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Shortage in labour after Tet minimal
The issue of worker shortage in Ho Chi Minh City after the Lunar New Year has subsided more quickly than ever this year.
The rate of workers returning on time after the holidays is higher than ever in Ho Chi Minh City
On February 21, most firms in the city’s industrial parks (IPs) and export processing zones (EPZs) resumed normal operations. Compared to previous years, they were faced with less difficulty in recruiting new workers and trying to bring current ones back to work post-holiday.
Over 1,000 workers returned to work at Truong Thanh Garment and Textile in Linh Trung IP 1 in Thu Duc district. Truong Thi Tham, the firm’s deputy director, stated that 95 per cent of workers are now back, compared with a figure of 70 per cent this time last year.
“As the company has been receiving large amounts of orders, we have taken measures to ensure that workers leaving for their hometowns for the holidays are going to come back. The company has arranged buses to take them home as well as saved part of their Tet bonuses for after they have returned to work,” she said.
In Linh Trung IPs 1 and 2, only 20 companies registered to resume operation on February 21; the majority are to do so five days later, so their staff can be back on time.
According to Nguyen Van Hung, HR manager of a seafood processing company in District 7’s Tan Thuan EPZ, the number of workers returning on time has increased sharply this year.
“90 per cent of our 650 workers have come back after the festive period, up 30 per cent against the previous year,” he said, attributing the high rate to the firm’s supportive policies as well as workers’ awareness of workplace discipline.
Tran Cong Khanh, head of the Labour Department under the Ho Chi Minh City Export Processing and Industrial Zones Management Authority, said that the returning rate in the city were at 70 per cent as of February 21. Most companies in IPs have given lucky money to their staff as a means of encouragement on their first day back at work.
According to a survey carried out by VIR, the returning rate has indeed increased significantly in Ho Chi Minh City and neighbouring provinces. The Duc Hoa and Xuyen A IPs in the southern province of Long An have seen 80 per cent of workers back after Tet, constituting the highest such rate in recent years.
Similarly, the situation has been much improved in both Binh Duong and Dong Nai. In the latter’s Amata IP, over 30 companies have now resumed their operations, with 90 percent of staff having returned.
According to Tran Thi Anh Dao, director of the Dong Nai Human Resources Forecast and Labour Market Information Centre, the rate of worker shortage in the province after the holidays remains low at 3-5 per cent, compared to 10 per cent the previous year. This rate stands at 8-10 per cent for labour-intensive businesses.
Dao noted that there has been a tendency in recent years for workers to secure and stick with stable jobs. At the same time, in order to retain staff, companies have introduced more incentives and supporting policies regarding wages and bonuses.
2018 started with major FDI inflows
5 Print EmailVietnam continues to be a lucrative target for a raft of foreign investors in the first two months of 2018.
A week ago, Japanese newswire Nikkei reported that the Japanese government and more than 20 large Japanese firms — including Sumitomo, Mitsubishi, Panasonic, and Tokyo Metro — are planning to join a gigantic project worth over $37 billion to build a smart city project in northern Hanoi.
The 310-hectarea project, with property developer BRG being the Vietnamese partner, is expected to be completed in 2023. It is also expected that in October 2018, construction of about 7,000 buildings and commercial works will begin. This may be completed in late 2019.
Early this month, private firm Hoa Phat Dung Quat Steel JSC, part of leading steel maker Hoa Phat Group, teamed up with Italy’s Danieli, one of the world’s largest suppliers of metallurgical equipment, on a giant stainless steel production project. The project will have a designed capacity of 600,000 tonnes per annum, which could be increased to one million tonnes per annum.
Located at the Hoa Phat Dung Quat iron and steel production complex in Dung Quat Economic Zone in the central province of Quang Ngai, the project will be completed by 2020 and will seek to help the country reduce its reliance on imported stainless steel products. Stainless steel importation came to 560,000 tonnes in 2017, up 10 per cent against the previous year.
In a meeting with Prime Minister Nguyen Xuan Phuc on February 8, Cho Hyun Joon, chairman of leading South Korean textile and chemical firm Hyosung, said that the group commits to strengthening co-operation with Vietnam, not only in processing spandex and yarn for automotive tyres, but also in chemicals and heavy industries.
