HCM City hopes to be trustworthy business destination of Japan
Chairman of the Ho Chi Minh City People’s Committee Nguyen Thanh Phong has expressed hope that Ho Chi Minh City – an economic hub of Vietnam, would become a trustworthy business destination of firms from Japan in general and Kansai region in particular.
During a reception for Chairman of the Kansai Economic Federation (Kankeiren) Shosuke Mori in Ho Chi Minh City on September 14, Phong pledged all possible support to Kankeiren members to do long-term business in the city.
He informed his guest that the city has operated a Kansai desk since 2014 to assist Kansai businesses in exploring Ho Chi Minh City market.
The city hopes Kansai region’s companies will invest in waste treatment technology, urban flooding prevention and high-technology manufacturing, he said.
Mori, for his part, said regional firms treasure economic and trade ties with Vietnam, in which Ho Chi Minh City is an important destination.
Kankeiren member businesses took the occasion to acquire information from HCM City agencies on foreign investment situation in the city, priority fields and potential of economic ties between Kankeiren and Ho Chi Minh City.
Kansai is the second largest economic, financial, scientific-technological hub of Japan, behind Kanto region, with strength in manufacturing industry. Firms from the region account for 20-30 percent of Japanese investment in Vietnam.
Quang Ninh calls for Singaporean investment
A seminar promoting investment in the northern province of Quang Ninh held in Singapore on September 13 is expected to open more cooperation opportunities between the two sides in the time ahead.
At the event, Quang Ninh representatives introduced the province’s potential and policies to attract foreign investors, especially those from Singapore.
Deputy Head of the Standing Committee of Quang Ninh’s Investment Promotion Agency (IPA) Tran Nhu Long hoped Singaporean investors will invest in areas that Singapore has strength such as support and hi-tech industries, health, education, services and tourism.
He said the province has developed and completed a synchronous planning system, which is appreciated by the world’s leading investors and foreign specialists. It has created the best possible conditions for investors with procedures being streamlined and handled in an open, transparent and rapid manner..
Quang Ninh is completing final steps for the establishment of the Van Don Economic Special Zone, the first of its kind in Vietnam, which will apply special preferential mechanisms.
Singaporean investors expressed their interest in the great potential of Quang Ninh, especially in tourism. They also spoke highly of the province’s investment attraction policies and administrative procedure reforms.
Chairman of KinderWorld Ricky Tan said his group invested in Quang Ninh in 2014, with procedures completed within seven months. With the support of the local authorities, the company wishes to invest more in the province, he added.
Quang Ninh is now home to 114 foreign direct investment projects with a total investment capital of 5.5 billion USD.
As of March 2016, Singapore ranked third among 18 countries and territories investing in the province, with seven projects worth 800 million USD.
Australia considers import of Vietnam fresh shrimp
Australia is willing to consider the import of fresh shrimp from Vietnam, which is expected to start in early 2017.
The Australian Department of Agriculture and Water Resources expressed the willingness at a working session with Vietnamese Deputy Minister of Agriculture and Rural Development Vu Van Tam during his working visit to Australia from September 8-10.
This constitutes a brilliant opportunity for the shrimp sector as shrimp is consumed most among seafood products in Australia with up to 50,000-60,000 tonnes per year.
As such, Australia must import an average of 30,000 tonnes of shrimp each year. However, strict regulations, especially those on disease control and biological safety, make it difficult for Vietnamese shrimp to enter the market.
Director of Animal Health Department under the Ministry of Agriculture and Rural Development Pham Van Dong said the department has built an action plan on disease control in order to ensure no disease-plagued shrimp is present in Australia.
In recent year, seafood diseases have been put under control thanks to the Government’s investment in human resources and testing equipment, he said, adding that Vietnam is capable of meeting Australia’s requirements on fresh shrimp exports.
Deputy Managing Director of the Vietnam – Australia Group Dang Quoc Tuan stressed the importance of ensuring biological safety in the production value chain to trace the origin of the product.
Therefore, the group has cooperated with leading national and global universities and institutes to establish the Standard Operating Procedure (SOP) to ensure maximum biological safety, he said, adding that the post-examination procedure also receives special attention.
To satisfy the Australian market’s requirements, businesses need appropriate investment and professional management to develop a national brand name for Vietnamese shrimp, thus promoting its value, he suggested.
The Vietnam-Australia Group also pays heed to controlling diseases in separate stages of production while conducting daily, weekly and monthly inspections, he noted.
