system would also be further expanded, it added.
KIDO Group was established in 1993 and has become a leading food producer in Viet Nam. It sells instant noodles, chilled foods, cooking oils and ice creams among other products.
FPT’s profit up sharply in first nine months
IT giant FPT Corporation achieved revenue and profit before tax in the first nine months of the year of VND19.59 trillion (US$846.35 million) and VND3.5 trillion ($151.65 million), a year-on-year increase of 20.5 per cent and 28.1 per cent, respectively.
In the third quarter of the year alone, FPT revenue and profit before tax reached more than VND7.1 trillion and over VND1.36 trillion, a year-on-year increase of 17.7 per cent and 30.2 per cent, respectively.
In the first nine months, its profit after tax reached VND2.94 trillion, up 27.7 per cent year-on-year.
Its EPS (earnings per share) were VND3,513, up 29.5 per cent year-on-year.
The profit margin continued to improve, reaching 17.9 per cent compared to 16.8 per cent in the first nine months of 2018.
As a key growth driver of FPT, the technology sector recorded revenue and profit before tax of VND11.06 trillion and VND1.47 trillion in the first nine months, up 25.3 per cent and 41.8 per cent year-on-year, respectively.
Of the figures, the IT services in the global market recorded revenue and profit before tax of VND7.79 trillion and VND1.24 trillion, up 32.1 per cent and 33.9 per cent year-on-year.
The telecom sector achieved VND7.56 trillion in revenue, a year-on-year increase of 16.6 per cent, and VND1.29 trillion in profit before tax, up 15.2 per cent year-on year.
As of September 30, the total number of students studying at its education system reached 47,200, up 30 per cent over the same period last year.
In the first nine months, overseas markets brought FPT revenue of VND8.22 trillion and profit before tax of VND1.34 trillion, up 28.5 per cent and 29.4 per cent year-on-year, respectively.
The overseas revenue and profit before tax contributed 42 per cent and 38 per cent to the corporation's performance compared to 39 per cent and 38 per cent in the same period last year.
State Treasury raises VND4 trillion through G-bonds
The State Treasury mobilised VND4 trillion (US$172.66 million) through Government bond auctions on the Hanoi Stock Exchange (HNX) on Wednesday.
Accordingly, the State Treasury offered five-year bonds valued at VND500 billion, 10-year and 15-year bonds each valued at VND1.5 trillion, and 20-year bonds valued at VND500 billion.
A total of VND500 billion was mobilised from five-year bonds with an annual interest rate of 2.85 per cent, down 0.04 per cent from the auction on October 2.
Bonds with 10-year maturity raised VND1.5 trillion with an annual interest rate of 3.78 per cent, down 0.18 per cent as compared with the October 9 auction.
Meanwhile, VND1.5 trillion was collected via 15-year bonds with a yield rate of 4 per cent, down 0.21 per cent from the auction on October 9.
The State Treasury also raised VND500 billion worth of 20-year bonds with an annual average yield rate of 4.58 per cent, 0.30 per cent lower than the previous auction on October 2.
So far this year, the State Treasury has collected over VND166.18 trillion from G-bond auctions at the HNX.
South African businesses seek export opportunities in VN
South African businesses aim to increase their export of goods to Viet Nam in the near future, speakers said on Monday at a conference in HCM City.
A delegation of South African businesses are on a trip in Viet Nam to showcase South African products, identify trade partners and investment opportunities, and study consumer tastes and import requirements.
Speaking at a business-matching event, Valentine Naidoo, representative of South Africa's Ministry of Industry and Trade, said that Viet Nam is an important gateway for South African goods to access Southeast Asian markets.
Jacobus Rreinier Grove, representative of Rukou Beverages Pty Ltd of South Africa, noted that South Africa and Viet Nam were both strong in agriculture but have different products that could be promoted in each other's market.
In the processing industry, South Africa has strengths in products made from natural and safe ingredients, he said.
Deshan Naidoo, director of Factocode Microfinish Co specialising in manufacturing components and auto parts, said that Viet Nam's well-developed manufacturing industry has a high demand for products in the supporting industry.
Many South African businesses, which want to establish partnerships with enterprises in Viet Nam's supporting industry, can assist in technology transfer and human resource training, he said.
According to Bui Thi Thanh An, deputy director of the Ministry of Industry and Trade's Department of Trade Promotion, South Africa is Viet Nam's largest trading partner in Africa with bilateral trade between the two countries increasing from US$658 million in 2010 to more than $1 billion last year.