The group is showing a keen interest in Vietnam’s power projects, particularly the supply of various kinds of transformers that are in dire need in the Vietnamese market.
Last year, Hyosung poured a total of $1.3 billion into a polypropylene manufacturing plant and liquefied petroleum gas (LPG) underground storage facility in Cai Mep Industrial Zone in the southern province of Ba Ria-Vung Tau.
In 2007, Hyosung invested $1.5 billion in a plant at Nhon Trach 5 Industrial Zone to produce textiles and core industrial raw materials.
Early this year, Japanese industrial giant Mitsubishi Motors unveiled a plan to build its second automotive manufacturing facility in Vietnam, valued at $250 million in total investment capital. The plant is slated to be completed in 2020 with an annual production capacity ranging from 30,000 to 50,000 car units, serving both domestic and export markets.
According to a recent Dong Nai Department of Planning and Investment report, the southern province solicited $62.2 million in foreign direct investment (FDI) capital in the first month of the year, a 50 per cent jump on-year. The sum came from four newly-committed projects valued at a total of $22.7 million in combined investment value, and three existing projects which sought $39.5 million in combined supplemental capital.
This year, Dong Nai aims to attract $1 billion in FDI capital, focusing on priority fields such as high-tech, supporting industries, and environmentally-friendly projects.
Representatives from a slew of foreign-invested enterprises based in the southern province of Binh Duong also revealed intentions to continue investment expansion this year.
Ricardo Vasques, Southeast Asia director of major US brewer AB Inbev, said in a recent meeting with Binh Duong leaders that the company will increase investment this year to boost production at its factory based in My Phuoc 2 Industrial Park (IP), and will launch a new beer brand, Hoegaarden.
AB Inbev currently runs two breweries based in My Phuoc 2 and VSIP 2 IPs, which produce the Budweiser beer brand serving the domestic and the export market.
SCIC to auction more than 2.4mn Maritime Bank shares
The State Capital Investment Corporation (SCIC) will put more than 2.4 million shares of Maritime Bank up for public auction on the Hanoi Stock Exchange on March 28.
The initial price will be VND12,400 ($0.54) per share, and interested investors must register to buy the entire offering.
This is the second attempt by SCIC to offload Maritime Bank’s shares since its failure in November 2015. Experts, however, have predicted that this auction too will fail due to overpricing, since Maritime Bank’s shares are being traded at some VND7,000 ($0.3)-VND8,000 ($0.35) per share on the over-the-counter (OTC) market.
Moreover, the share offering accounts for only 0.3 per cent of the bank’s charter capital, which would allow little influence by the investor over the bank’s management.
Founded in 1991 in the northern port city of Hai Phong, Maritime Bank had initial charter capital of VND40 billion ($1.7 million). It was relocated to Hanoi in 2005 and acquired the Mekong Development Commercial Joint Stock Bank in 2015, lifting its charter capital to VND11.75 trillion ($516.39 million), with total assets of some VND104 trillion ($4.5 billion).
The Vietnam Posts and Telecommunications Group (VNPT) previously announced a third auction of more than 71 million shares of Maritime Bank, equivalent to 6.09 per cent of its capital, at a minimum price of VND11,900 ($0.52) per share. Its two previous auctions, in March 2017 and January 2018, failed to draw investors.
The lender is one of the most aggressive commercial banks to sell bad debts to the Vietnam Asset Management Company, with a total value of almost VND10 trillion ($439.48 million) by the end of 2015.
Prices of Maritime Bank’s shares on the OTC market have doubled in the last year, from VND4,000 ($0.17) to VND8,000 ($0.35), owing to active divestment by stakeholders.
US-Vietnamese tie up to develop $50-million recycling facility
GFSI-MHE Manufacturing of Texas LLC signed a memorandum of understanding with Minh Hung Group of Vietnam to build and operate Southeast Asia’s largest recycling production facility in Vietnam.
Located in the Mekong Delta province of Tien Giang, the facility has an estimated investment of $50 million. Once put into operation in 2019, the facility will manufacture plywood from recycled fibre glass.
Under the agreement, GFSI-MHE Manufacturing of Texas LLC will provide the technology, operational experience, and equipment for this process. MH Group, along with Minh Hung Group, will provide the investment and commercial expertise to drive the initiative.