He expressed his confidence that the group will have an opportunity to export fresh shrimp to Australia in the coming time after Australian competent agencies come to Vietnam for evaluation and testing in the fourth quarter of 2016.
Australia is ranking fourth among countries with high demand for shrimp imports from Vietnam, he said.
That Vietnam could become the first exporter of fresh shrimp to Australia will help businesses increase exports to other markets as Australia is one of the countries with high requirements on biological safety as well as food hygiene and safety, he added.
Wood product exports drop in eight months
Vietnam shipped abroad nearly 4.4 billion USD worth of timber and wood products in the first eight months of 2016, a decline from a year earlier, said the Vietnam Timber and Forest Product Association (VIFORES).
Timber and wood products exports to China and Norway fell by 40 percent each while shipments to South Africa, Finland and India also saw sharp decreases.
Rises were seen in exports to some markets such as Cambodia, Mexico and Portugal.
VIFORES said the US is currently the biggest importer of Vietnam’s timber and wood products, purchasing 39.5 percent of total shipments.
It is followed by Japan (14.6 percent), China (14 percent), and the Republic of Korea (8.6 percent).
According to the Ministry of Agriculture and Rural Development, Vietnam achieved total export value of wooden products of 7.1 billion USD in 2015, up 8 percent from the previous year.
Wooden chairs, bedroom, outdoor and office furniture are the four key export categories.
Vientiane seeks trade augmentation with HCM City
Officials and entrepreneurs from Vientiane, Laos, had a working session with Ho Chi Minh City’s Investment and Trade Promotion Centre (ITPC) on September 13, aiming to boost bilateral trade.
Berlin Phetchantharath, Director of Vientiane’s department of industry and trade, said through this visit, the Lao delegation wants to guide development of trade with the Vietnamese southern hub and to help Vientiane businesses seek partnerships.
The Lao capital plans to develop its retail network and wants HCM City enterprises to build supermarkets and trade centres there, he added.
ITPC Deputy Director Ho Xuan Lam promised his centre will support Vientiane and HCM City companies in popularising Lao goods among local consumers.
In the short-term, the ITPC will use part of its showroom on the downtown street of Nguyen Hue for Lao firms to display products. It will also help the Lao side organise a pavilion at a high – tech agriculture and food processing fair (Hi – Tech Agro) which will be held in HCM City this November, he said.
Trade between HCM City and Laos exceeded 6 million USD in 2015, according to the Sai Gon Giai phong (Liberated Saigon) daily.
RoK Daegu Bank to open branch in HCM City
Daegu Bank of the Republic of Korea (RoK) is preparing to open a branch in Ho Chi Minh City in the near future with support from the State Bank of Vietnam.
At a meeting with CEO & Chairman of the bank Park In-Gyu in the RoK on September 13, Secretary of HCM City’s Party Committee Dinh La Thang said his city welcomes Daegu’s plan.
The presence of the bank in the southern metropolis is welcome as a large number of Korean businesses invest in HCM City, he added.
The official said he hopes the branch will come into operation soon to promote the bilateral economic ties.
Daegu’s representative office was set up in HCM City in December 2014.
Cooperation between HCM City and Daegu city since May 2015 has opened up new opportunities for the two sides to implement cooperation projects.
Electricity exhibition opens in HCM City
The latest machinery and technologies for electricity industry are on show at the sixth International Power Generation, Transmission and Distribution, Electrical Installation Technology Exhibition (Electric and Power Vietnam 2016) that opened on September 14 in HCM City.
On display are meters and monitoring systems; electrical installation, distribution and transmission technologies; industrial electronic products; production and process automation equipment; high to low voltage technologies; and others.
It has attracted 151 exhibitors from 22 countries and territories, including seven international group pavilions from China, Germany, Korea, India, Singapore, Taiwan, and Turkey.
Thirty-five Vietnamese power companies are also exhibiting some of their products.
Many conferences and seminars, including one on efficient usage of energy with ISO 50001 and security for industrial control systems, would be held on the sidelines of the exhibition.
The sixth International Industrial Power Automation and Process Control Technology Exhibition is being held alongside.
Organised by the VCCI Exhibition Service Co., Ltd and the Hong Kong Exhibition Services Ltd, the exhibition, on at the Saigon Exhibition and Convention Centre until September 16, is expected to attract 4,500 trade visitors.