Of the figure, Viet Nam exported to South Africa more than $724 million worth of exports, including telephones, agricultural products, coffee and spices, while South Africa mainly exported timber and steel with a value of about $386 million to Viet Nam.
However, trade still lags behind the potential due to a lack of information and delegation exchanges between Vietnamese and South African businesses, she noted, adding that the Ministry of Industry and Trade of the two countries will continue to expand the market for each other’s export products.
The event was organised by the Department of Trade Promotion under the Ministry of Industry and Trade in coordination with South Africa's Ministry of Industry and Trade.
Sustainable development key to joining global chain
Sustainable supplies of goods and production were key areas for Vietnamese businesses to focus on in order to join the global supply chain, Director General of the Foreign Trade Association (Amfori) Christian Ewert said at a conference held in Ha Noi on Monday.
Speaking at the Amfori Asia Sustainability Forum, which gathered about 100 delegates from Asian countries and territories, Ewert said in the context of the rise of Asia, the main products sought in Viet Nam were textiles, footwear and fast-moving consumer goods.
Organisations and management agencies in most countries were making efforts to implement the UN's sustainable development goals, and consumers were becoming more concerned about environmental protection and green products, Ewert said.
He said the impacts of climate change from production and business required businesses to become pioneers in sustainable development, focusing on environmental factors. Focus was needed from many countries to find common solutions for sustainable development, especially issues such as climate change, the environment, global supply chains and trade wars.
The global supply chain is posing a series of challenges for businesses, including the origin of goods, trade barriers and trade defence mechanisms. Sustainable development required businesses to form a chain of green product supply and service, and by doing so changing consumer habits.
Vo Tan Thanh, deputy director of Vietnam Chamber of Commerce and Industry (VCCI), said there were many global supply chains of goods and services for the European Union and United States located in Asian countries, but the number of Vietnamese enterprises participating in this chain was still very limited.
“This shows that Viet Nam cannot ignore sustainable development. Vietnamese businesses need to identify this as one of key tools to join the global supply chain, especially when the country has deeply integrated into the international economy. That will provide more opportunities for Vietnamese enterprises to expand their business.”
According to statistics from the Ministry of Industry and Trade, most foreign direct investment enterprises (FDI) were affiliated with foreign suppliers, while the majority of Vietnamese private enterprises sold goods and provided services to domestic partners. Only 15 per cent of domestic businesses supplied goods and services for foreign partners in Viet Nam.
The statistics showed 8.4 per cent of businesses directly exported to foreign countries, while 7.4 per cent sold indirectly via a third party.
Explaining the situation, some experts pointed out that many Vietnamese enterprises still applied outdated technologies leading to low productivity, and lacked experience in working with foreign enterprises and compliance awareness.
The experts also said that many Vietnamese enterprises had not been proactive or ineligible to participate in the global supply chain, so they could not exploit the benefits of free trade agreements.
Tuyen Nguyen, an expert at the International Finance Company, a member of the World Bank, said in the past, many Vietnamese businesses had reached global standards for sustainable development.
“For example, Vietnamese footwear enterprises previously had problems with labour resources, but now they are aiming to meet international standards. As for energy use, Vietnamese businesses in many fields have applied solar energy and are reusing wastewater,” Tuyen said.
At the forum, experts agreed that encouraging and promoting domestic enterprises to meet international standards would help Vietnamese enterprises to join the global supply chain. This would contribute to the implementation of Viet Nam's commitment to the UN's sustainable development goals.
Airport development key to socio-economic development
Airports with modern infrastructure that can serve as international hubs had the potential to become major drivers for national socio-economic development, said experts at a recent conference held to discuss the sustainable development of Viet Nam’s airports in Ha Noi.
Airports that had successfully transformed into international hubs produced a kind of ripple effect that significantly strengthened socio-economic development, said Dang Huy Dong, head of the Institute for Research Planning and Development and the organiser of the conference.
In the best-case scenario, State investment in infrastructure could be quickly recuperated while the airports continued to produce economic benefits.
“On the other hand, inefficient investments that lack foresight may become heavy financial burdens on the State budget,” Dong said, citing a stark contrast between Germany’s Frankfurt International Airport – one of Europe’s major aviation transport hubs - and Berlin International Airport, an ill-fated project that just can’t seem to take off after a decade of construction.
International experts discussed numerous issues related to the development of national gateway airports and how to secure the needed investment for infrastructure without creating too large a financial burden on the State.
They recommended the planning and implementation of airport projects must be completed with a long-term vision in the minds of policymakers. The airports must be well-connected with other existing means of transport to maximise the impact on socio-economic growth.