According to statistics from the Ministry of Natural Resources and Environment, Vietnam discharges around 28.5 million tonnes of solid waste per year, most of which is buried in landfills. There are several polluted landfills due to the lack of an adequate collection system, leachate treatment, and recycling technologies.
The large waste discharge poses challenges to environmental protection but presents opportunities to convert it into industrial materials and energy. The solution offered by GFSI-MHE Manufacturing of Texas LLC will help recycle a large volume of waste, including old composites and fibre glass.
Minh Hung Group is among the 80 enterprises holding the Vietnam Value 2016 certification by the Vietnamese government and has received many important and coveted awards, such as the Top 500 Fastest Growing Enterprises in Vietnam and the Top 500 Biggest Private Enterprises in Vietnam.
GFSI-MHE Manufacturing of Texas LLC is a joint venture (JV) between the US’ Global Fiberglass Solutions Inc. (GFSI) and Canada’s MHGroup. The company recycles spent and damaged fibre glass wind turbine blades into a plywood and sheetrock substitute material known as Ecopolypanel™ at its large-scale JV manufacturing facility in the US.
Hotel project in Danang found to violate construction regulations
A hotel project in the central city of Danang has been found to violate construction regulations after adding more floors without permission from authorities.
7 Seven Sea hotel project is located on Vo Nguyen Giap Street, Son Tra District was allowed to build one basement and 18 floors, however the investor, Ly Bang Services and Trade Ltd. Co. added another floor and some others items without seeking approval.
Le Van Tuan, chief inspector from the municipal Department of Construction, said that the investor will be fined VND614 million (USD27,909), equal to half of the value of the illegally-built items.
Construction violations have been reported in Danang for many years, including Bien Tien Sa resort on the Son Tra Peninsular. Dozens of villas and bungalows in The Song Resort project have also been found to be built without licenses along Danang beach.
Danang City’s Son Tra District authorities are inspecting violations by Muong Thanh Son Tra hotel and apartment complex project complex project invested by Muong Thanh Group.
The project has 42 storeys and two basement levels. The second to fifth storeys in the apartment block are for parking lots, gymnasium, swimming pools and kindergarten and public area. However, during the construction process, the investor failed to follow the approved designs and turned these four storeys into a total 104 apartments for sale.
According to Vu Quang Hung, director of the Danang Department of Construction, the department will co-operate with local agencies to tighten control over construction activities to detect violations which will be strictly punished.
Eight Viettel products at world mobile expo
Military-run telecom group Viettel brought eight products it has developed in education, mobile finance, network security, tourism, customer-protection solutions and others to the world’s biggest annual mobile event, the annual Mobile World Congress (MWC) in Barcelona, Spain, from February 26 to March 1.
This was the fourth time Viettel has taken part in the event.
“By displaying our products, Viettel would like to confirm that Vietnamese are able to create modern technologies which can compete globally,” Tao Duc Thang, the company’s Deputy General Director, said.
This year, MWC attracted 200 nations, 60 percent from Europe, 18 percent from America, and 15 percent from Asia with 2,200 kiosks.
“Creating a better future” was the theme for this year’s event.
Market research to promote exports to Middle East
Vietnamese export companies will have opportunities to set up distribution channels in the Middle East thanks to a market research programme launched by the Investment and Trade Promotion Centre in Ho Chi Minh City and the Vietnamese Embassy’s Commercial Affair Office in the United Arab Emirates (UAE).
The research will be carried out from March 4-9 this year. It aims to help rice, food and fruit exporters seek opportunities in Middle Eastern nations.
According to the Ministry of Industry and Trade, trade between Vietnam and the Middle East reached 12.8 billion USD in 2017, up 17.4 percent from 2016.
Vietnam’s main exports were mobile phones, computers and accessories, seafood, footwear, garment and textiles, fibre, rice, pepper, wood products, cashew nuts, natural rubber, vegetables and fruit and coffee beans.
The country mostly imported materials for domestic production, such as plastic, liquefied gas, electronic spare parts, machines and animal feed, from the Middle East.
February’s CPI edges up due to strong demand during Tet
The consumer price index (CPI) in February edged up 0.73 percent monthly and 3.15 percent annually, largely driven by people’s high demand for commodities and services to be used in the Lunar New Year (Tet) festival, the country’s largest holiday in a year, according to the General Statistics Office (GSO).