Tran Viet Dung, deputy director of VCCI Exhibition Service, said the significant increase in energy consumption as a result of Viet Nam’s expanding economy presents new opportunities for international suppliers to tap into the market.
BIM Group offers promotions for Green Bay Village
The diversified BIM Group is offering attractive promotions to buyers of Green Bay Village, the first gated community in harmony with the environment in northern Quảng Ninh Province, in September.
Accordingly, buyers will get five per cent discount on the apartments’ prices (before value added tax) by the developer for purchases made between September 5 and September 20, along with no service charge for two years.
Buyers will also get five per cent discount on pre-VAT prices on the immediate payment, which is from 95 per cent of the contract’s value
BIM Group and G5 Property Trading Floor Alliance will jointly organise a sale event on September 18 in Ha Long City, Quang Ninh Province.
Green Bay Village has a modern and cutting-edge design, a lot of green area, a well-equipped security system and modern amenities, an ideal environment for the citizens of this National World Heritage city.
Green Bay Village consists of 144 townhouses, priced from VND2.5 billion, eight garden houses, which can also be used for business purposes and a building with 368 apartments and eight duplex houses called Green Bay Premium.
Notably, all Green Bay Premium apartments have a beach view.
Located in BIM Group’s Halong Marina Urban Area, Green Bay Village will benefit from the urban area’s developed infrastructure system and facilities.
The development of a 248ha urban area with high-profile projects, such as resort townhouse Lotus Residences, shophouse Little Vietnam, Coral Townhouse and Sunrise Apartment Building, is contributing to changing the face of the coastal city and improving living standards.
PVC to pay US$3.1 million in dividends for 2015
PetroVietnam Mud Drilling Corporation, listed as PVC on the Ha Noi Stock Exchange, will pay a dividend of 14 per cent in cash on October 25 for last year’s performance.
The dividend is worth VND70 billion (US$3.1 million) as the company will pay VND1,400 for each of its shares.
The list of shareholders to receive the dividend will be concluded on September 26.
Following the announcement, PVC closed up 0.9 per cent yesterday with more than 570,000 shares in trading after a two-day decline of 5 per cent.
In the first half of 2016, the company earned a revenue of more than VND1.4 trillion, a quarter decrease from the same period of last year.
Therefore, PVC suffered an after-tax loss of VND6.22 billion, a huge step back from an after-tax profit of VND145.26 billion made a year ago.
At the end of August, the northern stock exchange added PVC to the list of stocks that are not qualified for margin trading due to the company’s first-half losses.
Growth Fund II LP raises almost US$40 million
The SSI Asset Management Company announced on Monday it had raised US$39.4 million for its DAIWA-SSIAM Vietnam Growth Fund II L.P from both foreign and local investors.
A portion also came from the Saigon Securities Inc. and Japan’s Daiwa Corporate Investment, the joint managers of the fund.
The private equity fund targets enterprises in manufacturing, services, consumer goods, agriculture, and seafood, which are thought to have great potential thanks to the country’s high rate of young people, increasing middle class, rapid urbanisation and Viet Nam’s global integration.
It also considers opportunities in the divestment of State-owned enterprises and equitisation, where it seeks to buy 10-30 per cent stakes in companies.
The two partners had set up their first Vietnam Growth Fund in 2009 and successfully sold their stakes in all the companies they invested in.
Foreign energy firms express interest in BSR
Binh Son Refining and Petrochemical Co Ltd (BSR) is willing to sell up to 49 per cent of its capital to a foreign strategic investor during its equitisation, which is reportedly appealing to major global energy companies.
Binh Son Refining and Petrochemical is the wholly-owned subsidiary of Vietnam National Oil and Gas Group (PVN) and the operator of the $3-billion Dung Quat Oil Refinery, the first oil refinery in Viet Nam.
The petrochemical company plans for its initial public offering by the end of 2017, one year late compared with its earlier target of the end of 2016, due to complexity in evaluating the company.
BSR general director Tran Ngoc Nguyen said the firm was inviting advisors to decide the corporate value.
“The schedule for equitisation is aligning with the Government’s nod for Binh Son’s IPO plan,” Nguyen said, adding that the most important work now is to seek strategic investors.
He said the company was working with some top global energy firms that had expressed interest in Binh Son’s equitisation, such as Russia’s Rosneft and Gazprom Neft, Thailand’s PTT and one US firm.
“A strategic investor can buy up to 49 per cent stake in the company. If they want to buy more, we will have to report to the Government,” Nguyen said.