In Viet Nam, Long Thanh International Airport which is to be constructed on the outskirts of HCM City, has been earmarked to be developed into a connecting hub. Lai Xuan Thanh, chairman of the Airport Corporation of Vietnam (ACV), said the airport would serve as a national gateway as well as a major transport hub for aviation companies in the region.
“Of the 22 airports in the country, only three meet the requirements to become national gateway airports: Noi Bai International Airport, Long Thanh-Tan Son Nhat International Airport and Da Nang International Airport,” Thanh said.
Large airports were usually under the management of State-owned enterprises as they were not only socio-economic development drivers but also strategic points for national defence and security, he added, saying digitalisation and technology were to be the focus of Long Thanh International Airport’s management model.
Vietnamese businesses active at RoK’s int’l agriculture expo
The Vietnam-Korea Businessmen and Investment Association (VKBIA) has joined the organiser of the ongoing International Agriculture Exhibition (IAE) 2019 in Jeollanam province, the Republic of Korea, to run several activities at the event.
The VKBIA and ten Vietnamese firms are showcasing their services and products at the IAE 2019, one of the most important trade promotion events in agriculture in the RoK, which is underway from October 17 to 27 and attracting more than 400 exhibitors from 30 countries and territories worldwide.
As a result of collaboration between the association and the organiser, Vietnam is hosting a Vietnam Day in the framework of the IAE to promote the nation’s people and landscape.
The VKBIA, together with the organiser and the Vietnamese Embassy in the RoK, also held a business matching event for Vietnamese and Korean firms on October 18, during which cooperation pacts, particularly those related to high-tech application, were signed.
At the exhibition, the association and the Jeollanam research institute for agricultural technique inked a memorandum of understanding on comprehensive partnership, opening up a new door for Vietnamese farm produce and R&D products to enter the Korean market.
The VKBIA also sealed cooperation deals with the Mekong Delta business club and Hau Giang province’s Vietnam – RoK economic collaboration office, both from Vietnam.
On the occasion, Governor of Jeollanam province and head of the IAE organizing committee Kim Yung-RoK presented an insignia to VKBIA Chairman Tran Hai Linh for his significant contributions to the IAE./.
Fewer firms debut on stock exchanges in nine months
The number of new listing firms on the two local bourses has remained modest in the first nine months of the year.
As of the end of September, 10 companies debuted on the Ho Chi Minh Stock Exchange (HoSE). Most of them moved from the Unlisted Public Company Market (UPCoM).
Nine companies debuted on the Hanoi Stock Exchange (HNX) in the January-September period.
Some of the companies making their debuts in the first three quarter included Gia Lai Electricity JSC (HoSE: GEG), Dabaco Group (HoSE: DBC) and Kosy JSC (HoSE: KOS).
The number of companies having new to the two local exchanges in the past nine-months was quite futile compared to the previous two years.
In 2018, total 33 companies started listing shares on HoSE and 22 firms came on the HNX.
Other companies are also planning to move their shares to the two local exchanges.
Those companies include Investment and Industrial Development JSC (UPCoM: BCM), Hanoi Plastics JSC (UPCoM: NHH) and Kien Giang Construction Investment Consulting Group (OTC: CKG).
Listing on the two exchanges is among the best ways for companies to raise capital, serving their business activities, and help increase the firm’s creditability to investors.
According to Nguyen Nhu So, Chairman of Dabaco JSC, moving the company from UPCoM to HoSE helps strengthen its status in comparison with other businesses in the consumer staples sector.
The company plans to increase its charter capital by selling private shares and issuing private convertible bond notes.
Some businesses are likely to break the promise of bringing their businesses onto the stock exchanges made in this year’s annual shareholder meetings.
Le Mien Thuy, General Director of Ricons Construction JSC, said the company plans to list shares on the stock exchanges in the last quarter of the year.
The underwriting firm expects construction companies will produce high profit reports in the October-December period and that would draw interest from investors, he said.
However, the listing will very much depend on the market trading conditions, which have been unfavourable for shareholders, the general director said.
The market trading conditions have remained difficult for any firms to thinking about listing shares on the HoSE and HNX, business executives said.
As of September 30, the benchmark VN-Index on HoSE struggled to gain a total of 12.6 percent.
Meanwhile, the HNX-Index on HNX increased by only 1.2 percent in the same period.
Market trading liquidity remained modest on the two exchanges as investors have been worried about key international events such as the US-China trade war and about the global economic recession.