The CPI rose by 1.24 percent from December 2017, pushing the index up 2.9 percent in the first two months this year.
Among 11 goods and services categories, nine saw price increases, including food and catering services (1.53 percent); transportation (0.79 percent); beverages and cigarettes (0.75 percent); other goods and services (0.74 percent); culture, entertainment and tourism (0.72 percent).
Director of the GSO’s Price Statistics Department Do Thi Ngoc attributed the hike to strong demand for food, beverages, cigarettes and electricity use during the Tet and massive rice purchase for exports to Indonesia and the Philippines.
Public transportation costs also went up 3.34 percent due to surging travelling demand.
Other factors reined in CPI growth such as falling gas and vegetable prices with respective decreases of 5.14 percent and 1.72 percent.
The price of gold rose 1.83 percent month on months while the price of US Dollar remained stable.
According to the GSO, core inflation in February (CPI exclusive of fresh food, energy and State-run health and education services) moved up 0.49 percent month-on-month and 1.47 percent year-on-year. The index for the first two months this year rose by 1.32 percent.
Can Tho: Early industrial restructuring needed for breakthrough growth
The Mekong Delta city of Can Tho needs to accelerate industrial restructuring, towards creating breakthroughs in its economic growth, a local official has said.
During a recent meeting with representatives from departments and sectors, Vice Chairman of the municipal People’s Committee Truong Quang Hoai Nam urged the municipal Department of Industry and Trade to devise measures to promote industrial restructuring, especially high-tech industries.
It is also necessary to adjust policies to encourage the development of support industry, and expand and development of new industries, he said.
According to reports at the meeting, Can Tho’s industrial production index (IPI) in the first two months of 2018 increased only 5.63 percent compared to the same period last year.
Nguyen Minh Toai, Director of the municipal Department of Industry and Trade, said rice production and seafood processing are the main industrial sectors of Can Tho.
He said the decreased IPI was resulted from the moderate operation of mechanical, seafood and construction firms, and production pause of consumer goods producers, food processors, and textiles plants during the country’s largest holiday – the Lunar New Year (Tet) Festival.
Meanwhile, Nam said Can Tho is focusing too much on the rice production and seafood processing, so there were no changes in its industrial production structure for years.
Chairman of the municipal People’s Committee Vo Thanh Thong asked the Department of Industry and Trade to roll out solutions to the issue, towards restructuring the local industry in the direction of increasing production value.
He also requested the People’s Committees of districts to pay attention to facilitating construction projects in the locality because the sector is also one of the contributors to the IPI.
411 new FDI projects licensed in two months
Vietnam granted investment licences to 411 new projects of foreign investors as of February 20, with a total registered capital of 1.39 billion USD which is equivalent to 68.6 percent of the figure for the same period last year.
In addition, 133 FDI projects registered for capital adjustment with additional investment of 700 million USD, a year-on-year fall of 8 percent, according to the Ministry of Planning and Investment’s Foreign Investment Agency.
Disbursements were estimated at 1.7 billion USD, up over 9.7 percent year-on-year.
In the reviewed period, there were 873 deals made by foreign investors to contribute capital to businesses and to buy shares of Vietnamese businesses with total capital of 1.25 billion USD, a year-on-year rise of 102 percent.
In total, the country attracted FDI worth 3.34 billion USD, or 98.2 percent of the figure of the same period last year.
Manufacturing-processing attracted the most FDI in the period with 1.83 billion USD, accounting for 54.6 percent of the total. Construction ranked second with 345 million USD and estate trading was third with 312 million USD, accounting for 10.3 percent and 9.3 percent of the total, respectively.
Among 60 nations and territories investing in Vietnam in the first two months, the Republic of Korean (RoK) was the biggest investor with 851.2 million USD, making up 25.5 percent of the total. It was followed by British Virgin Islands with approximately 450 million USD and Singapore with 418 million USD.
Ho Chi Minh City was the top destination for foreign investors, attracting 1.05 billion USD, or 31.27 percent, followed by Binh Duong (434 million USD), Ninh Thuan (253 million USD), or 12.98 percent and 7.6 percent respectively.
Large projects licensed in January-February included the 150 million USD Hanbaram wind-power project in Ninh Thuan province and the 80 million USD garment project funded by Ramatex Nam Dinh in Nam Dinh province, both of Singapore.