He believes the Government’s recent permission for Binh Son’s self-regulated price mechanism would help attract investors.
Early this month, the Government allowed Binh Son to make its own price mechanism for Dung Quat’s petrol products after the company repeatedly called for support to improve competitiveness.
Dung Quat’s current petrol is often more expensive than imported products due to higher import taxes imposed on their products compared with enterprises which benefit from import tariff incentives under free trade agreements Viet Nam has signed.
“Self-regulated price mechanism will increase the competitiveness of company products and then make it appealing to investors,” Nguyen said.
Korean CJ group teams up with Vietnam on food industry venture
CJ Group from the Republic of Korea has announced that it will cooperate with Saigon Trading Group (SATRA) to expand food trading in Vietnam.
The two groups signed a cooperation deal last week during a visit to the Republic of Korea by Ho Chi Minh City leaders.
Kim Chul Ha, CEO of CJ CheilJedang, said CJ CheilJedang, a subsidiary company of CJ Group, will cooperate with SATRA to develop food products.
“The cooperation with Satra is expected to serve as a foundation for CJ CheilJedang’s food business to grow in Vietnam,” he said
CJ CheilJedang will support SATRA in upgrading retail facilities, marketing and training courses, trade promotion and introduction of new products.
CJ Freshway, another subsidiary of CJ will supply fruits to SATRA’s nationwide supermarket chain. It is also planning on developing pre-cleaned and frozen vegetable products such as carrots, onions and broccoli.
The two sides also develop supply networks for high quality meat and aquatic products at competitive prices and chains of value ranging from materials to outsourcing to replace Chinese goods.
Lazada joins forces with Vietnamese retailers
‘Our message is that whatever you buy offline you can buy it online.’
Vietnam Lazada, part of Singaporean e-commerce startup Lazada Group which sells everything from rice cookers to smartphones and operates mainly in Southeast Asia, has signed deals with 40 Vietnamese retailers including major consumer electronics chains Cho Lon, Tran Anh and Home Center, as well as global cookware manufacturer Lock&Lock and local jewelery maker PNJ.
Lazada plans to cater for local consumers through the deals, while Vietnamese retailers can make use of the Lazada brand name to expand their customer bases.
Lazada has expanded rapidly in Southeast Asia, home to some 600 million people, since it was founded in 2012.
The e-commerce platform has increased its focus on the Vietnamese market where consumers spent more than US$4 billion shopping over the internet last year.
It is a part of Lazada’s development strategy to join forces with Vietnamese retailers, said CEO Alexandre Dardy.
“Our message is that whatever you buy offline you can buy it online,” said the chief executive officer, adding that Lazada is working to build consumer confidence in online shopping and the platform.
Internet and smartphone usage have been rising rapidly in Vietnam in recent years, meaning more people are beginning to shop over the internet.
Kid Plaza, a giant supplier of baby products, said its monthly revenues have trebled for the past three months since it sealed the deal with Lazada. The retailer highlighted that the agreement has helped it gain access to one of the largest platforms in the Southeast Asia region with a large and growing consumer base.
Lazada has set a goal of claiming at least 25 percent of Vietnam’s online shopping market.
Vietnam, with a population of 93 million, just three years ago was ranked as the smallest e-commerce market in the region in terms of sales. Now online retail is gaining momentum with 49 million internet users increasingly turning to online shopping.
The country projects 30% of the population will buy goods and services directly over the internet in 2020, with each shopper spending an average of US$350 per year.
In an attempt to boost e-commerce, the Southeast Asian country is trying to convince 50% of urban residents to convert to non-cash payments such as debit and credit cards.
Vietnam expects revenue from online retail to hit US$10 billion by 2020, accounting for 5% of the total nationwide revenue from sales of goods and services.
Satra strikes food partnership with CJ Group
South Korean giant the CJ Group has recently announced it will expand its food business in Vietnam through a partnership with the Saigon Trading Group (Satra).
A representative from CJ Vietnam’s Public Relations Department confirmed with VET on September 13 that a memorandum of understanding (MoU) between the two parties was signed a few days ago in Seoul during a diplomatic visit by a Ho Chi Minh City government delegation.
Under the agreement, CJ CheilJedang, CJ Group’s food subsidiary, will work with Satra to develop new products based on a combination of existing products. The two will work together in an original equipment manufacturer (OEM) deal for CJ CheilJedang’s drinks in Vietnam in the near future.