They have been seeking alternative investments, which are safer and less risky than local stocks, such as gold and government bonds./.
Vinh Phuc implements policies to develop industry in rural areas
The northern mountainous province of Vinh Phuc is implementing several policies to support industrial and handicraft establishments in rural areas, with the goal of shifting the economic structural in rural areas.
The provincial administration had approved an industrial extension programme for 2016-2020 with total budget of more than 34 billion VND (1.47 million USD at current exchange rate), which was designed to mobilise investment from all sectors in industrial and handicraft production. The programme also included measures to encourage enterprises and production households to adopt environmentally-friendly production technology and use natural resources economically.
From 2016 to 2018, Vinh Phuc carried out support projects targeting 78 industrial establishments at a total cost of 7.6 billion VND. As a result, beneficiary enterprises were able to reduce production costs, enhance their competitiveness and gradually establish their footholds in the market. Meanwhile, production households gained access to advanced technologies and new production methods.
With advice and support from the provincial industrial extension and development consultancy centre, the Tam Dao honey bee joint stock company in Binh Xuyen district invested more than 2.7 billion VND in new machinery for honey processing, turning out quality honey products with higher value, meeting consumers’ demand with hope for export.
The company at present produces hundreds of honey each year in various forms. Besides the traditional product of bottled honey, the company also offers royal jelly, bee pollen, special forest bee honey, Tam Dao mountain bee honey, or honey mixed with fruits. The company’s products have become a specialty of Vinh Phuc, and are available in many supermarkets, tourism sites and conferences.
Households engaged in fine art and handicraft production in Yen Lac town (Yen Lac district) have also benefited from such support programmes. Dozens of households in the town received financial assistance to buy machines. Ngo Van Tu said he got a preferential loan of 100 million VND to buy a perforating machine worth more than 200 million VND. According to Tu, the machine helps his family improve the quality of their products.
Pham Thi T, owner of a furniture making facility in Tien village, Yen Lac town, said while it is difficult for a production household to buy synchronous machinery and equipment, this is a must-do task, because it will bring great benefits, such as reducing labour costs, enhancing productivity and product quality, saving materials and limiting pollution.
Other beneficiaries of the industrial extension centre’s support projects were the Hoang Ha consultancy and construction joint stock company in Binh Xuyen district, the Khanh Ha trade limited liability company in Vinh Tuong district, the Nguyen Phuc one-member limited liability company in Song Lo district, to mention just a few. Most beneficiary enterprises reported higher productivity, better product quality, less use of labour, and less environmental pollution.
Besides, Vinh Phuc authorities have also held vocational training for thousands of labourers in rural areas, with focus on such occupations as sewing, embroidering, crochet, bead sewing, weaving, and carpentry.
The province has been building pilot production models using clean technology, and assisting industrial production establishments in rural areas in participating in industrial and trade fairs and exhibitions not only in the country but also abroad.
Director of the provincial industrial extension centre Nguyen Xuan Binh said the source of capital from the centre has partly helped ease capital shortage of local production facilities and stimulated investment from enterprises, cooperatives and business households.
In the time ahead, Vinh Phuc will give priority to developing industries that the province has advantages in, with the aim of increasing the proportion of industry and handicraft in the rural economic structure. It is noteworthy that the province has already fulfilled the criterion on electricity supply in building new-style rural areas, laying the foundation for industrialization./.
Digital transformation essential for business in 4IR era
Digital transformation is not only a trend but also essential for businesses to thrive as the fourth industrial revolution (4IR) has boomed globally, heard at a conference held in Ho Chi Minh City on October 20.
The conference titled “Vietnam Economic Forecasts in the Context of Digital Economy and New Trends – Adaptation and Business Process Transformation” was organised by PTI Education and Training.
The 4IR today is no longer a phenomenon in a few countries or areas but having direct impact on economic development on a global scale, said former Director of the Vietnam Institute of Economics Tran Dinh Thien.
The further Vietnam integrates into the global economy, the greater effect the global digital economy will have on Vietnamese enterprises. Therefore, in order to survive and thrive, domestic firms have no other choice but to quickly join the digital transformation or digitalise the business and management, Thien said.
However, Vietnam is lacking manpower, necessary finance and infrastructure, and more importanly, transparent institution for the digital transformation, he noted.
To shift from a physical to a digital economy, apart from essential technological foundation, the country must also change its institutional mindset because the 4IR is actually an institutional revolution, the expert explained.
Vietnam needs to promote a transparent public institution, develop an effective government, and ensure intellectual property rights and cyber security. It must also develop digital human resources and build a digital technology industry, smart agriculture, smart tourism, and an ecosystem for innovation and entrepreneurship, he recommended.