A project producing motor vehicle spare parts in Hai Duong province of the Kefico Vietnam Company added 120 million USD to its investment, and a solar panel factory of the Vina Cell Technology Company added 100 million USD.
January saw nearly 1.25 billion USD of FDI poured into Vietnam, equal to 75.9 percent of the figure in the same period last year.
In 2017, Vietnam remained an attractive destination for foreign investors with total FDI capital registered in the country hitting a record high of 35.88 billion USD, up 44.4 percent year on year.
FDI disbursement last year also reached a record high, increasing by 10.8 percent to 17.5 billion USD.
Hanoi, HCM City both see CPI rise in February
The consumer price index (CPI) of Hanoi and Ho Chi Minh City in February rose by 0.89 percent and 0.34 percent over the previous month, and up 2.86 percent and 2.41 percent year-on-year, respectively.
The rise was driven by the high demand for commodities and services during the Lunar New Year (Tet) festival, the country’s largest holidays in a year.
According to the Hanoi Statistics Office, compared with the previous month, increases were seen in most of the commodity groups, especially food and catering (2.17 percent). The prices of food, including pork, beef, poultry, seafood and vegetables, also surged in the period.
Housing, electricity, fuel and construction materials went down 0.08 percent while post and telecommunications declined 0.32 percent.
In February, the city served 848,000 domestic visitors. Earnings from accommodation and catering services reached about 10 trillion VND (439.37 million USD) in the first two months of 2018, rising 11.5 percent against same period last year.
Hanoi’s export revenue is estimated to hit 2.09 billion USD in the Jan-Feb period, up 25.1 percent year-on-year while its import is valued at 2.49 billion USD, up 15.4 percent.
In the southern largest economic hub of HCM City, the prices of eight out of 11 commodity baskets recorded growth, with the highest rate seen in food and catering at 0.81 percent, reported the municipal Statistics Office on February 28.
Other goods with higher prices were other goods and services (0.75 percent); beverage and cigarettes (0.72 percent); culture, entertainment, and tourism (0.33 percent); telecommunications (0.18 percent); medicine and healthcare services (0.12 percent); transportation (0.6 percent) and education (0.01 percent).
Meanwhile, decreases were seen in housing, electricity, fuel and construction materials (0.1 percent); beverage and equipment and home appliances (0.03 percent).
The price of gold increased by 0.71 percent, while the price of US dollar declined 0.51 percent from that of January 2017.
Japanese bank to open office in Hanoi
Japan’s Juroku Bank Ltd will open a representative office in Hanoi in the time ahead after getting a licence from the State Bank of Vietnam (SBV) in early February.
On February 2, SBV issued License No 32/GP-NHNN, permitting Juroku Bank to establish its representative office in Hanoi for five years.
Accordingly, the office will function as a liaison office for market research and promotion of investment projects of Juroku Bank in Vietnam.
The office will promote and monitor the implementation of contracts and agreements signed between the bank and credit institutions and businesses, as well as the bank’s financed projects in Vietnam.
It will also address the demand for loans from Japanese companies operating in Vietnam, especially those in the Tokai sub-region, where the bank’s headquarters is located.
The opening of the bank is a new opportunity for Japanese investment in Vietnam in 2018, with a predicted wave of investment coming from local, small and medium enterprises instead of giant corporations.
In a recent interview to the Vietnam Government Portal, Karashima Hiroshi, President of Japan Business Association in Vietnam (JBAV), said Vietnam was emerging as the No. 1 market in Asia for Japanese investors, as evident from a survey by Japan Bank for International Cooperation. The number of JBAV’s member enterprises investing and operating in Vietnam has increased by 1,750 companies (second only to Japanese firms in Thailand).
This partly shows that the business efficiency of Japanese firms in Vietnam is approaching closer to and catching up with those operating in Thailand, Hiroshi said.
Last year, Japan was the largest investor in Vietnam among 115 countries and territories with investment projects worth 9.11 billion USD in the country.
Import-export surges nearly 40 percent
Vietnam’s import-export revenue amounted to 57.12 billion USD from the beginning of 2018 to mid-February, up 37.2 percent compared to the same period last year.
According the General Department of Vietnam Customs, a trade surplus of 1.67 billion USD was recorded in the period.