CJ CheilJedang will help Satra upgrade its retail network’s facilities as well as improve its marketing via training courses along with marketing and promotion programs. It will also introduce a “CJ Zone” in Satra’s retail network for marketing imported South Korean products.
“The cooperation between the two companies will play an important role in the development of CJ’s food business in Vietnam,” said Mr. Kim Chul Ha, CEO of CJ CheilJedang. “It is not only a chance for South Korean products to be promoted in Vietnam but also an opportunity to raise competitiveness among local businesses.”
On the same day, another subsidiary, CJ Freshway, CJ’s food and food service distributor, also inked an agreement to become Satra’s exclusive distributor of South Korean fruit. CJ Freshway will work with Satra in planning and organizing supply chains for fresh fruit distribution as well as in improving cold storage systems to ensure stable supply and product quality.
Both companies will also be involved in the supply chain for livestock and fishery products of high quality with competitive prices and also establish a value chain for processing raw materials to gradually replace existing sources from China.
CJ CheilJedang is a core subsidiary in charge of the food and bio engineering business unit of the CJ Group. After being launched in 1953 as a food ingredient company, it continuously extended its business to processed foods. In 2007 it began to concentrate on the food and bio engineering business. It has led the development of the South Korean food industry for the past 60 years, becoming the nation’s leading food company.
CJ Freshway is also a leading company in South Korea’s food distribution and food service industry. Considered the first company with food material distribution since its beginning in 1999, CJ Freshway now provides about 20,000 types of food materials to food distribution agencies, canteens, hotels, franchised restaurants and general restaurants.
Saigon Trading Group (Satra) has established itself as one of the leading business corporations in Vietnam. Incorporated in 1995, Satra has developed from a State-owned enterprise into a multi-corporation enterprise with over 70 subsidiaries, affiliates and joint ventures, generating annual revenue of $2.07 billion last year. It currently operates 90 supermarkets and convenient stores around the country.
CJ Group has a 4 per cent stake in Satra’s affiliate, Vissan, Vietnam’s leading food manufacturer. The South Korean retailer first set foot in Vietnam in 1998 and is involved in logistics, entertainment, communications, food and film production.
It has plans to pour an additional $500 million into M&A deals in the fields of food, bio-technology, retail and entertainment in Vietnam. In the first half of this year it injected $2.1 million into a chili plantation with the Korean International Cooperation Agency and farmers in south-central Ninh Thuan province.
Workshop pushes Vietnamese exports to UK
A workshop was held on September 9 by the Vietnam Trade Promotion Agency at the Star Galaxy Conference Centre in Hanoi on promoting Vietnamese brands in the UK.
Information was distributed relating to the registration of Vietnamese brands in the UK, support available for Vietnamese enterprises, and building brands to penetrate into the fastidious market.
The main content of the workshop focused on discussing the importance of brands in exports and the strengthening of private Vietnamese brands around the world. The strengths and weaknesses of Vietnamese brands was also analyzed carefully. The status of the UK market and the tastes of British consumers was also discussed.
Mr. Saby Mishra, CEO of J.Walter Thompson Vietnam, told VET that Vietnam has many products of good quality that meet the UK’s high requirements.
“Coffee is a strength of Vietnam in the UK,” he said. “We respect the potential of Vietnamese products. The UK is a competitive market so Vietnamese brands need to adopt communication campaigns.”
Vietnam’s coffee exports to the UK in the first seven months this year reached $53.16 billion, with other key export items being mobile phones and accessories, silk and textiles. Total exports from Vietnam to the UK in the first seven months stood at $2.8 billion, according to Vietnam Customs.
Cooperative relations between Vietnam and the UK is constantly evolving. Since they established diplomatic relations in 1973 Vietnam has received valuable assistance from the UK in its construction and development. The UK is also a market of great potential for Vietnamese brands and the country is willing to import Vietnamese products if they meet requirements.
Besides focusing on their products, enterprises should also pay attention to studying the UK market and have communication campaigns to find success in the UK, according to Mr. Mishra.
Ms. Nguyen Thi Hong Thuy, Commercial Counselor and Head of the Commercial Office at the Embassy of Vietnam in the UK, also spoke of the importance of communications campaigns, likening the absence of such programs to “a beautiful girl in the dark”.
Mr. Do Kim Lang, Deputy Director General of the Vietnam Trade Promotion Agency, told VET that the difficulty for Vietnamese products entering the UK is that most are processed products. Though many Vietnamese products are available in the UK, Vietnam brand names remain limited.