Echoing Thien’s view, former Minister of Trade Truong Dinh Tuyen said as an economy of which over 90 percent of the firms are of small and medium sizes, Vietnam is more vulnerable to new waves if it does not stay active.
He stressed that it is important to improve the competitiveness of domestic businesses and the entire economy and digital transformation is one effective solution.
To do so, the State needs to promote institutional reforms to create a transparent and stable policy environment that allows the domestic firms to develop long-term business strategies, he added./.
VPBank on stable development track
Privately-held VPBank, one of the top performers in the local banking industry, continues to report rosy business performance in the third quarter of this year, buoyed by a sharp growth in the revenue and profit performance, and improvements in its operating cost and asset quality.
These encouraging results were noted in the bank’s third-quarter financial statement which has just been released.
Particularly, the bank posted a 14.7 per cent jump in consolidated credit expansion in the first nine months compared to the end of 2018, which is much higher compared to the banking sector’s average growth of 8.4 per cent during the period.
VPBank also posted a 19.9 per cent jump in total deposit volume.
Its consolidated total operating income during the period reached VND26.333 trillion ($1.14 billion), a 19.1 per cent jump compared to a year ago. If the abrupt earnings from bancassurance co-operative contracts were excluded, the jump in total operating incomes would be 23.9 per cent on-year.
The total operating income of the bank inched up 25 per cent against the same period last year and up 7.1 per cent compared to the previous quarter.
The bank’s consolidated pretax profit stayed on its growth momentum, touching VND7.199 trillion ($313 million) by the end of September, a 17.5 per cent jump on-year. Excluding the abrupt earnings from bancassurance co-operative contracts, VPBank’s operating income jumped 36.6 per cent on-year.
Net interest income continued to be the key driver of the bank’s total operating income, hitting VND22.428 trillion ($975.13 million) during this nine-month period, up 23 per cent on-year. The income from services operation, however, rose impressively by 93.4 per cent on-year to VND1.942 trillion ($84.43 million) in the first nine months of this year, attesting to the bank’s proper orientation to diversify income sources and lessen reliance on net income sources.
By the end of September, VPBank’s non-performing loans stood at 3.1 per cent compared to 4.24 per cent one year ago. Particularly, the bad debts ratio of the parent bank fell to 2.45 per cent by the end of the third quarter. During this period, this ratio of FE Credit –VPBank’s consumer lending arm – went down to 5.21 per cent by the end of September from 6.36 per cent a year ago.
Improved operation efficiency and asset value will provide solid fundaments for VPBank to continue on this growth momentum in the last quarter as well as in the upcoming years.
VPBank was also doing a smart job in tackling bad debts placed at state-owned Vietnam Asset Management Company (VAMC) which was dubbed the bad debts bank, bringing its bad debts at VAMC from more than VND3.1 trillion ($134.78 million) to less than VND908 billion ($39.4 million), down 70 per cent during the period.
Low bad debts rate and strong measures to bring down bad debts at VAMC helped the bank improve its asset quality remarkably, paving the way for VPBank to post stable profit growth in the time ahead.
VPBank’s consolidated operating expenditure in the first nine months of this year rose by 17.3 per cent on-year, lower than the bank’s 19.1 per cent revenue jump. This contributed to bringing down the bank’s cost-income ratio (CIR or efficiency ratio) to 34.7 per cent compared to the 35.8 per cent in the first half.
Improved expenditure ratios came in the wake of adjustments to the bank’s business and operating model which took place in the latter part of 2018.
Particularly, the parent bank has taken drastic measures to optimise operating expenditure, which grew by only 11.6 per cent on-year. The parent bank’s operating expenditure in the third quarter even shed 4.3 per cent compared to the second quarter. Its CIR also fell to 38.8 per cent by the end of September, compared to the 41.3 per cent at the end of June.
Higher profits attest to the bank’s operating efficiency. Along with this, the bank’s return on assets (ROA) bolstered 2.3 per cent by the end of September 2019 compared to the 2.1 per cent in the first half of this year.
Returns-on-equity (ROE) reached 20.4 per cent by the end of September, compared to 19 per cent in the year’s first half. The capital adequacy ratio, according to Basel II standards, rose 11.4 per cent by the end of September, staying at a high level compared to the central bank’s requirements.
Improved operation efficiency and asset value will provide solid fundaments for VPBank to continue on this growth momentum in the last quarter as well as in the upcoming years.