The foreign-invested sector’s import-export turnover was close to 11 billion USD within the first 15 days of February, down 18.1 percent from the last half of January.
Vietnam’s total foreign trade value was 425 billion USD in 2017. The value of exports was estimated at 213.77 billion USD, a year-on-year increase of 21 percent, higher than the annual growth rate of 9 percent in export value in 2016.
Meanwhile, the value of imports in 2017 was estimated at 211.1 billion USD, 20.8 percent higher than 2016.
As a result, the country maintained a trade surplus of about 2.7 billion USD, the same figure as 2016.
Businesses faces Tra fish material shortages
Businesses are facing shortages of material Tra fish whereas the prices of Tra fish (pangasius) in the Mekong Delta is setting a record high, outstripping VND30,000 VND per kilo, thereby generating high profit to local farmers.
According to Duong Nghia Quoc, Chairman of the Vietnam Pangasius Association has attributed shortages of material Tra fish to a lack of breeding tra fish stocks, noting that there will be limitations in the supply of material Tra fish for exports in 2018 and the prices of exported Tra fish stand high throughout the year.
A representative of a seafood processing firm in Chau Doc city of southern An Giang province says the company needs up to 200 tonnes of Tra fish a day to meet growing export demand but it is suffering from the shortages.
Tra fish exports surged 4% to US$1.8 billion last year with China, the US and the EU still being Vietnam’s largest importers, says the Vietnam Association of Seafood Exporters and Producers (VASEP).
Binh Phuoc enterprises resume operation after Tet
All enterprises in the southern province of Binh Phuoc have resumed their operation with 40,438 workers, or nearly 100 percent, returning to work after the week-long Lunar New Year (Tet) holiday.
In Dong Xoai II industrial park, many factories have reached 100 percent of their production capacity.
Vice President of the Binh Phuoc Labour Federation Do Thanh Lai said that many companies wish to recruit more workers to expand their production. A provincial survey showed that 88 firms in the province’s industrial parks need additional 12,000 unskilled labourers in 2018.
Meanwhile, the job floor under the provincial job placement centre revealed that this year local firms are in need of 30,000 workers, mostly unskilled labourers in garment and footwear sectors.
To attract more workers, the firms have offered numerous incentives to workers, vowing salary, bonuses and allowances totalling up to 8 million VND per month.
Wooden products, handicrafts to be showcased in HCM City
The Vietnam International Furniture and Home Accessories Fair (VIFA – EXPO 2018) will take place in Ho Chi Minh City from March 7 to 10, said the city’s Handicraft and Wood Industry Association (HAWA) on February 28.
The event, covering an area of 30,000 square metres of the Saigon Exhibition and Convention Centre, will feature 1,980 booths, up 29 percent compared to the previous year.
HAWA Vice Chairman Huynh Van Hanh said VIFA – EXPO 2018 is the largest annual event of the wood industry as it gathers all wooden products, handicrafts, furniture and supporting services, meeting demand of consumers from all over the world.
More than 2,000 visitors from 95 countries and territories had registered to attend the event as of February 27.
Nghi Son oil refinery ready for operation
The Nghi Son Oil Refinery and Petrochemical (NSRP) complex in the central province of Thanh Hoa is ready for official operation from February 28.
The refinery is scheduled to produce the first commercial oil products in May this year.
Once become operational, the project will help ensure the national energy security. It is expected to contribute 10 trillion VND (436 million USD) to the local budget in 2018.
Addressing a ceremony to announce the milestone held on February 28, General Director of the complex Turki Alajmi highlighted the strategic importance of the project, saying that it will help meet Vietnam’s increasing demand of petrochemical products to serve the country’s industrialisation and modernisation.
He thanked the Vietnamese Government and local authorities for their support and facilitation to the project.
The NSRP is built in Nghi Son economic zone in Tinh Gia district. This is the largest national oil and gas project of the country with total investment of over 9 billion USD.
Japanese firm Idemitsu Kosan and the Kuwait Petroleum International Company (KPI) each contributed 31.1 percent of the total investment, while capital contribution rates of the Vietnam Oil and Gas Group (PetroVietnam) and another firm of Japan – Mitsui Chemicals are 25.1 and 4.7 percent, respectively.
With its capacity of 10 million tonnes of petrochemical products per year, the Nghi Son petrochemical refinery complex is expected to help improve the self-reliance of Vietnam in producing refinery and petrochemical products.