Vietwater 2016 features impressive global line-up
Vietwater 2016 Expo & Forum, Vietnam’s leading international water supply, sanitation, water resources, and purification event, organised by UBM Asia, will take place at Saigon Exhibition and Convention Centre in Ho Chi Minh City on November 9-11, 2016.
Hosted by the Vietnam Water Supply and Sewerage Association (VWSA) and supported by the Ministry of Construction (MOC), Vietwater is renowned as the flagship business platform in the drainage, sewerage, and water supply industries.
Featuring over 400 exhibitors from 38 countries and regions and 15 international pavilions, participants hail from France, Germany, Australia, Finland, Belgium, Japan, mainland China, Singapore, South Korea, Thailand, Taiwan, just to name a few countries.
Vietwater 2016 expects to welcome over 10,000 trade visitors, professionals, consultants, engineers, key decision-makers, thought leaders, and government representatives.
According to Cao Lai Quang, VWSA’s chairman, the Vietnamese water sector has seen more than its fair share of challenges, such as a shortage of investment capital, lack of clean water sources, especially in the context of the current drought, pollution, and salty marshes.
“This exhibition is a golden opportunity for key players in the sector to exchange information, experiences, find new partners as well as update on new technologies,” Quang said.
Under the same roof with the three-day exhibition, Vietwater 2016 will also host a series of Technical Seminars and Workshops.
In particular, Vietwater 2016 will be co-located with Vietnam’s leading renewable energy and energy efficiency exhibition, RE & EE Vietnam 2016, which will work towards offering sustainable means of development in the water and energy sectors of Vietnam and the region.
Vietnamobile to focus on young customers
Vietnamobile decided to take a novel approach and target younger subscribers instead of competing with Vietnam’s major network operators in all segments.
Speaking at its recent press conference to launch Vietnamobile’s newest product, the Pizza Sim, which allows customers to mix-and-match call, text, data, and entertainment packages to tailor their individual plan to meet their unique needs, general manager Elizabete Fong explained that young customers are more open to new things, and that Vietnamobile is going to introduce interesting and innovative products that the market is lacking, with the Pizza Sim being only the start.
Though Vietnamobile’s market share is way smaller than that of the three dominant operators, Fong believes that there is still potential for the network in Vietnam.
“We have been in Vietnam for 10 years, during which we have seen the mobile market exploding. However, even when the number of subscribers is 140 per cent of the population, there are still a lot of opportunities,” she said. “Maybe it is easier for the top three. But being No. 4, we are going to be a challenger.”
The operator hopes that the Pizza Sim, with its competitive tariffs on calls, texts, and data, is going to accelerate the growth of the company’s customer base.
Vietnamobile is in the process of expanding its 3G coverage to all 63 cities and provinces of Vietnam from the current 12. “We want to make a good 3G foundation,” she said, “but we are well-positioned to deploy 4G.”
Recently, Vietnamobile announced a change of status from a business cooperation contract to a joint stock company, with Hanoi Telecommunication Joint Stock Company holding a 50 per cent stake, Hutchison Telecommunications (Vietnam) S.À.R.L holding 49 per, and individual investor Trinh Minh Chau, general director of Hanoi Telecommunication Joint Stock Company, holding a 1 per cent stake. According to Fong, changing into a shareholding structure makes the operation more efficient.
Fong added that the operator is continuously lobbying the Vietnamese government to “make competition fairer in the market.”
“At the moment, the dominant players pay us 10 per cent more than we pay them for interconnection (VND550 (2.4 US cent) against VND500 (2.2 US cent) per minute). But we believe that there should be a bigger difference because the dominant players already have major market shares and, most importantly, already amortised most of their investments so their cost may not actually be that high,” she said.
“We heard that maybe the government is looking to reduce interconnection fees. By our international experience, we are trying to supply information to the government and hope that they would heed our suggestions to really improve the competitive environment, particularly for small players like us,” she said.
According to data released by the Ministry of Information and Telecommunications (MIC), in 2015 the number of Vietnamobile’s 2G and 3G subscribers was about 11 million, compared to a total of 120.6 million in Vietnam.
SHB consolidates grasp on Indochina
Saigon-Hanoi Commercial Joint Stock Bank (SHB) is expanding its operations in Indochina to solidify its foothold on the market.
On September 9, SHB held the inauguration ceremony of its 100 per cent owned bank in Cambodia.