Businesses striving to gain foothold for exports to Australia
Vietnamese businesses need to make greater efforts to overcome barriers if they desire to gain entry into the Australian market which is seen as having untapped potential.
According to statistics from the General Department of Vietnam Customs, last year’s bilateral trade between the countries increased by 22.1% to US$6.46 billion with Vietnam’s exports to Australia accounting for US$3.3 billion, a year-on-year rise of 15.1% while imports were increased by 30.5% to US$3.1 billion.
Some of the products behind the strong export growth are cameras and components (up 329.3%), crude oil (up 69%), vehicles and spare parts (up 62%), and steel (up 61.7%). While the product areas in which Vietnam holds a distinct advantage made no significant breakthroughs in export earnings.
Nguyen Thi Hoang Thuy, head of the Vietnam Trade Office in Australia notes Australia as a choosy market with strict regulations on technical and product quality standards for imported goods based on its consumer protection policies.
This is seen as the reason why the volume of Vietnamese products in the market stands at less than 2%.
Substandard Vietnamese products and little investment in building brand names remain a major obstacle hindering domestic businesses from boosting exports to the highly lucrative market, especially most of its products exported to Australia are primarily raw and unprocessed materials.
However, Vietnam needs to capitalize on the ASEAN-Australia-New Zealand Free Trade Agreement (AANFTA) by fully grasping the details of the deal to bolster exports to Australia, particularly when 90-100% of total tax lines have been cut for the period covering 2010 to 2020.
Regarding the Australian market, exporters to the oceanic country say Australian customers pay no or little attention to the origins of imported products whereas they care about the quality, patterns, and prices, which are inherently weak points of Vietnamese products.
For their success in the potential market, Ms Thuy has urged domestic businesses to stay active in access to up-to-date market information, take full advantage of FTA preferences, and put product quality first.
In addition, it is essential for businesses to intensify proper investment in developing a material zone which is up to international standards and partner with each other to form production chains in order to sharpen competitive edge, she says.
She also assures the Vietnam Trade Office in Australia’s readiness to provide domestic businesses with updated information on tax policies, distribution networks, import regulations, and FTA preferences via its website to facilitate their market penetration.
Giant solar power plant to start operation this year
Gia Lai Electricity JSC’s Phong Dien solar power plant is expected to start operation in September and generate power for 32,628 households.
Gia Lai Electricity JSC, a subsidiary of TTC Group, has just signed an EPC contract with the consortium of Asian electronics giant Sharp Corporation (Japan), Sharp Solution Asia (SSSA) (Thailand), and NSN Construction and Engineering JSC to construct the Phong Dien solar power plant.
Sharp is a multinational electronics corporation based in Sakai, Japan, and has been an integral part of Taiwan-based Foxconn Group since 2016.
The plant is located on 45 hectares in Phong Dien district of Thua Thien-Hue province in the Central Coast. The plant is expected to start operations in September 2018, generating enough power for 32,628 average households in Vietnam, or around 0.1 per cent of the country’s population.
The supply will help reduce CO2 emissions by around 20,500 tonnes a year compared to coal-fired power plants, which play a key role in Vietnam’s energy chain.
The total project investment is nearly VND700 billion ($31 million), 40 per cent of which comes from investors and the remaining 60 per cent from banks.
This is the first solar power plant that TTC Group will start in the country, while planning to deploy other projects in Tay Ninh (324MW), Binh Thuan (300MW), Ninh Thuan (300MW), and Gia Lai (49MW).
Thai Van Chuyen, general director of TTC Group, said that solar and wind power are two sectors to keep an eye on in the coming time as total investment capital will reach around US$1billion by 2020.
Solar power currently accounts for 0.01 per cent of the country’s total power output, but the government plans to increase the ratio to 3.3 per cent by 2030 and 20 per cent by 2050.
Vietnam is aiming to produce 10.7 per cent of its electricity through renewable energy by 2030, mainly through solar and wind energy.
Sharp rise in January exports of cement and clinker
Vietnam’s cement and clinker exports for the first month of the year have seen a marked increase, according to the General Department of Vietnam Customs.
The country’s exports of cement and clinker bore out respective increases of 121% in volume and 112% in value compared to the same period last year, reaching 2.9 million tons, valued at US$101.12 million.
The export price of cement and clinker in January dropped by 4.6% against December 2017, to an average of US$34.8 per ton.
Bangladesh remains the largest of the 12 major consumers of Vietnam’s cement and clinker products, accounting for 31.3% of the country’s total exports, trailed by the Philippines.
Cement and clinker exports to nearly all foreign markets in January witnessed a rise against last year’s corresponding period.
Especially, exports to Taiwanese market increased remarkably with a 545.6% rise over the reviewed period comprising 161,407 tons valued at US$4.88 million.
Kido acquires manufacturing and processing firm
Vietnam’s leading food firm Kido Corporation (Kido) has completed the negotiations for the purchase of a food manufacturing and processing firm which has an annual revenue of VND1.6-2 trillion ($70.4-87.9 million).
This was announced by Tran Le Nguyen, the general director of Kido. Nguyen added that in 2018, Kido expects to achieve a breakthrough in business results with the aim to acquire VND12 trillion ($527.68 million) in revenue and VND800 billion ($35.2 million) in pre-tax profit, signifying increases of 68 and 40 per cent.
According to Nguyen, this year, the company estimated to earn an additional VND2.5 trillion ($109.9 million) in revenue from instant noodles, beverages, and sauces.
Especially, in the instant noodle segment, Kido will co-operate with an unidentified Thai firmto expand manufacturing and distributing operations.
Besides, Kido will partner up with another Thai firm to establish a joint venture company specialising in manufacturing tea and drinks mixed with milk.
Furthermore, in order to realise these targets, Kido spent massive efforts to integrate Vocarimex and Tuong An, which had different corporate cultures as well as working processes.
The highlight of Kido’s business results last year was the soaring revenue thanks to the contribution of newly acquired Vocarimex and Tuong An.
Notably, Kido reported a net revenue of over VND7 trillion ($308.2 million), doubling the 2016 figure, with a gross profit of VND1.49 trillion ($65.6 million) and pre-tax profit of VND569 billion ($25.05 million).
Along with the acquisition of Vocarimex and Tuong An, Kido teamed up with TTC Group to produce and distribute sugar.
The two signed a strategic partnership in Ho Chi Minh City to increase market presence. Accordingly, Kido will distribute 60,000 tonnes of Bien Hoa Sugar in 2018. The sum is projected to reach 200,000 tonnes by 2020.
Under the plan, Kido will exclusively distribute some of TTC’s refined sugar products via its network of 200 distributors and 450,000 retail points. In addition to distribution, Kido will be responsible for achieving annual sales targets and expanding product coverage.
Meanwhile, TTC will produce sugar and grant distribution rights over some of its products to Kido.
BSR’s share value reaches ceiling price on first day on UpCOM
Binh Son Refining and Petrochemical Company Limited (BSR)’s shares soared in value on the first day of transaction on the Unlisted Public Company Market (UpCOM), reaching the ceiling price of VND31,300 ($1.38) from the reference price of VND22,400 ($0.98).
This morning, BSR listed 241.4 million shares on the UpCOM. Within the morning, share value increased by 40 per cent compared to the reference price. Ending the transaction this morning, 11.73 million shares were traded at the average unit price of VND31,000 ($1.36).
Previously, BSR reported a successful initial public offering (IPO) with a complete take-up of the offered shares and the record selling unit price of VND14.8 million ($651.69).
The average selling price was VND23,043 ($1.01), 57.8 per cent higher than the initial price. The lowest selling price was VND20,800 ($0.92). Of particular note, an individual investor succeeded in buying 10,000 shares at the record price of VND14.8 million ($651.69) apiece.
Regarding the race to become the strategic investor, to date, Petrolimex and Indian Oil have officially submitted the applications.
Numerous foreign investment funds won at the IPO with high buying prices, two of which are Vietnam Opportunity Fund (VOF)—a member of VinaCapital—and Dragon Capital. VOF spent $25 million acquiring a 10 per cent stake in BSR.
After the IPO, BSR earned VND5.57 trillion ($245.26 million) in proceeds, 1.5 times more than it expected.
Besides, Russia’s top energy firms Rosneft and Gazprom Neft, Thailand’s PTT, and Kuwait Petroleum Corporation signalled intentions to join the race. However, no official movements have been implemented.
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