The bank, which has a chartered capital of $50 million, is the second SHB subsidiary in Indochina after the one located in Laos.
SHB plans to increase the new bank’s chartered capital to $75 million by 2018. In addition, it set a target to open nine first-tier branches and 14 transaction offices, not counting the major office, in the next three years.
Earlier in January 2016, SHB opened a wholly-owned subsidiary in Laos with a chartered capital of $50 million. The new bank was upgraded from a transaction office which started operation in 2012.
SHB specialises in credit services, currency, gold trading, and international payments. In August 2012, the bank merged with Hanoi Building Bank (Habubank). As of the first quarter of this year, SHB had a total asset value of VND205 trillion ($9.23 billion) and a chartered capital of VND9.5 trillion ($427.87 million). It currently has approximately 500 branches and transaction offices across the country.
Cambodia is a highly sought-after target for Vietnamese banks, considering the current presence of BIDV, Sacombank, Agribank, and MBBank.
Along with Cambodia, Laos is considered a traditional market of Vietnamese banks. Earlier, State Bank of Vietnam authorised Vietnam Joint Stock Commercial Bank for Industry and the Trade (Vietinbank) and Military Bank to open wholly-owned subsidiaries in Laos by upgrading their existing branches.
Foreign angel investors look for partners to co-invest in Vietnam
Foreign angel investors are upbeat about investing in Vietnamese start-ups and are looking for partners with similar visions to co-invest.
A panel of angel investors from the European Union, New Zealand, and the United States expressed the hope while discussing the role of foreign investors in Vietnam’s startup ecosystem yesterday at a conference in Hanoi. The event, which is part of the larger Mekong Business Initiative, attracted many local start-up founders and investors.
“I am impressed with the entrepreneurial spirit we have encountered in Laos, Cambodia, and Vietnam,” said panellist Irish-American angel investor David Beatty, founder and managing partner of Gaingels LLC, which makes seed investments in companies with LGBT founders.
The panellists agreed that the biggest challenge for angel investors in Vietnam is having no one with similar experience to talk to, due to the small number of angel investors operating in the country.
“We need more investors to come in in order for the Vietnamese entrepreneur ecosystem to be sustainable,” said Beatty.
Earlier, the angel investors spent two days at workshops with Hanoi-based start-ups to share knowledge and provide training in presentation skills. As part of the Mekong Angel Investors Network (MAIN), an international group of angel investors, they are on a two-week trip around Cambodia, Laos, and Vietnam. The delegation is working with local investors in each city and is looking for investment opportunities in early-stage high-growth companies.
The MAIN delegation was organised by the Mekong Business Initiative (MBI) and Lotus Fund, with funding from the Asian Development Bank and the Australian government. The delegation arrived on Sunday for its second mission to Vietnam in the last three months and expects to return with a new set of investors on a quarterly basis, although the cities the investors visit may vary.
Central Bank disapproves of HCMC Real Estate Association’s proposal
The State Bank of Vietnam has sent a document in response to a proposal by the HCMC Real Estate Association to extend the disbursement of the VND30 trillion (US$1.34 billion) housing credit package for businesses.
According to the proposal, the package’s disbursement will continue for credit contracts signed before March 31, 2016 by social housing investors.
They include investors of social housing projects and commercial projects, which have been converted into social purpose and left half-done.
The investors have enjoyed tax and land incentives when building social housing projects. In addition, the package’s disbursement extension for citizens has indirectly assisted businesses to sell apartments, the bank says.
Among goals of the package, social welfare via assistances for citizens to access low interest loans to buy apartments and improve their accommodation situation is more important than others.
Guidebook on Vietnam-EU FTA launched
The Delegation of the European Union (EU) to Vietnam and the Vietnam Chamber of Commerce and Industry (VCCI) – Da Nang branch on September 13 co-launched a handbook in support of Vietnamese enterprises when the Vietnam-EU Free Trade Agreement (EVFTA) takes effect.
The EVFTA is seen as an opportunity for Vietnam’s goods to penetrate foreign markets. As soon as the agreement comes into force, the EU has agreed to eliminate more than 85% tariffs for imports from Vietnam. After seven years, the figure will rise to 99%.
The European market has also committed to importing key commodities such as rice, shrimp, wood products, garments and handicrafts from Vietnam.
The EVFTA guidebook published aims to help the business community with useful information on the FTA in a simple and clear manner.
It introduces details of the EVFTA with comprehensible and concise information for Vietnamese enterprises to actively explore the most effective business and investment opportunities as soon as the agreement takes effect.
For the EU side, the EU Delegation to Vietnam also introduced a guidebook in English to provide similar information for European enterprises.
The handbook is the first step to ensuring the two businesses have a good understanding of the opportunities offered by the EVFTA, to help businesses take advantage of the opportunities brought about by the agreement.
VNREA: State budget funds needed to back social housing market
The Vietnam Real Estate Association (VNREA) has called for the Government to use capital from the State budget to support social housing market development and low-income homebuyers.
According to VNREA’s recent report, there is an imbalance in housing products on the market. A majority of citizens want to purchase social and low-cost homes but property developers mainly provide products in the high-end segment.
Speaking to the Daily, VNREA chairman Nguyen Tran Nam said the Government plays a pivotal role in the property market and that if the housing market performs without effective management, there would be an imbalance between supply and demand.
It takes a long time to complete a housing project so realty developers want to sell homes at high prices to make profit, Nam pointed out. Therefore, luxury apartments abound while the market falls short of affordable homes.
He said the real estate market saw an oversupply in 2010-2011 when social housing projects made up a small fraction of over 3,900 real estate projects in total. In reality, 80% of homebuyers wanted to purchase low-cost houses and thus inventories stayed high.
Firms could not sell their products, so they lacked money to finish their half-done projects.
The Government at that time issued Resolution 02 permitting enterprises to convert commercial housing projects into social ones. The Government also launched a home credit package worth VND30 trillion (US$1.3 billion) to support enterprises to build social houses and people to buy these homes, which allowed the market to recover.
Nam said the Government’s home credit package has borne fruit, saying some other nations had to spend billions of U.S. dollars to spur the real estate market.
Bank loans under the credit package are not available now. Nam said the Government needs to intervene in the housing market by using other capital sources like the abovementioned package as petitioned by the Ministry of Construction.
At a cabinet meeting in June, the Government assigned the ministries of planning-investment and finance and relevant agencies to consider capital allocations from the State budget for social housing development in 2016-2020. This is in line with the Housing Law and the Government’s Decree 100/2015/ND-CP dated October 20, 2015.
The Ministry of Construct has proposed the Prime Minister order the Ministry of Planning and Investment to allocate capital to support buyers of budget homes in line with the prevailing regulations.
Nam said the Ministry of Finance also threw its weight behind the proposal. However, given budget constraints at present, the Ministry of Planning and Investment said the construction ministry and the State Bank of Vietnam should find other sources of funding to develop social homes.
Nam said another home credit package is essential to help the poor in urban cities to acquire homes and back the property market to continue recovery.
He said the existing regulations stipulate that 20% of land and houses must be used for social housing development. However, finance is essential since both firms and individuals need cheap loans to construct and buy low-cost homes.
Nam said high-income earners account for 20% of the total and middle- and low-income citizens the remainder, so the property market depends on the second group.
The Government should concentrate on developing the social housing market in the coming time, according to Nam.
The construction ministry has proposed Hanoi and HCMC apply special mechanisms to spur growth in the social housing market to meet increasing demand for low-cost homes. The two cities were urged to assess market demand when awarding investment licenses to realty projects to avoid an imbalance in supply and demand.
ACMECS countries support sustainable tourism
High-ranking tourism officials of the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS) involving Cambodia, Laos, Myanmar, Thailand and Vietnam have pledged to join forces to promote sustainable tourism growth in the region.
The pledge was made as part of a statement issued at the ACMECS Summit during the HCMC International Travel Expo (ITE HCMC) with the theme “Five countries – one destination” on September 8-10.
ACMECS countries have registered encouraging tourism growth over the past years, heard the summit. Last year alone, the five nations attracted 52 million international visitors, up 17% year-on-year and 8.8 million intra-region tourists, up 8%.
However, the rapid growth of the tourism industry and more arrivals have negatively affected the environment. Therefore, the countries committed to developing the sector in a responsible and sustainable manner to cushion the impact.
The joint statement reaffirms the region’s strong commitment to sustainable development in the tourism sector and creation of suitable conditions for members to make responsible use of resources to improve tourism services and spur socio-economic growth, said a press release issued after the summit.
The ITE HCMC also featured programs to connect local and foreign travel agencies and tourism service providers, conferences to tourism promotion in Australia and New Zealand, and new trends in tourism promotion.
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